Diversification of business through digital technologies: case study of Kazakhstan industrial companies

Abstract

This article examines the impact of digital technologies on the diversification of industrial enterprises’ activities, using the example of industrial firms in Kazakhstan. A literature review was conducted to analyze the influence of digital technologies on financial, human resource, and logistics indicators of enterprises, as well as their effects on activity diversification. Based on the review and expert interviews, the authors developed survey questions and conducted a survey among 230 respondents who are middle and high-level managers of industrial enterprises in Kazakhstan. Using the Smart PLS program, we employed a dual-model approach: one to measure variables like digital technologies, financial performance, HR performance, logistic performance and diversification levels (Formative model), and another to analyze their relationships (Structural Equation Modeling, SEM). The findings indicate strong convergent validity among the variables studied. Interestingly, digital technologies have a significant impact on financial and HR performances, but less so on logistic performance. This highlights a common issue among most industrial enterprises: the limited use of digital technologies in their logistical consolidation. Moreover, while financial and HR performances strongly influence enterprise diversification, logistic has a minor effect. These results underscore the intricate dynamics within enterprise management frameworks and highlight how technological and organizational strategies can affect diversification outcomes differently. The results of the study can be useful for supporting the theory of the relationship between digital technologies and the diversification of enterprise activities, as well as for identifying problem areas that require deeper analysis and intervention by top managers of enterprises.