Organizational performance through dynamic capabilities in digital business transformation : A Systematic Literature Review

Abstract

This study explores the role of dynamic capabilities in enhancing organizational performance during digital transformation through a systematic literature review. The research question of this thesis is: What are the key dynamic capabilities that organizations need to foster digital business transformation? How do dynamic capabilities influence organizational performance during digital business transformation? The main goal is to identify and categorize the key dynamic capabilities that organizations need to develop or strengthen to successfully navigate and thrive in digital transformation processes. Systematic literature review method was chosen as research methodology for this thesis. This approach was considered as the most effective for analyzing existing research on the topic while also being the most appropriate method for addressing the research question. The literature review was carried out in a systematic manner, with each stage planned and thoroughly documented. After the screening process which took several stages where the studies were evaluated based on the criteria’s, in total 11 articles were selected for the final research. The findings of the thesis highlight the importance of three main dynamic capabilities need for successful business digital transformation which are digital foundation and infrastructure; strategic frameworks, organizational agility and digital leadership; sensing, seizing, and decision-making capabilities. Digital foundations and infrastructure includes robust IT systems, digital service provisioning, strategic partner network promotion, technological capabilities, and cybersecurity measures that enable unlined digital operations. Strategic frameworks, organizational agility and digital leadership includes the importance of talents, knowledge creation, digital skills and culture fostering in order to achieve competitive advantage. Sensing, seizing, and decision-making capabilities play a crucial role in driving continuous improvement by identifying market opportunities, recognizing emerging trends, and maintaining a competitive edge. These capabilities emphasize the importance of staying informed about industry developments and making strategic decisions based on data-driven insights.