Pushing and Pulling – Digital Business Model Innovation and Dynamic Capabilities

Abstract

We theorize and empirically demonstrate that firms engaging in digital business model innovation experience a dual effect on their dynamic capabilities. From a global survey of automotive decision makers, we first identify the need for the specific dynamic capabilities of organizational agility and absorptive capacity for effective digital business model innovation. Second, we discover that the use of digital technologies in innovating business models further drives these capabilities. Our study provides important implications for research on dynamic capabilities and digital innovation, and for practitioners facing challenges of digital transformation by pointing to less understood consequences of digital business model innovation.