Abstract
In order to tap the potential of digital technologies, two main concepts have been developed in IS Research: the currently much-discussed concept of ‘digital transformation’ and the concept of ‘IS/IT-organizational transformation’, which was developed many years ago. Both concepts refer to organizations that emerged in the pre-digital age. In addition, there are initial considerations as to what structures ‘digital companies’ have and whether companies from the pre-digital era can or should become digital companies. Until now, all three concepts are unconnected, yet they all address the same question, each within different contexts. This paper proposes a process-oriented meta-concept that relates the three established concepts. We reconstruct the process of digital-driven change in a very successful European media group over a period of 70 years and use the model of punctuated equilibrium as a theoretical lens. Rather than synthesizing the concepts into a unified new theory, our concept describes the alternation between relatively stable and open phases of a company in the context of the availability of new digital technologies, thereby providing an explanation of when and why each concept becomes salient. It also describes when an open phase starts and comes to closure. All three concepts, which were previously unconnected, can be positioned in this concept. In this way, we achieve significant progress in conceptual clarity and show in which context each of the three concepts is relevant. For practitioners, our integrative approach provides guidance for selecting and sequencing concepts in the specific situation of a company.
Keywords
Introduction
Established companies in traditional industries, such as banking, automotive, or publishing, that were financially successful in the pre-digital economy, before the widespread diffusion of digital technologies, are increasingly facing the challenge of keeping up with the times (Chanias et al., 2019). We refer to the ‘pre-digital’ period as a phase dominated by analog technologies, followed by an early IT-enabled regime centered on data-processing technologies (e.g., mainframes and PCs). In contrast, the ‘digital era’ is characterized by technologies with greater potential impact, such as the internet and, more recently, artificial intelligence. This distinction is crucial, as different technological regimes are associated with qualitatively different modes of organizational change, ranging from incremental organizational adjustments to more fundamental transformations. A key task for preparing an established company for the ‘digital age’ is to ensure the recognition of the opportunities and risks associated with new digital technologies at an early stage. This involves both concrete solutions – such as the use of machine learning for customer interaction or Internet of Things technologies to offer real-time services – and the implementation of adequate management approaches to handle digital technology-driven change. Yet, managers often struggle to decide whether incremental adjustments are sufficient or whether a more fundamental transformation is required, and the academic literature provides little guidance on this dilemma.
Until now, Information Systems research (IS) has offered two concepts on how a company can manage change driven by digital technologies. The first is the concept of ‘IS/IT-enabled organizational transformation’ (ITOT), which emerged in the 1990s (Besson and Rowe, 2012). It focuses on changes to major processes of companies, often but not exclusively driven by ERP systems. The IT departments are seen as a key driver of this change. Around 2015, the discussion about the concept of digital transformation (DT) arose (Wessel et al., 2021). This second concept is also about organizational changes driven by digital technologies. However, unlike ITOT, in this approach, the change is conceptualized as more ‘fundamental’, potentially leading to a change in products, business models, and the value proposition of a company (Riedl et al., 2023), sometimes even in the organizational identity (Graf et al., 2023a; Wessel et al., 2021). DT is usually driven forward by a specialist organization, often coordinated by a digital innovation unit (Schumm et al., 2022). In addition, there are initial considerations as to what characterizes a digital company (Piccoli et al., 2024).
While academic discourse on managing digital technology-induced organizational change continues, these three concepts – ITOT, DT, and digital company – remain largely unconnected, leaving both scholars and practitioners with little clarity about how they relate to one another or when each concept becomes relevant, which might lead to theoretical inaccuracy and hamper managerial decision-making. Even though selected special questions are discussed (Currie et al., 2024; Firk et al., 2021; Hess et al., 2016; Lischke et al., 2025), such as organizational integration (e.g., the role of a Chief Digital Officer), the management of transformation programs (e.g., the evaluation of individual projects), and their manifestation in different contexts (e.g., smaller companies), more fundamental questions remain open (Carroll et al., 2023a; Wessel et al., 2025). It not only concerns the relationship and distinctions between the concepts, but also their historical dimension (Currie et al., 2024). The concepts of ITOT and DT evolved consecutively over time, based on the assumption that newly emerging digital technologies trigger more fundamental organizational change. Therefore, it remains unclear if ITOT has become a historical relic that is replaced by DT or whether this mode of change remains relevant. Closely related is the frequently raised question of whether DT will ever have an end or whether companies remain in a state of permanent ongoing transformation. If DT is assumed to reach an end, this raises the question of what follows, that is, which mode a company enters once it is able to fully exploit the potential of digital technologies? Linked to that is the question of whether an established company has to develop toward the mode in which digital-born companies organize the absorption of digital technologies. These unresolved issues, not least, illustrate that, despite the richness of prior research, managers still face uncertainty about how to navigate when confronted with new technologies.
