Effect of Managerial Capability and Organizational Capability on Digital Innovation Among Organizations in Sri Lanka

Despite the growing importance of digital innovation to achieve better performance, empirical studies examining different factors that affect digital innovation within organizations are scarce. Further, the findings of existing studies are inconsistent, leading to a knowledge gap within the context. Thus, this research focused on identifying the critical success factors affecting digital innovation from managerial and organizational perspectives. The literature review revealed four factors affecting digital innovation. A new conceptual framework was designed to test the relationships identified, and it was tested using survey data collected from 135 managerial-level employees of organizations that are engaged in digital innovation processes in Sri Lanka. Data were analyzed using the PLS-SEM approach. The findings revealed that top management support and organizational learning had a positive and significant effect on digital innovation. Since there is a dearth of research in the context of digital innovation, the conceptual framework introduced and the findings of the study will encourage organizations to understand and leverage the determinants necessary to foster digital innovation within organizations