Digital Capabilities, Data-Driven Decision-Making, and Operational Performance in SMEs: A Moderated Mediation Model

Riyanti Hamdani; Wirawan ED Radianto; David Sukardi Kodrat

doi:10.61255/jeemba.v4i5.1737

Authors

Riyanti Hamdani Universitas Ciputra Surabaya, Indonesia
Wirawan ED Radianto Universitas Ciputra Surabaya, Indonesia
David Sukardi Kodrat Universitas Ciputra Surabaya, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i5.1737

Keywords:

digital transformation, analytic capability, learning system orientation, driven decision-making, environmental dynamism

Abstract

Purpose – This study examines how digital transformation, analytic capability, and learning system orientation drive operational performance among SMEs through data-driven decision-making (DDDM), and tests whether environmental dynamism moderates the DDDM-performance link, offering a possible explanation for a contradiction in prior digital capability research between studies reporting a direct performance effect and studies reporting none.

Design/methodology/approach – The study surveys 275 Indonesian SME owners and managers through purposive and snowball sampling, analyzed with partial least squares structural equation modeling (PLS-SEM) in SmartPLS 4, supplemented by confirmatory tetrad analysis, a cross-validated predictive ability test, and necessary condition analysis (NCA).

Finding/Results – Six of the seven hypothesized relationships are supported, including a staged effect of digital transformation on analytic capability (H5); the hypothesized moderating effect of environmental dynamism (H6) is not supported. A competing model with direct effects added, estimated directly in SmartPLS, shows data-driven decision-making fully mediates the effects of all three antecedents (digital transformation, analytic capability, and learning system orientation) on operational performance. DDDM strongly predicts operational performance, environmental dynamism has a significant direct but no significant moderating effect, and learning system orientation is confirmed as a necessary condition for performance. Discriminant validity and out-of-sample predictive power are confirmed.

Originality/Value – The study extends digital capability research by reframing learning orientation's necessity and environmental dynamism's moderating effect into supported propositions, and by specifying data-driven decision-making as a plausible mechanism reconciling conflicting findings in prior studies, giving SME managers a mechanism-based roadmap for digital investment.

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