Effect of Technology Adoption and Process Innovation on Competitive Advantage

Abstract

In a world that is currently immersed in digitalization, technology usage and process innovation have become key organizational means by which to create and maintain a competitive advantage. This paper has explored how technology adoption and process innovation have direct positive impacts on a competitive advantage in organizations that are actively involved in utilizing digital technologies in Pakistan. A quantitative survey-based design was utilized, and data were obtained on 300 employees working in digitally active organizations by issue a self-refadministered questionnaire using a set of scales to assess all three constructs at a 5-point Likert scale. The use of purposive sampling was also done, which focused on the respondents who had first-hand knowledge about the organizational processes and technology systems. The descriptive statistics along with Cronbachs alpha reliability test, Pearson correlation test, confirmatory factor analysis (CFA), and structural equation modeling (SEM) were used to analyze the data, in SPSS 25 and AMOS 24. The direct impact of technology adoption on competitive advantage (.49) was significant and so was the direct impact of process innovation (.46). The two predictors together accounted 61.4% of variance in competitive advantage (R-squared =.614). The validity of the measurement models was established with a range of AVE value (.53-59) and composite reliability coefficients (.88-93). These results determine that mindful technology adoption and methodological process innovation are mutually enhancing and complementary forces of competitiveness in the digitally active organizational setting in Pakistan, which significantly impacts the digital transformation strategy and organizational process management.