sustainability
Article
Strategic Orientation, Dynamic Capabilities, and Digital
Transformation of Commercial Banks: A Fuzzy-Set QCA Approach
Songsong Cheng 1,2 , Qunpeng Fan 3 and Minghao Huang 4, *
Citation: Cheng, S.; Fan, Q.; Huang,
M. Strategic Orientation, Dynamic
Capabilities, and Digital
Transformation of Commercial Banks:
A Fuzzy-Set QCA Approach.
Sustainability 2023, 15, 1915.
https://doi.org/10.3390/su15031915
Academic Editors: Sultan
Sikandar Mirza, Muhammad
Usman Khurram and Tanveer Ahsan
Received: 10 November 2022
Revised: 29 December 2022
Accepted: 16 January 2023
Published: 19 January 2023
Copyright: © 2023 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
Sustainability 2023, 15, 1915. https://doi.org/10.3390/su15031915
1 School of Economics and Finance, South China University of Technology, Guangzhou 510006, China
2 Mobile Post-Doctoral Stations, Shunde Rural Commercial Bank, Foshan 528300, China
3 School of Economic, Management and Law, Jilin Normal University, Siping 136000, China
4 Seoul Business School, aSSIST, Seoul 03767, Republic of Korea
* Correspondence: mhuang@assist.ac.kr
Abstract: Digital transformation is a critical challenge for commercial banks to achieve sustainable
competitive advantages in the digital economy. However, conventional research focuses too much on
constructing linear models to explain the non-linear relationships between and among the factors
relevant to digital transformation. By adopting the configurational framework, we propose that
the interactions between strategy and dynamic capabilities determine the paths of how digital
transformation may succeed or fail. The fuzzy-set qualitative comparative analysis (fsQCA) of
digital transformation practices by Chinese commercial banks shows that: (1) a single condition
of strategic orientation or dynamic capabilities does not constitute the necessary condition for
high digital transformation, yet market orientation plays a more general role in generating high
digital transformation. (2) There are three configurational paths that can contribute to high digital
transformation of commercial banks, such as sensing capability-driven paths dominated by strategic
orientation, integrating capability-driven paths dominated by strategic orientation, and the market
orientation-driven paths dominated by dynamic capabilities. (3) There are two configurational
paths that lead to non-high digital transformation, which verifies the existence of the asymmetrical
relationship compared to the configurational paths of high digital transformation; (4) In the pathways
dominated by strategic orientation, there is a substitutive relationship between sensing capability
and integrating capability. The findings make contributions to the literature on digital transformation
and provide implications for the digital transformation of commercial banks.
Keywords: strategic orientation; dynamic capabilities; digital transformation; fsQCA
1. Introduction
In the context of a new round of scientific and technological revolution, the develop-
ment and application of digital technologies such as big data and cloud computing have
reconstructed the value creation logic of many industries [1]. The financial industry is
no exception. Online and decentralized digital business models, as well as mobile and
intelligent digital financial services, have been gradually replacing the traditional business
models of commercial banks [2,3]. The sudden COVID-19 pandemic had a huge impact on
the offline economy, and it accelerates the process of the transition. Commercial banks can
quickly respond to the financial needs of enterprises and society under the epidemic's con-
trol by using non-contact digital financial services [4,5]. In the Fourteenth Five-Year Plan,
the Chinese government made an important strategic deployment of “steadily developing
financial technology and accelerating the digital transformation of financial institutions”.
Furthermore, in 2022, the State Council of China issued “the Fourteenth Five-Year Digital
Economy Development Plan”, emphasizing the urgency to further promote the applica-
tion of big data, artificial intelligence, blockchain, and other digital technologies in the
banking industry. In China, the macro-level government, the meso-level industry, and the
https://www.mdpi.com/journal/sustainability
Sustainability 2023, 15, 1915 2 of 19

micro-level organizations have reached a consensus that digital transformation is the core
inevitable strategy for commercial banks to pursue the sustainable competitive advantage
in a new digital era.
However, the digital transformation of commercial banks is not easy. Although digital
transformation has not changed the nature and inherent logic of finance itself [6], it has
broken the traditional financial system to a certain extent. Moreover, digital transformation
involves cognitive digitalization, structural digitalization, and product digitalization of
commercial banks [7], which involves complex systematic engineering [8]. Statistics show
that, in 2020, China’s banking institutions will invest 207.8 billion yuan in information tech-
nology, with a year-on-year growth of 20%. However, according to the recent research by
Xie and Wang (2022) [9], since 2016, the growth rate of digital transformation of commercial
banks has decreased significantly, and the growth rate of digital transformation in 2020
was less than 5%. These statistics and data confirm our view that although commercial
banks are actively exploring the successful path of digital transformation, the issue of how
to activate and accelerate digital transformation is still an urgent strategic imperative for
Chinese commercial banks.
Most scholars follow the PEST analysis framework to explore the impact of govern-
ment policies, digital economy, social digitalization, and digital technology on the digital
transformation of enterprises. Chen et al. (2022) [10] argued that tax policy is one of the
important tools to promote the digital transformation of enterprises. The latest research of
Bonnet et al. (2021) [11] claimed that digital technology is the key to determine the digital
transformation of enterprises. Some other researchers, such as researchers from the micro-
level research community, investigated the causes of enterprise digital transformation from
the perspective of managers’ characteristics such as digital leadership, managers’ cognition,
digital capabilities, and other personal factors [12,13]. While the two research streams have
contributed to our understanding of the important roles that the macroenvironment and
microagents play in generating the digital transformation of commercial banks, they are
still limited in several ways. Furthermore, the existing research either overemphasizes
external factors such as the macroenvironment or exaggerates the managers’ personal traits,
and neglects the active choice of the internal strategy of the organization and its interactions
with its organizational dynamic capabilities. Kane et al. (2015) [14] asserted that the key
driving force of digital transformation is strategy, not technology. The strategic orientation
towards market-pull and technology-push will inherently promote commercial banks to
apply new digital financial technologies and provide digital financial services [15]. Digital
transformation is embedded in the market environment, and the digital strategic response
of commercial banks triggers the reconstruction of internal and external capabilities. Thus,
the topic of dynamic capabilities—such as the sensing, integrating, and transforming of
internal and external capabilities to improve the fitness between strategy and environment—
becomes salient [16]. Dynamic capabilities provide a capability foundation for commercial
banks to integrate digital technology and business processes in the digital economy.
Both strategic orientation and dynamic capabilities are essential for digital trans-
formation [15,17,18], and they allow commercial banks to obtain stronger flexibility and
sustainable growth in the digital age. Therefore, commercial banks’ dynamic capabilities
should fit the strategic orientation [19]. However, scholars have rarely integrated these
factors from a holistic perspective. For example, some studies ignored the linkage between
strategies and capabilities and thus cannot figure out the detailed mechanisms of interac-
tions. Others applied regression methods to explore the interaction effect of strategies and
capabilities, which has serious methodological and theoretical mismatch problems [20].
Because regression analysis mostly adopts interactive items or other methods to multiply
the strategic indicators and capability instruments one by one, these methods cannot an-
alyze the impact of the concurrence of strategic and capability conditions on the digital
transformation of commercial banks, nor can it judge the strategic capability structure
to achieve high digital transformation [21]. Therefore, the nature of interaction effect in
regression analysis is limited to the traditional contingency relationship [22], rather than
Sustainability 2023, 15, 1915 3 of 19

the real overall holistic analysis. Fortunately, qualitative comparative analysis (QCA)
adopts the configurational perspective, through Boolean algebra and set theory, and we can
explore multiple equivalent paths of mutual combination of different conditions, which
significantly improves the matching of theories and methods under the integrative analy-
sis [23,24]. QCA and configurational analysis assume that the factors are interdependent
rather than independent, which is suitable for explaining complex concurrent causal prob-
lems with multiple conditions [25]. As one of the mainstream methods in QCA research,
Fuzzy set QCA (fsQCA) has the dual advantages of both qualitative analysis and quan-
titative analysis [26]. It cannot only identify the necessity of a single condition, but also
explore the full interaction between factors [19,27], so as to reveal the complex causal
mechanism of strategic orientation and dynamic capabilities on the digital transformation
of commercial banks, and present the configurational path to achieve high and non-high
digital transformation.
Through our study, we intend to make four key contributions. First, to our knowledge,
we are the first to theorize and empirically examine the commercial banks’ digital transfor-
mation from a configurational perspective between strategy and capability. By building
on configurational theory [27], this study extends the previous literature by discerning the
complex concurrent paths of how organizational strategies and capabilities impact digital
transformation in Chinese commercial banks [15,28]. Second, we theoretically delineate
and empirically validate the interactive mechanism of strategic orientation, dynamic ca-
pabilities, and digital transformation. Such findings contribute to the nascent academic
literature by enriching the digital connotation of both strategic management theory and
dynamic capabilities theory. Third, by introducing fsQCA into commercial banks’ digital
transformation, we apply the analysis of necessity (No Y without X) and sufficient (If X,
then Y) conditions to examine the links [29,30]. We argue that including the two causal
reasonings would adequately tap the relationship between strategic orientation, dynamic
capabilities, and digital transformation. Scholars have been debating over different com-
binatorial ways of achieving digital transformation for some time [31,32], and we extend
the conversation by exploring the configurational paths of strategy and capability, which
can further foster digital transformation research using the fsQCA approach. Finally, in
managerial practice, we address an issue of considerably substantive relevance. Our re-
search and its findings can be used to deepen our understanding of how commercial banks’
strategies and capabilities jointly influence digital transformation practice. For example,
our sufficiency analysis shows that the three different configurational paths can be used to
help managers achieve high digital transformation.

2. Literature Review
2.1. Digital Transformation of Commercial Banks
With the rapid development of digital technology, the disintermediation, and financial
globalization of the financial industry, the place where bank customers make financial
transactions is gradually changing from trading floors to online platforms [33]. The most
advantageous local customer market may be eroded by foreign financial technology com-
panies. Under the impact of the COVID-19 pandemic, population mobility was restricted,
and most banks had to close physical outlets or shorten business hours, resulting in a
significant reduction in the business volume of traditional banks. Under the dual pressures
from financial technology and epidemic isolation policy, commercial banks are faced with
huge digital challenges and need to make all-round digital innovation and reform [5,34]. In
recent years, commercial banks are also transforming their organizational structure and
product channels with the help of other digital technologies such as big data and artificial
intelligence. Digital transformation refers to organizational change that is triggered and
shaped by the widespread diffusion of digital technologies [35]. Digital transformation
will fully integrate digital technology with the existing business resources and capabilities
of commercial banks, thus generating the transformation, upgrading, and sustainable
development. The digital transformation of commercial banks involves many aspects of
Sustainability 2023, 15, 1915 4 of 19

organizations: cognitive digital transformation, structural digital transformation, and prod-

uct digital transformation [7]. Cognitive digitalization is the basis for the commercial banks
to recognize the digital transformation, which guides the banks to develop in the digital
direction; traditional commercial banks are characterized by seniority, departments are in-
dependent, processes are lengthy, and decisions are slow, which is significantly inconsistent
with the flat organization and fast iterative digital finance. Structural digital transformation
is not only the establishment of digital departments, but also the reconstruction of systems,
processes, and cultures; product digital transformation refers to the redefinition and discov-
ery of financial product value, the formation of digital financial products for online sales
channels with digital technology, and the full completion of product digitalization.

2.2. Strategic Orientation

In the environment of interest rate marketization and rapid development of financial
technology, the Chinese commercial banks are facing increasingly fierce market competi-
tion, and their intermediary status is seriously challenged. To develop new customers and
increase the market share, commercial banks must make fundamental changes. According
to the strategic management theory [36], strategic orientation determines the develop-
ment direction of commercial banks. The differences in the way commercial banks carry
out strategic change and reap the benefits of change are also influenced by their choice
of strategic orientation. Strategic orientation refers to the strategic direction and opera-
tional principles set by commercial banks to continuously achieve excellent performance,
which will also determine the resource allocation and strategic actions of commercial
banks [37]. The existing research on the strategic orientation of commercial banks involves
entrepreneurship orientation, technology orientation, market orientation, and other aspects.
In the context of digital technology-enabled financial services, technology and markets are
increasingly becoming core elements of the strategic orientation of commercial banks that
lead the digital transformation of commercial banks [38,39]. Therefore, we use technology
orientation and market orientation as the two important strategic orientations that will lead
the digital transformation of commercial banks.
Technology orientation reflects the technology-push logic of commercial banks [40],
which is the commitment of commercial banks to transform their business model and to
optimize operational efficiency by innovating financial technologies and building new
trading platforms. With the rapid development of digital technology, digital financial
service is increasingly impacting the operation and profitability of commercial banks [7,41].
In the face of such digital challenges, commercial banks with high technology orientation
will gradually increase their digital awareness and put digital technology development and
application at the forefront of their development. Further, commercial banks will continue
to accumulate the knowledge base of digital technology, and they will actively acquire
and apply new digital technologies to push the digital transformation of their current
business. Specifically, the digital technology will drive the commercial banks to digitalize
their management and products, reshape their value chains and business models, and
ultimately lead to a comprehensive digital transformation.
Market orientation refers to the strategic tendency of commercial banks to actively
collect and respond to market information to create and improve customer value. The
market-pull principle reflects the business philosophy of commercial banks to put cus-
tomers at the core of operational and strategic decision making. In the era of the digital
economy, commercial banks with a high market orientation are more inclined to implement
the digital transformation, thus constructing value creation logic centered on customer de-
mand and experience [8]. The reason is that digital transformation helps commercial banks
use digital technologies and platform algorithms to quickly store, retrieve, and analyze
customer information [42] and communicate with customers faster and more effectively.
Thus, they can anticipate and capture customer’s unmet needs [43], address differentiated
needs among customers precisely, promote commercial banks to their products and services
to online channels, enable customers to transact through online platforms, overcome the
Sustainability 2023, 15, 1915 5 of 19

time and location constraints of traditional commercial banking, improve and enhance
customer service, and ultimately increase customer satisfaction and loyalty. Therefore,
under the market orientation, commercial banks can meet the dynamic needs of customers
and create customer value better through digital transformation.

