Perceived digital embeddedness and innovation ambidexterity in SMEs: the indirect association of perceived digital transformation orientation
Wencan Li, Jin-Bo ZhouPurpose
This study aims to investigate how SMEs leverage perceived digital embeddedness to achieve innovation ambidexterity. Integrating social network theory with resource orchestration theory and treating perceived digital transformation orientation as a perceived digital readiness condition that may support knowledge integration, it explores the nonlinear indirect role of perceived digital transformation orientation in the network embeddedness-innovation ambidexterity relationship.
Design/methodology/approach
Survey data were collected from 314 Chinese SMEs. Hierarchical regression analysis and nonlinear indirect effects tests were used to examine the hypothesized relationships, including inverted U-shaped effects and nonlinear indirect effects.
Findings
Both perceived structural and perceived relational embeddedness are positively associated with innovation ambidexterity. However, both dimensions exhibit an inverted U-shaped relationship with perceived digital transformation orientation. Perceived digital transformation orientation is consistent with an indirect association between embeddedness and ambidexterity that follows a nonlinear pattern: positive at low to moderate embeddedness levels but diminishing or turning negative at high embeddedness levels.
Originality/value
This study contributes to knowledge management research by offering perceptual evidence that SMEs’ self-assessed digital embeddedness is linked to ambidextrous innovation through a nonlinear perceived transformation-oriented pathway. It identifies potential nonlinear knowledge processes underlying the perceived embeddedness-innovation linkage, suggesting that external knowledge inputs, as perceived by managers, yield diminishing returns beyond firms’ self-assessed integration capacity. The study offers preliminary evidence on how resource-constrained SMEs that perceive themselves as combining external knowledge sourcing with internal integration may achieve innovation ambidexterity.