Building Dynamic Capabilities through Digital Innovation Units? - An analysis of their contribution and the spill-over effects to the main organization

To meet the challenge of digital transformation and remain competitive in an increasingly volatile business environment, many incumbent companies have set up digital innovation units (DIUs). Despite a steadily growing body of knowledge, research explaining the value contribution of such units is still at an early stage. Drawing on empirical data from a multiple case study, we adopt a dynamic capabilities perspective to better understand how DIUs also contribute to building dynamic capabilities as part of their role in the digital transformation of the main organization. To this end, we examined the DIUs of six manufacturing companies and were able to identify several DIU activities and skills that feed into the development and expansion of dynamic capabilities. Moreover, with respect to these activities and skills, we also uncovered positive spillover effects from the DIU to the main organization