2.3. Dynamic Capabilities

Digital transformation is not innate [8], but is the result of a gradual evolution of
commercial banks as a consequence of their organizational capabilities. As the dynamic
and complex nature of the environment continues to increase, it becomes steeply more
difficult for commercial banks to implement digital transformation. Therefore, organiza-
tional capabilities that help banks improvise their resources to match with the changing
environment are increasingly important [44]. This paper focuses on dynamic nature of
capabilities because digital transformation implies a reconfiguration of the competitive
advantage of commercial banks, in which dynamic capabilities may play a crucial role.
In other words, the dynamic capabilities theory can provide a solid explanatory basis for
commercial banks to respond to market changes through digital transformation [45,46].
Specifically, Teece et al. (1997) [47] proposed that dynamic capabilities are both internal and
external to the organization, and new organizational capabilities can be shaped through
organic innovation. Therefore, compared with operational capabilities, the improvement
of dynamic capabilities will have a positive impact on the operational processes, resource
allocation, and management capabilities of commercial banks, thus helping commercial
banks to allocate resources and capabilities related to digital transformation in a planned
and conscious manner.
Further, the dynamic capabilities are a multi-dimensional aggregative construct that
includes three cascading sub-capabilities: sensing capability, integrating capability, and
transforming capability [16]. The sensing capability reflects the ability of commercial banks
to acquire technical market information and identify new opportunities or threats [48]. In a
digital technology environment featuring digitalization and intelligence, such as artificial
intelligence and big data, sensing capability helps strengthen commercial banks’ digital
transformation perceptions, and the increased awareness will encourage commercial banks
to be more proactive in seeking opportunities for digital transformation. Moreover, digital
transformation allows commercial banks to use digital infrastructure such as IoT platforms
to collect and analyze data in real-time [49]. Therefore, commercial banks with a strong
sensing capability may put digital transformation on the agenda to better identify risks in
the market environment. The integrating capability helps commercial banks respond to
digital change opportunities or eliminate competitive digital threats by effectively coor-
dinating and allocating work tasks and organizational resources across departments [50].
Digital transformation cannot be separated from the support of organizational governance
structure. Organizations with higher transforming capabilities can ensure the flexibility
of organizational structure [51]. Therefore, commercial banks need to reconfigure trans-
forming capabilities to continuously update and align internal operational processes, as
well as innovatively deploy existing resource capabilities to execute digital transformation
more effectively. The combined capacity of the sensing capability, integrating capability,
and transforming capability help commercial banks better respond to changing customer
demands and technology requirements than their competitors. Thus, dynamic capabilities
will lay the solid foundation for their ability to capture timely information about digital
change, rapidly integrate digital technologies and business processes, and achieve high
digital transformation.

2.4. Configurational Framework

In summary, technology orientation, market orientation, sensing capability, integrating
capability, and transforming capability are critical factors influencing digital transformation.
These elements provide the basis for a systematic exploration of the complex relationship
between and among strategic orientation, dynamic capabilities, and the digital transforma-
 cesses, and achieve high digital transformation.

2.4. Configurational Framework

In summary, technology orientation, market orientation, sensing capability, integrat-
Sustainability 2023, 15, 1915 ing capability, and transforming capability are critical factors influencing digital transfor- 6 of 19
mation. These elements provide the basis for a systematic exploration of the complex re-
lationship between and among strategic orientation, dynamic capabilities, and the digital
transformation of commercial banks. Although digital transformation is the result of the
tion of commercial banks. Although digital transformation is the result of the co-evolution
co-evolution of organizational strategy and capabilities, existing research only focuses on
of organizational strategy and capabilities, existing research only focuses on the single
the single effect of strategic orientation and dynamic capabilities on the digital transfor-
effect of strategic orientation and dynamic capabilities on the digital transformation of
mation of commercial banks. In the development process of commercial banks, strategic
commercial banks. In the development process of commercial banks, strategic orientation
orientation
and dynamic and dynamic are
capabilities capabilities are interdependent,
interdependent, symbiotic, and symbiotic,
interactive, andbutinteractive, but
it is difficult
it is difficult to analyze the joint effect between them traditional research
to analyze the joint effect between them traditional research perspectives and methods [21], perspectives and
methods
thus we are[21], thus we
unable are unable
to analyze the to analyze
high digital the high digital transformation
transformation path of commercial path ofbankscom-
mercial
from thebanks
holisticfrom the holistic
perspective. perspective.
Therefore, it is Therefore,
still an open it is still an to
question open question to
be answered how be
answered how the strategic orientation and dynamic capabilities
the strategic orientation and dynamic capabilities of commercial banks are inextricably of commercial banks are
inextricably together
intertwined intertwined together
to further to further
affect digital affect digital transformation.
transformation.
The configurational perspective suggests thatoutcomes
The configurational perspective suggests that outcomes occur
occur due to interactions
due to interactions be-
tween these critical elements or factors and that isolated conditions
between these critical elements or factors and that isolated conditions make it difficult to make it difficult to
systematically reveal
systematically reveal thethe complex
complex mechanisms
mechanisms of of underlying
underlying outcome
outcome formation
formation [22].[22]. In
In
other words, the configuration perspective focuses on analyzing
other words, the configuration perspective focuses on analyzing the synergistic effect and the synergistic effect and
combinationalrelationship
combinational relationshipbetween
betweenelements,
elements,which whichis is suitable
suitable forfor exploring
exploring thethe nonlin-
nonlinear
ear relationship between causes and effects, and it is helpful for
relationship between causes and effects, and it is helpful for mining multiple equivalent mining multiple equiva-
lent paths
paths to achieve
to achieve the highthe digital
high digital transformation
transformation of commercial
of commercial banks.banks. Therefore,
Therefore, this paperthis
paper
will will adopt
adopt a configurational
a configurational perspective
perspective to incorporate
to incorporate technology
technology orientation,
orientation, mar-
market
ket orientation,
orientation, sensing
sensing capability,
capability, integrating
integrating capability,
capability, and transforming
and transforming capability
capability into into
one
one research
research framework.
framework. WithinWithin
suchsuch a comprehensive
a comprehensive framework,
framework, it willit will further
further analyze
analyze the
the complex
complex interactions
interactions amongamong
the the conditions
conditions mentioned
mentioned above,
above, andand it isitalso
is also committed
committed to
to answering
answering thethe following
following questions:
questions: first,
first, whether
whether a single
a single element
element of strategic
of strategic orienta-
orientation
tiondynamic
and and dynamic capabilities
capabilities constitutes
constitutes a necessary
a necessary condition condition for thetransformation
for the digital digital transfor- of
mation of commercial
commercial banks; second, banks;howsecond, how theorientation
the strategic strategic orientation
and dynamic andcapabilities
dynamic capabil-condi-
tions of commercial
ities conditions banks are coupled
of commercial banks to areproduce
coupled highto and non-high
produce highdigital transformation.
and non-high digital
Figure 1 presentsFigure
transformation. the research model
1 presents theofresearch
this paper. model of this paper.

Strategic pulling Capability driving

Strategic Dynamic
orientation capabilities
Sensing
Technology Configuration Commercial banks
capability
orientation
effect High digital transformation
Integrating
capability
Market
orientation Transforming
capability

Figure 1. The configurational framework of the digital transformation of commercial banks.

Figure 1. The configurational framework of the digital transformation of commercial banks.
3. Research Methods
3. Research
3.1. Methods
Sample and Data Collection
3.1. Sample
Chineseand Data Collection
commercial banks have developed an enormous scale and are among the
world’sChinese commercial banksofhave
leading banks in terms total developed
assets. Facing
an the challenges
enormous scaleofand
digital
aretransforma-
among the
tion,
world’s leading banks in terms of total assets. Facing the challenges of digital channels
commercial banks in China have both vigorously expanded online mobile transfor-
and promoted
mation, intelligent,
commercial banksexperiential, andboth
in China have community-based changesonline
vigorously expanded in offline branches.
mobile chan-
At theand
nels same time, theyintelligent,
promoted also increase investment and
experiential, in digital financial technology,
community-based changes focus on im-
in offline
proving their independent R&D capabilities, and actively apply for fintech-related patents.
These actions provide a representative sample for us to study the digital transformation of
commercial banks, thus this paper uses Chinese commercial banks as sample cases.
The research data in this paper are derived from two primary sources. First, the data
on the digital transformation of commercial banks for the outcome variable is obtained
from the Peking University Digital Transformation Index Report for Commercial Banks
(2018). The report, released by Peking University’s Institute of Digital Finance, covers all
large state-owned banks, joint-stock banks, city commercial banks, private banks, leading
rural commercial banks, and foreign banks in China. The report team constructed and
Sustainability 2023, 15, 1915 7 of 19

calculated the digital transformation index of China’s commercial banks based on the text
content of the annual reports and financial data of commercial banks, avoiding the method
of subjective evaluation and scoring by experts. The data is reliable and often used in
scientific research. Second, data on the antecedent variables (strategic orientation and
dynamic capabilities) were obtained from the questionnaire survey. After screening and
sorting out the digital transformation data of Chinese commercial banks, we randomly
selected 100 out of 167 commercial banks as the research subjects of this paper. Further,
this study limited the interviewees to the chairman, general manager, and deputy general
manager of the bank because they can evaluate the performance of the bank’s strategic
orientation and dynamic capabilities as a whole, and thus could make a correct evaluation
of the questionnaire and ensure the quality of the data. In addition, because the respondents
were located in different places, it was too difficult to conduct individual research. To
ensure that the questionnaires could be distributed and collected centrally, we cooperated
with TZ Management Consulting, which was responsible for the distribution and collection
of questionnaires, and one of us followed up and supervised the entire process. This
survey started in September 2018. TZ distributed questionnaires in 90 commercial banks
in the following two months and collected 86 questionnaires. After eliminating invalid
questionnaires such as missing critical data and selecting the same rating for all questions,
44 valid questionnaires were obtained, and the final response rate of the questionnaires was
48.89%. Finally, the two sets of data are matched to obtain the complete data of 44 Chinese
commercial banks, which are used as the final sample data in this paper. The sample
characteristics are presented in Table 1.

Table 1. Sample characteristics.

Category Frequency Percent (%)

Nature of the bank City commercial bank 17 38.64
Rural commercial bank 27 61.36
Region Jiangsu 19 43.18
Zhejiang 15 34.09
Other 10 22.73
Years of establishment Less than 10 years 7 15.91
10–20 years 23 52.27
More than 20 years 14 31.82
The number of employees Less than 1000 employees 18 40.91
1000–5000 employees 16 36.36
5000–10,000 employees 7 15.91
More than 10,000 employees 3 6.82
Operating income (Yearly/RMB) Less than 1 billion 7 15.91
1–3 billion 14 31.82
3–6 billion 11 25
More than 6 billion 12 27.27

3.2. The fsQCA Approach

The Qualitative Comparative Analysis (QCA) method was originally developed by
Ragin in 1987. The QCA method was mainly applied to sociology, political science, and
other disciplines in its early stage and began to be widely applied in the field of organi-
zational management [21]. According to the variable type, QCA is divided into crisp set
QCA (csQCA), multi-value QCA (mvQCA), and fuzzy-set QCA (fsQCA). Among them,
csQCA can only deal with a binary data type whose antecedent conditions and values
Sustainability 2023, 15, 1915 8 of 19

are 0–1. Due to technical limitations, variable information is easily lost, so the scope of its
application is narrow. Instead, mvQCA uses multi-valued classifications, allowing condi-
tion variables and results to be multivalued with nominal variables, which improves the
accuracy of Boolean assignment of interval and ratio variables to a certain extent. However,
when dealing with the non-categorical variable type, it will encounter extreme assignment
difficulties of variables [22,52]. The fsQCA can resolve all of these problems. It cannot
only deal with the category data, but also with the degree variable problem [53]. By using
the membership degree assignment method, variables can be more accurately calibrated.
Therefore, compared with csQCA and mvQCA, fsQCA has a wider scope of application
and higher research quality [8].
Therefore, this paper uses the fsQCA approach to analyze the complex causal mech-
anisms of strategic orientation and dynamic capabilities in the digital transformation of
commercial banks based on a configurational perspective. There are several more specific
reasons to choose the fsQCA method. First, strategic orientation and dynamic capabili-
ties drive the digital transformation of commercial banks as a result of the complex and
interwoven impact from both of them. Traditional linear regression focuses on analyzing
the between-construct relationships characterized by complementary, additive, substitu-
tion, or suppression effects. It is challenging to examine the non-linear effects arising
from the synergistic effects that are differentiated from traditional bivariate interaction
effects [21]. The fsQCA approach can break with the net effect thinking. It starts from a
holistic and systemic perspective and focuses on figuring out the complex relationship
between causes [8,23,54], thus enabling the exploration of the elemental configurations that
cause the digital transformation of commercial banks and the identification of multiple
causal paths that influence the digital transformation of banks. Second, the fsQCA method
transcends the traditional divisions and boundaries of quantitative and qualitative analy-
sis [26]. The approach can both overcome the challenges of replication in small samples
(less than 10 or 15) and remedy the deficiencies of inadequate intrinsic case analysis in
large samples (more than 100). In this paper, the research sample is 44 commercial banks,
and the sample size is between large and small samples. Because the medium size of the
sample fits well with the fsQCA approach, based on the fsQCA approach, this paper can
explore the complex causal effects of a bank’s internal strategic orientation and dynamic
capabilities and summarize replicable strategies to accelerate the digital transformation of
commercial banks.
According to the configuration approach proposed by Fiss (2011), Dai (2022), and
Gupta et al. (2020) [23,55,56], the fundamental analysis of fsQCA includes theoretical
analysis and refinement of antecedent conditions, data collections, variable recalibration
and aggregation membership scores, selection of case frequency and consistency threshold,
construction of truth table (identification of configurational conditions of observed cases),
and QCA standardization analysis. The fsQCA analysis further simplifies the configuration
by generating a simple solution and an intermediate solution (the latter includes the former),
distinguishes between core conditions and periphery conditions, and reports the results
with QCA symbols. In this study, the antecedent conditions are the five elements of strategic
orientation and dynamic capabilities. Samples and data sources report the data collection
process; variable calibration, data analysis, results reporting, and other contents will be
presented in the subsequent analysis.

3.3. Measurement
3.3.1. Outcome Variables
Digital transformation of commercial banks. This paper uses the Digital Transforma-
tion Index for Chinese Commercial Banks constructed by the Institute of Digital Finance of
Peking University for measurement. The index consists of three parts: digital cognition,
digital organization, and digital products. By extracting and analyzing the text descriptions
of banks’ annual reports on digital technology application awareness and thinking (e.g.,
intelligence, big data, digital, etc.), management digital innovation behaviors (e.g., Internet
Sustainability 2023, 15, 1915 9 of 19

finance department, financial technology department, digital finance department, etc.),

and digital finance-related product development behaviors (e.g., mobile banking, WeChat
banking, Internet finance, Internet credit, e-commerce, etc.), we can then judge the degree
of digital transformation of commercial banks.

3.3.2. Antecedent Conditions

Strategic orientation–technology orientation. We adopted four items from Zhou
(2005) [37] to measure technology orientation, such as “We use sophisticated technologies
in our new product development.” The four items were measured on a five-point Likert
scale (1 = strongly disagree, 5 = strongly agree).
Strategic orientation–market orientation. Consistent with prior research [57], market
orientation was measured with twelve items developed by Kohli et al. (1993) [58] and
refined by Homburg and Pflesser (2000) [59], such as “We poll end-users at least once a year
to assess the quality of our products and services.” We anchored all items with a five-point
Likert scale, where 1= strongly disagree, and 5= strongly agree.
Dynamic capabilities. Teece et al. (1997) [47] proposed the theory of dynamic capabil-
ities based on resource capability evolution. Twelve items have been rated based on the
instruments developed by Lu et al. (2018) [60] to measure the three dimensions (sensing
capability, integrating capability, and transforming capability) of dynamic capabilities, such
as “Employees are assigned to tasks commensurate with their relevant knowledge and
skill.” All items were rated with a five-point Likert scale from 1 (strongly disagree) to
5 (strongly agree).

