The Relationship Amongst Organizational Ambidexterity, Digital Transformation, Competitive Advantage, Strategic Agility and Environmental Hostility in SME’s

Abstract

Purpose – The aim of this study is to reveal the impacts of organizational ambidexterity and digital transformation on competitive advantage under the moderating roles of environmental hostility and strategic agility. Design/methodology/approach – In the study, quantitative research method is used. The research population is 17451 small-scaled SME’s entrepreneurs and managers in the wholesale and retail trade sector, which have less than 50 employees per year, with an annual net sales revenue or financial balance sheet not exceeding 25 million Turkish Liras according to the data of the Turkish Statistical Institute (TUIK) for the end of 2020. In this cross-sectional study, online questionnaires were sent to entrepreneurs and managers of 450 small-scale SMEs, which were reached by convenience sampling method, and the data obtained from 366 valid questionnaires were analyzed through the Smart PLS program. Findings – While research results confirm the positive impacts of organizational ambidexterity and digital transformation on competitive advantage, they also show that strategic agility has a moderating role, but environmental hostility does not moderate the relationship between these variables. In other words, the results of this study indicate that entrepreneurs/managers, benefit from digital transformation applications at a high level, help their organizations gain competitive advantage when they have the ability to use their skills and competencies at the same time. Discussion – Research findings show that SMEs’ ambidexterity increases by facilitating their digital transformation, while at the same time, both their ambidexterity and digital transformation increase their competitive advantages. In addition, it reveals that the ambidexterity of SMEs increases their competitive advantage through their digital transformation. Results indicate that SMEs with strategic agility further increase the positive impacts of their ambidexterity on their competitive advantages owing to their dynamic processes and ability to transform by adapting to the environment. On the other hand, it has been determined that environmental hostility do not decrease the positive impacts of SMEs' ambidexterity on their competitive advantages. This situation can be explained as a natural transformation into competitive advantage, as markets with environmental problems necessitate new radical changes and encourage more proactive, effective and up-to-date strategies.