Knowledge and organisational learning (KOL) theme group

Guest speaker: Professor Cornelia Storz, Goethe University, Frankfurt

Abstract: 

Steve Casper, Marcela Miozzo, Cornelia Storz

Why do entrepreneurial digital firms in different countries differ in their organisation despite operating in a global industry with global products? A firm’s organisational identity guides and restricts action and shapes its routines and capabilities. Research on strategic management has started to illuminate the complex relation between organisational identity and technology. In particular, attention has been paid to the difficulties for firms to pursue new technological opportunities when this requires a change in organisational identity (Tripsas, 2009). Less attention, however, has been paid to how organisational identity is forged in new firms in new industries triggered by technological change. In this case, firms face many challenges “as both entrepreneurs and crucial stakeholders may not fully understand the nature of the new ventures, and their conformity to established institutional rules may still be in question” (Aldrich and Fiol, 1994). While new firms in new industries, on the one hand, do not face “inertia” from their organizational identity as experienced by incumbents in existing industries facing a technological shock, on the other, they face a lack of an established industry identity. These firms do not have established guidelines for the development of their products, capabilities, or for how they should behave or perform.

We extend the understanding of the relation between organisational identity, technology and institutions by exploring the role of the systems of production and innovation in shaping the organisational identities of new firms in new industries. We study entrepreneurial firms in a booming digital industry, the online games industry, in two countries, the USA and Japan.  We propose that new firms in new industries triggered by technological change develop an organisational identity shaped by three factors: first, their unique entrepreneurial resources, second, the emergent sectoral innovation systems, and, third, the national systems of production and innovation, which filters the influences of the other factors. Our findings show the emergence of two clearly defined claims to organisational identity, which we call “digital engineer” and “digital creative”, which are related to different decisions on product innovation, especially the design and conceptualisation of new games. Organisational identity shapes the organisational actions of these firms, that is, firm boundary decisions, capability formation, and corporate development.