Corporate Decision on Digital Transformation: The Impact of Non- market Factors Lu Yao ZHANG

Abstract

This multiple regression study examined the entrepreneur's political network and digital transformation (DT). The study investigated the relationship between the political network and the adoption of digital transformation strategy and if moderated by perceived corruption and political ideology of top managers among diverse enterprises in China. The study was important because there has been minimal strategic management research on non-market factors of digital transformation. The instruments used for the study were political network relationships, digital transformation strategies, perceived corruption, economic conservatism, cultural conservatism, social conservatism, and meritocracy of top managers. A basic regression model is a causality test between the political network, the independent variable, and DT, the outcome variable. In addition, moderated multiple regression analysis with factor analysis utilized the Statistical Package for the Social Sciences (STATA 15) to analyze moderator variables perceived corruption and political ideology and their interaction with the political network and effect on DT. The study included two hundred fourteen top managers as a convenience sample. Results of the study indicate a statistically significant relationship and effect between the political network and digital transformation, β =0.19, p < .01. In addition, results indicate statistical significance in studying the effect of political networks on corporate digital transformation by interaction between perceived corruption, β= -0.09, p < .01, economic conservatism, β= - 0.08, p < .01, and meritocracy, β= 0.09, p < .01. Practical significance indicates that the firm with higher level of political network relationships is more likely to conduct digital transformation and the higher level of top manager's perceived corruption and economic conservatism mitigates the positive impact of political network on digital transformation, while the higher level of top manager's meritocracy tendency strengthens the positive impact of political network on digital transformation. Keywords: political network, digital transformation, non-market factors, resource dependence theory, co-opetition, public-private alliances