Organizational Culture and Digital Transformation: Capabilities in SMEs: A Comparative Study of AI/ML adoption in German and Italian SMEs

Abstract

Abstract: Small and Medium Enterprises (SMEs) are the center of the economy for every country, but they are lagging behind the large enterprises in the digitalization, AI implementation and ML optimization due to different facts like the absence of skills, limited digital maturity and cautious investment cultures. This study is focused on exploring how organizational cultural typologies shapes artificial intelligence (AI) and machine learning (ML) adoption and digital transformation capabilities by SMEs in Italy and Germany. Focusing on Competing Values Framework (CVF), in this study the goal is to find out how these cultural typologies (e.g. Clan, adhocracy, hierarchy and market) constrain or enable AI/ML and digital transformation in processes and products innovation. A comparative qualitative research design is considered which is based on twenty semi structured interviews where ten interviews will be from German SMEs and ten interviews will be from Italian SMEs. These semi structured interviews are covering the CVF dimensions, digital transformation capabilities, AI/ML use cases and their impact on process and products innovation. Interview transcripts will be analyzed thematically through NVivo, and a four-stage coding framework is considered to capture General, Cultural, AI/ML and performance related themes like resistance, perceived risk and challenges including dark side of digital transformation. The results of this study will be showing the mixture of how cultural aspects are either driving or resisting the usage of AI/ML and digital transformation in process and products of SMEs. The aim of this study is to contribute to digital transformation and AI-adoption research through organizational culture, not just the resources and technology as a key mechanism. Further the cross-country analysis will highlight the key differences in how SMEs realize the value from AI-based digital transformation. The results may provide new insights for industry professionals and policymakers on how to diagnose cultural typologies and align policy support, capability building and cultural change to foster effective and responsible AI adoption in European SMEs.