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

Abstract

We adopt a multifaceted view of organizational identity to contribute to research on organizational identity and incumbent adaptations to disruptive innovations. Based on a qualitative, multi-case study on the responses of German publishing houses to the emergence of digitalization, we distill a novel and thus far disregarded facet of organizational identity: organizational role identity. We show how organizational role identity and organizational domain identity -the facet that has so far dominated research on identity and innovation -interactively determine how organizations interpret and respond to a disruptive innovation. In contrast to previous studies, we show that incumbents experience dysfunctional identity-driven struggles when one of the two identity facets is challenged by the disruptive innovation while the other is enhanced. We also induce that domain and role identities can jointly determine how quickly incumbents react to a disruption, whether they adopt that disruption, and the innovativeness of their responses.

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

“…Most importantly, it induces a grounded, “middle‐range” theory of how institutions affect incumbents’ sensemaking of discontinuous innovations, including three general patterns of institution‐infused interpretation—a sense of unfairness, a sense of confusion, and cognitive marginalization of new entrants. These findings offer new insights into the understudied field‐level determinants of managerial cognition in the era of ferment of discontinuous innovation, which differ from the organization level or top management level cognitive determinants studied thus far (Eggers and Kaplan, ; Gerstner et al, ; Gilbert, ; Kammerlander et al, ; Tripsas, ; Tripsas and Gavetti, ). Relatedly, this paper contributes by shedding light on the intricacies of regulations in the context of discontinuous innovation (Dobbin and Dowd, ; Kou and McGahan, ).…”

“…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. Nevertheless, the data yield novel insights by showing that it was the speed of new entrants and their use of different categorizations and roles that prevented incumbents from truly making sense of entrants’ behavior and its consequences.…”

“…In a different vein, research on organizational cognition and identity indicates that confusion about the impact of an external development on the organization can be productive because it can ignite decision makers to (re)construct shared interpretations and to engage in collective action (Ravasi and Schultz, ). In this regard, Kammerlander and colleagues (), for instance, recently showed how publishing firms whose members struggled particularly strongly with interpreting the impact of digitalization came up with the most innovative responses to this innovation, largely because the confusion and struggles triggered intensive discussions and a rethinking of the status quo. Altogether, the empirical findings and extant theory suggest:

Proposition 6: Incumbent managers’ sense of unfairness and their confusion regarding a discontinuous innovation initially lead them to engage in institutional work.

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“…Investigating innovations such as digital imaging (Tripsas and Gavetti, ) and online news (Gilbert, ), researchers have identified a set of inherent barriers to the adoption of discontinuous innovations. For instance, studies reveal that the capital providers systematically prefer continuous innovation to discontinuous innovation (Benner, ; Christensen, ), and that discontinuous innovations often clash with established firms’ identities (Kammerlander, König, and Richards, ). Scholars have also identified forces that might enable organizations to overcome organizational inertia, for instance, structural ambidexterity (O’Reilly and Tushman, ) and facets of executive personality (Gerstner, König, Enders, and Hambrick, ).…”

Frequently asked questions in qualitative family business research and some guidelines to avoid risky paths

“…Second, she suggests making use of content-rich tables. In our own work, we have also had good experiences with making use of tables and online appendices to include rich and interesting, yet non-core information (e.g., Kammerlander et al, 2018;Rondi et al, 2018). An interesting organizational research methods article by Michael Pratt (2008) provides some further insightful suggestions on how to present all the required information in a single paper in a convincing way, as well as an overview of the criteria editors and reviewers adopt to assess qualitative manuscripts.…”