3.3.3. Calibration
The use of the fsQCA method requires the calibration of variables into an aggregate
concept, i.e., the calibration aims at transforming regular variables into fuzzy variables
between 0 and 1 [61].
At present, there are four mainstream methods to calibrate variables into sets: First, cal-
ibration is based on case-based descriptive statistics. For example, Chen and Tian (2022) [8]
used the maximum observation value (4.833) as the critical value of complete membership
(1), the mean value (3.64) as the intersection point (0.5), and the minimum value (2.167) as
the critical value of complete non-membership (0) when calibrating and integrating the
previous dependent variable. Second, use the scale of the meter for calibration. In the
measurement of the 5-point Likert scale, the scale itself provides the information of the
calibration variable; for example, 1 represents “almost inconformity”, 3 represents “basic
conformity”, and 5 represents “complete conformity”. Scholars coded “1” as completely
non-subordinate, “3” as the intersection, and “5” as completely subordinate [23,54]. Third,
calibrate based on the percentile of case data. This calibration method is often used in the
absence of theoretical and knowledge base. That is, when the three anchor points of full
membership, intersection, and non-membership of variables are respectively set as 75%,
50%, and 25% quantiles of sample data, some studies are set as 90%, 50%, and 10% [62,63].
Fourth, set calibration standards according to data characteristics or empirical attributes.
For example, Leppanen et al. (2021) [64] selected Tobin’s Q value 1 as the intersection point.
According to the financial calculation formula, when the perceived value of an enterprise is
the same as its total asset value, Tobin’s Q equals 1 if firms’ valid value is the same as the
value of its total assets.
Since the conditional variables (technology orientation, market orientation, sensing
capability, integrating capability, and transforming capability) obtained data through
questionnaires, there may be social desirability bias, and the outcome variable (digital
transformation of commercial banks) is a newly published measurement that lacks practical
and theoretical support. Therefore, referring to related studies [23], a biased calibration was
used in this paper to set the calibration points for one outcome variable and five conditional
variables “fully in”, “crossover point”, and “fully out” to the upper (75%), median (50%),
Sustainability 2023, 15, 1915 10 of 19

and lower (25%) quartiles of the case data, respectively. Calibration anchors and descriptive
statistics for each variable are reported in Table 2.

Table 2. Sets, calibration, and descriptive statistics.

Fuzzy Set Calibration Descriptive Statistics

Set Fully In Crossover Point Fully Out Mean Std. Dev. Min. Max.
Digital transformation of commercial banks 17.108 25.013 36.351 31.899 21.970 8.15 102.87
Technology orientation 4.00 4.33 4.67 4.030 0.937 1.67 5
Market orientation 3.42 4.17 4.67 3.856 1.176 1.00 5
Sensing capability 4.00 4.25 4.50 3.943 1.028 1.25 5
Integrating capacity 3.80 4.40 4.55 3.964 0.953 1.40 4.8
Transforming capability 4.00 4.33 4.67 3.894 1.031 1.00 5

4. Results
The necessity conditions (No Y without X) and sufficient analysis of the configurations
(If X, then Y) in this paper are analyzed using fsQCA3.0 software.

4.1. Necessity Conditions Analysis

Necessity conditions analysis is used to test whether any single condition is necessary
for commercial banks’ high or non-high digital transformation. Table 3 reports the results
of the necessary tests for single conditions. The data show that the consistency coefficient of
single conditional variables is below 0.9 in both high and non-high digital transformation
groups of commercial banks, indicating that the necessary conditions for generating high
and non-high digital transformation of commercial banks do not exist [26].

Table 3. Necessity analysis of single conditions.

Outcome Variables
High Digital Transformation of Non-High Digital Transformation of
Conditional Variables Commercial Banks Commercial Banks
Consistency Coverage Consistency Coverage
Technology orientation 0.486 0.514 0.586 0.629
~Technology orientation 0.649 0.607 0.547 0.519
Market orientation 0.628 0.610 0.452 0.446
~Market orientation 0.429 0.436 0.605 0.623
Sensing capability 0.564 0.501 0.658 0.593
~Sensing capability 0.542 0.610 0.446 0.509
Integrating capacity 0.464 0.518 0.537 0.608
~Integrating capacity 0.649 0.580 0.575 0.521
Transforming capability 0.399 0.490 0.495 0.617
~Transforming capability 0.689 0.573 0.592 0.500

4.2. Sufficiency Analysis of the Configuration

The sufficiency analysis of conditional configurations aims to analyze the configura-
tions of strategic orientation and dynamic capabilities that lead to commercial banks’ high
and non-high digital transformation. These different configurations represent different
combinations of conditions to achieve the same outcome.
 Sustainability 2023, 15, 1915 11 of 19

EER REVIEW 12 of 19

Sustainability 2022, 14, x FOR PEER REVIEW

ability 2022, 14, x FOR PEER REVIEW 12 Commercial
of 19
4.2.1. The Configuration That Generates High Digital Transformation of Banks
According
Table 4. Configurations that generate the high to existing
and non-high digitalstudies [54,63],2022,
transformation
Sustainability the case frequency
of commercial
14, x FOR threshold is set as 1, and the
PEER REVIEW
banks. consistency threshold is set as 0.8. To reduce potential contradictory configurations, the
Table 4. Configurations Table
that generate
proportional 4.inconsistency
the in
reduction highConfigurations
and non-high(PRI)that generate
digital theused
high to
istransformation
further and non-high
of filter
commercial digital
the truth transformation
table rows of c
banks. thatTransformation banks.
are linked to theof Non-High Digital
outcome [56]. Based on the analysis of the distribution of case data, the
High Digital
Conditional PRI consistency
Commercial Banks
Transformation
threshold is set to 0.6 in this paper. The resultsTable
of Commercial of fsQCA4. Configurations that generate the
analysis willNon-High
report Digi
Non-High Digital
banks.
Variables three categories BanksHigh Digital Transformation of
High Digital of complex, Transformationparsimonious, of and intermediate solutions. Typically, scholars
Conditional Conditional Transformation Commercial Commercial Transformation of Co
ofBanks
S1a combine S1b the parsimonious S2
Commercial Banks and NS1
intermediate NS2
solutions to determine each solution’s core and
Variables Variables Banks Banks
Technology periphery conditions, i.e., conditions that appear in both parsimonious Conditional and intermediateDigital T High
● ● S1a  S1b Conditions ● S2 that occur S1a ● NS1 S1b NS2 S2 NS1 Comme
orientation solutions are core conditions. only in the intermediate Variables solutions are
Technology periphery Technology
Market orientation ● ● conditions ● ● [23]. ●   ● ● ● ● ● S1a
orientation The expression of QCA orientationresults has its own symbols. In the table, the size of the circle
Sensing capability ● ● ● Technology
Market orientation distinguishes ●between Market the● core orientation ●
condition and ● the periphery ● condition.  ● The symbol  ●
Integrating capacity ● ●  ● orientation
Sustainability 2022, 14, Sensing
x FOR PEER
represents the
capability
REVIEW ● existence Sensingof thecapability ●
core condition, ● represents the existence ● ● of the edge12condi- of 19
Transforming
Integrating  capacity tion,  represents ● Integrating
the lack ● of the capacity
● core ● condition,  represents ● Market
the●lack
orientation
● of the periphery  ●
capability Sustainabilitycondition, Sensing capability ●
Transforming 2022, 14, x FOR and blank
Sustainability
PEER REVIEW represents
2022, 14, x FORthe
Transforming PEER optional
REVIEWcondition. In the expression, * represents and,
Consistency 0.784 and 0.702  0.787  0.846 ● 0.848●  Integrating ● capacity ●
capability ~ represents negation. capability
Raw coverage 0.226 Table 4. Configurations
0.191 0.154thethat generate0.210 the analysis high and0.249 non-high digital transformation of commercial
Table 0.784 4 reports configuration results Transforming
SustainabilityConsistency
2022, 14, banks.
x FOR PEER REVIEW
Consistency
0.702 0.787 0.784 0.846that 0.702generate 0.848 the
0.787 high digital trans-
0.846  12
Unique coverage 0.053 formation 0.018 of commercial 0.087 Table banks. 0.112
4. ConfigurationsThe results
Table that show 0.150
4.generate that
Configurations three
the0.191 configurations
highthat and0.249 capability
generate
non-high the(S1a,
digital S1b, and
high transformation
and non-high dig of
14, xSustainability
FOR PEER REVIEW
2022, Raw
14, x FOR PEER REVIEWS2) coverage Sustainability 0.226 Raw
0.191 coverage 0.154 0.226 0.210 0.154 0.210
14, x FOR Solution
PEER REVIEW coverage generate 2022,
0.331 the 14, high x FOR
banks.
Sustainability
PEER transformation
digital
Sustainability
REVIEW
2022,0.361
2022,
14, x FOR PEER
14, banks.
x FOR
REVIEW 12 of
of commercial
PEER REVIEW 12
19
Non-High
banks,
of 19 whereDigital
Consistency 12 ofand
S1a 19 S1b
0.784
Sustainability
RyREVIEW
2022, 14, x FOR2022,PEER 14,REVIEW
x FOR PEER Unique REVIEW coverage 0.053 Unique
High
0.018 Digitalcoverage 0.087Transformation 0.053 12 of 0.112 19 of 0.018 120.150 0.087
of 19 of12 of the190.112
Solution consistency constitute Conditional
0.741 a second-order equivalent 0.868 configuration, i.e., their coreRaw
Transformation conditions
coverage are
Commercial same.
0.226
14, xSustainability
FOR PEER REVIEW 2022, 14, x FORSolution
Sustainability 2022, 14, xSustainability
PEER REVIEW coverage Solution
0.331 coverage Commercial Banks 0.331
0.361 12 of 19 12 of 19Non-High 0.361Dig
● and  indicate theFOR PEER REVIEW
existence 2022, 14,The
and absence x FOR PEER REVIEW
overall Table 4. consistency
coresolution
Variables
of conditions; Sustainability
Configurations
● and  represent 2022,that
shows 14,generate
x FOR
0.741,
the PEER
and
existence the
High Digital0.741
REVIEW
high
it and
explains
and non-high
Transformationthe
High
Unique digital
significance
Banks
Digital
12level
of Transformation
coverage
of 19
transformation of theof comme
0.053 of
12
Solution
Table 4.Sustainability
Configurations consistency
Table aforementioned
that4.xspaces
Configurations
generate thebanks. Solution
configurations
high that and 0.741
generate
non-high consistency
Conditional as a whole. Conditional 0.868 Transformation 0.868
highoftran Co
Tr
absence of periphery conditions; 2022, blank
14, FOR indicate
PEER REVIEW that the S1athe
condition Table
digital
high
may and
4.S1b
be transformation
Configurations
non-high
present digital
orCommercialTable
absent.
S2 ofthat
commercial
transformation
4.generate
Configurations
BanksNS1
Solution theCommercial
high
of commercial
that
coverage and generate
non-high
NS2Banks the
digital and
12
Table 4. Configurations
banks. ● and  indicate
banks.
thatthe Sustainability
generate
existence the 2022,
andhigh 14,
●and
absencexand
FOR PEER
non-high
 of indicate
core
Variables
REVIEW
digital transformation
the existence
conditions;
banks. ● and and
Variables Table
of commercial
absence
represent
banks.
4.ofthe
Configurations
core conditions;
existence and that● andgenerate
 representtheBanks
high theand ex0
Table 4. Configurations Table that Table
4. Configurations
generate the high 4. Configurations
that and generate
Technology non-high that generate
thedigital
high and the high
transformation
non-high digitaland non-high
of commercial digital
transformation of commercial transformation of commercial
banks.4. Configurations absence of periphery conditions; blank banks.
ofspaces Solution
indicate consistency Non-High Digital 0
banks. Sensing Table banks. absence of
capability-driven periphery
Table
banks.
Table
that
path Table conditions;
4. Configurations
generate
led 4.by the high
strategic
Configurations
4. Configurations Table
blank
that
that
and spaces
generate
orientation
4. that non-high●indicate
generate
Configurations
generate
the
the
that
digital
high High
(technology
the
high high
that
and
and ●
the
and
generate
condition
transformation
non-high
Digital
orientation
non-high S1a
non-high the  may
digital
digital
digital
high
Table
be
and S1bpresent
*commercial
Transformation transformation
transformation
transformation
4. ● ofthat
or
S1a
Configurations
non-high S2 ofthe
absent.
of
digital
of
condition
commercial
commercialS1b
commercial
that
transformation
generate●NS1 may
banks.theof
be presen
S2
high
comme and
banks. banks. orientation Conditional Non-High Digital Non-High
● and  Transformation
Digital
indicate the existence of Commer
and absen No
market orientation * sensing capability
banks. High *~transforming
Digital Transformation
banks. High capability).
Digital
Technology In
ofTransformationconfiguration
Commercial
Non-High Technologyof high S1a,
Digital
banks. Banks
High Digital Transformation High Digital of Transform
Sustainability
Conditional Sensing 2022, 14, xMarket
FOR
Conditional
High PEER
Digital
capability-driven REVIEW
Table
orientation path4.
Variables
Transformation ledSensing
by ●
Configurations ofTable
Non-High
strategic that
Transformation●
generate
capability-driven
Conditional
4. Digital
orientation
Configurations ●the(technology
Non-High of●
path and
led
Transformation
Commercial
Non-High
that ●bynon-high
absence
Non-High
Conditional
Digital
generate ●
strategic
orientation
Digital the
digital
of periphery
Digital
of Commercial transformation
and●
orientation
*High
Transformation
high 
non-high ●
conditions;
(technology
Banks
Digital of
 comme
blank
Transfor
Transform
of digital
12sp
or
tran
the configuration path
ConditionalHigh of high
Digital technology
High Transformation
High
Digital orientation,
CommercialDigital High
Transformation
banks. of Banks high
Digital
Transformation market
Commercial
orientation
of Commercial orientation,
Transformation
of Banks
Transformation Non-High
Banks and
of
orientation ofnon- Commercial
Digital ConditionalCommercial
Non-High Digital Banks Commercial Ban
Conditional
Conditional VariablesConditional
market
Variables Conditional
orientation High Sensing
Variables *Commercial
sensing
Digital capability market
Banks
capability
Transformation
High orientation
Transformation ● ofTransformation
*~transforming
Digital banks. of*S1asensing
Variables
Transformation
Commercial Banks
capability). of ●
capability
Transformation
S1b Inof *~transforming
Non-High
Variables
Commercial
configuration S2Banks
Commercial of Digital
Commercial
S1a,Banks capability).
Non-High ● In
NS1Commercial configur
Digital NS2Ban
high transforming capability
Variables
Conditional as core
Commercial conditions
Conditional Banks and
Commercial complementary
High Commercial
MarketDigital
Banks orientation high
Banks
Transformation
High
Transformationsensing
Digital
Market ● capabil-
Banksof Transformation
orientation
ofTransformation
Commercial ● orientation,
Variables ●ofof●Commercial
Sensing High ● Digital
capability-driven  orientation
Transform
●path le
PEER ity Variables
REVIEW the configuration
Variables Variables
Conditional
S1apath
Integrating
S1aCommercialof high S1b
capacity the
Conditional
technology S1a
Technology
Banks configuration
S1bCommercial S2 orientation,Banks
S1b path
Banks NS1
●
S2of of
high high
S2market technology
●Transformation
12 of 19 NS1 Conditional
orientation,
Banks NS2S1a
NS1 Banksand of non-
S1b high
Transformation
CommercialNS2 S1amarket
Non-High ●S2
NS2Commercial of Commer
S1b
Digital● NS
as a periphery condition can produce
Variables S1a the Table
Variables high S1bdigital Sensing transformation
Commercial
S2capability Banks
High ● NS1
Sensingcommercial
Commercial
Digital ●
Banks ● conditions
capability
Transformation Banks
NS2 market Banks●
of ●
orientation ● * sensing
S1a ●
S1b
capabili BanNo
high
Technology transforming
S1aintegrating Variables
S1b
Technology capability
S1a S2commercial
Transforming as high
4.
core
Variables
S1a S1b NS1
orientation transforming
Configurations
conditions S1band
S2canthat capability
generate
complementary
Technology S2
NS2 as
the
NS1 high core
high highand
High NS1 non-high
sensing
Variables
TechnologyDigital Banksand
capabil-
NS2 Transformation complementary
digital NS2
Transformationtransformation Banks high of
ofof Commer sensin
comme
banks.Technology
Regardless
2022, 14,Technology
of their
x orientation ●
S1a
capabilities, ●Conditional
S1b
banks. ity ●
S1a
Integrating
as the
S2
banks
a periphery S1b
capacity
still
● ConditionalNS1
condition ● achieve
 can●
Commercial
Integrating S2 capacity
produce Banks
NS2● ●●●
Technology
NS1 thethe ●
configuration
high ●● NS2
digital ● ●● 19of
path
12transformation high ●●
Transfor
techno
of ●
Sustainability
Technology
FOR ity
orientation
digital transformation with
PEER
as a
Technology
REVIEW
periphery
poor Technology ● condition
orientation
transforming capability can
●
Market
capabilities produce
S1a
Variablesorientation
so long high
S1b
as they digital
●
S1a
orientation●
have transformation
S2
high S1b●
tech- ● NS1 of
orientation commercial
S2
Commercial
● NS2
Banks 
NS1●of
S1a Banks ●NS2
S1b co
orientation
Technology ●Regardless ●
Technology ● 14, x ●●capabilities,
Transforming● ●  commercial
Variables  ●● ●high
orientation ●transforming ● capability asstill
coreacc
orientation
nology
Table Market
4. Market
orientation banks.
orientation
Configurations orientation
orientation
and market
that
Sustainability
Market
generateorientation, ●
orientation
Technology
the
2022,
ofConsistency
their
orientation
highas and well
FORbanks.
integrating
●as
Sensing
non-high
PEER
solid
Regardless
REVIEW
●capability
Technology 0.784 ●
● transformation
sensing
digital Market
of their
0.702 Transforming
●
●orientation
capabilities.
S1a
integrating
of ● banks
0.787
commercial S1b can
Market
capabilities,
still
● ● achieve
orientation
Technology
●  ●
0.846
S2 
commercial
●high
● ●  ●
Non-High
NS1
banks can
0.848● ● Digital ● ●NS2 ●
Market orientation
orientation
digital transformation ●
orientation with poor ● digital●
transforming ●
transformation
capability ● High with● 
Digital  poor
capability ● Market
transforming
Transformation 
S1a ● ity 
as
orientation a periphery
S1b
capabilities ● ●●
of tech- so long as they have condition
S2 can● ●
prodNS
Market Integrating
banks. orientation
Sensing aMarket ●
capability-driven Market
orientation
capability Sensing ●
orientation
orientation
path
●Raw led ● by strategic
coverage
capability ● Conditional
Integrating ●●
orientation
Technologyorientation
● ● capabilities
0.226
capacity ●
(technology
●Sensing 0.191 so long
●
capability  0.154
●orientation asSensing
they●
● orientation ●have  high
0.210
capability
banks. ● Transformation
Regardless ●  ●of 0.249●
their of Commer
integrating ●
Sensing capability ●●orientation nology
●orientation, ● Consistency●
orientation ● Technology
and ●  market
Commercial
Consistency
0.784 ●
orientation,
Sensing
Banks as
● capability
0.702 well0.787 as
of●solid  ●
sensing
● 0.846 capabilities. ●
Market orientation
nology Market
orientation and market ● as well as solid ●
sensing capabilities. ●0.784 0.702 0.787
Sensing capability Table 4. capability
Configurations
x FOR * PEER
market
Sensing orientation
capability
REVIEW Integrating Sensing* capacity
integrating
●capability Market
Sensing
Integrating orientation
capability
Unique ● coverage
capacity ●that
*~transforming
Market generate
●Transforming●●
Variablesorientation
orientation 0.053●
the high
●
capability). ● and
Integrating Innon-high
●
0.018
●a capability-driven ● ● digital
configuration
capacity 0.087 ● Market transformation
Integrating
12 ● ●
of
 orientation
digital
19by 0.112
capacity
commercial
●●
● orientation
transformation
● 0.150
Banks
●with poor
●
● tran ● 
Integrating
Sensing capability Integrating
capacity banks. Sensing a capability-driven
● capability ● path
● Integrating
Raw led●
Table ● by Non-High
coverage
4.strategic 
orientation
Configurations  Digital
orientation
Raw ●
0.226 coverage
that  path
(technology
Integrating
generate ●led
0.191 the ● strategic
orientation
capacity
0.226
high 0.154
and non-high ● ●
0.191 0.210
digital (technology
0.154●
transforma o
S1b, the
Integrating configuration
capacity
Integrating Integrating
Transforming
capacity path
High of high
Digital
Sensing
Integrating
capacity technology
Transformation
capability
Solution
Transforming● capacity orientation,
coverageSensing
●
Market of
capability high
●orientation
capability  market
● 0.331 orientation,
●
●
S1a
Transforming ● ●●  S1band
● Sensing nology
Transforming ●
capability
S2
● 0.361
orientation ● ● 
NS1 ● and market NS2
orient●
Conditional * market
Transforming orientation  *capacity integrating  * market

