International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

Contents lists available at Science-Gate

International Journal of Advanced and Applied Sciences

Journal homepage: http://www.science-gate.com/IJAAS.html

Digital transformation in Vietnam: A case study of Hanoi SMEs

Luong Ngoc Minh 1, Nguyen Ngoc Tan 1, Dinh Van Toan 2, Truong Duc Thao 3, *, Nguyen Thanh Huyen 3, Nguyễn
Thu Hoài 4

1Faculty of Business Administration and Tourism, Hanoi University, Hanoi, Vietnam

2VNU Center for Education Accreditation (VNU-CEA), Hanoi, Vietnam
3Faculty of E-Commerce and Digital Economy, Dai Nam University, Hanoi, Vietnam
4Faculty of Economics and Management, Thang Long University, Hoàng Mai, Vietnam

ARTICLE INFO ABSTRACT

Article history: This research involved surveying 456 Small and Medium-sized Enterprises
Received 5 December 2023 (SMEs) in Hanoi, Vietnam, to understand the factors that affect their digital
Received in revised form transformation. After gathering the data, it was analyzed using advanced
15 April 2024 statistical methods, specifically Structural Equation Modeling (SEM), with the
Accepted 18 April 2024 help of software tools like SPSS and AMOS. The findings revealed six key
factors that play a significant role in the digital transformation of SMEs.
Keywords: These factors mostly impact the process indirectly by shaping the companies'
Digital transformation intentions toward digital transformation, with a less direct influence on the
SMEs transformation process itself.
Structural equation modeling
Digital transformation intention
© 2024 The Authors. Published by IASE. This is an open access article under the CC
BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

1. Introduction methods primarily depends on the intentions of the

individuals involved (Ajzen, 1991; Dung et al., 2023).
*Digital Transformation has garnered significant Our research indicates that there is a limited
attention in the activities of governments, amount of literature on digital transformation in
enterprises, and academia. Digital transformation is small and medium-sized enterprises (SMEs) in
a continuum of activities, a comprehensive process Vietnam. Most of these studies focus on assessing
of digitalization and its advanced application aimed readiness levels or stages of digital transformation
at creating novel methodologies and approaches at a without thoroughly examining the factors that
higher level of operation. By this understanding, influence it. Consequently, as many as 57.6% of
digital transformation unfolds through three stages: SMEs in Vietnam face challenges in implementing
digitization, digital application-digital operation, and digital transformation. According to a 2020 survey
digital transformation (Nguyen and Nguyen, 2022; by Cisco and IDC on the digital maturity of SMEs
Singhdong et al., 2021). In the literature, there are across 14 Asia Pacific countries, the findings include:
two main streams of research. The first one (1) only 3% of businesses, down from 22% in 2019,
concentrates on the digital transformation strategy believe that digital transformation is unimportant to
of enterprises, as illustrated by studies such as those their operations; (2) 62% anticipate that digital
by Hess et al. (2016), Matt et al. (2015), and Zinder transformation will enhance performance and foster
and Yunatova (2016). The second one delves into an the creation of new products and services; (3) 56%
examination of the digital transformation process recognize that keeping up with competition and
and the influencing factors (Gamache et al., 2019; digital transformation is crucial for survival and
Eller et al., 2020), primarily focusing on assessing growth in today's market. However, in Vietnam and
the direct impact of these factors on the digital other developing countries, SMEs—which often
transformation process, with less emphasis on other make up over 90% of businesses—typically struggle
aspects. According to the Theory of Planned with digital transformation due to limited resources,
Behavior (TPB), the argument may still not be outdated technology, and a workforce that is unable
convincing because adopting new management to keep pace with technological advancements,
leading to delays in digital transformation initiatives.
* Corresponding Author. Therefore, in this study, we focus on assessing the
Email Address: [email protected] (T. D. Thao) current state of digital transformation within
https://doi.org/10.21833/ijaas.2024.04.022 enterprises and the factors influencing this process
Corresponding author's ORCID profile: through two mechanisms: direct and indirect effects
https://orcid.org/0000-0003-1160-4312
2313-626X/© 2024 The Authors. Published by IASE. via the intermediary variable 'Digital Transformation
This is an open access article under the CC BY-NC-ND license Intention.' We anticipate that the indirect
(http://creativecommons.org/licenses/by-nc-nd/4.0/)

