The Impact of Digital Operational Capability on Business Profitability Performance of Small and Medium-sized Enterprises
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Abstract
Against the backdrop of the digital economy, small‑ and medium‑sized enterprises (SMEs) are trapped in the digital paradox of mismatched transformation input and return. Adopting a systematic literature‑review method, this paper defines digital operational capability as enterprises’ process‑oriented capability to realize visualization, automation and intelligence of business activities supported by digital technologies. Based on the Resource‑Based View and Dynamic Capabilities Theory, this study aims to sort out its conceptual system, unpack the mechanism linking digital operational capability and SMEs’ profitability performance, and identify research gaps for future exploration. Digital operational capability, with four dimensions, positively improves SMEs’ short‑term financial performance (e.g., ROA), medium‑term operational performance (e.g., inventory turnover) and long‑term value performance (e.g., sustainable competitive advantage). Value transformation is realized via three paths: business model innovation, organizational capability upgrading and innovation cultivation, while constrained by internal‑organizational, external‑environmental and complementary‑capability factors. SME digitalization features lightweight application, high external dependence and uncertain returns. This review puts forward targeted future research directions, offering theoretical references for SME digital operation practice and subsequent empirical research.
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