A Study on the Determinants that Influence Digital Transformation Adoption among Malaysia’s Manufacturing Firms

Abstract

Purpose: This study aims to examine the factors influencing the adoption of digital transformation in Malaysian manufacturing firms. By integrating the Technology-Organization-Environment (TOE) and Human-Organization-Technology (HOT-fit) frameworks, this conceptual paper seeks to understand how various organizational, technological, environmental and human factors contribute to successful digital transformation adoption. Design/methodology/approach: Using a deductive approach, hypotheses were developed based on existing literature. Data will be collected via a cross-sectional survey targeting Chief Technology Officers (CTOs) and senior managers from manufacturing companies listed in the Federation of Malaysian Manufacturers (FMM) directory. Structural equation modeling (SEM) with Partial Least Squares (PLS) will be used to analyze the relationships among digital transformational leadership, organizational agility, cost, competitive pressure and digital transformation. Expected Findings: Digital transformational leadership, organizational agility and competitive pressure significantly influence digital transformation adoption positively, while cost will negatively impact adoption of digital transformation. Research limitations/implications: Limited to Malaysian manufacturing firms, which may affect the generalizability of findings to other sectors or regions. Future research could expand to different industries and areas, and longitudinal studies could provide deeper insights into the dynamic nature of digital transformation. Practical implications: The research offers insights for policymakers and business leaders in the manufacturing sector, emphasizing the need for digital transformational leadership, organizational agility, healthy competitive pressure and low technological infrastructure investment. It provides a comprehensive understanding of the interplay between technological, organizational, environmental and human factors, aiding effective digital transformation strategies. Originality/value: This study integrates the TOE and HOT-fit theories, empirically testing their applicability in digital transformation adoption within manufacturing firms. It lays a foundation for future research and practical applications in enhancing digital capabilities and competitiveness.