207
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

mechanism will exhibit greater strength, as human interconnectivity across functions. This phase places
behavior is strongly driven by the intention to significant emphasis on restructuring management
perform such actions, according to TPB theory. models for more effective business operations.
Finally, the third phase, known as the digital
2. Literature review transformation of managerial capabilities,
represents a comprehensive shift toward complete
2.1. Digital transformation in enterprises digital transformation. It focuses on seamless
integration and synchronization of business and
In recent years, Digital Transformation has management systems, enabling real-time
emerged as a pivotal issue in shaping information information sharing across departments. This
system strategy (Agarwal, 2020). At the macro level, transformation empowers businesses to manage and
Digital Transformation encompasses profound execute operations more efficiently and cost-
changes occurring in society and industries through effectively (Li et al., 2018).
the utilization of digital technology (Agarwal, 2020).
Digital transformation involves leveraging 2.2. Factors affecting the digital transformation
technology to significantly improve a business's process of enterprise
overall performance and effectiveness (Stolterman
and Fors, 2004). Digital transformation goes beyond The application of digital technologies is
merely digitizing resources; it requires that business recognized as a catalyst for enhancing digital
value is generated on the foundation of digital assets. transformation capabilities (Lanzolla and Anderson,
Following this perspective, digital transformation 2008). Digital technologies encompass a wide
in enterprises can be understood as the utilization of spectrum, including big data, mobile, cloud
new digital technologies, such as social media computing, and search-based applications (White,
platforms, advanced analytical techniques, or 2012). An alternate viewpoint, Chatterjee et al.
automated linking systems, to drive significant (2002) suggested that for digital transformation to
changes in business operations. This includes be effective, it is crucial that managers recognize and
enhancing the customer experience, optimizing support the advantages and benefits of new
operations, and creating new business models mới technologies by integrating them into the company's
(Fitzgerald et al., 2014). Digital transformation processes. Along the same lines, Hess et al. (2016)
encompasses changes enabled by digital technology emphasized the role of human factors in driving
within the business model, resulting in product transformation processes, stressing the importance
adjustments, organizational restructuring, or the of aligning human capabilities with digital
automation of enterprise processes (Hess et al., technology applications.
2016). Thus, digital transformation within Nadkarni and Prügl's (2021) synthesis of prior
enterprises goes beyond mere digitization of data, research indicated that the factors influencing a
operational processes, or organizational information. business's digital transformation capability can be
What is crucial is the application of technology to categorized into three groups: 33% focus on
analyze digitized data, subsequently changing the technology, 34% on organization, and 33% on both
way value is created for the business. technology and organization. In studies concentrated
The process of business digital transformation on organizational aspects, four frequently mentioned
encompasses three key aspects. Firstly, it involves factors that directly impact the expected outcomes of
the transformation of operational processes. The a business's digital transformation are (1) The
establishment and utilization of electronic data attitude and capabilities of managers, (2) digital
exchange systems can help businesses save time and transformation strategy, (3) employee capabilities,
enhance efficiency. Secondly, it entails a shift in and (4) corporate culture. Regarding research
operational models, meaning a change in the way emphasizing technology, the utilization of
operations are conducted to create value for the technology platforms for business activities, such as
business. Finally, it encompasses the modification of systematic data storage, customer interaction,
the customer experience, stemming from the internal communication, and other functions, affects
dynamic interaction between customers and the a business's digital transformation capability
business, influencing customers' experiences and (Nadkarni and Prügl, 2021). In the research
perceptions. conducted by Nguyen and Nguyen (2022),
The digital transformation process of businesses technology platforms were identified as a key
unfolds across three distinct stages. In the initial component. The authors also introduced a new
stage of strategic alignment, enterprises harness aspect, referred to as the pressure for businesses to
technological solutions to enhance the customer undertake digital transformation. This factor, named
experience and achieve their goals. Resources that 'Digital Transformation Pressure,' highlights the
are readily available and cost-effective, aligning with compelling forces pushing businesses to improve
the enterprise's capabilities, are commonly utilized their operational methods and change their business
during this phase. The subsequent phase revolves models. Digital platforms greatly enhance the
around the digital transformation of the business efficiency of interactions within enterprises and with
model. Here, enterprises emphasize the widespread external parties, offering more convenience than
adoption of digital technology, fostering traditional methods. Moreover, the digitalization of
208
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

management information systems and customer Depending on the business conditions,