Although the concepts of ITOT and DT, as well as the concept of a ‘digital company’, seem to address different situations of a company, and therefore, all have their justification, it is noticeable that they are largely viewed in isolation. Only the distinction between ITOT and DT has been repeatedly debated, although not finally resolved (cf. Graf et al., 2023a; Wessel et al., 2021). This observation echoes the broader fragmentation in IS research on ‘Digital X’ themes, where multiple perspectives proliferate without sufficient integration (Baiyere et al., 2023). Recent work has highlighted the need to move beyond binary distinctions such as ‘Digital versus IT’ and to theorize this relationship through underlying organizing logics (Baiyere et al., 2025). Hence, instead of further discussing the distinctions between concepts or developing a new theoretical approach, we build on this call by aiming to connect these three concepts through an overarching concept that considers their respective characteristics, but also addresses open questions about the conditions under which digital technologies trigger different modes of change and the criteria that mark the closure of a DT phase.
We, therefore, pose the following research question:
How can ITOT, DT, and the digital company be conceptually integrated in a process-oriented meta-concept of digital change that clarifies when and why each concept becomes salient?
For developing such a meta-concept of companies’ digital change, we refer to the historical reconstruction of digital technology-driven changes at an internationally active European media company over a period of 70 years. This company has already undergone several phases of change and – what makes it particularly interesting – now perceives its DT as complete. Thereby, we respond to the call to consider the historical, longitudinal perspective of digital change (Currie et al., 2024). The case study serves us as an analytical basis for theory-driven conceptualization. We draw on the Punctuated Equilibrium Model (PEM) from organization theory as a unifying theoretical lens through which we integrate the established concepts, providing a process perspective that links their respective characteristics and clarifies how phases of relative stability (convergence) and transformation (punctuation) alternate in digital change.
By providing a meta-concept – instead of developing a new approach – we contribute to the recent debate on digital technology-induced organizational change in three respects in particular: (1) we clarify what triggers a DT in contrast to ITOT by referring to top management’s perception of new digital technologies; (2) we theoretically define when DT is accomplished by referring to the readjustment of the organization’s deep structures. Thereby, we emphasize that digital change is permanent, while DT has a closure; (3) we integrate the idea of ‘digital company’ into a process-oriented meta-concept of digital change, by framing a ‘digital company’ as the outcome of a digital change process rather than a specific state.
This paper is structured as follows: First, we outline the theoretical frame, followed by the description of the research design and methodology. Next, we present the results of our case study. We then analyze our observations against our theoretical framework and develop a meta-concept of digital change. Finally, we reflect on theoretical and practical contributions and suggest avenues for future research.
Theoretical background
Concepts for managing the adoption of digital technologies
Major concepts of managing technology-induced change of organizations.
Since the 1980s, IS research has studied the role of IT in organizational change. Building on established change theories such as evolutionism (e.g., Orlikowski, 1996), and institutionalism (e.g., Gosain, 2004), ITOT refers to the change of an organization driven by the implementation and use of IT (Besson and Rowe, 2012). Research focused on enterprise systems like ERP systems and CRM system and their transformative impact, recognizing IT as a ‘major asset for leveraging organizational transformation’ (Besson and Rowe, 2012: 104). Generally, ITOT involves activities aimed at supporting existing value propositions by making a company more efficient through the use of IT and digitalizing organization-wide processes (Wessel et al., 2021). Often, the IT department is regarded as the driving force of the change.
Inspired by the profound and holistic impact of emerging digital technologies that are generative, combinatorial, and malleable (Kallinikos et al., 2013; Yoo et al., 2010), DT has manifested itself as one of the IS community’s central topics since about 2015 (Carroll et al., 2023b; Hanelt et al., 2021). The concept refers to the systemic and holistic technology-induced changes to an organization’s core, such as its products, business models, competencies, and structure (Vial, 2019). These far-reaching transformations with digital innovations at their core (Wiesböck and Hess, 2020) lead to novel value propositions and even a new (Wessel et al., 2021), or challenged organizational identity (Graf et al., 2023a). DT fundamentally affects all parts of a company’s established structures and setting and even transcends its borders, spilling over to its ecosystem (Hanelt et al., 2021; Mann et al., 2022). The significant transformation endeavor is (often) driven by a specialized organization within a company (Holotiuk et al., 2024) or a dedicated top executive (Singh et al., 2020). While ITOT and DT are often contrasted as distinct modes of digital technology-induced change, recent work has emphasized that such binaries may obscure their intertwined organizational logics (Baiyere et al., 2025).
