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Digital Innovation Units (DIU) are dedicated organizational units that companies increasingly set up to explore and develop new digital innovations. Despite the growing scholarly attention on DIUs, there is little evidence about their actual performance and, specifically, about the importance of information alignment between the DIU and the main company. To address this gap our study focuses on the concept of information asymmetries to investigate the factors that enable or hinder the reduction of information asymmetries between members of the DIU and the main company. Based on 21 exploratory interviews with both sides, we propose a framework showing three barriers (Exploratory Goal-Setting, Outcome Uncertainty and Assessment Misfit) and subsequent enablers that can reduce information asymmetries between them. Our findings expand knowledge on the relationship between DIUs and their main company and the role that Performance Measurement Systems play to align and steer the digital innovation efforts of DIUs.



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