Innovating Innovation: Organizational Identities in the Age of Discontinuity

Prior research has emphasized the importance of dynamic capabilities for fostering innovation. Yet, incumbent firms have difficulties sensing and seizing opportunities and reconfiguring resources due to existing organizational identities. An established organizational identity is likely to preclude certain options, including possible innovations. To innovate, however, is of primary importance for firm survival. Environments are becoming more dynamic and digitalized, requiring organizations to continuously rethink their products and services. We conducted an ethnographic case study of a German system integrator that changed its business model through digital innovation. The study addresses the question of how the interplay between dynamic capabilities and organizational identity unfolds in an incumbent firm that engages in digital innovation.