relations, combined with advanced analytical employees, as well as managers, must develop the
techniques, provides a stronger and more effective ability to perceive and adapt within the context of
basis for implementing business solutions. digital networks and connectivity (Brennen and
Consequently, the evident trend toward digital Kreiss, 2016; Daniel and Wilson, 2003). Employee
transformation exerts pressure on businesses to capability is manifested in their proficiency in using
engage in such changes, which is why this factor is information technology applications, the provision of
called 'Digital Transformation Pressure.' training by the company for employees in digital
An alternative perspective posits that decisions applications, a positive attitude of employees toward
concerning digital transformation closely resemble new technology applications, empowerment of
choices made when adopting a novel management employees within the organization, and the presence
approach involving the replacement of outdated of specialized IT personnel within the company
technologies with more contemporary ones (Ajzen, (Nguyen and Nguyen, 2022; Singhdong et al., 2021).
1991; Davis, 1989; Ong et al., 2015; Tang et al., The digital transformation of businesses
2010). Consequently, the decisions associated with necessitates the establishment of a corporate culture
an organization's digital transformation process are that prioritizes data validation and sharing (Dremel
evidently subject to the influence of decision-makers et al., 2017). Besides, this transformation may also
intentions to execute the digital transformation (Kim introduce cultural tensions, as noted by Kohli and
and Kim, 2022). Thus, in the context of this research, Johnson (2011), with younger, tech-savvy employees
we propose the inclusion of the variable 'Digital potentially clashing with more experienced
Transformation Intention' as an intermediate factor colleagues who are less familiar with digital
mediating the relationships between the various technologies. A digital transformation culture is
factors affecting a business's digital transformation characterized by various elements, including a
process. Our objective is to assess the impact of willingness among individuals to share their
these factors on the digital transformation of small knowledge, a commitment to mutual learning,
and medium-sized enterprises, exploring both their proactive engagement in tasks, recognition of data as
direct and indirect effects. a shared organizational asset, stringent data
The transformation in the thinking and actions of validation practices, and effective collaboration
managers significantly influences the digital among employees (Nguyen and Nguyen, 2022;
transformation capabilities of an enterprise. These Singhdong et al., 2021; Stoianova et al., 2020).
changes involve the managerial capacity to enhance The process of digital transformation brings
decision-making processes by incorporating open about changes in job structures (Loebbecke and
information and data (Wu et al., 2024). Additionally, Picot, 2015) as well as the roles and requirements
they involve alterations in the learning and within the workplace (White, 2012). Digital
development of managers (Sia et al., 2016). Digital connectivity enables the emergence of cross-
transformation managers exhibit characteristics functional teams throughout the entire organization.
such as a keen interest in digital transformation, a In this context, traditional hierarchical job structures
positive attitude towards the digital transformation are gradually fading, and new opportunities are
of their enterprises, the utilization of new technology extending beyond the scope of the enterprise
applications in interactions, support for proposals (Loebbecke and Picot, 2015). A digital workplace
involving technological applications to digitize must be adaptable, principled, imaginative, and not
operational and management processes within their contingent on physical location (White, 2012). The
organizations, continuous learning to enhance their technological foundation for digital transformation is
capabilities in meeting digital transformation understood as how a company employs its website
requirements, and readiness to address concerns for information dissemination, facilitates employees'
arising from the darker aspects of digital usage of personal electronic devices for work
transformation (Nguyen and Nguyen, 2022; purposes, implements internal interactive systems to
Singhdong et al., 2021; Stoianova et al., 2020). reduce direct task assignment, leverages cloud
Information technology plays a crucial role in computing techniques for internal management, and
business operations. It not only supports establishes a digital workspace (Nguyen and Nguyen,
management activities but has evolved into an 2022).
essential element in building business strategy Digital transformation pressure refers to the
(Bharadwaj, 2000; Kim et al., 2021). The digital actions that businesses need to take during the
transformation strategy is reflected in aspects such process of digital transformation in order to create
as digital transformation objectives outlined in the greater value. These actions include the utilization of
business strategy, the establishment of electronic digital technology applications to enhance customer
offices as part of the company's strategic plan, the interactions, optimize operational and managerial
implementation of database systems, a focus on processes, foster improved interdepartmental
changing the operational model, and an emphasis on collaboration, efficiently utilize resources, and
optimizing the customer experience on digital innovate in product or service development to better
platforms (Nguyen and Nguyen, 2022; Singhdong et serve customer needs hàng (Nguyen and Nguyen,
al., 2021). 2022; Singhdong et al., 2021).

209
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

3. Methodology of various factors on the digital transformation

process of SMEs in Hanoi using two mechanisms: (1)
3.1. Conceptual framework direct impact and (2) indirect impact through the
intermediary variable 'Digital Transformation
Based on the comprehensive review of the Intention.' We hypothesize that the indirect impact
research findings and theoretical foundations mechanism will yield stronger results compared to
presented above, we outline the research framework the direct mechanism, as the behavior of decision-
of this study, as shown in Fig. 1. With this conceptual makers is often heavily influenced by their intention
framework, we simultaneously examine the impact to carry out such actions.

Managers attitudes and capabilities

(Lead)

Digital transformation strategy (Stra)

Digital transformation intention (Intent)

Employees capability (Staff)

Corporate culture (Cult)

Technological infrastructure (Tech) Digital transformation process (DiTrans)

Digital transformation pressures (Pres)

Fig. 1: Conceptual framework of factors affecting digital transformation process

3.2. Data collection enterprises in Hanoi by direct contact and meeting.

The result was 456 valid entries (more than 360
In this study, we rely on the number of questions required), while 29 were invalid due to incomplete
to calculate a sample size that is both appropriate information. The response rate reached 91.2%
and reliable (Hair et al., 1998). Therefore, with a (>90%), which confirms that representatives of
questionnaire containing content related to the small and medium-sized enterprises in Hanoi are
research model comprising 36 observed variables, very open when participating in the survey, and the
the minimum number of valid responses should be answers are serious and trustworthy (Neuman,
180 or, ideally, 360 valid responses. 2014). The detailed breakdown of the valid
Based on sample size requirements, 500 survey responses is shown in Table 1.
forms were sent to small and medium-sized

