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Unraveling the paradoxical effects of digital transformation on organizational Resilience: The role of customer and supplier concentrations

Author

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  • Chi, Maomao
  • Li, Wenjing
  • Li, Yuanxiang John
  • Zhou, Min
  • Huang, Rui

Abstract

Digital transformation brings new opportunities but also presents challenges for firms aiming to enhance organizational resilience. This study delves into the paradoxical effects of digital transformation by focusing on two critical dimensions of organizational resilience: resistance capacity and recovery capacity. By integrating Dynamic Capability Theory (DCT) and Resource Dependence Theory (RDT), we explore how opportunities for dynamic learning and adaptability, afforded by utilizing both internal resources from digital transformation and external resources from outside partners, may affect organizational resilience in the manufacturing sector. Analyzing a panel dataset of 15,845 firm-year observations from 2,002 organizations listed on China’s Shanghai and Shenzhen Stock Exchanges (2011–2021), we uncover a digital transformation paradox: it negatively impacts resistance capacity but positively influences recovery capacity. Interestingly, customer and supplier concentrations mitigate the negative effect of digital transformation on resistance capacity, but they do not significantly affect the relationship between digital transformation and recovery capacity. This study provides valuable insights by integrating perspectives from dynamic capability and external resource dependence. It offers both theoretical and practical implications for effectively managing digital transformation and enhancing organizational resilience within supply chain networks.

Suggested Citation

  • Chi, Maomao & Li, Wenjing & Li, Yuanxiang John & Zhou, Min & Huang, Rui, 2025. "Unraveling the paradoxical effects of digital transformation on organizational Resilience: The role of customer and supplier concentrations," Journal of Business Research, Elsevier, vol. 191(C).
    • Handle: RePEc:eee:jbrese:v:191:y:2025:i:c:s0148296325000918
    DOI: 10.1016/j.jbusres.2025.115268
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