Most manufacturing firms that undergo digital transformation fail to seize the expected benefits. A key reason is that those firms fail to extend their identity of operational excellence with a digital service provider identity, leading to tensions at the interface – the product. Although research has addressed individual aspects of organizational identity, it remains to be understood how organizational identity evolves in incumbent firms in a period of liminality. In a case study with a leading automotive manufacturer, we show how two conflicting identities lead to paradoxical tensions and how separating them through a spinoff shifts those tensions. This study provides the first results on conflicting organizational identities during the liminal period of digital transformation.

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Track 2: Business Models, Digital Transformation & Entrepreneurship