Assessing the Impact of Strategic and Organizational Factors on Digital Capabilities

ABSTRACT Digital Transformation (DT) involves the use of new digital technologies to enable major business improvements that enhance customer experience, accelerate operations, create new business models, and improve the daily operations of companies. Drawing on dynamic capability theory, this empirical study assesses the impact of strategic and organizational factors on building digital capabilities (DC), which are technology‐based abilities, supported by a digitally advanced mindset to carry out tasks and processes. The proposed model analyzes unexplored connections between digital vision or orientation, organizational culture, DT‐oriented leadership, and human resources practices and their impact on DC. Hypotheses are tested in a sample of 110 Spanish financial and consulting companies using a structural equation model (SEM) employing the partial least squares (PLS) technique. Our findings reveal that all the variables introduced in the model are enablers of DC, contributing also to a company's DT. The main contribution of this research is to show how DC are developed by employing coherent strategic and organizational factors, which support the development of DT.