Does the Strategy Improve Employee Innovativeness? Understanding the Impact of Digital Business Strategy

Gaining competitive advantage via digital technology is a central theme in the digital age. To succeed, companies must formulate a digital business strategy (DBS) that integrates business and IT. Although employee creativity is essential for DBS‐driven business model restructuring, the link remains under‐researched. This study examines how DBS influences employee digital innovativeness, specifically mediating through digital literacy and digital technology self‐efficacy. Using structural equation modeling on data from 572 employees in Japan, we analyze the pathway from strategy to innovation. The results indicate that DBS promotes digital innovativeness not just directly, but also through an indirect path where digital literacy enhances self‐efficacy. The findings suggest that strategy alone does not build confidence; capability development is a prerequisite. This study advances management theory by identifying the behavioral mechanisms linking firm‐level strategy to individual innovation, highlighting that for a DBS to be effective, managers must foster employees' digital capabilities to ensure value for both the firm and employees.