Cycles of Innovation and Alignment in Digital Transformation: Investigating the Dynamics of Resource Recombination in a Construction Firm

Abstract

The generative nature of digital technology implies that during digital transformation (DT), organizations traverse multiple cycles of innovation and resource alignment. Still, extant research mainly chronicles DT as linear and contained phenomenon occurring in response to a dramatic environmental change event. How new resources align with previous ones into novel combinations, the work that supports continuous organizational capability building, and the temporal relationships between cycles of change in DT has received scant attention. Drawing on dynamic capability theory, we analyze innovation and resource alignment cycles driving DT at Lundqvist Trävaru AB, a small Swedish construction firm. Our study has at least two contributions. First, the analysis reveals three types of dynamic capabilities that shape resource generation and alignment in DT. Second, we provide a process model outlining the innovation and alignment cycles that fuel DT as they scale in the focal firm.