Organizing for digital transformation in incumbent firms: a microfoundational analysis
Emanuele Leoni, Luca Gastaldi, Nadia AlegianiPurpose
Digital transformation (DT) demands profound organizational changes, yet a granular, microfoundational understanding of how large, complex incumbent firms internally adapt structures, processes and individuals over time remains underexplored. This article aims to address this gap by investigating the dynamic interplay of microfoundational components in enabling DT.
Design/methodology/approach
The article undertook a 3-year longitudinal case study within an incumbent organization to explore its organizational evolution during a DT. Information was gathered from many sources at different points along the transformation process, which included numerous interviews and focus groups with nearly 50 participants.
Findings
Our findings reveal two critical, co-evolving microfoundational mechanisms: dynamic ambidexterity in information and communication technology governance, which allows for balancing centralized control with business proximity, and proactive micro-level workforce adaptation, which transforms individual capabilities to effectively manage the inevitable resistance toward organizational change. These mechanisms illustrate an iterative process of organizational learning and adaptation across DT phases.
Practical implications
We offer actionable guidance for managers to foster these mechanisms, including strategies for balancing central strategic direction with local execution flexibility, and concrete approaches for continuous individual upskilling and proactive change management, acknowledging associated conditions and trade-offs.
Originality/value
This article extends DT and microfoundations literature by providing a granular, processual account of how digital change is enacted and experienced within complex incumbents. By explicitly naming and detailing these emergent mechanisms, our study offers novel insights into managing the inherent tensions and co-evolution of individuals, processes and structures in longitudinal DT journeys.