ABSTRACT
In discontinuous environments with high levels of uncertainty, such as those undergoing digitalization there are opportunities for innovation in processes, offerings, and business models. To exploit these opportunities, companies need transformation capabilities to drive the required transformations which do not take place automatically and are sometimes initiated hesitantly. These capabilities, as discussed in the literature, concern the organizational agility that enables short, binding, decision-making processes to determine the optimum path for transformation. However, in capital-intensive sectors in particular, the transition from present to future business must be managed by securing the foundations of the present business for as long as possible, and, at the same time, creating future business ahead of time. For this, the capability to optimize scale and scope economies is vital for safeguarding efficiency. Just as flexibility and efficiency are in opposition on the product/service level, so it is with organizational agility and the optimization of scale and scope economies on the capability level. Therefore, in this article, we tested the hypotheses that the goal conflicts between organizational agility and the capability to optimize scale and scope economies could be mediated by the impact of dynamic capabilities in capital-intensive industries, leading to improvements in processes, offerings, and business models. Transformation capabilities were empirically examined in this cross-industry study of 128 German companies, using a structural equation model. The empirical investigation confirmed the mediation effects of dynamic capabilities and the importance of a possible 'hybrid agility' (agility despite economies of scale and scope) for the improvement of processes, offerings, and business models through digitalization.
Keywords
Digitalization, hybrid agility, dynamic capabilities, organizational agility, economies of scale and scope.