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Abstract

To drive digital innovation and navigate the challenges of digital transformation, incumbent firms have increasingly launched digital units (DUs). While research in the field of IS has primarily focused on internally oriented DUs (i.e., innovation labs), there are first signs of a shift towards more externally oriented variants (i.e., digital venture builders) in theory and practice. Based on an interview study with 13 experts from different industries, we highlight four intentions (i.e., new growth potential, extension of the knowledge base, opportunity to renew employees’ perception, and hybrid ambidexterity) why established companies transform their internally oriented DUs into digital venture builders. We make this transition more comprehensible by linking the intentions to the main reasons for the failure of internally orientated DUs. By doing so, we contribute to the existing IS literature on DUs, especially the recent development regarding the phenomenon’s evolution.

Paper Number

1370

Author Connect URL

https://authorconnect.aisnet.org/conferences/AMCIS2024/papers/1370

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Aug 16th, 12:00 AM

Upgrading Digital Units: Why Incumbent Firms Engage in Digital Venture Building

To drive digital innovation and navigate the challenges of digital transformation, incumbent firms have increasingly launched digital units (DUs). While research in the field of IS has primarily focused on internally oriented DUs (i.e., innovation labs), there are first signs of a shift towards more externally oriented variants (i.e., digital venture builders) in theory and practice. Based on an interview study with 13 experts from different industries, we highlight four intentions (i.e., new growth potential, extension of the knowledge base, opportunity to renew employees’ perception, and hybrid ambidexterity) why established companies transform their internally oriented DUs into digital venture builders. We make this transition more comprehensible by linking the intentions to the main reasons for the failure of internally orientated DUs. By doing so, we contribute to the existing IS literature on DUs, especially the recent development regarding the phenomenon’s evolution.

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