capability
Unique ●
banks. orientation
Transformation 
*~transforming
● coverage Market * integrating
of Commercial
●
orientation
● 0.053
Unique capability). capability ●
●
In *~transforming
● configuration
Transforming ● ●0.018  ● capability).
●  In con  ●
non-high
Transforming
Integrating
transforming
capability
capacity
capability
Transforming
Integrating
as
Commercial
Integrating
Transforming core
capability
Solution conditions
 capacity Banks
consistency
● and
Consistency
Integrating
Sensing Technology
S1b,
complementary
●
capacity
capability
the configuration
●
● 0.741 high
capability
0.784
● path ●of coverage
●
● integrating 0.702
high ● 0.018
Integrating  0.787
Non-High
capability
technology ●0.053
●capacity 0.087
Digital
Integrating 0.868
orientation, ●a 
0.846
0.112
high●market
capability-driven
0.087●orient ●pa
0.848
Variables
Transforming
capability S1b,
capability
capability
Transforming
as periphery the
 configuration
conditions Transforming path
 of
● high
High  technology
Digital
Solution ● 
●
Transformation
Sensing
coverage Banks
orientation, ● ●
capability
Solution high
of
● market
●
coverage 0.331 orientation,
●
capability  and ●
0.331 0.361 ●
capability
Table 4. Consistency capability ●can
thatConditional
capability
Transforming
Consistency
0.784
and produce
 S1b  the
indicate the

0.702 high
Transforming
the
Raw
Integrating 
digital
orientation
0.784
existence
non-highcoverage ●and
0.787
capacity
transformation

0.702
absence
transforming Consistency
0.2260.846 of conditions;
●
0.787
of●capability
core commer- Transformation
0.191● Transforming
asDigital0.848 * 0.154
Consistency
0.784
core●0.846
and
● market of 0.702
●represent
conditions Commercial
orientation
and 0.848
the 
0.784 0.787
existence
0.210
complementary andNon-Hig
* integrating 0.702 ●cap
0.249 0.8i
cial banks. Consistency
Configurations
non-high
Consistency
In other words, S1a
capability regardless
generate
transforming 0.784
capabilityof their
high
capability and
0.702
sensing S2 as non-high
core
Commercial
0.787
capabilities,
Solution
digital
conditionsNS1 transformation
Integrating
consistency and
Banks
commercial 0.846
Solutioncomplementary
●
capacity
banksNS2
Highof commercial

can
consistency 0.848
0.741 high
●
Consistency ●integrating
Transformation ● 0.741
●
0.784of ● high
0.702
0.868 
Consistency
banks. Raw Consistency
0.784
coverage Raw absence
Variables
0.784
capability
Consistency
0.702
0.226
coverageof
0.784 periphery
0.787
Market
0.191
Unique conditions;
0.7840.702
capability
0.702
0.226 orientation
capability
Transforming coverage 0.846
0.154 as blank
Conditional
0.702
0.787
0.191 spaces
Raw
periphery ●
0.787
0.0530.210 indicate
0.787
0.848
coverage 0.846
0.154
conditions that ●
0.018 the
can Raw condition
0.846
0.249
0.226
0.210
produce S1b,
capability
0.846 Banks
0.848
●
coverage
0.087 themay
the be
0.191
high present
configuration
0.848
0.249 
0.848
0.226
0.112
digital or
0.154absent.
Transformation
path
transformation of high
0.191 
0.150 te
0.2
o
Technology
still achieve high
Raw capability
digital
coverage as
transformation periphery0.226with conditions
poor can
transforming
0.191 and 
produce
0.154 the
capabilities high
Transforming
●
digital
so 0.787
0.210 long transformation
as
 indicate  Commercial
they Raw
0.249 of
coverage commer-
Banks
●conditions; ●0.226 0.191
Consistency ● Unique Consistency
0.784 ● 0.702  ●0.784 0.787
indicate 0.702
● the 0.846
existence
and and● absence the0.848
0.846
existence
ofnon-high
their
core and absence
 0.848
transforming ●of core
and  represent
● conditions;
capability the
as ●ex
c●
Raw coverage Raw
orientationUnique
coverage Raw 0.226
coverage
cial coverage
banks. InRaw Consistency
other coverage
0.191
0.053
0.226 0.226 0.154
coverage
words, Sensing
0.018
Solution
regardless S1a
Consistency
0.784
0.226
cial
0.191
0.053
0.191
capability banks.
capability
of0.087
coverage0.210
their S1b
Variables
0.702
In0.191
other
0.154
0.018
Unique
sensing 0.784
words,
●0.112
0.154 S2
0.787
0.154
0.249
coverage
0.087
capabilities, regardless
0.210 0.702
0.331 Unique NS1
Consistency
0.846
0.210
of
0.150
commercial0.053
0.112
0.210 ●banks
0.787
0.249 sensing
coverage 0.018
can NS2
0.848
0.249 0.846
0.1500.784
capabilities,
0.053
0.2490.087 0.361 0.702
commercial
0.018 ●Ba
0.848 0.1
have high technology
Unique
Raw coverage orientation,
coverage Raw market
0.053
0.226 orientation,
Sensing
coverage 0.018 and
absence
capability-driven
0.191 0.226 strong of
0.087
0.154 integrating
periphery
path
0.191 Non-High
ledcapability
0.112
by
0.210 capabilities.
conditions;
absence of
strategic
0.154 periphery
blank
Digital spaces
Unique
0.150
orientation
0.249conditions;
0.210 indicate
coverage
capability(technologythat
blank the spaces
condition
0.249
as periphery 0.053 indicate
orientation may
conditions
that
* be
0.018 presen
the
can
co
Unique coverage Unique 0.053 coverage HighTechnology
Raw
Unique Digital
coverage
coverage
0.018 0.053 Transformation
0.087 Raw still
0.226
0.053
0.018 achieve
coverage of
0.112 high
0.191
0.018
0.087 digital
0.226 transformation
0.154
0.087
0.150 S1a
0.191 Raw with
0.210
0.112 S1b
poor
coverage
0.154 transforming S2
0.249
0.150  capabilities
0.210
0.226 NS1
0.191 so●
0.249 lo
Market UniqueSolution
coverage
orientation
Configuration
Conditional
Solution
Uniquehave
coverage
still achieve
analysis
coverage
coverage
● can Solution
high
identify
Unique
0.053
market
0.053
coverage
digital ●the 0.331
Integrating
transformation
Solution
interaction
orientation
coverage 0.331
0.018
Consistency
● *0.018
●sensing
0.053
capacity
with
consistency
between0.087
0.331
poor 
● Solution
transforming
conditions
Transformation
capability
0.018
0.784
0.087[23].
Consistency 0.112
coverage
*~transforming
0.112 0.087
0.361
By
of
0.361 com- ●Solution
capabilities
0.741
0.702
Commercial ●so
0.112
0.784
capability).
Solution
0.150
0.112
0.150
coverage
●0.361
long
0.787
coverage
0.331
as they
In0.702 ●0.846
configuration
0.150
0.150 0.868
0.787S1a,
0.331
0.331
0.848
0.8
high orientation
Unique
technology Commercial
coverage
orientation, Banks
Unique have
 0.053
market high
coverage technology
Technology
orientation, 0.018 0.053
and orientation,
0.087
strong 0.018market
ofUnique 0.112cial 0.087banks.
orientation,
coverage In
and other
strong
0.150
0.112
0.053 words, regardless
integrating 0.018 cap
0.150
Solution
paring coverage
the
Sensing Solution
two
Solution
Solution
consistency
configuration
capability
Solution coverage
Variables
Solution consistency
coverage
Solution
coverage
●Solution
groups
Solution
0.331 coverage
consistency
the dominated
configuration
coverage
●0.741
and
0.741
0.331by Raw●0.331
Transforming
indicate
coverage
strategic
path 0.331 ofSensing
high
the0.331
0.741
orientation 0.361
Solution
existence
technology
0.331 Raw
0.226
capability-driven
(S1a

consistency
and
coverageand
Banks 0.868
absence
Sensing
orientation, ●integrating
S1b),
0.868
0.361
0.191
path●

