Dynamic capabilities and organizational inertia during digital transformation
Airikkala, Aleksi (2021)
Airikkala, Aleksi
2021
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2021040910015
https://urn.fi/URN:NBN:fi-fe2021040910015
Tiivistelmä
Research on digital transformations is growing, and research streams regarding the subject are forming. One of those streams is organizational inertia and how it affects the new value creation processes enabled by digital transformation. While information technology increases the uncon- trollable complexity in which firms operate, organizational inertia can be controlled. The pur- pose of this study is through an empirical case to understand sources of organizational inertia, how it affects the success of digital transformation, and how the organizational inertia can be overcome.
While the capability view is a dominant lens to research on why some firms succeed and others fail in the face of environmental change, the theoretical premise of this study extends that view to the microfoundations of dynamic capabilities. To reflect the chosen approach for this study, the theoretical framework comprises employee-level adoption against organization-level trans- formation. In addition to common microfoundations concepts, three types of organizational in- ertia are defined to set the baseline for the empirical part of this study, and current definitions of digital transformation are discussed.
The empirical part was carried out as a single case study. The chosen case was Keltainen Pörssi, a former publication and online media acquired by Sanoma Oy, which provided a fitting context to study organizational inertia due to its unsuccessful reponse to an industry-wide digital trans- formation. The data were collected from two sources – semi-structured interviews and publicly available sources. Adapting the retrospective setting of interviews, the discussed teams cen- tered around how the establishment of online media succeeded and what kind of tensions emerged. A content analysis was performed for the interview data, and a timeline was con- structed based on the publicly available sources.
The study's main findings consist of the recognized types of organizational inertia and their sources, what kind of effects they had on the digital transformation, and how some of the rec- ognized types of inertia can be overcome. On top of structural, socio-technical, and cognitive inertia, identity, business model inertia, and a success trap were identified as sources of organ- ization inertia. While the chosen framework for this case focused on employee-level adoption, that did not play a role in the observed transformation. On the other hand, the findings support a more relational approach to digital transformation, where the transformation is not always driven by intentionality, and the scope of the transformation difficult to determine.
While the capability view is a dominant lens to research on why some firms succeed and others fail in the face of environmental change, the theoretical premise of this study extends that view to the microfoundations of dynamic capabilities. To reflect the chosen approach for this study, the theoretical framework comprises employee-level adoption against organization-level trans- formation. In addition to common microfoundations concepts, three types of organizational in- ertia are defined to set the baseline for the empirical part of this study, and current definitions of digital transformation are discussed.
The empirical part was carried out as a single case study. The chosen case was Keltainen Pörssi, a former publication and online media acquired by Sanoma Oy, which provided a fitting context to study organizational inertia due to its unsuccessful reponse to an industry-wide digital trans- formation. The data were collected from two sources – semi-structured interviews and publicly available sources. Adapting the retrospective setting of interviews, the discussed teams cen- tered around how the establishment of online media succeeded and what kind of tensions emerged. A content analysis was performed for the interview data, and a timeline was con- structed based on the publicly available sources.
The study's main findings consist of the recognized types of organizational inertia and their sources, what kind of effects they had on the digital transformation, and how some of the rec- ognized types of inertia can be overcome. On top of structural, socio-technical, and cognitive inertia, identity, business model inertia, and a success trap were identified as sources of organ- ization inertia. While the chosen framework for this case focused on employee-level adoption, that did not play a role in the observed transformation. On the other hand, the findings support a more relational approach to digital transformation, where the transformation is not always driven by intentionality, and the scope of the transformation difficult to determine.