| Summary: | The research was developed upon the theoretical lenses of technology adaptation and the planned process change perspective to develop a holistic model of digital adaptation strategy for Malaysian Small and Medium Enterprises (SMEs). The aims of the research are to explore dimensions that are crucial in shaping the IR4.0 digital adaptation strategy among Malaysian SMEs, to build understanding of the interplay of these dimensions in molding SMEs’ digital change adaptation strategy and to confirm the factors that are crucial in shaping the digital change adaptation strategy among Malaysian SMEs.
The exploratory sequential mixed methods research design was conducted to achieve the objectives of the study. Findings from the qualitative phase revealed nine dimensions, represented by seven internal forces and two external forces that are pertinent in the development of the digital adaptation strategy among Malaysian SMEs. The internal forces are firm strategy, nature of business, value creation, leadership, talent characteristics, skill enhancement and change management. The external dimensions, on the other hand, consist of government commitment and external pressure. Further assessment in the quantitative stage highlighted leadership, firm strategy, value creation and external pressure are positively and significantly correlated with SMEs digital adaptation. Results from regression analysis further confirmed that firm strategy and external pressures are the significant factors impacting the SMEs’ digital adaptation. Theoretically, the findings provide a holistic understanding of the factors shaping and driving Malaysian SMEs’ digital adaptation strategy. Both internal and external factors need to be considered in developing a framework for digital adaptation among SMEs. Practically, SMEs need to look at both internal and external factors in implementing their digital initiatives to stay competitive in the advanced technology environment.
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