Lately, instead of capturing the process of transformation, scholars have sought to conceptualize the target state of a digital organization (Piccoli et al., 2024). The stream on digital ventures studies new organizations born digital, arguing that digital companies revolve around digital artifacts at their core (Briel et al., 2018) and produce digital market offerings (Lehmann et al., 2022). Those studying organizations that underwent a DT argue that the strategic primacy of digital resources marks the transition to being a digital organization (Piccoli et al., 2024). In this state, technology-induced change is a constant feature of the company, and digital innovations are adopted whenever available or necessary.
The academic discourse on the distinctions between the concepts has intensified in recent years (Markus and Rowe, 2023; Piccoli et al., 2024; Wessel et al., 2021). Wessel et al. (2021) argue that ITOT and DT can be distinguished by their different impact on a company’s value proposition (supporting vs redefining) and identity (old vs new). Others argue that the changes associated with DT are more profound, far-reaching, and multifaceted than in ITOT since the technologies underlying the changes are of a different kind (Hanelt et al., 2021; Vial, 2019). Some argue that the centrality of digital resources to a company’s core is the differentiating aspect between the concepts (Piccoli et al., 2024). Notwithstanding their differences in impact and scope, all concepts deal with questions of technology-induced change on an organizational level. They all tackle the question of how digital innovations – the combination of an innovative business solution and an innovative technological solution (Nambisan et al., 2017; Wiesböck and Hess, 2020) – are managed and strategically aligned in a constantly changing technological landscape. To overcome current conceptual debates and move toward an integrative perspective of organizational change driven by digital technologies, these aspects serve as starting points for relating the concepts.
The lens of the punctuated equilibrium model
Organization research offers a wide array of theories and models to describe and understand how organizations change. These approaches often differ fundamentally in their presuppositions, ontological stances, and basic ideas about the nature of change, e.g., its processual flow and direction. Despite these different perspectives, there is a broad consensus in organization studies that organizational ‘transformation’ constitutes a fundamental change, characterized by a transformation of the organization’s deep structure (Besson and Rowe, 2012; Gersick, 1991; Pettigrew, 1985; Tichy, 1983). Gersick defines an organization’s deep structure as ‘the set of fundamental “choices” a system has made of (1) the basic parts into which its units will be organized and (2) the basic activity patterns that will maintain its existence’ (Gersick, 1991: 14). Following the suggestion of Besson and Rowe, two seminal concepts of organizational transformation can be distinguished (Besson and Rowe, 2012): Lewin’s model of change and the Punctuated Equilibrium Model (PEM). Among the most prominent change models is Lewin’s model of change (Lewin, 1951). This model suggests that organizational change unfolds in three phases: unfreeze – change – refreeze. In the first phase, preparations are made for change by ‘unfreezing’ previous stable organizational structures. This is intended to generate a commitment to the change. The second phase involves implementing the change, followed by a final phase of stabilizing and solidifying these changes. The new organizational constitution has become ‘refrozen’. Lewin’s model has been foundational, but criticized for its linearity and a too static view of organizations. Moreover, while the model provides an explanation of how organizational change occurs, it remains open as to what triggers the change.
The Punctuated Equilibrium Model (PEM) addresses these limitations. Thus, we turn to this theoretical lens to deeply understand the multifaceted and fluid character of digital technology-induced changes in organizations. PEM integrates both the idea of change and stability by differentiating between phases of incremental and fundamental change, while retaining the basic idea of stages (Gersick, 1991; Romanelli and Tushman, 1994; Tushman and Romanelli, 1985). The model suggests that organizations typically experience long periods of relative stability (convergence period), punctuated by short periods of fundamental change (period of punctuation). Thereafter, again, it follows another convergence period of consolidation and re-stabilization (Tushman and Romanelli, 1985: 181). Both periods are characterized by permanent change and developments – however, of different extents and with different goals. A punctuation phase denotes a temporary phase of fundamental reconfiguration, whereas convergence periods are characterized by continuous but incremental adaptation.
During a convergence period, organizations focus on gaining equilibrium, leading to a state of relative stability. This period is characterized by incremental changes that are based on the organization’s deep structures. While smaller changes and developments within the organization occur, the fundamental organizational decisions and basic orientations remain stable. In fact, these changes aim at solidifying them. On the one hand, organizations seek to achieve efficiency and effectiveness based on these decisions by stabilizing, routinizing, and refining the organizational setting. On the other hand, developing an organization toward greater stability also meets the requirement for reliability and accountability from the market and customers (external conditions). In this phase, organizations do not transform themselves fundamentally; rather, they reinforce existing deep structures until an external or internal trigger prompts punctuation.
