Digital orientation, knowledge acquisition, and digitization in non-digital native firms

Abstract

Understanding how non-digital native firms achieve successful digital transformation remains a significant challenge in information management. This study investigates the digital transformation process from a knowledge-based perspective, using a panel dataset comprising 13,882 firm-year observations from 3109 industrial firms in Zhejiang Province, China (2014–2022). Employing fixed-effects regression and mediation-moderation analyses, the study examines how digital orientation influences digital transformation across three core business processes: procurement, production, and sales. Key findings highlight distinct knowledge acquisition pathways: digital orientation directly enhances production digitization (β = 0.032, p < 0.05), whereas its influence on procurement and sales digitization operates indirectly through tactical (β = 0.058, p < 0.01) and strategic knowledge acquisition (β = 0.041, p < 0.001). Further analysis reveals that absorptive capacity significantly strengthens the effect of tactical knowledge acquisition (β = 0.034, p < 0.1) but does not affect strategic knowledge pathways. The study underscores the importance of targeted knowledge management practices and suggests firms optimize their digital investments and internal training resources to initiate and sustain digital transformation effectively. Moreover, clarifying strategic goals related to digitalization is essential for guiding firms toward consistent innovation. These insights provide practical guidelines for enhancing digital transformation strategies, ultimately assisting traditional firms in overcoming internal capability constraints and fostering sustainable digitization outcomes.