0.361
Solution
itcore
Solutionhigh
0.226
capabilities.
market
0.361
consistency
conditions;
capability-driven
led by 0.154
● ● 0.868
strategic
consistency
still
0.741
0.361
achieve
0.361
●path
and
orientation,
0.191 high

orientation represent
0.210
led by
●may and
digital0.154
the
strategic
non-
0.741
(technology existence
0.741
transformatio
0.249
●orient or
0.2
Solution ● and
consistency  indicate
Solution the Market
Configuration
consistencySolution
Solution
● existence
and 
0.741 orientation
analysis
coverage
consistency
indicate
and absence
the absence
can
Solution
existence
of
Unique core
0.741●
identifyof
capability
market Configuration
periphery
and the
coverage
conditions;
absence
coverage ●
orientation ●
orientation
conditions;
interaction
0.331
0.741 ●and
ofand
0.868 
coreanalysis
 between
indicate ●
blank
conditions;
*market
0.053 represent
sensing canspaces
the identify
conditions
0.331
the
existence
orientation● andindicate
Solution
existence
0.868
capability
0.018   the
represent
indicate
and interaction
that
[23].
coverage
andabsence
**~transforming
sensing
0.0870.868 the
By
0.361
0.868 the
the condition
com-
existence
of 
between
existence
capability core conditions;
and
and
capability).
0.112 conditions
be
0.361 present
absence
*~transforming 0.331
● and
of
In configu or [23
core
0.150 ab
re
cap
is Integrating
found that
Solution there
capacity
●Solution
and are mutual
 indicate
consistency theSolution substitution
existencehighconsistency
S1a transforming
and ●absence effects
S1b of between
●capability
core 0.741 S2the sensing
conditions; as 
core capability
Uniqueconditions
NS1
●configuration
and coverage
 represent
andand●the inte-
complementary
●● NS2
and  indicate
0.053
existence have and highthehigh
0.018 sensing
technology
existence and capabil-
0.087
orientation,
absence of mar
core0.1
 indicate absence of consistency
paring
periphery the
commercial two
absence
conditions;
Sensing
● Solution
and configuration
of
 existence periphery
blank
capability
consistency
indicate the 0.741
spaces groups
conditions;
Solution
existence paring
indicate
●
●and dominated
blankMarket
that
consistency
absence two
the0.741
spaces
0.741 by strategic
orientation
absence
condition
indicate
of orientation
core of
conditions;●
periphery
may that 0.868
be groups
orientation
the present
conditions;
0.741
● condition
absence
Solution
and dominated
or (S1a
of
absent.
may ●
and 0.868
periphery
blank be
consistency
represent
path by
S1b),
spaces
0.868 present
the strategic
it
conditions; ●
indicate
existence or
● orientation
absent.
and that
blank thespaces
0.868spaces  (S1a
condition
0.7410.848 indic a
● and
grating the●existence
capability.
Transforming
absence
and
of For indicate
periphery
and absence
the ity
conditions; banksof
as core
a with and
conditions;
periphery
blank
absence
both
spacesSolution the
Consistency
high of
condition
indicate configuration
andcore  conditions;
coverage
technology
that
represent
can
thethereproduce path
the
condition
●the
0.784 and of
configuration
existence
the
may
 highand
high
be led technology
represent0.702
and
0.331
high
digital
present
absence
the
or orientation,
of high
0.787
existence
transformation
of
absent.
periphery
and technology high
of0.846
conditions; market
orientation,
commercial 0.361
blank orientation high
indic
● Technology
and  indicate the ● existence
and  indicate
and absence
the existence
of Sensing
is
core found
and capability-driven
conditions;that
absence ● Solution
ofandcore are
 coverage
path
mutual
conditions;
represent the● by
substitution
and strategic
existence
 represent
and Configuration
0.331
orientation
effects the between
existence analysis
(technology
sensing
and can ident
orientati
capability
absence
market of periphery
orientation, absenceis found
conditions;
focusing 
of peripherythat
absence
blank
● and there
●
onspaces
Integrating  of are
indicate
sensing  capability
periphery
conditions;
andindicate mutual
capacity
indicate
the ●conditions;
blank
that the
●Solution
existence
and Raw●
substitution
the
spaces
 high
existence 
blank
condition
indicate
indicate
or and
coverage and
absence
integrating
consistency the effects
spaces
may
Sensing
transforming ●●of
that
absence be the
existence between
of
core●
indicate
present
condition
capability
capability
high
core
0.226
capability and that
or
● sensing
conditions;
conditions; the
absent.
absence
canmay
transforming
as condition
●
core
●
0.191
0.741 be
of
alsoand●capability
present
and   may
conditions
core capability be
represent
conditions;
represent
indicate
0.154 and
or absent.present
andas
the
the inte-
●core
the or ● ●
complementary
existence
existence
and
existence absent.
conditions
 and
represent
0.210 and absence
and0.868 and
absence high
the comple
ofsensi
existence
core
0.249
capabilityorientation banks. Regardless of their integrating capabilities, commercial paringbanks the can twostill achieve
configuration high
absence ofgrating
Sensing periphery absence
conditions;
capability-driven
capability.
absence Sensing
Transforming
of For
of
periphery
of periphery blank
path
periphery
spaces
conditions;
market
capability-driven
led
conditions;
commercial absence byindicate
conditions;grating
strategic
blank
ity banks
of as
blank
orientation that
spaces
periphery
blank
a with the
spaces
capability.
path *condition
orientation
led
indicate
periphery
Integrating both
spaces byindicate
Solution
sensingFor
Sensing
strategic
that
conditions;high
indicate the
condition
ity
capacity
may
as
that
consistency
capability
commercial
(technology be
condition
technology
blank
that
a
the
the
present
spaces
periphery
can
condition
capability-driven
orientation may banks
condition
absence
produce beorpresent
*~transforming
orientation
Sensing
orientation
indicate
absent.
of
may
with
(technology
may
condition path
orbe
periphery
that
the both
be
●
present
0.741
capability).
absent.
and
the
high high
*capability-driven
led high
present
can condition
or
orientation
by
conditions;
digital
produceor ●
absent.
technology
strategic
absent.
may Inblank
transformation
the ledgroups
configuration
path
*be orientation
orientation
present
spaces
high  byor str
indic
digitalof (tc
ab
achieve digital Sensing
transformation, capability-driven as● shown
digital in Figure
path led
●
transformation and 2.strategic
Unique
by  coverage
indicate
with orientation
the
poor existence
 0.053
transforming (technology
and● absence 0.018
capabilities oforientation
coreSensing 0.087
conditions;
so long *capability-driven
ashigh ● andhave
they 0.112
represent
high path the
tech- led 0.150
by
existence str
Consistency
Market
Sensingmarket orientation
orientation
capability-driven 0.784
market
Sensingorientation,* sensing
path 0.702
ledorientation
Sensing
capability-driven bycapability ●
the
capability-driven
strategic 0.787
configuration
* sensing
path market
*~transforming
orientation
led ●
capability
path led0.846
path
orientation,
● and
market of 
capability).high
focusing
indicate
*~transforming
by orientation
strategic In 0.848
technologythe on existence
configuration
orientation 
capability).
*market ● is
orientation,
sensing and found
capability
absence
orientation
capability
S1a,
(technology In integrating that
configurationof or there
market
core
**~transforming
sensing
orientation are
S1a, mutual
orientation,
integrating
conditions;
capability
* be present ● and subst
capabilityand
capability
*~tran re
market Sensing
market
orientation capability
* sensing
capability-driven nology
Sensing
focusing
capability
orientation
path absence
capability-driven
led
on of by
sensing
banks.
*~transforming
Solution
by and
strategic
strategic
periphery
market
coverage
path
(technology
capability
Regardless orientation
Transforming
conditions;
capability).
orientation,
orientation
led by
or
ofbanks. orientation
their
strategic blank
In
as
(technology
(technology
integrating
integrating
Regardless
spaces
configuration
well 0.331
orientation
* indicate
market
as solid
orientation
orientation
capability
capabilities,
of their that
orientation
S1a,
sensing
(technology *
can
the *also
commercial
condition
*
capabilities.sensing
orientation
capabilities,
may banks
capability
0.361
*
cancommerc
still
or ab
*~tran ac
Raw
market orientation coverage
Sensing *capability
the configuration
market sensing
achieve 0.226
path
market
orientation
capability
digital 0.191
●transformation,
the configuration
of *high Wetechnology
orientation
Sensing sensing high
path
thencapability
*~transforming *adopted
capability-driven 0.154
sensing
astransforming
ofachieve
Sensing ●
orientation,
high
Ragin
capability).
shown digital
technology
in(2008)
capability
*~transforming
path absence
0.210
capability
high
the
capability-driven
led
Figure [26] of
transformation,
configuration
market
logic
In*~transforming
configuration
by periphery
2.orientation,asframework
capability).
strategic core
path 0.249
orientation, as
high
path
Inthe
conditions;
conditions
shown
capability).
S1a,
orientation
led market
of
toandhigh
configuration
by strategic
Sensing grating
and
in
●configuration blank
non-
demonstrate
In 
Figure
orientation,
technology
(technology capability.
spaces
complementary
S1a, 2.the
path
configuration
capability-driven
orientation ●
indicate For
orientation,
and
of (technology
three
orientation highnon-highcommercial
that the
technology
pathways
S1a, path
* as highcondition
sensing
led ●by cap
marke
orientati ba
orie
str
the configuration path Consistency
of high technology
Integrating digital
0.784
orientation,
a*~transforming
Solution capability-driven transformation
consistency capability
0.702
high market
path digital
led with
0.787 transformation
poor
orientation,
by strategic
0.741 transforming
the 0.846
configuration
and
orientation with
non- capabilities
poor path
(technology transforming
0.848
of highso long capabilities
technology
orientation
0.868 they have
orie
Unique market
Integrating
the configuration theorientation
coverage
high transforming
path capacity
configuration
of high market
0.053
high
the * configuration
sensing
capability
technology
market orientation
transforming
further,
path ofcapability
0.018
as corepath
from
orientation,
orientationhigh ●a** theoretical
ity sensing
as0.087
conditions
capability
of
technology
market sensing ahigh
high capability
periphery
as
and core
perspective.
technology
●
market
orientation,
orientation
capability capability).
0.112
complementary *~transforming
condition
conditions
high
orientation,
* 
transforming
high
sensing We
orientation,
*~transforming can
and In
high
propose
market
and
capability configuration
produce
0.150
high
non- capability).
complementary
sensing
capability
high
two the
market
orientation,●
capability).
market transforming
capabil-
conditional
*~transforming asS1a,
market
high In
high
core configuration
digital
orientation,
and
orientation
In non- orientation,
sensing
paths
configuration transformation
conditions
capability
and
capability).
* of
sensing capabil-
high S1a,
and
non- as
S1a,
Infocusing
core of
complementar
digital
capability on
comme
condition
configuration *~tran sen
highconfiguration
transformingpath capability Sensing
astechnology
core conditions nology
Sensing and orientation
capability-driven
complementary and
nology market
path
high orientation
led orientation,
sensing bycore
high andcapability).
strategic
transforming
capabil- market
as well as
orientation orientation,
solid sensing
(technology as well
capabilities
as solid
orientati
Technology
the
ity as high
acapability
periphery the
ity
high
Raw
condition
as
coverage
* market
configuration
of high
transformation
acapability
periphery
transforming can
orientation
producepath
● and
banks. that
condition
capability of0.226
 * integrating
orientation,
high
indicate
Regardless
the havehigh
ascan technology
core theConsistency
different
produce
digital
0.191
high
of
ity
capability
existence
their
conditions as market
orientation,
Sensing
core and
integrating
transformation
the
ahigh
0.154
orientation,
absence
characteristics:
periphery
high
and digital
0.784
*~transforming
high
capability-driven
capabilities,
complementarycondition
ofity
0.210
market
and
oftransformation
aone
commercial
as non- 0.702
orientation,
path
conditions;
achieve
commercial
is
periphery
can
high led
dominated
produce ●capability
of
sensing by
and
digital In
condition
0.787
0.249
and
strategic

