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

Abstract

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.