In contrast, a period of punctuation can be regarded as a shock that strikes an organization to its very core, affecting the deep structure itself. For Tushman and Romanelli, ‘major changes in competitive, technological, social and legal conditions of the environment’ (1985: 178) can be such a trigger (exogenous shock), demanding significant alterations concerning the organizational setting or even a fundamental transformation of the organization itself. Thus, new digital technologies can be such perceived shocks as the internet was for many organizations. However, a trigger, e.g., the internet, does not automatically lead to organizational transformation. Rather, it is the organizational members’ interpretation of changed exigencies that prompts them to act differently and alter the structures. The potential of a technology must be considered in each individual case. Executive leadership plays a seminal role in initiating a transformation. Only if the organization’s leadership interprets a new digital technology as a ‘game-changer’ does this technology become a trigger, initiating a punctuation phase, leading to a DT. By interpreting new digital technologies as game-changing for the company, they create a situation in which the deep structure is actively questioned and rethought, and if regarded as necessary, far-reaching decisions are taken that lead to changes in the deep structure. However, transformation is only realized if the workforce changes its actions and, thereby, the structures. This, not least, provides explanations for the plethora of failed attempts.
A punctuation period reaches closure when the deep structure is re-stabilized, that is, when fundamental decisions have been settled, and new action routines have been established. This theoretical perspective provides a reference point and a conceptual anchor to delineate the closure of DT. After an initial re-stabilization of the deep structures, the company enters a new convergence phase of relative stability, where the range of variations in actions decreases and only incremental changes on the structural level occur. Consequently, while change occurs permanently, it is defined that this change turns into a transformation when the organization’s deep structures are affected (Romanelli and Tushman, 1994). While literature provides several conceptualizations of an organization’s deep structure, we argue that an organization’s deep structure must be determined on a case-by-case basis.
Of course, PEM has not been without criticism. Scholars have pointed out that its dichotomous distinction between stability and disruption may oversimplify the more fluid, continuous, and multi-layered nature of organizational change (Orlikowski, 1996; Tsoukas and Chia, 2002). However, precisely this distinction makes PEM a useful heuristic for our study, as the concepts of ITOT and DT reflect these different logics of incremental versus transformative change. Furthermore, concerns about technological determinism have been raised, that is, the assumption that technologies in themselves automatically and unilaterally trigger and determine organizational change (Leonardi and Barley, 2010; Markus and Robey, 1988; Orlikowski, 1992). To address this critique, we read PEM through a structuration-theoretical lens (Giddens, 1984), in which interpretation, agency, and leadership play a constitutive role in both stabilizing and reproducing the deep structure and in turning technological potential into organizational triggers. Structuration serves us as a complementary perspective to avoid technological determinism, rather than as a second independent lens. In this way, we use PEM not as a rigid template but as a sensitizing piece of research that enables us to integrate the concepts of ITOT, DT, and digital company into a coherent process-oriented meta-concept of digital change.
Previous studies on IT implementation have applied PEM – albeit with a limited scope (Besson and Rowe, 2012). For example, Lassila and Brancheau (1999) examined commercial software packages, Wang et al. (2011) focused on business IT alignment, and Garfield and Dennis (2012) on IT governance. Lyytinen and Newman (2008) utilize PEM to develop a socio-technical change model to explain information systems change, and Silva and Hirschheim (2007) investigated strategic IS implementation. These studies show that PEM is suitable for conceptualizing digital change processes; however, they primarily focus on change phenomena within digital process innovation under the ITOT research stream and use PEM to explain organizational change and inertia due to IT implementation. Nevertheless, questions remain about the broader organizational impact and post-change developments.