banks
commercial
the byhigh
capabil-
as
configuration
non-
represent
transformation,
can core
strategic
can still
digital
condition
produce
0.846
orientation
the existence
asand
achieve
transfo sho
the (t
high transforming
Solution coverage
Transforming
orientation transformingas thecore configurationcapability
conditions
0.331 as
and core
path
the
market complementary
conditions
configuration
of high Integrating
orientation and
technology high
path* complementary
aofsensing
sensing
High orientation,
0.361
capability-driven
digital capabil-
technology
Integrating
capability high
high the sensing
market
configuration
orientation,
path
a capabil-
orientation,
capability-driven
*~transforming led by high
strategicpath market
capability). and
of
path high
orientationnon-
ledorientation,
In technology
by strategic
(technology
configuration orie
orie
ity astransforming
high a periphery high condition
Unique
capability
S1b,
transforming cancore
the
coverage
as produce
configuration
absence
conditions
capability
digital the
0.053 of high
●
path
periphery
as
and coredigital
of
Raw high
0.018
complementary transformation
technology
conditions;
coverage
conditions
market ● blank
0.087
and
orientation high ofity
orientation,
spaces
0.226
complementary
sensing
* commercial
as
sensing a
indicate
0.112 periphery
high
capabil-
Sensing
that
0.191
high
capabilitymarket
the condition
condition
sensing orientation,
0.154
0.150 may
capabil-
*~transforming can be produce
and
present
0.210
capability ortheab
ity as Solution banks.
a periphery ity
consistencyRegardless
condition
capability
banks.
as a periphery
Regardless
banks.
ity
can of as
high
Technology
of
their
their
aorientation,
produce Regardless
integrating
periphery
condition
transforming the high
0.741
integrating
non-high
canand
of
condition
high the
capabilities,
their
produce
digital
capability
the
transforming *transformation
other
integrating
transforming can
Sensing
market
configuration
capabilities,
as by
commercial
produce
Technology
transformation
the core high
commercial
capability
dynamic
banks. with
capabilities,
conditionsthe
digital
capability
orientation
path of banks
of
0.868
transformation high
banks
poor
*capabilities.
Regardless
*high
astransformation
core
transforming
commercial
can
digital
transformation
commercial
as
and
market ofcore
integrating still
ofbanks.
complementary
technology
can
conditions
conditions
still
high
orientation
banks.
We
their
achieve banks
capability capabilities
will
ofintegrating
transformationRegardless
*high analyze
can
commercial
transforming
and
orientation,
achieve
and
high still
complementary
integrating
Regardless
high
complementary
capability
sensing
*~transforming
high so
the
ofcapabilities,
of achieve
their
capabilitylong
commercial results as
capabil-
capability
market
of commercial
their
high
as they
integrating
highhigh of
commercial
core
capability).
integrating
integrating
have
the
sensing
condition
*~transformin
orientation, high
capabilit
In
and
capabilit
ban
capcotn
ity as
digital a periphery
transformation itycondition
digital as
Solution
orientation a
three
with periphery
can
coverage produce
configurations
transformation
poor condition
nology
transforming aswith the high
can
capability
orientation
in detail
poor
capabilitiesproduce
digital
Unique
orientation the
0.331
below.and
transforming
digital the
configuration
coverage
market
cansostill long high
transformation digital
orientation,
capabilities
as they of
path
0.053
have transformation
commercial
digital
so of
withas
high
longhigh
well technology
0.018
0.361
as
atransformation
poortech-
aspaththey solid
transformingof sensingorientation,
0.087 capabilities. high
High 0.112 marke
digital
banks.● andRegardless
 indicate
Market banks.
ofthe
Consistency
digital
their
existence
transformation
banks.
Regardless
integratingity
andas Regardless
ofacapabilities,
absence
0.784
with
their
periphery
Integrating
capabilitypoor core of
ofintegratingity
0.702 their
commercial
condition
conditions;
high
transforming
as periphery
integrating
capabilities,
aS1b, periphery
transforming
Sensing
can banks capabilities,
producecommercial
commercial
condition
● capability-driven
the
0.787 and
capabilities
conditions represent
configuration
capability the
0.846S1b,
socoverage
can long
produce
banks
achieve
high
can
the commercial
path
as banks
existence
asthe
core
paththey of high
produce
digital canityHigh
configuration
the ledhigh
conditions
have and
0.848
by
digital
high
banks
still digital
achieve
transformation
as
the high
technology
strategic
high and can
periphery
transformation
digital tech- ofhave
still
high
digital ofachieve
condition
orientation,
complementary
orientation
transformation high high
with
transformation
commercial capabilities
tech-
poor
high
technology
with hightransforming
can
high
(technology
poor
of(technology
commer-
produce
market soorien
of comme
orientation
sensing long
orientati
transforming
the
cap
banks. Regardless banks.
of their
Solution Regardless
integrating
consistency
Sensing ofcapabilities,
their
capability-driven integrating
Integrating commercial
Solution
a capabilities,
high
0.741
path led
capability-drivenbanks
transforming
by commercial
can
strategic still
path achieve
capability
transformation banks
orientation
led by high
as can
core
0.331
of
strategic 0.868 still achieve
conditions
Technology
(technology
orientation high
and
orientation transformation
complementar orienta of
0.3
digital
absence ofnology
transformation
orientation
periphery
Raw coverageorientation
digital with poor
conditions; nology
and
digital
transformation
banks.blank marketorientation
transformation
transforming with
Regardless
spaces orientation,
capability poor
indicate and
capabilities
banks.
of with
their
ityother market
that
aswith as
transforming well
poor
so
Regardless
integrating
the
anon-high orientation,
as
condition
periphery solid
transforming
long nology
capabilities
asof they sensing
capabilities,
their
may
transforming
condition as
haveorientation
well
integrating
be present
non-high capabilities.
capabilities
so high
long as solid
tech-
commercial
capability
can as
or
produce and
nology
so
they sensing
capabilities,
banks.
absent.
transforming
as market
long
have
banks orientation
as capabilities.
high
Regardless
coreorientation
the orientation,
they
can
conditions
high have
tech-
commercial
capabilitystill
digital ofand high
achieve
their
and market
as
banks
as market
core well
tech-
integrating
high can
complementary
transformation as
orientation,
conditions solid
still sensing
capabilit
achieve
of comme and
high asco
nology
digital orientation
transformation and0.226
digital market
cial
with
 banks.
transformation
poor
* orientation
market
0.191
orientation,
Inmarket
transforming as 0.154
orientation
well
words,
poor as
capabilities solid
regardless *
transforming
Market ity so
as 0.210
sensing
sensingof
long
a capability
their capabilities.
capabilities
as
periphery theysensing 0.249
*~transforming
nology
commercial
have so
condition capabilities,
high
long banks
tech-
as
can they capability).
and
commercial
orientation
produce have high
the In
banks
tech-
high configuration
orientation,
can
commercial
digital transfo as
banks
nology orientation Integrating
nology
and market ●
aMarket
orientation and
capability-driven
nology
orientation,
digital indicate
Integrating
and asorientation
market
transformation theapath
well existence
*orientation,
and market
capability-driven
asled
digital market
solid
with by* sensing
and absence
Solution
orientation
strategic
orientation,
sensing
transformation
poor as
Integrating
capability well
as
capability
path of core
consistency
*ledintegrating
orientation
Integrating
asby
capabilities.
transformingas solid
with
periphery well*~transforming
conditions;
strategic
(technology
sensing
poor
capability a as
astransforming
capabilities
conditions solid ●
capability and
capability-driven
orientation
sensing
capabilities.
digital
so capability).
represent
orientation
Integrating
Integrating
periphery
can long 0.741
*~transforming
(technology
capabilities.
transformation
capabilities
produce as they
conditions
the
the
pathIn
ahave configuration
existence
so
high capability).
capability-driven
led orientation
byproduce
high
canlong
with
digital
and
strategic
tech-
as
poor they S1a,
Inpathconfigura
orientation
transforming
have
transformation
the highled
high 0.8
by
dig t
Unique
nology coverage
Integrating
orientation aabsence
nology
and
orientation 0.053
capability-driven
still
market achieve
oforientationorientation,
periphery
banks.
0.018
the
path
high
and led
conditions;
Regardless
configuration
digital
market
as 0.087
byconfiguration
strategic
welltransformation
orientation
blank orientation,
capability
of
path
asstrategic
solid
spaces
their
orientation
banks. sensing
integrating
0.112
of as high
indicate withwell
Regardless technology
(technology
poor
capabilities.
that as
capabilities,
0.150
transforming
solid
the of orientation,
orientation
Integrating
sensing
their
condition capability
may
commercial high
capabilities
capabilities.
integrating be capabilities,
present or
banks
market
a capability-driven
soabsent.
long can
asandstill
orientation,
they
commercial
achieve
path led andbanbyon
Sensing
Integrating acapability-driven
* market orientation
capability-driven
Integrating *nology path
market
*aIntegrating
integrating
path
capability-driven
led byastrategic
orientation
by
orientation S1b,
strategic
capability* the
capability-driven
nology
and path orientation
integrating
orientation
market
cial led ●
orientationby and
*~transforming path 
capability
banks. Incapability* led
(technology
orientation, and path
indicate
(technology
market
other by of
the
capability).
strategic
orientation
market
ascial well
words, high
existence
orientation
*~transforming
orientation
orientation technology
In *
orientation
(technology
orientation,
banks.as solid
regardless and
nology *
sensing
as
In*configuration
other absence
configuration
*market
integrating
capability).orientation,
(technology
wellorientation
orientation
ofwords, of
orientation
capabilities.
their as core
capability
In
solid
sensing
regardlessand high
conditions;
configuration
*
orientation
sensing market market
integrating
capabilities, ●
*~transforming orientation,
capabilities.
ofastheir  represen
capability
orientation, capa as *
* marketcoverage orientation * Integrating
integrating
have high digital
highled
aacapability
technology transformation
transforming
*~transforming
orientation, with poor
capability).as coretransforming
conditions
In market capabilities
and complementary
orientation so*orientation
long
integrating theysensing
high commercial
have high
sensing
capability capa
cap *It
market
* market
Solution
Figure 2. Substitution
S1b, Integrating
the
orientation
orientation * market
effects abetween
configuration
* sensing
* integrating *capability-driven
S1b,
orientation path
the
capability
market
sensing
capability configuration
* of
Integrating high
0.331
capability
path
non-high
technology
*~transforming
orientation
integrating
*~transforming
and
capability-driven
path
* integratingbyintegrating
capability
capability-driven
Integrating strategic
of absence
transforming
capability).apath
orientation,
high capability
capability). ofmarket
capability.
orientation
*~transforming
path led
digital In Inby
periphery
technology
S1b, capability
high
the
capability-driven
led by
orientation,
0.361
strategic
(technology
transformation conditions;
configuration
market aspath
orientation,
configuration
*~transforming
configuration
capability).
strategic core and
orientation
orientation,
S1b,
S1a,
orientation
led blank
path
high
In the
strong
orientation
with
conditions
capability).
by of spaces
market
integrating
(technology
poor and
configuration
and
high
configuration
Integrating
strategic
(technology InMarket
transforming
indicate
aorientation,
technology
configuration
orientation
capabilities.
that
complementary
path
capability-driven
orientation capabilities
the condition
orientation,
of
and high
(technology high somay
technolog
path long
integra
high
orienta
led be
by m
S1b,
Solution the configuration
consistency path
Sensing of high
Configuration
0.741 nology
technology
capability-driven still
ity *asintegrating
aanalysis achieve
orientation
periphery
orientation,
path canled high
and
condition
identify
by digital
market
high still
strategic canachieve
transformation
orientation,
market
the produce
interaction
0.868 high
orientation,
orientation S1b, digital
as
the
the with
well
betweenhigh transformation
poor
as
configuration
and
(technology solid transforming
orientation
digital
conditions sensing
transformation
orientationpath with
[23]. ofBy *capabilities
poor
capabilities.
highcom- of transform
comme
technolog so lo
S1b,the * market
theconfiguration
non-high
configuration orientation
path
S1b,Figurethe of
path ofhigh
transforming * market
*
non-high
S1b,
configuration
*high integrating
technology
thecapability orientation
transforming
configuration
technology path as
of capability
capability
orientation,
*core *path
orientation,
high conditions*~transforming
capability
of
technology as
high periphery
high
high as capability
market
and nology
core
non-high capability).
complementary
technology *~transforming
orientation
conditions
* orientation, transforming
orientation, can
and
and In and
high configuration
produce
*non- capability).
market
complementary
non-highintegrating
highcapabilitythe
market high
transforming In
orientation, configuration
digital
asorientation,
high
core as
*integrating
conditions well
transformation
capability
and as solid
and
as core sensing
of
complem comm
cond
non-high
S1b,  the
2.
transforming
configuration market
S1b,
market
Substitution capability
paring
path
the
orientation
effects
orientationtheastwo
configuration
of high
market
between
banks.
core
* produce
sensing
technology
integrating
Figure
path
have
Integrating orientation
sensing
Regardless
conditions
configuration high
capability
of amarket
and
orientation,
high
orientation,
capability
2. Substitution
technology
ofand
groups their
orientation,
integrating
●capability-driven
capability and effects
have high
*~transforming
integrating
complementary
dominated
*~transforming
technology high market
between
orientation,
high
integrating
orientation,
market
and
capability
technology
path market
led
capabilities,
high
by non-high
capability).
orientation,
orientation,
market
capability.capability).
sensingby*~transforming
integrating
strategic
high
orientation
capability
orientation,
orientation,
strategic
In
marketcommercial
transforming
orientation
and
and
In
configuration
configuration
and and
orientation
orientation,
capability).
(S1a
integrating
integrating
market strong
banks (technology
capability
and
S1a,
andcan
S1b),
In
capability
still it
configura
capability.
orientation,
integrating and
orienta
achieve
asorientation
core condcaps*
non-high
● and
high transforming
transforming
indicate
capabilitynon-high
the existence
capability
as periphery
capability asascore
capability
non-high
transforming
S1b, the
and
conditions
core
absence
conditions
as periphery
transforming
conditions
capability
configuration can of
cial
S1b,
core
and
as banks. conditions;
capability
and core
path
the In
complementary
conditions the
complementaryother
high
as
conditions
configuration
of high canSensing
core words, Integrating
high
capability
digital
produce represent
capability-driven
conditions
and
technology high
path regardless
sensing
transformation
the
as
complementary
of periphery
high
and
integrating
orientation,
high acapabil-
the capability-driven
existence
of
digital their
capability
of
complementary
technology
S1b, path
conditions
high
high
and
commer- led
sensing
transformation
the as by path
periphery
integrating
market
configuration
orientation,can
high led
strategic
capabilities,
produce
of
orientation,high byorientation
strategic
conditions
commer-
integrating
path thecommercial
market
of
and high
high can (technol
digital banks
produce
orientation,
technolog tran
capability as periphery conditions can *core
market
digital
produce Configuration
areorientation
transformation
the high * with analysis
integratingpoor Configuration
can
capability
transforming identify analysis
the interaction
*~transforming
capabilities can identify
so between
capability).
long the
as interaction
they conditions
Inhaveconfigura
high bet
[23 t
absence
non-high
ity as a periphery
of periphery
cial banks.transforming
In other
condition
conditions;
the
cial words,
can
is found
configuration
non-high banks.
blank
capabilityregardless
produce In other
that
spaces
transformingas
the path there
still indicate
ofof
high high
conditions
capability
achieve
words, their
digital
mutual
that the
technology
market
high
regardless
sensing as
and *digital
substitution
condition
core
digital
transformation orientation transformation
may
orientation,
complementary
conditions
market transformation
capabilities,
cial
of their
banks. sensing
In
of
beeffects
orientation present
and high
*commercial
sensing
commercial
other high capability
with of
between
or
*market
capabilities,
cial
words,
commer-
absent.
complementary
integrating
capability
poor
banks
banks.
as
sensingperiphery
orientation,2.high
In *~transforming
transforming
regardless
commercial
can
Figure other
capability
capability
ofwords,
their
Substitution
conditions
and
integrating
banks non- and
*~transforming
capabilities
sensing
can
inte-
capability).
regardless
can
effects soproduce
long
capabilities
of
between capa
Insen
their asco
 Solution coverage 0.331 0.361
Solution consistency 0.741 0.868
● and  indicate the existence and absence of core conditions; ● and  represent the existence and
absence of periphery conditions; blank spaces indicate that the condition may be present or absent.
Sustainability 2023, 15, 1915 12 of 19
Sensing capability-driven path led by strategic orientation (technology orientation *
market orientation * sensing capability *~transforming capability). In configuration S1a,
the configuration
the configuration path path ofof high
high technology
technology orientation,
orientation, high
high market
market orientation,
orientation, and and non-
non-
high transforming capability as core conditions and complementary
high transforming capability as core conditions and complementary high sensing capability high sensing capabil-
itya as
as a periphery
periphery condition
condition can produce
can produce the digital
the high high digital transformation
transformation of commercial
of commercial banks.
banks. Regardless
Regardless of their of their integrating
integrating capabilities,
capabilities, commercialcommercial
banks canbanks
stillcan still achieve
achieve high
high digital
digital transformation
transformation with poor with poor transforming
transforming capabilities
capabilities so longso aslong
theyas theyhigh
have havetechnology
high tech-
nology orientation
orientation and market and orientation,
market orientation,
as well as assolid
well sensing
as solid capabilities.
sensing capabilities.
Integrating a capability-driven path led by strategic orientation
Integrating a capability-driven path led by strategic orientation (technology (technologyorientation
orientation
* market orientation * integrating capability *~transforming capability).
* market orientation * integrating capability *~transforming capability). In configuration In configuration
S1b, the
S1b, the configuration
configuration path path ofofhigh
hightechnology
technologyorientation,
orientation, high
highmarket
marketorientation,
orientation, and and
non-high transforming
non-high transforming capability
capability asas core
core conditions
conditions andandcomplementary
complementary high highintegrating
integrating
capability as
capability as periphery
periphery conditions
conditions cancan produce
produce the the high
high digital
digital transformation of commer-
cial banks.
cial banks. In In other
other words,
words, regardless
regardless of oftheir
theirsensing
sensingcapabilities,
capabilities, commercial
commercial banks banks can
can
still
still achieve
achieve high high digital
digital transformation
transformation withwith poor
poor transforming
transforming capabilities
capabilities soso long
long as
as they
they
have
have highhigh technology
technology orientation, market market orientation,
orientation,and andstrong
strongintegrating
integratingcapabilities.
capabilities.
Configuration
Configuration analysis
analysis cancan identify
identify the
the interaction
interaction between
between conditions
conditions [23].
[23]. By com-
paring
paringthe thetwotwoconfiguration
configurationgroupsgroupsdominated
dominatedbyby strategic orientation
strategic orientation (S1a and
(S1a S1b),
and it isit
S1b),
found
is found thatthat
there are mutual
there are mutualsubstitution effects
substitution between
effects sensing
between capability
sensing and integrating
capability and inte-
capability. For commercial
grating capability. banks with
For commercial banksboth high
with technology
both orientation
high technology and highand
orientation market
high
orientation, focusing on sensing capability or integrating capability
market orientation, focusing on sensing capability or integrating capability can also can also achieve digital
transformation, as shown in Figure
achieve digital transformation, 2.
as shown in Figure 2.