Table 1: Survey sample structure

Criteria Structure Number Percentage (%)
Industry 161 35.3
By sector Agriculture 124 27.2
Commerce/services 171 37.5
< 10 workers 96 21.1
10-50 workers 140 30.7
By labor scale 50-100 workers 149 32.7
100-150 workers 48 10.5
>150 workers 23 5.0
< 3 billion VND 48 10.5
3 – 10 billion VND 100 21.9
10 – 50 billion VND 113 24.8
By revenue 50 – 100 billion VND 97 21.3
100 – 150 billion VND 45 9.9
150 – 200 billion VND 31 6.8
>200 billion VND 22 4.8
Total 456 100

210
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

Table 1 shows that the sample structure in terms exceeding the acceptable threshold of 0.6, affirming
of sector is currently dominated by businesses the suitability of the measurement scales employed
operating in the commerce/services sector, with 171 in the study.
enterprises accounting for 37.5%. Next is 161 The measurement model with df=565 was
enterprises operating in the industrial sector, assessed using CFA, and the results indicate that the
accounting for 35.3%. Finally, there are 124 model is compatible with the research dataset. The
enterprises operating in the agricultural sector, goodness-of-fit statistics are as follows: Chi-
accounting for 27.2%. This is understandable, as square=1568.149 (p=0.000), cmin/df=2.775,
Hanoi is the economic and political center of the CFI=0.915, GFI=0.846, TLI=0.905, and
country, and the number of businesses operating in RMSEA=0.062. These statistics collectively suggest a
the commerce/services sector is much higher than in satisfactory model fit. Moreover, all standardized
the other two sectors. Therefore, this sample loadings of observed variables are greater than 0.5,
structure is appropriate. and the unstandardized loadings of variables are
The outcome of the Exploratory Factor Analysis statistically significant, affirming the convergence of
(EFA) employing the Principal Axis Factoring measurement scales. The correlation coefficients
method with Promax rotation and a stopping between concepts are all less than one unit,
criterion of eigenvalues greater than one was applied indicating that the concepts are distinct. Overall, the
to analyze 36 observed variables. The Kaiser-Meyer- measurement model is well-suited to the research
Olkin (KMO) measure of sampling adequacy yielded dataset, with no significant correlations among
a value of 0.833, signifying high adequacy, with a measurement errors, ensuring model parsimony.
significance level of 0.000. Moreover, the eigenvalues
reached 71.741, indicating substantial variance 4. Results and discussions
explained when the analysis terminated at a factor
eigenvalue of 1.062. Notably, the rotation matrix 4.1. The results of testing the model using SEM
revealed that the measurement items in the study
consistently converged into six factors, aligning The current state of relationships between factors
seamlessly with the originally proposed research influencing the digital transformation process in
model. Additionally, the reliability assessment of the SMEs in Hanoi is estimated by an SEM model. The
concepts and research measures demonstrated that results are shown in Table 2.
all factors exhibited Cronbach's Alpha coefficients

Table 2: Results of standardized estimation of parameters in the theoretical model

Relationship between concepts Standardized estimation Unstandardized estimation Standard deviation t-value p-value
R2 of digital transformation intention=0.466
Intent<--- Lead 0.155 0.145 0.038 3.791 0.000
Intent <--- Stra 0.199 0.185 0.048 3.866 0.000
Intent <--- Staff 0.201 0.240 0.067 3.560 0.000
Intent <--- Cult 0.059 0.051 0.039 1.314 0.189
Intent <--- Tech 0.509 0.434 0.055 7.874 0.000
Intent <--- Pres -0.117 -0.099 0.050 -1.954 0.051
R2 of digital transformation process=0.537
Intent<--- Lead 0.128 0.136 0.041 3.314 0.000
Intent <--- Stra -0.022 -0.024 0.052 -0.460 0.645
Intent <--- Staff 0.101 0.138 0.073 1.887 0.059
Intent <--- Cult 0.046 0.045 0.042 1.068 0.285
Intent <--- Tech 0.161 0.156 0.064 2.441 0.015
Intent <--- Pres -0.001 -0.001 0.055 -0.017 0.986
DiTrans<--- Intent 0.546 0.621 0.075 8.267 0.000

The model estimation results illustrate that the as much as 53.7% of the variation in the "Digital
impact of various factors on the "Digital Transformation Process" among SMEs in Hanoi is
Transformation Intention" within SMEs in Hanoi is accounted for by the factors within the model, while
reflected in an estimated model fit with an R-squared the remaining 46.3% is attributable to external
value (R2) of 0.466. This signifies that approximately factors not included in the model and random error.
46.6% of the variation in "Digital Transformation
Intent" among SMEs in Hanoi can be elucidated by 4.2. Discussion
six key factors: (1) The attitude and capabilities of
managers; (2) Digital Transformation Strategy; (3) According to statistics from Market Research
Employee Capability; (4) Corporate Culture; (5) Future, a market research company, global
Technology Infrastructure; and (6) Digital investment in digital transformation in 2018 reached
Transformation Pressure. 205.65 billion USD. It is estimated that by 2025, this
Similarly, the model estimation results indicate number will reach about 817.05 billion USD with an
that the dependence of the "Digital Transformation average annual investment growth rate of 18.87%.
Process" of SMEs in Hanoi on various factors, both In Vietnam, less than 40% of businesses have enough
through direct and indirect mechanisms, results in financial capacity to meet the requirement of
an R-squared value (R2) of 0.537. This implies that moderate to complete digital transformation to be