Research method
Research design and case selection
Our interest is to get a comprehensive understanding of different modes of digital technology-induced organizational change processes, ultimately integrating established concepts into an overarching theoretical concept of digital change. Thus, our study aligns with process tracing studies, which seek to reveal explanations ‘that indicate how the process unfolds over time’ (Poole et al., 2000: 12). Tracing organizational changes associated with the utilization and implementation of new digital technologies requires a long-term perspective, as they often unfold over extended periods. The need for this perspective has recently been highlighted by Currie et al. (2024). Such a longitudinal approach poses various challenges for data collection and analysis. Since we aim to analyze change not solely retrospective but as still ‘in the making’ and open-ended, we follow historical developments over time; however, we do not adopt a strict historical case study design. Rather, we used an interpretative case study design, integrating historical and contemporary data sources to investigate the process of digital technology-induced organizational change driven over time. Being aware of the limitations of a single case study approach, this design is particularly suitable for studying in depth how processes unfold and develop. The focus is on rich and accurate process descriptions to capture digital changes holistically. Moreover, interpretive case study research allows the use of theory as part of an iterative process of data collection and analysis. By approaching data analysis openly and questioning existing assumptions, it is possible to expand theories or to develop new theories as a product of the research (Eisenhardt, 1989; Walsham, 1995). Our objective is not to conduct a deductive test of existing theory, nor to develop a completely new theoretical approach. Rather, we aim at a theory-guided conceptualization, integrating the major existing theoretical concepts of digital technology-induced organizational change into a meta-concept that specifies when and why each concept becomes salient. The case study serves as an analytical foundation for developing this process-oriented meta-concept. Hence, our study seeks analytical and theoretical generalization rather than statistical generalization.
Three key criteria guided our case selection. First, we sought a pre-digital company that had undergone several waves of digital technology-induced change. Second, digital change should have had an impact on the company’s mode of value creation and thus affected the company holistically. Third, we sought a rare case where the company itself perceives DT as completed. For these reasons, we deliberately selected an established media company as our case, since the media industry is a particularly revealing setting for studying digital change (Hess and Constantiou, 2018). Media companies have long been exposed to shifting consumer behavior and have had to engage with newly emerging digital technologies at an early stage. Hence, they faced digital change from early on (Hess, 2014). We deliberately chose MediaCo as our case since it fulfills all three selection criteria. It is a family-owned European Media Group with an annual turnover of approximately 3 billion € and about 10,500 employees, operating locally and internationally. Founded as a traditional printing and publishing house in 1903, MediaCo embraced emerging technologies at an early stage and progressively expanded its business models beyond traditional publishing (gradually being digitalized) towards digital ventures such as social networks and e-commerce. Today, it is one of the largest media companies in a major European country, operating in the publishing sector as well as, by now, also in consumer-oriented online platforms. Moreover, MediaCo defines itself as fully digital-defined, evident in the fact that digital businesses are no longer bundled into a separate division but integrated across all units.
Data collection and analysis
Since our aim is to conceptualize digital technology-induced organizational change rather than testing or confirming an existing theory, we adopt an abductive/retroductive approach (Peirce, 1934; Timmermans and Tavory, 2012), iteratively oscillating between theory and empirical data in terms of ‘systematic combining’ (Dubois and Gadde, 2002, 2014). In this process, abductive reasoning guided the iterative development and refinement of preliminary conceptualizations by confronting empirical observations with existing theoretical ideas. This approach aims at constructing, modifying, or refining theory based on qualitative research (Gioia et al., 2013; Thomas, 2010). While its methodological precepts resemble grounded theory, it rejects the idea of a ‘theory-free’ data encounter (Timmermans and Tavory, 2012). Instead, existing theoretical approaches serve as initial inspiration, while other theoretical approaches are tested against the empirical material throughout the research process to modify, extend, and develop theory (Dubois and Gadde, 2002). In addition to the abductive logic of ‘systematic combining’, we engaged in retroductive reasoning by asking what underlying conditions must hold for the observed pattern of alternating incremental and transformative change to occur. When our empirical reconstruction revealed qualitatively different change periods, we used PEM’s notion of deep structure to infer whether and how these periods involved shifts in fundamental organizational choices. We further mobilized a structuration-theoretical lens to retroductively account for the role of managerial interpretation and agency in turning technological developments into organizational triggers. We iteratively confronted these inferred conditions with the empirical material and considered alternative explanations (e.g., purely technology-driven or purely market-driven accounts) to refine our conceptualization.
Data collection and data analysis are carried out as a continuous and mutual process throughout the research process. For data selection within the case, we applied ‘theoretical sampling’ (Glaser and Strauss, 1967), a grounded theory method that is also regarded as appropriate for an abductive/retroductive approach of systematic combining (Dubois and Gadde, 2002: 559). The aim was to gather different perspectives on the phenomena until theoretical saturation (Urquhart et al., 2010). To reconstruct MediaCo’s digital journey over time, we triangulated diverse data sources, combining archival data with interview data collected from September 2022 to April 2023. 1 Archival data helped trace critical junctures, events, and decisions related to digital technology-induced change, but inherently reflect specific perspectives (e.g., internal communication by management, external communication to stakeholders, journalistic coverage on the company) and emphasize particular issues while silencing others (Decker, 2013). Interviews, by contrast, helped capture subjective perspectives and assessments of past, present, and future events or circumstances, and offered informal explanations for decisions made in the organization. However, they risk bias from retrospective memorization of past events. Triangulating different data sources mitigates the mentioned disadvantages and, in line with the systematic combining approach, iteratively provides additional points of connection and reveals new aspects of the research problem during the data analysis process (Dubois and Gadde, 2002).