Technology Sensing
orientation capability High digital
transformation of
Market commercial banks
Integrating
orientation capability

Figure2.2. Substitution
Figure Substitution effects
effectsbetween
betweensensing
sensingcapability
capabilityand
andintegrating
integratingcapability.
capability.

The dynamic capabilities-driven path led by strategic orientation (~technology ori-

entation * market orientation * sensing capability * integrating capability * transforming
capability). In configuration S2, the configuration path of high sensing capability, high
transforming capability, and non-high technology orientation as core conditions and com-
plementary high market orientation and high integrating capability as periphery conditions
can produce the high digital transformation of commercial banks. That is, in the absence
of technology orientation, commercial banks can also achieve high digital transformation
so long as they have strong sensing capability, integrating capability, and transforming
capability, while matching high market orientation.

4.2.2. The Configuration That Generates Non-High Digital Transformation of

Commercial Banks
This paper also examines the configuration paths that generate non-high digital trans-
formation of commercial banks. Two configurations produce non-high digital transforma-
tion. The overall solution consistency is 0.868, with a coverage of 0.361. Configuration
NS1 (technology orientation *~market orientation *~integrating capability * transforming
capability) shows that regardless of the bank’s sensing capability, high digital transforma-
tion is difficult to achieve in commercial banks lacking market orientation and integrating
capability, even with technology orientation and transforming capability. Configuration
NS2 (technology orientation * ~market orientation * sensing capability * integrating capa-
bility) shows that even if technology orientation, strong sensing capability, and integrating
capability exist, the degree of digital transformation of commercial banks will not be high
in an ecology lacking market orientation.
Sustainability 2023, 15, 1915 13 of 19

4.2.3. Horizontal Analysis of Antecedent Conditions

We then conducted a horizontal analysis to compare the degree to which antecedent
conditions impact digital transformation. As shown in Table 4, all three configuration
groups that produce high digital transformation of commercial banks contain high market
orientation. All configuration groups that produce non-high digital transformation of
commercial banks include non-high market orientation. These results are a good indication
that market orientation has a more widespread impact on the digital transformation of
commercial banks. There is a strong correlation between market orientation and high
digital transformation of commercial banks. However, regardless of the existence of
market orientation, commercial banks can achieve high digital transformation. In other
words, market orientation must be effectively combined with other conditions to affect
digital transformation.

4.3. Robustness Checks

A robustness test is a method to verify the reliability of research results by changing
research conditions. To strengthen the accuracy of the findings, this paper conducts a
robustness check on the conditional configurations that generate high digital transformation
in commercial banks. First, we adjust the consistency threshold from 0.8 to 0.75, resulting
in a consistent configuration. Second, considering that there are commercial banks with
more than 10,000 employees in the sample, there may be differences between these huge
banks and other small and medium banks in terms of conditions and foundations of digital
transformation. After deleting three mega commercial banks (Bank of Shanghai, Bank of
Jiangsu, and Bank of Ningbo), the configurations obtained from the analysis are the same.
The above results indicate the reliability and robustness of the study findings.

5. Discussion
5.1. Research Conclusions
This paper uses an fsQCA approach to explore the configurational effects of strategic
orientation (technology orientation, market orientation) and dynamic capabilities (sensing
capability, integrating capability, and transforming capability) on the digital transformation
of commercial banks. The results of the analyses lead to the following conclusions:
First, neither strategic orientation nor dynamic capabilities offer the necessary condi-
tions for the digital transformation of commercial banks alone, but high market orientation
plays a more general role in the digital transformation of commercial banks.
Second, there are three configuration paths for high digital transformation of commer-
cial banks, namely, sensing capability-driven path dominated by strategic orientation, inte-
grating capability-driven path dominated by strategic orientation, and market orientation-
driven path dominated by dynamic capabilities, which represent multiple-equifinal paths
for achieving high digital transformation among different commercial banks.
Third, there are two configuration paths for non-high digital transformation of com-
mercial banks, which has an asymmetric relationship with the configuration that generates
high digital transformation of commercial banks.
Finally, the results show a synergistic relationship in dynamic capabilities conditions.
With high technology orientation and high market orientation, commercial banks can
equivalently substitute high sensing capability with high integrating capability to drive
their high digital transformation.

5.2. Theoretical Contributions

Our findings offer important contributions to several streams of research (Table 5).
Sustainability 2023, 15, 1915 14 of 19

Table 5. Contributions of this research.

Characteristics of Conventional Our Findings from a Configurational

Regression Methods fsQCA Approach
Organizational strategic orientation and
dynamic capabilities are not necessary
conditions for high digital
transformation alone
Organizational strategy, capability, and
Market orientation is an important
digital transformation are
condition for commercial banks to
significantly correlated
achieve high digital transformation
The configuration model of strategic
orientation and dynamic capabilities has
been constructed
Theoretical Contributions
Analyzing the digital transformation of
commercial banks from the
configurational perspective of causal
complex factors such as organizational
strategy and capability is helpful to
reconcile the conflicts of inconsistent
research results
Confirming the powerful effect of market
orientation on digital transformation of
commercial banks
Providing new ideas for the research on
the coupling of organizational elements
and digital ecology of commercial banks,
and partially responding to the digital
transformation framework proposed by
Hanelt (2021) [35]
Deepening the symbiotic relationship of
organizational capability elements and
make up for the deficiency of existing
literature on the potential substitutive
relationship between and among
dynamic capabilities factors

The relationships between and among the
elements of dynamic capabilities
are progressive
There is symmetry in the research
conclusion. The high market orientation
can promote commercial banks to achieve
high digital transformation, while the low
market orientation cannot.
Sensing capability and integrating
capability play a completely substitutive
role in promoting the digital
transformation of commercial banks
The driving mechanism of commercial
banks’ digital transformation has causal
asymmetry: three configuration paths to
achieve high digital transformation are
not directly opposed to two paths leading
to non-high digital transformation
Supporting the initiative of Wilden et al.
(2016) [65] and Ma et al. (2022) [66] to
systematically study dynamic capabilities
using configuration theory
Showing the advantages of QCA in
discerning the relationship between
various elements within the model and in
providing methodological guidance for
the follow-up exploration of complex
digital transformation phenomenon
Demonstrating that the QCA method can
break through the unified symmetry
assumption of causality effect in linear
regression and further clarify the
complex causes in more detail

Based on the causal necessity analysis, this paper finds that a single condition of
strategic orientation or a dynamic capabilities element does not constitute the necessary
condition of high digital transformation. Although previous research found that dynamic
capabilities or resource arrangement capabilities are significantly related to digital trans-
formation [8,45], digital strategic vision is a necessary and insufficient condition for the
development of commercial banks [15]. However, this study claims that these strategic
capabilities are not the necessary conditions for high digital transformation. For example, in
S1a, in the absence of the transformation capability, high-tech orientation, high market ori-
entation, and high-level sensing capability jointly promote the high digital transformation
of commercial banks. This will help to settle the dispute over the inconsistent conclusions of
digital transformation due to ignoring the concurrence of organizational factors in previous
studies. In addition, the research results show that market orientation is an important
Sustainability 2023, 15, 1915 15 of 19

condition for commercial banks to achieve digital transformation and verify the strong
impact of market orientation on commercial banks to accelerate the digital initiatives [67].
By adopting the configuration theory [27], this paper integrates five elements of
organizational strategy and capability to investigate the complex causal mechanism of the
digital transformation of commercial banks. The previous studies examined the impact of
organizational strategy [68] and organizational capability [31], respectively, and addressed
the importance of strategy and capability to the digital transformation of commercial banks.
However, the internal mechanism of the synergy of strategy and capability affecting the
digital transformation of commercial banks is still unclear. The configuration analysis of
strategic orientation and dynamic capabilities in this study provides a new idea for research
on the coupling of organizational elements and digital ecology of commercial banks, and
partially responds to the digital transformation framework proposed by Hanelt (2021) [35]:
awareness (market orientation, sensing capability), acceleration (technology orientation,
integrating capability), and harmonizing skills (transforming capability).
This study uses fsQCA to observe that sensing capability and integrating capability
are substitutive in promoting the digital transformation of commercial banks. Further, it
enriches the literature on the symbiotic relationship of organizational capability elements.
For high digital transformation, technology orientation and market orientation complement
each other. Under this condition, the two elements of dynamic capabilities play a substitute
role in explaining the digital transformation—that is, the perception of corresponding
capabilities and the integration and utilization capabilities play a completely substitutive
role in promoting the digital transformation of commercial banks. The research results make
up for the deficiency of existing research on the potential substitution relationship between
dynamic capabilities elements [16], and support the advocacy of Wilden et al. (2016) [65]
and Ma Hongjia et al. (2022) [66]. Of course, this also fully reflects the advantages of
fsQCA in exploring the relationships between various elements within the model [69] and
provides methodological guidance for demonstrating the complex digital transformation
phenomena in the future.
Finally, this study certifies that the inherent mechanism of the digital transformation of
commercial banks has causal asymmetry. The configurational path leading to high digital
transformation is not directly opposite to those leading to non-high digital transformation.
In other words, the reasons for non-high digital transformation cannot be directly deduced
according to the factors and conditions leading to high digital transformation. As a result,
the QCA method breaks through the unified symmetry assumption of causality effect in
linear regression [63,70]. Thus, the approach can more subtly explore the reasons for the
results [25] and further clarify the complex causes in more detail.

5.3. Practical Implications

Our findings imply that commercial banks develop a customer-centric value creation
logic and, strategically, strengthen the market orientation in the digital transformation. The
results of analysis show that customer-centric market orientation plays a more pervasive
role in driving digital transformation. When implementing digital transformation, com-
mercial banks need to consider customer demands. Based on providing the best customer
experience that is supported by digital technology [71], commercial banks strive to con-
struct the bridge between themselves and the customer. The high digital transformation can
optimize financial technology and services promptly according to customer information
data [72] so as to aggregate and create a continuous stream of digital value.
Second, managers of commercial banks should understand the relationship between
organizational strategy and capability from the holistic perspective and correctly compre-
hend the complex causal interactions of strategic orientation and dynamic capabilities.
Digital transformation of commercial banks is the result of the interaction of various ele-
ments of organizational strategic orientation and dynamic capabilities, and a single element
is not a prerequisite for high digital transformation. This suggests that commercial banks
cannot be limited to optimizing individual strategic orientation or dynamic capabilities
Sustainability 2023, 15, 1915 16 of 19

elements, and more attention must be paid to the complex webs of causal mechanisms
between organizational strategies and capabilities to create the combination that can help
commercial banks achieve high digital transformation.
Third, commercial banks should choose the appropriate digital transformation path
based on their own strategic direction and capability base. For commercial banks with a
clear strategic orientation, focusing on enhancing sensing capability (see S1a) or integrating
capability (see S1b) is the “recipe” for achieving digital transformation; if commercial banks
have strong dynamic capabilities, building a customer-centric market orientation is an
important configuration for achieving high-level digital transformation (see S2).

5.4. Limitations and Future Research

This study is not excepted from limitations. First, we analyze digital transformation
of commercial banks from a static perspective. Du et al. (2021) [73] proposed that the
temporal dimension should be incorporated into the QCA approach to develop dynamic
configuration theory. In the future, data could be collected period by period to construct a
panel model to study the impact of the evolutionary trajectory of strategic orientation and
dynamic capabilities on the digital transformation of commercial banks based on time-series
QCA. Second, we only explored the effect of strategic orientation and dynamic capabilities.
Exploring more organizational elements from multi-levels and multi-dimensional perspec-
tives in the QCA research model can further enrich the literature. Third, this paper simply
analyzes the managerial support path of the digital transformation at the organizational
level. In the future, the technical practice path of transformation can be designed based on
network or digital ecosystem with emerging technologies such as blockchain [74], cloud
computing [75], and other technologies.

6. Conclusions
The fuzzy-set qualitative comparative analysis (fsQCA) of digital transformation prac-
tices by Chinese commercial banks shows that a single condition of strategic orientation
or dynamic capabilities does not constitute the necessary condition for high digital trans-
formation, yet market orientation plays a more general role in generating high digital
transformation. The results suggest that successful digital transformation does not depend
on a single condition, but on complex synergistic interactions between strategic orientation
and dynamic capabilities. One key recommendation for managerial practice is that, in the
digital economy, stronger market orientation leads to higher digital transformation. This
is a first step for Chinese commercial banks to achieve sustained competitive advantage
through digital transformation. In addition, and as a second step, in the volatility, uncer-
tainty, complexity, and ambiguity environment, it appears that commercial banks need
more consistent strategic orientation and stronger dynamic capabilities to achieve a higher
digital transformation.