211
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

able to undertake consulting and solutions in the observed variables related to the "Transformation
field of digital transformation. On the contrary, up to Process" factor. The study included 456 SMEs in
43.3% of businesses plan to invest their budget in Hanoi. Results indicate that the average values for
digital transformation, but in reality, they do not this factor range from 3.29 to 3.82, with an overall
meet the actual needs of the business. More average of 3.52 (Table 3). The highest scoring
ominously, up to 20% of businesses certainly have criterion, with an average of 3.82, was "Enterprises
no budget plan to invest in digital transformation. A are fully capable of digitizing all business and
lack of budget for digital transformation is also a management processes." This was followed by the
common challenge for businesses in Vietnam, criterion "Enterprises have a digital transformation
especially small and medium-sized enterprises. strategy to offer new values and experiences to
Currently, Hanoi is home to approximately customers using digital technology platforms," which
360,000 businesses, with SMEs making up over had an average score of 3.64. The third criterion,
97.2% of this total. These SMEs contribute more than "Enterprises are transforming business models to
45% to the city's gross regional products (GRDP) enhance business efficiency," scored an average of
and provide employment for over 50% of the 3.34. The lowest scoring criterion, "Enterprises are
workforce. enhancing their management capabilities to improve
To evaluate the current state of digital business efficiency following successful digital
transformation at SMEs in Hanoi, researchers used transformation," had an average score of 3.29.
statistical analysis to measure the average values of

Table 3: Descriptive statistics on the current status of the digital transformation process at small and medium-sized
enterprises in Hanoi
No. Observed variable Sample Mean Standard deviation
Enterprises are fully capable of digitizing all business and
1. 456 3.82 0.83
management processes
Enterprises have a digital transformation strategy to bring new
2. 456 3.64 0.84
values and experiences to customers on digital technology platforms
Enterprises are digitally transforming their business models to
3. 456 3.34 0.89
achieve higher business efficiency
Enterprises are digitally transforming their management
4. capabilities to achieve higher business efficiency after successful 456 3.29 0.87
digital transformation
5. Average 456 3.52 0.86

This result shows that the level of digital further explained in studies on the emotions of
transformation process at small and medium-sized decision-makers affecting the intention to apply new
enterprises in Hanoi is currently at an average level management methods. For example, if the leader is a
(3.52), in which they affirm that their business has modern person, the intention to apply will be
the ability to digitize all business and management stronger than in the case of leaders with traditional
processes (3.82 out of 4-Agree), meaning they tendencies (Mai et al., 2009; Kim and Kim, 2022).
definitely have the ability to digitally transform at Digital transformation strategy has a positive
level 1, but they are not really sure whether their impact on the intention to engage in digital
business can completely and successfully digital transformation and consequently positively
transform, because of the level of digital influences the digital transformation process of
transformation confirmation at level 3 is quite low SMEs in Hanoi. This hypothesis is accepted with a
(3.29 out of 3-Normal). confidence level exceeding 99%, as indicated by a p-
The attitude and capabilities of managers have a value of 0.000 and a standardized Beta value of
positive impact on the intention to engage in digital 0.199. Notably, this ranks as the third highest among
transformation and, consequently, positively the influencing factors. This suggests that if SMEs in
influence the digital transformation process of SMEs Hanoi adopt clear digital transformation strategies,
in Hanoi. Accepting this hypothesis with a 99% their intention to pursue digital transformation is
confidence level (p=0.000) and a standardized Beta higher. However, it is essential to note that the
value of 0.155 implies that if the attitude and majority of these enterprises currently lack a well-
capabilities of managers of SMEs in Hanoi possess defined digital transformation strategy (scoring 2.84
awareness, determination, and a desire for digital on average). This is also the reality that exists in
transformation within their businesses, intention to many Vietnamese businesses today (small and
implement digital transformation will be higher. medium-sized enterprises do not have clear
Consequently, this intention indirectly contributes strategies and directions) (Hai et al., 2021). This is a
positively to the enterprise's overall digital significant observation, emphasizing the need for
transformation process. This result aligns with the policies and initiatives to promote the digital
Theory of Planned Behavior (TPB), where behavioral transformation process among SMEs in Vietnam in
intention is strongly influenced by individuals' general and specifically in Hanoi.
perceptions and attitudes, emphasizing the pivotal Corporate culture has a positive impact on the
role of the attitude and capabilities of managers in intention to digitally transform and thereby
fostering digital transformation within SMEs. This is positively impacts the digital transformation process

