Digitization initiatives and capability cognition - A multiple case study in Finnish manufacturing firms

Abstract

The objective of the research was to analyze how organizations identify, define, and develop opportunities and capabilities and match them together when facing a technological discontinuity. Three large Finnish manufacturing companies and their industrial internet initiatives formed the setting for this comparative case study.

The research methodology followed the abductive Gioia method, combining iteratively inductive analysis of qualitative interview data with findings from prior literature. The theoretical framework was a combination of strategy process research (resource allocation process view) and managerial cognition literature.

My findings suggest that the matching is iterative in nature, with the pattern alternating between inside-out identification of opportunities based on existing capabilities and outside-in definition of capabilities based on interpreted opportunities. The pattern of matching depends on managerial commitment. In a high-commitment regime, capabilities are built before all opportunities are clear. In a low-commitment regime, capability building follows the clarification of opportunities. The pattern of strategy making also varies depending on how the top management perceives the nature of the technological discontinuity.