14/07/2025
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Keywords: Technology - organization - environment framework; Sustainable development goals; Digital transformation, Vietnamese enterprises
After the pandemic, digital transformation is no longer an option – it is a matter of survival for businesses. However, the reality shows that many Vietnamese businesses are still struggling in this process. Not because of a lack of technology, but because of a lack of a suitable roadmap, aligned with their own internal capabilities and industry context. Digital transformation cannot succeed if it merely copies models from elsewhere. Recognizing this, a group of student researchers from the University of Economics Ho Chi Minh City (UEH) chose to approach this problem using the TOE framework – a method that integrates three core elements: Technology, Organization, and Environment. The goal is to propose a practical direction that can be directly applied to the digital transformation strategy of Vietnamese enterprises.
In reality, many businesses after the pandemic have rushed into digital transformation, leading to wasted resources or the adoption of inappropriate technologies. Some others lag behind due to a lack of support from policies, infrastructure, or internal teams. In that context, studying the factors affecting the effectiveness of transformation – from technological capabilities, organizational orientation to the legal environment – becomes essential. This study also focuses on the connection between digital transformation and sustainable development goals (SDGs), opening up a strategic perspective for businesses in the long term.
Research foundation
*Vietnamese businesses still face many barriers when embarking on digital transformation.
Although digital transformation has become a "hot" keyword in recent years, in reality, many Vietnamese businesses are still struggling on this journey. On one hand, they recognize the benefits of technology – from enhancing operational efficiency to expanding markets and improving customer experience. But on the other hand, the journey of digital transformation is not easy at all.
According to research, the barriers faced by Vietnamese businesses mainly stem from three key groups: weak technological infrastructure, a lack of management capacity, and limitations in the legal environment. For example, many small and medium-sized enterprises (SMEs) lack the resources to invest in new technology systems or train suitable personnel. At the same time, business leaders also face difficulties in shaping a comprehensive technology strategy due to a lack of experience or insufficient awareness of the role of digital transformation in an increasingly fierce competitive environment.
This situation became even more apparent after the COVID-19 pandemic – a time when many businesses were forced to change their operations but could not adapt in time due to a lack of preparation. As Fonseka (2022) pointed out, the pandemic was a turning point that highlighted the urgency of technology in ensuring sustainable growth. However, in Vietnam, the gap between "awareness" and "implementation" remains significant. Moreover, state policy support remains fragmented and lacks synchronization, while legal standards related to digital technology—especially e-commerce and user data—are still being refined. This makes many businesses feel "hesitant," even reluctant to approach new business models.
Therefore, a comprehensive theoretical framework is needed to explain and guide the behavior of technology application in enterprises, which is both suitable for the Vietnamese context and capable of scaling according to global development trends. This is the reason why the TOE Framework – a classic model with high adaptability – was chosen for research in this context.
*TOE Framework - The analytical framework is suitable for the digital transformation reality in Vietnam
Faced with a myriad of challenges in the digitalization journey, researchers and strategists need an analytical tool flexible enough to interpret and guide the transformation process. In that context, the TOE Framework – short for Technology, Organization, and Environment – has emerged as a comprehensive theoretical framework capable of fully reflecting the factors influencing the adoption and implementation of new technologies by businesses.
TOE was introduced by Tornatzky and Fleischer in 1990 and has since been widely applied in various fields such as e-commerce, big data, AI, ERP systems, etc. Unlike models that focus solely on human or technological factors, TOE approaches from all three perspectives: available technological capabilities, organizational characteristics, and the external environmental context – including industry competition and legal policies (Tornatzky & Fleischer, 1990; Chatterjee et al., 2020). Especially for Vietnamese enterprises – which are simultaneously facing many internal shortcomings and external barriers – TOE becomes a suitable choice. Partly because this model is not limited by the size of the business or the industry, allowing for flexible adjustments according to each specific case. On the other hand, TOE also has high scalability – it can be combined with other models such as TAM or DOI to enhance the ability to predict innovation behavior (Abed, 2020; Ashraf et al., 2022).
The application of the TOE framework in digital transformation research not only helps identify the factors that drive or hinder this process but also paves the way for developing strategies tailored to each group of businesses, especially when linking TOE with the Sustainable Development Goals (SDGs) as in this study. Thus, TOE is not merely an academic analytical framework, but also a practical tool for Vietnamese enterprises to gradually transform in the digital era.
*Fundamental factors determining success in digital transformation
From the TOE framework, the authors identified 11 key factors influencing the intention to adopt technology and the operational efficiency of businesses. Three groups of factors are clearly divided: technological factors (relative advantage, compatibility, observability), organizational factors (top management support, business orientation, technological orientation), and environmental factors (industry competition, trend awareness, government support, and legal framework).