Author Contributions: Conceptualization, S.C. and M.H.; methodology, Q.F.; software, S.C.; vali-
dation, S.C. and M.H.; formal analysis, S.C.; investigation and resources, Q.F.; data curation and
writing—original draft preparation, S.C.; writing—review and editing, supervision, and project
administration, M.H. All authors have read and agreed to the published version of the manuscript.
Funding: This research was funded by the Guangdong Planning Foundation of Philosophy and
Social Science, grant number GD22XGL50.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: The data and models used during the study are available from the
corresponding author by request.
Conflicts of Interest: The authors declare no conflict of interest.
Sustainability 2023, 15, 1915 17 of 19

References
1. Benner, M.J.; Waldfogel, J. Changing the channel: Digitization and the rise of “middle tail” strategies. Strateg. Manag. J. 2020, 44,
264–287. [CrossRef]
2. Thakor, A.V. Fintech and banking: What do we know? J. Financ. Intermediation 2020, 41, 100833. [CrossRef]
3. Cappa, F.; Oriani, R.; Peruffo, E.; McCarthy, I. Big data for creating and capturing value in the digitalized environment: Unpacking
the effects of volume, variety, and veracity on firm performance. J. Prod. Innov. Manag. 2021, 38, 49–67. [CrossRef]
4. Hassan, M.K.; Rabbani, M.R.; Ali, M.A.M. Challenges for the Islamic finance and banking in post COVID era and the role of
Fintech. J. Econ. Coop. Dev. 2020, 41, 93–116.
5. Candy, C.; Robin, R.; Sativa, E.; Septiana, S.; Can, H.; Alice, A. Fintech in the time of COVID-19: Conceptual overview. J. Akunt.
Keuang. Dan Manaj. 2022, 3, 253–262. [CrossRef]
6. Tang, S.; Wu, X.C.; Zhu, J. Digital finance and enterprise technology innovation: Structural feature, mechanism identification and
effect difference under financial supervision. Manag. World 2020, 36, 52–67. (In Chinese)
7. Wang, S.H.; Xie, X.L. Economic pressure or social pressure: The development of digital finance and the digital innovation of
commercial banks. Economist 2021, 1, 100–108. (In Chinese)
8. Chen, H.; Tian, Z. Environmental uncertainty, resource orchestration and digital transformation: A fuzzy-set QCA approach. J.
Bus. Res. 2022, 139, 184–193. [CrossRef]
9. Xie, X.L.; Wang, S.H. Digital transformation of commercial banks in China: Measurement, progress and impact. China Econ. Q.
2022, 22, 1937–1956. (In Chinese)
10. Chen, H.; Huang, Y.T.; Yang, Y.C. The impact of government tax incentives on enterprises' digital transformation: Empirical
evidence from the policy of accelerated depreciation of fixed assets. Rev. Ind. Econ. 2022, 1–15. (In Chinese) [CrossRef]
11. Bonnet, D.; Westerman, G. The new elements of digital transformation. MIT Sloan Manag. Rev. 2021, 62, 82–89.
12. McCarthy, P.; Sammon, D.; Alhassan, I. Digital transformation leadership characteristics: A literature analysis. J. Decis. Syst. 2021,
1–31. [CrossRef]
13. Wang, S.H.; Xie, X.L. Know before you act? Managerial cognition and bank digital transformation. Chin. Rev. Financ. Stud. 2021,
13, 78–97. (In Chinese)
14. Kane, G.C.; Palmer, D.; Phillips, A.N.; Kiron, D.; Buckley, N. Strategy, not Technology, Drives Digital Transformation. MIT Sloan
Management Review and Deloitte University Press. 2015, pp. 1–25. Available online: https://www2.deloitte.com/content/dam/
Deloitte/fr/Documents/strategy/dup_strategy-not-technology-drives-digital-transformation.pdf (accessed on 9 November 2022).
15. Niemand, T.; Rigtering, J.P.C.; Kallmünzer, A.; Kraus, S.; Maalaoui, A. Digitalization in the financial industry: A contingency
approach of entrepreneurial orientation and strategic vision on digitalization. Eur. Manag. J. 2021, 39, 317–326. [CrossRef]
16. Teece, D.J. Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strateg.
Manag. J. 2007, 28, 1319–1350. [CrossRef]
17. Ghosh, S.; Hughes, M.; Hodgkinson, I.; Hughes, P. Digital transformation of industrial businesses: A dynamic capability approach.
Technovation 2022, 113, 102414. [CrossRef]
18. Yu, J.; Moon, T. Impact of digital strategic orientation on organizational performance through digital competence. Sustainability
2021, 13, 9766. [CrossRef]
19. Fainshmidt, S.; Wenger, L.; Pezeshkan, A.; Mallon, M.R. When do dynamic capabilities lead to competitive advantage? The
importance of strategic fit. J. Manag. Stud. 2019, 56, 758–787. [CrossRef]
20. Cheng, J.Q.; Luo, J.L.; Du, Y.Z.; Liu, Q.C. What kinds of entrepreneurial ecosystem can produce country-level female high
entrepreneurial activity? Stud. Sci. Sci. 2021, 39, 695–702. (In Chinese)
21. Fiss, P.C. A set-theoretic approach to organizational configurations. Acad. Manag. Rev. 2007, 32, 1180–1198. [CrossRef]
22. Du, Y.Z.; Jia, L.D. Configurational perspective and qualitative comparative analysis (QCA): A new way of management research.
Manag. World 2017, 6, 155–167. (In Chinese)
23. Fiss, P.C. Building better causal theories: A fuzzy set approach to typologies in organization research. Acad. Manag. J. 2011, 54,
393–420. [CrossRef]
24. Ragin, C.C. Comparative Method: Moving Beyond Qualitative and Quantitative Strategies; University of California Press: Oakland,
CA, USA, 2014; pp. 1–185.
25. Douglas, E.J.; Shepherd, D.A.; Prentice, C. Using fuzzy-set qualitative comparative analysis for a finer-grained understanding of
entrepreneurship. J. Bus. Ventur. 2020, 35, 105970. [CrossRef]
26. Ragin, C.C. Redesigning Social Inquiry: Fuzzy Sets and Beyond; University of Chicago Press: Chicago, IL, USA, 2008.
27. Furnari, S.; Crilly, D.; Misangyi, V.F.; Greckhamer, T.; Fiss, P.C.; Aguilera, R.V. Capturing causal complexity: Heuristics for
configurational theorizing. Acad. Manag. Rev. 2021, 46, 778–799. [CrossRef]
28. Naimi-Sadigh, A.; Asgari, T.; Rabiei, M. Digital transformation in the value chain disruption of banking services. J. Knowl. Econ.
2022, 13, 1212–1242. [CrossRef]
29. Dul, J. Necessary condition analysis (NCA): Logic and methodology of “necessary but not sufficient” causality. Organ. Res.
Methods 2016, 19, 10–52. [CrossRef]
30. Parmigiani, A.; Irwin, J.; Lahneman, B. Building greener motorhomes: How dual-purpose technical and relational capabilities
affect component and full product innovation. Strateg. Manag. J. 2022, 43, 1110–1140. [CrossRef]
Sustainability 2023, 15, 1915 18 of 19

31. Liu, D.Y.; Chen, S.W.; Chou, T.C. Resource fit in digital transformation: Lessons learned from the CBC Bank global e-banking
project. Manag. Decis. 2011, 49, 10. [CrossRef]
32. Diener, F.; Špaček, M. Digital transformation in banking: A managerial perspective on barriers to change. Sustainability 2021, 13,
2032. [CrossRef]
33. Lucas, H.C.; Oh, W.; Weber, B.W. The defensive use of IT in a newly vulnerable market: The New York Stock Exchange, 1980–2007.
J. Strateg. Inf. Syst. 2009, 18, 3–15. [CrossRef]
34. Fu, J.; Mishra, M. Fintech in the time of COVID−19: Technological adoption during crises. J. Financ. Intermediation 2022, 50,
100945. [CrossRef]
35. Hanelt, A.; Bohnsack, R.; Marz, D.; Antunes Marante, C. A systematic review of the literature on digital transformation: Insights
and implications for strategy and organizational change. J. Manag. Stud. 2021, 58, 1159–1197. [CrossRef]
36. Dong, B.; Xu, H.; Luo, J.; Nicol, C.D.; Liu, W. Many roads lead to Rome: How entrepreneurial orientation and trust boost the
positive network range and entrepreneurial performance relationship. Ind. Mark. Manag. 2021, 88, 173–185. [CrossRef]
37. Zhou, K.Z.; Yim, C.K.; Tse, D.K. The effects of strategic orientations on technology- and market-based breakthrough innovations.
J. Mark. 2005, 69, 42–60. [CrossRef]
38. Hamada Fawzy Thabet, A.; Abbas, M. Banks performance and impact of market orientation strategy: Do employee satisfaction
and customer loyalty augment this relationship? Int. Rev. Manag. Mark. 2017, 7, 60–66.
39. Xie, Z.C.; Zhao, X.L.; Liu, Y. Fin-tech driving and strategic digitization transformation of commercial banks. China Soft Sci. 2018,
8, 184–192. (In Chinese)
40. Mubarak, M.F.; Petraite, M. Industry 4.0 technologies, digital trust and technological orientation: What matters in open innovation?
Technol. Forecast. Soc. Chang. 2020, 161, 120332. [CrossRef]
41. Setia, P.; Venkatesh, V.; Joglekar, S. Leveraging digital technologies: How information quality leads to localized capabilities and
customer service performance. MIS Q. 2013, 37, 565–590. [CrossRef]
42. Agrawal, A.; Gans, J.S.; Goldfarb, A. What to expect from artificial intelligence. MIT Sloan Manag. Rev. 2017, 58, 23–26.
43. Matarazzo, M.; Penco, L.; Profumo, G.; Quaglia, R. Digital transformation and customer value creation in Made in Italy SMEs: A
dynamic capabilities perspective. J. Bus. Res. 2021, 123, 642–656. [CrossRef]
44. Svahn, F.; Mathiassen, L.; Lindgren, R. Embracing digital innovation in incumbent firms: How Volvo Cars managed competing
concerns. MIS Q. 2017, 41, 239–253. [CrossRef]
45. Warner, K.S.R.; Wäger, M. Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal.
Long Range Plan. 2019, 52, 326–349. [CrossRef]
46. Schilke, O.; Hu, S.; Helfat, C.E. Quo vadis, dynamic capabilities? A content-analytic review of the current state of knowledge and
recommendations for future research. Acad. Manag. Ann. 2018, 12, 390–439. [CrossRef]
47. Teece, D.J.; Pisano, G.; Shuen, A. Dynamic capabilities and strategic management. Strateg. Manag. J. 1997, 18, 509–533. [CrossRef]
48. Giudici, A.; Reinmoeller, P.; Ravasi, D. Open-system orchestration as a relational source of sensing capabilities: Evidence from a
venture association. Acad. Manag. J. 2018, 61, 1369–1402. [CrossRef]
49. Ross, J.W.; Sebastian, I.M.; Beath, C.M. How to develop a great digital strategy. MIT Sloan Manag. Rev. 2017, 58, 7–9.
50. Helfat, C.E.; Raubitschek, R.S. Dynamic and integrative capabilities for profiting from innovation in digital platform-based
ecosystems. Res. Policy 2018, 47, 1391–1399. [CrossRef]
51. Cannas, R. Exploring digital transformation and dynamic capabilities in agrifood SMEs. J. Small Bus. Manag. 2021, 1–27.
[CrossRef]
52. Cronqvist, L.; Berg-Schlosser, D. Multi-value QCA (mvQCA). Config. Comp. Methods Qual. Comp. Anal. (QCA) Relat. Tech. 2009, 51, 69–86.
53. Sharma, A.; Iyer, G.R.; Mehrotra, A.; Krishnan, R. Sustainability and business-to-business marketing: A framework and
implications. Ind. Mark. Manag. 2010, 39, 330–341. [CrossRef]
54. Du, Y.; Kim, P.H. One size does not fit all: Strategy configurations, complex environments, and new venture performance in
emerging economies. J. Bus. Res. 2021, 124, 272–285. [CrossRef]
55. Dai, X. Supply chain relationship quality and corporate technological innovations: A multimethod study. Sustainability 2022, 14,
9203. [CrossRef]
56. Gupta, K.; Crilly, D.; Greckhamer, T. Stakeholder engagement strategies, national institutions, and firm performance: A
configurational perspective. Strateg. Manag. J. 2020, 41, 1869–1900. [CrossRef]
57. Länsiluoto, A.; Joensuu-Salo, S.; Varamäki, E.; Viljamaa, A.; Sorama, K. Market orientation and performance measurement system
adoption impact on performance in SMEs. J. Small Bus. Manag. 2019, 57, 1027–1043. [CrossRef]
58. Kohli, A.K.; Jaworski, B.J.; Kumar, A. MARKOR—A measure of market orientation. J. Mark. Res. 1993, 30, 467–477. [CrossRef]
59. Homburg, C.; Pflesser, C. A multiple layer model of market-oriented organizational culture: Measurement issues and performance
outcomes. J. Mark. Res. 1999, 10, 198.
60. Lu, Q.C.; Liang, L.L.; Jia, F. How does strategic learning impact on organizational innovation: A dynamic capability perspective.
Manag. World 2018, 34, 109–129.
61. Schneider, C.Q.; Wagemann, C. Set-Theoretic Methods for the Social Sciences: A Guide to Qualitative Comparative Analysis; Cambridge
University Press: Cambridge, UK, 2009.
62. Ribeiro-Navarrete, S.; Palacios-Marqués, D.; Lassala, C.; Ulrich, K. Key factors of information management for crowdfunding
investor satisfaction. Int. J. Inf. Manag. 2021, 59, 102354. [CrossRef]
Sustainability 2023, 15, 1915 19 of 19

63. De Crescenzo, V.; Ribeiro-Soriano, D.E.; Covin, J.G. Exploring the viability of equity crowdfunding as a fundraising instrument:
A configurational analysis of contingency factors that lead to crowdfunding success and failure. J. Bus. Res. 2020, 115, 348–356.
[CrossRef]
64. Leppänen, P.; George, G.; Alexy, O. When do novel business models lead to high firm performance? A configurational approach
to value drivers, competitive strategy, and firm environment. Acad. Manag. J. 2021. [CrossRef]
65. Wilden, R.; Devinney, T.M.; Dowling, G.R. The architecture of dynamic capability research identifying the building blocks of a
configurational approach. Acad. Manag. Ann. 2016, 10, 997–1076. [CrossRef]
66. Ma, H.J.; Xiao, L.; Han, S.T. Review on dynamic capabilities in the entrepreneurship field—Based on the LDA topic model. Nankai
Bus. Rev. 2022, 25, 1–20. (In Chinese)
67. Omoregbe, O.; Azage, J.; Alufohai, D.I. Innovation strategies and market orientation in seleccted Nigerian banks. Oradea J. Bus.
Econ. 2022, 7, 45–61. [CrossRef]
68. Sia, S.K.; Soh, C.; Weill, P. How DBS bank pursued a digital business strategy. MIS Q. Exec. 2016, 15, 105–121.
69. Tang, K.Y.; Ouyang, J.; Zhen, J.; Ren, H. How does regional innovation ecosystem drive innovation performance? A fuzzy set
Qualitative Comparative Analysis based on 31 provinces. Sci. Sci. Manag. S. T. 2021, 42, 53–72. (In Chinese)
70. Rihoux, B.; Ragin, C.C. Configurational Comparative Methods: Qualitative Comparative Analysis (QCA) and Related Techniques; Sage
Publications: Thousand Oaks, CA, USA, 2008.
71. Kohtamäki, M.; Parida, V.; Patel, P.C.; Gebauer, H. The relationship between digitalization and servitization: The role of
servitization in capturing the financial potential of digitalization. Technol. Forecast. Soc. Chang. 2020, 151, 119804. [CrossRef]
72. Mainardes, E.W.; Ferreira Costa, P.M.; Nossa, S.N. Customers' satisfaction with fintech services: Evidence from Brazil. J. Financ.
Serv. Mark. 2022. [CrossRef]
73. Du, Y.Z.; Li, J.X.; Liu, Q.C.; Zhao, S.T.; Chen, K.W. Configurational theory and QCA method from a complex dynamic perspective:
Research progress and future directions. Manag. World 2021, 37, 180–197. (In Chinese)
74. Momoh, M.O.; Chinedu, P.U.; Nwankwo, W.; Aliu, D.; Shaba, M.S. Blockchain Adoption: Applications and Challenges. Int. J.
Softw. Eng. Comput. Syst. 2021, 7, 19–25. [CrossRef]
75. Asadi, S.; Nilashi, M.; Husin, A.R.C.; Yadegaridehkordi, E. Customers perspectives on adoption of cloud computing in banking
sector. Inf. Technol. Manag. 2017, 18, 305–330. [CrossRef]

Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual
author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to
people or property resulting from any ideas, methods, instructions or products referred to in the content.