212
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

of small and medium-sized enterprises in Hanoi. findings regarding this relationship are inconclusive.
Based on the estimation results, there is not enough In other words, this research did not find a
basis to conclude this relationship. In other words, significant impact of digital transformation strategy
this study shows that corporate culture has no on the digital transformation process of SMEs in
relationship to influencing the digital transformation Hanoi (p-value=0.645). This result is not consistent
intention of small and medium enterprises in Hanoi with the study conducted by Nguyen and Nguyen
(p_value=0.189). This is consistent with the fact that (2022), which reported a p-value of 0.000 and a
small and medium-sized enterprises with small scale standardized Beta value of 0.26 for this relationship.
and low seniority, where the role of corporate This discrepancy might be explained by the fact that
culture is still quite blurred in organizational issues. many SMEs currently do not have a well-established
Technology infrastructure has a positive impact digital transformation strategy and often focus on
on the intention to engage in digital transformation yearly financial plans instead.
and, consequently, positively influences the digital Employee capability has a positive impact on the
transformation process of SMEs in Hanoi. This digital transformation process of SMEs in Hanoi. This
hypothesis is accepted with a confidence level hypothesis is accepted with a confidence level
exceeding 99%, as indicated by a p-value of 0.000, exceeding 90% (p-value=0.059), and it achieves a
and it holds the highest standardized Beta value standardized Beta value of 0.101, indicating a
among the influencing factors, at 0.509. However, the positive relationship between employee capability
current state of this factor reflects that the and the digital transformation process of SMEs in
technology infrastructure supporting the digital Hanoi. These results align with the study conducted
transformation in SMEs in Hanoi is relatively low, by Nguyen and Nguyen (2022), which reported a p-
with an average factor score of only 3.07. This value of 0.000 and a standardized Beta value of 0.5
underscores the importance of addressing for this relationship, although the effect is somewhat
technology infrastructure challenges to facilitate and weaker. This difference may be explained by the
enhance digital transformation efforts among SMEs specific characteristics of the research sample, which
in the Hanoi region. primarily consists of small-scale businesses with low
Digital transformation pressure has a positive employee counts and revenue levels.
impact on the intention to engage in digital The corporate culture has a positive impact on
transformation and, consequently, positively the digital transformation process of SMEs in Hanoi.
influences the digital transformation process of However, it is important to note that the findings
SMEs in Hanoi. This hypothesis is rejected with a regarding this relationship are inconclusive. In other
confidence level slightly above 90% (p-value=0.051), words, this research did not find a significant impact
and it has a standardized Beta value of -0.117. This of corporate culture on the digital transformation
implies that as digital transformation pressure process of SMEs in Hanoi (p-value=0.285). This
increases, the intention to engage in digital result is not consistent with the study conducted by
transformation decreases or vice versa. This result Nguyen and Nguyen (2022), which reported a p-
aligns with the statistical findings where the average value of 0.000 and a standardized Beta value of 0.18
score for the "Digital Transformation Pressure" for this relationship. This can be explained by the
factor is 2.89, while the average score for the digital influence of Asian cultural factors that create people
transformation intent factor is 3.63. It suggests that with a perfectionist personality and less tolerant of
there may be a negative association between the change (Mai et al., 2009), leading to poor decision
perceived pressure to digitally transform and the making to apply new management methods to the
actual intention to do so among SMEs in Hanoi. organization of business leaders (Dung et al., 2023).
The attitude and capabilities of managers have a Technology infrastructure has a positive impact
positive impact on the digital transformation process on the digital transformation process of SMEs in
of SMEs in Hanoi. This hypothesis is accepted with a Hanoi. This hypothesis is accepted with a confidence
confidence level exceeding 99% (p-value=0.000), level exceeding 95% (p-value=0.015), and it achieves
and it achieves a standardized Beta value of 0.128. a standardized Beta value of 0.161. These results
These findings align with previous research, align with the study conducted by Nguyen and
including the study conducted by Nguyen and Nguyen (2022), which reported a p-value of 0.000
Nguyen (2022), which reported a p-value of 0.000 and a standardized Beta value of 0.38 for this
and a standardized Beta value of 0.32. Many other relationship. Once again, this reaffirms the crucial
studies also support this consensus, indicating that role of technology infrastructure in the digital
the attitude and capabilities of managers play a transformation process of SMEs in Hanoi. In fact,
significant role in influencing the digital some businesses have applied digital technology, but
transformation process of SMEs in Hanoi. This mainly in some specific operations, which have not
underscores that whether a business undergoes been deployed synchronously and comprehensively.
digital transformation and the pace at which it In terms of software usage in business activities,
occurs is heavily dependent on the manager's accounting is the profession in which SMEs in Hanoi
awareness and determination. have the largest proportion, with nearly 40% of
Digital transformation strategy has a positive businesses using digital technology at a high level
impact on the digital transformation process of SMEs and frequently. The current situation of vehicle
in Hanoi. However, it's important to note that the management and freight transportation in
213
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