Our reconstruction of MediaCo’s digital journey over time is not to be understood as a holistic corporate history but rather as ‘analytically structured history’, using analytical concepts to construct ‘a narrative of structures and events’ (Rowlinson et al., 2014: 264). We collected 60 documents, including annual financial reports, official press releases, self-published reports, media reports, and internal documents covering the company’s history. Our focus was on the period from 1960 to 2023, as this period has been revealed as the core period of digital technology-induced change.
Overview of collected data.
As implied for an abductive/retroductive approach, data collection and data analysis were iterative. We used archival and interview data complementarily to reconstruct MediaCo’s digital journey. For an initial analysis of archival data, we followed an analytically structured history strategy that is suggested for ‘the construction of a narrative of structures and events that may not even have been perceived as such by actors at the time’ (Rowlinson et al., 2014: 264) to reconstruct MediaCo’s history against the backdrop of digital technology-induced organizational change. In close communication with our MediaCo contact, we reflected and adjusted the constructed narrative. This step supported and guided the further data collection and analysis to consider contextual details, incorporate time-dependent data, and gather new perspectives (Langley, 1999).
Role of different data sources in the triangulation.
Following our abductive/retroductive research approach, we employed a combination of deductive and inductive approaches using thematic analysis (Braun and Clarke, 2022; Guest et al., 2012). Due to its flexibility across data corpus, theoretical paradigm, and ability to integrate deductive and inductive analysis, thematic analysis is considered well-suited for abductive/retroductive research (Thompson, 2022). We followed the methodological steps outlined by Braun and Clarke (2022). The interview transcripts were coded using the qualitative data analysis software package Atlas.ti.
In line with our abductive/retroductive approach, we repeatedly conducted the coding and theme-generating phases to iteratively develop our theoretically guided concept. A deductive approach, using theoretical categories as an analytical lens, was complemented by inductive coding, allowing us to analyze data to systematically identify emerging categories from the data themselves. During coding, we iterated between empirical data, theoretical conceptions from (IS) organizational change and DT, and results from the document analysis. We repeatedly revisited our data and modified and fine-grained the coding. Figure 1 provides a coding example for differentiating phases of digital change. Coding example for phases of digital change.
Identifying deep structures as a special challenge
PEM’s core idea of the impact of organizational change on the organization’s deep structure guided our initial coding in particular. Since no fixed set of dimensions of deep structures has emerged in the literature (Hannan and Freeman, 1984; Mintzberg, 1979; Tushman and Romanelli, 1985; Zald, 1970), we started with the proposal from Romanelli and Tushman (1994). They suggest five domains, which they define as elements of an organization's deep structure: these are (1) organizational culture and core values, (2) strategy, (3) structure, (4) power distribution, and (5) control system (Romanelli and Tushman, 1994; Tushman and Romanelli, 1985). Silva and Hirschman (2007) also used a similar categorization for investigating the impact of the implementation of strategic information systems on the deep structure of public organizations.
While these conceptualizations have been valuable in developing theoretical sensitivity to the phenomenon, data analysis and exchanges between the authors and MediaCo key contacts revealed that the five dimensions only partially cover ‘the set of fundamental “choices”’ (Gersick, 1991: 14) that are ‘important to organizational survival and central to organizational activities’ (Romanelli and Tushman, 1994: 1147). Therefore, we used Romanelli and Tushman’s domains as sensitizing categories for our initial deductive coding and operationalized ‘deep structure’ by identifying empirical indicators of such fundamental organizational choices. Specifically, we coded events, statements, and decisions as deep structure relevant when they reflected institutionalized and consequential choices regarding the organization’s core activities and long-term viability. During iterative coding cycles, we compared these indicators against the initial domains and refined the set when recurring patterns could not be adequately captured. We retained only those refined dimensions that were (a) repeatedly evidenced across data sources, (b) linked to strategic or structural decisions rather than isolated practices, and (c) analytically central for distinguishing incremental from transformative change over time (i.e., convergence vs punctuation in the PEM).
