This thesis explores the impact of digitalization on organizational performance in Sweden,

with a particular emphasis on the moderating role of technological literacy. Using

contingency theory as the theoretical framework, this thesis explores the importance of

aligning internal capabilities with the external environments to maximize digitalization

initiatives. Organizational performance is measured through two key dimensions, financial

and managerial performance, as well as a combined performance index that represents overall

organizational performance. Based on survey data collected from 100 respondents, primarily

from Sweden, the findings indicate a significant positive relationship between digitalization

and both financial and managerial performance, as well as the combined overall performance

index. The strongest effect is identified for financial outcomes. However, the hypothesized

moderation effect of technological literacy was not statistically significant. Two possible

reasons are proposed: (1) Sweden’s high baseline level of technological literacy may lead to a

saturation effect, and (2) the increasing accessibility and user-friendliness of digital tools

reduce the need for high technological literacy levels to use them effectively.

Methodologically, this thesis contributes to the literature by effectively applying moderation

analysis and constructing a multi-dimensional performance metric. While the cross-sectional

design and relatively small sample size present some limitations, the study still provides

valuable insight into how digitalization affects organizational performance in digitally mature

environments.