businesses in Hanoi shows that 64% of businesses Intent Digital transformation intention
only use digital software to a very small extent or DiTrans Digital transformation process
very rarely. Enterprises that regularly apply digital
software in this activity account for a low rate, only Compliance with ethical standards
18.25%. More than 40% of businesses currently do
not or rarely use digital software in warehouse, Conflict of interest
order, customer, and human resource management
activities (Le Viet and Dang Quoc, 2023). The author(s) declared no potential conflicts of
Digital transformation pressure has a positive interest with respect to the research, authorship,
impact on the digital transformation process of SMEs and/or publication of this article.
in Hanoi. However, it is important to note that the
findings regarding this relationship are inconclusive. References
In other words, this research did not find a
significant impact of digital transformation pressure Agarwal R (2020). Digital transformation: A path to economic and
societal value. Revista CEA, 6(12): 9-12.
on the digital transformation process of SMEs in https://doi.org/10.22430/24223182.1700
Hanoi (p-value=0.986). This result is not consistent
Ajzen I (1991). The theory of planned behavior. Organizational
with the study conducted by Nguyen and Nguyen
Behavior and Human Decision Processes, 50(2): 179-211.
(2022), which reported a p-value of 0.000 and a https://doi.org/10.1016/0749-5978(91)90020-T
standardized Beta value of 0.33 for this relationship.
Bharadwaj AS (2000). A resource-based perspective on
The intention to undergo digital transformation information technology capability and firm performance: An
has a positive impact and, consequently, positively empirical investigation. MIS Quarterly, 24(1): 169-196.
influences the digital transformation process of https://doi.org/10.2307/3250983
SMEs in Hanoi. This hypothesis is accepted with high Brennen JS and Kreiss D (2016). Digitalization. In: Craig RT (Ed.),
confidence, with a p-value of 0.000 and a The international encyclopedia of communication theory and
significantly high standardized Beta value of 0.546. philosophy: 1-11. Wiley-Blackwell, Hoboken, USA.
This finding suggests that the indirect causal https://doi.org/10.1002/9781118766804.wbiect111
mechanism has a stronger influence on the Chatterjee D, Grewal R, and Sambamurthy V (2002). Shaping up
relationship between factors and the digital for e-commerce: Institutional enablers of the organizational
assimilation of web technologies. MIS Quarterly, 26(2): 65-89.
transformation process of SMEs in Hanoi than the https://doi.org/10.2307/4132321
direct causal mechanism. It indicates the importance
of considering the intention to undergo digital Daniel EM and Wilson HN (2003). The role of dynamic capabilities
in e-business transformation. European Journal of
transformation as a crucial driver for successful Information Systems, 12: 282-296.
digital transformation processes in SMEs in Hanoi. https://doi.org/10.1057/palgrave.ejis.3000478
Davis FD (1989). Perceived usefulness, perceived ease of use, and
5. Conclusion user acceptance of information technology. MIS Quarterly,
13(3): 319-340. https://doi.org/10.2307/249008
Through our research on the factors influencing Dremel C, Wulf J, Herterich MM, Waizmann JC, and Brenner W
the digital transformation process of SMEs in (2017). How AUDI AG established big data analytics in its
Vietnam, based on data collected from 456 SMEs in digital transformation. MIS Quarterly Executive, 16(2): 81-
Hanoi, we have examined and validated six factors 100.
affecting this process through both direct and Dung PX, Trung VT, Thao TD, and Hoang CC (2023). Intention to
indirect causal mechanisms. The results demonstrate apply rehabilitation exercises to patients in healthcare
facilities in Vietnam. International Journal of Advanced and
that the influence of these factors on the digital Applied Sciences, 10(6): 80-88.
transformation process is stronger through the https://doi.org/10.21833/ijaas.2023.06.010
indirect causal mechanism mediated by "digital
Eller R, Alford P, Kallmünzer A, and Peters M (2020). Antecedents,
transformation intention" than through direct consequences, and challenges of small and medium-sized
causation. This finding further supports the Theory enterprise digitalization. Journal of Business Research, 112:
of Planned Behavior (TPB) and provides theoretical 119-127. https://doi.org/10.1016/j.jbusres.2020.03.004
and practical foundations for conducting future Fitzgerald M, Kruschwitz N, Bonnet D, and Welch M (2014).
research on the digital transformation process of Embracing digital technology: A new strategic imperative. MIT
businesses. The results of this study may be Sloan Management Review, 55(2): 1-12.
applicable not only to SMEs in Vietnam but also to Gamache S, Abdul-Nour G, and Baril C (2019). Development of a
similar developing countries, given the similarities in digital performance assessment model for Quebec
economic, social, and technological conditions. manufacturing SMEs. Procedia Manufacturing, 38: 1085-1094.
https://doi.org/10.1016/j.promfg.2020.01.196

List of abbreviations Hai H, Xuan N, Thao T, and Hien P (2021). The effects of strategy
and market orientation on the performance of Vietnamese
startups. Management Science Letters, 11(4): 1357-1366.
Lead The attitude and capabilities of managers https://doi.org/10.5267/j.msl.2020.11.004
Stra Digital transformation strategy
Staff Employee capability Hair JF, Anderson RE, Tatham RL, and Black WC (1998).
Cult Corporate culture Multivariate data analysis. 5th Edition, Prentice Hall, Upper
Saddle River, USA.
Tech Technology infrastructure
Pres Digital transformation pressure