The survey results of 300 businesses show that technological knowledge and the role of leadership have the most significant impact on the intention to digital transformation. Companies with leadership teams that clearly understand the benefits of technological innovation and are willing to invest have a significantly higher likelihood of successful transformation (Maroufkhani et al., 2022). At the same time, the level of environmental favorability – such as government support policies or competition from industry rivals – also acts as a catalyst driving businesses to take action.
It is noteworthy that the scale of the business is not a decisive factor; on the contrary, small but agile businesses with clear direction can still successfully transform. Thus, in the practical landscape, the combination of inherent strengths and external influences is the key for Vietnamese businesses to overcome barriers and achieve sustainable digital transformation.
Research results
The authors surveyed 300 businesses in Vietnam to understand what truly influences their decision to embark on digital transformation. After analyzing the data, the results show that the two most important factors influencing a company's decision to undergo digital transformation are: (1) whether they clearly see the practical benefits of technology, and (2) whether the leaders truly support and lead the transformation.
If businesses see that applying technology helps save costs, increase revenue, or serve customers better, they will have a clear motivation to change. At the same time, if business leaders demonstrate determination – from financial investment to developing specific plans – the entire organization will easily move towards transformation. One quite surprising thing is that the size of the business – large or small – does not significantly affect its ability to undergo digital transformation. In reality, many small businesses still succeed in digital transformation if they have vision and proactivity.
In addition, external factors such as government support policies or competition among businesses in the same industry also have a certain impact, but not as strong as what happens within the business itself. In other words, it is the internal strength and innovative mindset that form the foundation for businesses to transform in the digital era.
Policy implication
From the research results, many practical lessons and suggestions can be drawn to help Vietnamese businesses digitize more effectively. First of all, the most important factor is the leader. When the head of the enterprise truly believes in technology, is ready to change, and dares to invest, the entire organization will move along. Therefore, there is a need for training programs and practical experience sharing specifically for management levels – not just technical knowledge, but more importantly, strategic thinking and determination to act.
Secondly, many businesses today still do not see the clear benefits of digital transformation. Therefore, stronger communication about successful cases is needed, clarifying specific benefits such as cost savings, faster customer service, market expansion, etc. When they see the real effectiveness, businesses will have the motivation and clear reasons to change.
Another important point is that the size of the business does not determine its ability to transform. Many small businesses can still succeed if they have a spirit of learning and the right orientation. Therefore, support policies should focus on bringing technology closer to small and micro enterprises – through simple, low-cost, and easy-to-implement solutions. The authorities can design short-term consulting and training packages or create available technology platforms for businesses to simply apply, instead of having to build from scratch.
Finally, the external environment – such as laws, policies, or industry competition – still plays an important role. The state should play a "guiding" role by perfecting the legal framework, while also implementing specific incentive policies such as financial support, tax incentives, and connecting businesses with technology experts,... These factors not only help businesses feel more at ease during the transition but also create a healthy competitive environment and promote innovation.
The research paper has indirectly contributed to SDG 8 – Decent Work and Economic Growth, SDG 9 – Industry, Innovation, and Infrastructure, and SDG 17 – Partnerships for the Goals. View the full research article "Application of the Technology - Organization - Environment (TOE) Framework for Vietnamese Enterprises in the Digital Era with Sustainable Development Goals" HERE.
Authors: Le Hong Diem, Luu Tuan Khang, Nguyen Thuy Linh, Huynh Le Thuy Van, ngo Trieu Chau - Ho Chi Minh City University of Economics
This article is part of the Green Research Community series with the message "Research Contribution for UEH Living Lab Green Campus" UEH respectfully invites the community to watch the next edition of the Green Research Community newsletter.
*In order to create optimal conditions for the development of the "UEH Green Researcher Community," members of the community will participate in a scientific research methodology class related to the topics of Living Lab and Green Campus. In addition, when the product meets the standards, the research group will receive a Certificate from the UEH Sustainable University Project Board and funding support for a qualified project.
Additional information:
SDG 8 – Sustainable economic growth and decent work aim to promote inclusive and sustainable economic growth, full and productive employment, and decent work for all. This goal encourages innovation, entrepreneurship, and reduces unemployment, while also protecting workers' rights in the globalized economy.
SDG 9 – Industry, Innovation, and Infrastructure focuses on building sustainable infrastructure, promoting inclusive industrialization, and enhancing innovation. This goal emphasizes the role of science and technology in economic development, narrowing the technological gap between countries, and supporting businesses in adopting green technology.
SDG 17 – Partnership for the Goals emphasizes the importance of global partnerships, from the international to the local level, in mobilizing financial, technological, and knowledge resources to achieve other SDGs. This goal promotes coordination between the government, the private sector, and civil society to create positive and lasting impacts.
News, photos: UEH Green Campus Project, UEH Youth Union - UEH Student Association, UEH Media and Partner Development Board
Narrator: Thanh Kieu
