Ralebitso Kenneth Letshaba
Abstract
This study aimed to evaluate the readiness of small and medium enterprises (SMEs) for digital transformation. It investigates how internal enablers, digital culture, digital orientation, digital capabilities, and digital strategy, contribute to digital transformation among SMEs. Grounded in Dynamic Capabilities Theory (DCT), the study conceptualizes these enablers as dynamic competencies enabling firms to adapt to digital disruption. The research focused on SME owners and managers located in the Matlosana Local Municipality, situated in South Africa’s North West Province. A non-probability convenience sampling method was used to gather data from a total of 213 SMEs. Data from 213 valid responses were analyzed using Smart-PLS structural equation modeling to test hypothesized relationships among constructs. Digital orientation, digital capability, and digital strategy significantly and positively influenced digital transformation, with digital orientation having the strongest impact. Surprisingly, digital culture showed no significant direct effect. SME leaders should prioritize strategy, capabilities, and orientation to enable transformation, particularly in resource-constrained contexts. This research extends DCT by empirically demonstrating the differentiated roles of internal digital enablers in SME transformation readiness. Digital transformation in SMEs is a strategically driven process; without deliberate alignment of capabilities and strategy, cultural readiness alone is insufficient to drive meaningful digital change.