Thus, to further conceptualize and theorize digital change processes, we iteratively adjusted and refined the set of relevant dimensions of the deep structure in response to empirical findings. Based on the main themes reflecting core organizational dimensions of digital technology-induced change that emerged from the material, for MediaCo, we defined these themes as core elements of the deep structure: (1) portfolio of products and their business models, (2) organizational structure and power distribution, (3) IT architecture, (4) capabilities, and (5) organizational identity. This differs slightly from the domains offered by Romanelli and Tushman: First, their dimension of ‘organizational culture and core value’ largely aligns with our dimension of ‘organizational identity’, whereas our category goes beyond cultural and value-related issues, covering the collective inner-organizational self-understanding, and resonates with the debate around the organizational identity change in the context of DT (Graf et al., 2023a; Wessel et al., 2021). Second, instead of treating structure and power distribution as separate dimensions, we integrated them into one, as the organizational structures mainly reflect power distributions within a company. Third, we broadened the dimension of ‘strategy’ towards ‘portfolio of products and their business models’ to capture the company’s fundamental decisions towards market offerings and the impact of digital technology-induced change on these issues. Moreover, this dimension is also extensively discussed in the context of the DT concept. Lastly, the suggested dimension of ‘control system’ does not appear consistently in our data. 2 Instead, we added two additional categories that appeared important dimensions throughout digital technology-driven changes, that is, ‘capabilities’, pointing to the expertise for handling digital technologies, and ‘IT architecture’, referring to the organization’s basic technostructure and linking internal operations with market offerings. Regarding capabilities, we follow Bohrer (2024). The description of the IT architecture of a company helps to get an overview of the IT systems used in the company. An IT architecture includes hardware and software, their distribution, and how they interact (Ross, 2008; Widjaja and Gregory, 2020).
Figure 2 illustrates the underlying coding logic using the dimension of organizational identity as an example; analogous indicators were identified for all deep structure dimensions. Table 4 provides an audit-trail-style mapping of empirical indicators to the refined deep-structure dimensions and their relation to the domains suggested by Romanelli and Tushman (1994). Coding example for MediaCo’s deep structure dimension ‘organizational identity’. Mapping empirical evidence to deep-structure dimensions.
Case analysis
MediaCo’s digital journey
Our analysis reveals that MediaCo has dealt with emerging technologies at an early stage. MediaCo started as a printing company and developed itself and its product portfolio in the direction of content business (journalism). The early years were strongly influenced by the founder’s technology-open mindset that fostered the identification and implementation of new (analog) technologies, such as the development from the traditional gravure printing process to four-color printing. From the early 1930s, the company expanded its product portfolio from its focus on printing to publishing and selling its own newspapers and people magazines. It developed into a traditional media company, constantly growing. That enabled the development from a small local business to a major international company in the 1960s.
The document analysis revealed that a first major turning point towards digitization was the introduction of the first computer as a punch card machine in 1966, which enabled MediaCo to operate so-called data processing and triggered early process-level organizational adjustments, thereby paving the way for broader digitalization. During this time, MediaCo significantly invested in the digitizing of the printing process. Alongside the implementation of early digital technologies, an IT department was founded in 1967. Application systems led to more efficiency in the editorial process and greater flexibility in production. Specifically, graphic terminals for text input and the scanner technology made it possible to edit text and illustrations jointly. This also provided new advertising opportunities since computer-aided solutions made it possible to adjust advertisements’ shape, size, and placement. MediaCo used these opportunities to further build up its competitive advantage in the home market and to expand into new international markets. The use of the first personal computer in the 1980s and related application systems also had an impact on the workflow and work coordination of the production department. In addition, the organization of back-office processes was increasingly shaped by broader digitalization efforts.
A major cornerstone in MediaCo’s digital journey is associated with the rise of the internet in the early 1990s. The internet posed opportunities and challenges for all companies worldwide; however, companies have recognized and taken up these opportunities at different paces. The eminent role of the internet for the media industry and especially for MediaCo became highly present in the archival data and was stressed repeatedly in our interviews. Our research data reveal the company owner’s visionary mindset, which led to fundamental changes throughout the company. From early on, he perceived and recognized the internet as a game-changer for the company and the whole business sector. One interview partner mentioned: ‘The first wave was the internet. […] and right from the start, [the owner] understood that and went right along with it’. Another interview partner emphasized: ‘[…] the development of the internet – of course, that was the basis for everything. But [the owner], in my view, recognized very, very early on that this internet would change everything. He was on it very early and realized that this thing would revolutionize the world’. This technology-centered attitude of MediaCo’s leadership led them to take an active role in driving early investments and the digitalization of the company’s product portfolio. In the mid-1990s, MediaCo launched its first online news portals. Moreover, the internet as a technological medium gained importance in MediaCo’s business model as the firm transferred its print titles to the digital world. The internet became a core technology behind the company’s products and fostered the expansion of digital brands. Mainly due to its founder’s mindset and attitude, for MediaCo, the internet was recognized as holding high potential to significantly transform the future of its business area. It was realized as an opportunity rather than a risk. Consequently, the exploitation of the internet went along with far-reaching essential strategic decisions and fundamental changes.