214
 Minh et al/International Journal of Advanced and Applied Sciences, 11(4) 2024, Pages: 207-215

Hess T, Matt C, Benlian A, and Wiesböck F (2016). Options for Bình Định. Journal of Economics and Development, 304(2):
formulating a digital transformation strategy. MIS Quarterly 65-74.
Executive, 15(2): 123-139.
Ong CM, Kathawala Y, and Sawalha N (2015). A model for ISO
Kim K and Kim B (2022). Decision-making model for reinforcing 9000 quality management system maintenance. Quality
digital transformation strategies based on artificial Management Journal, 22(2): 11-32.
intelligence technology. Information, 13(5): 253. https://doi.org/10.1080/10686967.2015.11918426
https://doi.org/10.3390/info13050253
Sia SK, Soh C, and Weill P (2016). How DBS Bank pursued a digital
Kim S, Choi B, and Lew YK (2021). Where is the age of business strategy. MIS Quarterly Executive, 15(2): 105-121.
digitalization heading? The meaning, characteristics, and
implications of contemporary digital transformation. Singhdong P, Suthiwartnarueput K, and Pornchaiwiseskul P
Sustainability, 13(16): 8909. (2021). Factors influencing digital transformation of logistics
https://doi.org/10.3390/su13168909 service providers: A case study in Thailand. The Journal of
Asian Finance, Economics and Business, 8(5): 241-251.
Kohli R and Johnson S (2011). Digital transformation in latecomer
industries: CIO and CEO leadership lessons from Encana Oil Stoianova O, Lezina T, and Ivanova V (2020). Corporate culture:
and Gas (USA) Inc. MIS Quarterly Executive, 10(4): 141-156. Impact on companies’ readiness for digital transformation. In:
Tobji MAB, Jallouli R, Samet A, Touzani M, Strat VA, and
Lanzolla G and Anderson J (2008). Digital transformation. Pocatilu P (Eds.), Digital economy: Emerging technologies and
Business Strategic Review, 19(2): 72–76. business innovation. ICDEc 2020. Lecture notes in business
https://doi.org/10.1111/j.1467-8616.2008.00539.x information processing: 13-26. Volume 395, Springer, Cham,
Switzerland. https://doi.org/10.1007/978-3-030-64642-4_2
Le Viet H and Dang Quoc H (2023). The factors affecting digital
transformation in Vietnam logistics enterprises. Electronics, Stolterman E and Fors AC (2004). Information technology and the
12(8): 1825. https://doi.org/10.3390/electronics12081825 good life. In: Kaplan B, Truex DP, Wastell D, Wood-Harper AT,
and DeGross JI (Eds.), Information systems research:
Li L, Su F, Zhang W, and Mao JY (2018). Digital transformation by International federation for information processing: 687-692.
SME entrepreneurs: A capability perspective. Information Volume 143, Springer, Boston, USA.
Systems Journal, 28(6): 1129-1157. https://doi.org/10.1007/1-4020-8095-6_45
https://doi.org/10.1111/isj.12153
Tang Z, Chen X, and Wu Z (2010). Using behavior theory to
Loebbecke C and Picot A (2015). Reflections on societal and investigate individual-level determinants of employee
business model transformation arising from digitization and involvement in TQM. Total Quality Management, 21(12):
big data analytics: A research agenda. The Journal of Strategic 1231-1260. https://doi.org/10.1080/14783363.2010.530794
Information Systems, 24(3): 149-157.
https://doi.org/10.1016/j.jsis.2015.08.002 White M (2012). Digital workplaces: Vision and reality. Business
Information Review, 29(4): 205-214.
Mai NTT, Smith K, and Cao JR (2009). Measurement of modern https://doi.org/10.1177/0266382112470412
and traditional self-concepts in Asian transitional economies.
Journal of Asia-Pacific Business, 10(3): 201-220. Wu W, Song J, Lu L, and Guo H (2024). Is managerial ability a
https://doi.org/10.1080/10599230903094745 catalyst for driving digital transformation in enterprises? An
empirical analysis from internal and external pressure
Matt C, Hess T, and Benlian A (2015). Digital transformation perspectives. PLOS ONE, 19(2): e0293454.
strategies. Business and Information Systems Engineering, 57, https://doi.org/10.1371/journal.pone.0293454
339-343. https://doi.org/10.1007/s12599-015-0401-5 PMid:38349897 PMCid:PMC10863858
Nadkarni S and Prügl R (2021). Digital transformation: A review, Zinder E and Yunatova I (2016). Synergy for digital
synthesis and opportunities for future research. Management transformation: Person’s multiple roles and subject domains
Review Quarterly, 71: 233-341. integration. In: Chugunov A, Bolgov R, Kabanov Y, Kampis G,
https://doi.org/10.1007/s11301-020-00185-7 and Wimmer M (Eds.), Digital transformation and global
Neuman WL (2014). Social research methods: Qualitative and society: Communications in computer and information
quantitative approaches. 7th Edition, Pearson, London, UK. science: 155–168. Volume 674, Springer, Cham, Switzerland.
https://doi.org/10.1007/978-3-319-49700-6_16
Nguyen TKA and Nguyen TXN (2022). Các nhân tố ảnh hưởng đến
chuyển đổi số của doanh nghiệp: Trường hợp nghiên cứu tại

215