Organizational Identity and Innovation

Abstract

Though much work has studied organizational identity and the management of innovation, very little work explores the connection between them. Yet we argue that these separate conversations yield implications for one another and offer a rich area for future research. By its nature, innovation is about novelty and change, while identity is rooted in stability and endurance. This contrast creates a fundamental tension, which we explore. We propose that innovative activities like technological change fall on a spectrum from identity-enhancing to identity-stretching to identity-challenging. Both identity-enhancing and identity-stretching innovations result in a mutually constitutive dynamic in which identity and innovation reinforce each other. Identity-challenging innovations, however, create organizational discord and dysfunctional dynamics unless realigned with identity. We discuss the implications of these varying states and call for future research that builds upon and extends our understanding of the relationship between identity and innovation across multiple levels of analysis.

Why Do Incumbents Respond Heterogeneously to Disruptive Innovations? The Interplay of Domain Identity and Role Identity

“…Within this research stream, a new conversation has emerged, which suggests that studies of the dynamics between organizational identity and innovation might be particularly suitable for developing a more accurate portrayal of the challenges involved in adapting to disruptive innovation (Altman and Tripsas, ; Anthony and Tripsas, ; Garud and Karunakaran, ; Livengood and Reger, ; Tripsas, ). According to Gioia et al (, p. 125), ‘[o]rganizational identity represents those features of an organization that in the eyes of its members are central to the organization’s character or ‘self‐image,’ make the organization distinctive from other similar organizations, and are viewed as having continuity over time.’ In other words, ‘organizational identity’ refers to members’ situated perceptions of who we are as an organization (Albert and Whetten, ).…”

“…The recent studies on organizational identity and innovation promise a new perspective on one of the focal questions in the conversation on disruptive innovation: Why do relatively homogeneous incumbents within an industry respond heterogeneously to the same disruption (Livengood and Reger, ; Tripsas, )? Most importantly, response heterogeneity might be explained by the fact that the decision makers in some firms perceive a given disruptive innovation as enhancing their organization’s identity, while decision makers in other firms perceive the same innovation as threatening or challenging their organization’s identity (Anthony and Tripsas, ). Additionally, firms might differ in how their members align identity perceptions and innovative activities (Anthony and Tripsas, ; Garud and Karunakaran, ).…”

“…Most importantly, response heterogeneity might be explained by the fact that the decision makers in some firms perceive a given disruptive innovation as enhancing their organization’s identity, while decision makers in other firms perceive the same innovation as threatening or challenging their organization’s identity (Anthony and Tripsas, ). Additionally, firms might differ in how their members align identity perceptions and innovative activities (Anthony and Tripsas, ; Garud and Karunakaran, ).…”

“…Despite these important advances, critical conceptual and empirical gaps remain in our understanding of the role of organizational identity in incumbents’ responses to disruptive innovations. Most importantly, as noted by Anthony and Tripsas (), the extant literature almost exclusively adopts a sociological or institutional view of organizational identity (Navis and Glynn, ; Watkiss and Glynn, ). This perspective envisions organizational identity as enacted through claims of membership in a specific category, or domain, of organizations, especially claims about ‘which group of organizations we belong to’ and ‘what is our competitive home turf’ (Porac et al, ).…”

Institution‐Infused Sensemaking of Discontinuous Innovations: The Case of the Sharing Economy

“…Weick (), for instance, describes the breakdown of individuals’ sensemaking in overwhelming situations and how people’s views of their identity—the idea of who they are, and what makes them enduringly distinctive from others (Gioia et al, )—limit their options for action. Recently, studies have highlighted that managers consider discontinuous innovations as identity‐challenging (Altman and Tripsas, ; Tripsas, ), including in the case of online platform businesses (Anthony and Tripsas, ). As Kammerlander et al () have shown, such challenges can lead to profound cognitive struggles among incumbent managers.…”