Bridging Policy and Performance: A Strategic Alignment Perspective on Digital Transformation in Malaysian SMEs

Abstract

Abstract With the progress of national strategies such as the Malaysia Digital Economy Blueprint, the Malaysian government is actively guiding Small and Medium-sized Enterprises (SMEs) to carry out Digital Transformation. To enhance National Economic Resilience. However, Most SMEs still face weak Digital Leadership, a lack of Digital Culture, insufficient Financial Literacy, and Cybersecurity standardisation and other challenges. This paper is based on official economic and industrial data, combined with four recent international SSCI/SCI journals, and adopts Strategic Alignment Theory (SAT) as the analysis framework. This paper discusses the structural dilemma and organisational mechanism of SMES’ digital transformation from three dimensions: Policy, Organisation and Technology. The study found a synergy between Service-Level Alignment (SLA), a key bridge between IT resources and business goals, and Organisational Culture Maturity. It has a significant positive effect on Performance. In addition, the study pointed out that although the Malaysian government has introduced several supportive policies (such as My Digital Grant, MDEC training program), the transformation effectiveness is hindered by low policy reach rate, high implementation complexity, and the lack of enterprise capacity. To promote the sustainable transformation of SMEs, this paper suggests that policy design should pay more attention to the Capability adaptation and process guidance mechanism, and promote the Internal Capability Building of cognition, process and culture. Achieve efficient Coordinated Alignment between policy resources and enterprise performance.