Leveraging Cognitive Conflict and Organizational Unlearning for Digital Mastery in SMEs: Insights From Upper Echelons

Abstract

In the rapidly evolving digital economy, digital transformation has emerged as a crucial strategy for firms to navigate market crises and improve operational efficiency. However, small- and medium-sized enterprises (SMEs) face significant resource and capability constraints in their digital transformation efforts, presenting unique challenges compared with larger corporations. In this article, we focus on Chinese manufacturing SMEs, integrating upper echelons and dynamic capability theories to explore how top management team (TMT) cognitive conflict influences digital transformation competency (DTC) through organizational unlearning. The study also examines the moderating roles of CEO agile leadership and strategic consensus. An empirical analysis of 139 manufacturing SMEs over one year reveals that TMT cognitive conflict positively impacts DTC and promotes organizational unlearning. Furthermore, organizational unlearning mediates the relationship between TMT cognitive conflict and DTC. The findings also indicate that strategic consensus and CEO agile leadership positively moderate the effect of cognitive conflict on organizational unlearning. These results provide new theoretical and practical insights, highlighting the critical factors influencing SMEs’ digital transformation and emphasizing the importance of TMT characteristics in driving this process.