When considering future developments, managers anticipate that machine learning (as the currently most important variant of artificial intelligence) will play a pivotal role in shaping market dynamics, influencing customer behavior, and transforming the way in which firms attain competitive advantages. However, unlike the internet in the 1990s, there is no clear stance recognizable that machine learning is perceived unanimously as a clear ‘game-changer’ throughout the company, fundamentally challenging the company again. Some interview partners see artificial intelligence as the current ‘big wave’ that will, like the internet before, lead to necessary holistic transformations and changes. One interviewee, for example, states: ‘And we are right on the verge of the next major wave now, with artificial intelligence. This will be a technology that will once again touch the foundations of our company’. Others admit the strong influence but argue that the current organizational setting is suitable for coping with the opportunities of these technologies. Another informant argues that ‘this is, in a way, an evolution that will continue. It won’t be another revolution’.
Based on the available data, we have seen three digital technologies that have attracted particular attention in the digital journey of MediaCo. First, this was the introduction of the computer in the 1960s. Then, the internet came along in the 1990s. For several years now, the focus has been on artificial intelligence in the form of machine learning. Figure 3 gives an overview of MediaCo’s critical junctures during its digital journey. Main phases of MediaCo’s digital journey.
Changes in the deep structure
The key question is whether and how MediaCo has changed, respectively, fundamentally transformed due to these technical developments. To analyze the character and magnitude of these changes, we utilize the concept of deep structure. As outlined above, based on our abductive/retroductive approach, deliberately moving back and forth between theoretical perspectives and empirical observations, we conceptualized five core dimensions of the deep structures that appeared relevant in the context of MediaCo: (1) portfolio of products and their business models, (2) organizational structure and power distribution, (3) IT architecture, (4) capabilities, and (5) organizational identity.
Changes in the deep structure during MediaCo’s digital technology-induced change phases.
Dimension 1 – Changes in the portfolio of products and their business models
With its roots in printing and publishing, MediaCo quickly leveraged digital technologies. The internet greatly contributed to the expansion of the product portfolio. Until the early 1990s, the traditional print and publishing business contributed around 80% of profits. With the rise of the internet, MediaCo decided to build digital products around its core business. Even though core business revenue has declined since the early 2000s, MediaCo maintains its traditional core products while fostering digital products and services as the main business focus. Interviewees emphasized that the publishing remains central: ‘[…] the publishing house, I believe, will always exist. […] this business is still an important pillar of this company. There’s no question about that […], but this business is no longer the main driver’.
Over the years, MediaCo effectively exploited digital technology to bring its former offline businesses into the digital world. A first transformative step of the journalistic core business was made in the mid-1990s by creating content websites linked to the publishing house. Later, acquisitions accelerated the shift towards digital. Since the 2000s, the company has increasingly extended its offerings to digital services and platforms. Besides the expansion and transformation of its own product portfolio, MediaCo founded a venture capital unit, acting as an investor to acquire digital businesses. The acquisitions led to a wide range of different digital business models, where some were held to sell, and others were operated as new digital businesses. Today, the venture capital arm is part of the company’s core business and portfolio strategy.
Starting with the adoption of the internet in the 1990s, MediaCo gradually digitalized most of its offerings and expanded its product portfolio towards digital products and services. By now, digital business contributes about 75% of total revenue and builds the main part of the business, while traditional publishing still remains important. Today, MediaCo’s digital portfolio includes online magazines, booking and comparison portals, and job platforms. While the portfolio evolved, the company’s B2C focus remained. However, digital revenue increasingly comes from B2B models, including trading, distribution, commission, and advertising.
Dimension 2 – Changes in organizational structure and power distribution
Since the 1990s, MediaCo’s transformation of its product portfolio was accompanied by a fundamental restructuring characterized by decentralization. Traditionally centered around printing and publishing, the company introduced a holding structure with independent profit centers in 1995, each managing smaller units similarly. This shift also redefined leadership: while board members had previously made top-down decisions, the new structure emphasized mid-level responsibility and bottom-up decision-making. At the top of each profit center, the position of a CEO was established, ultimately responsible for decision-making and reporting. In 2010, the first non-family CEO was appointed, while the owner remained publisher and supervisory board member. Acting less family-business-driven, the new CEO focused on data and performance, further driving fundamental structural alterations at MediaCo. Key steps included integrating the bundle of consumer-centric digital growth companies into a separate digital business unit (DBU) and creating a digital management board role.
The decentralized structure fostered bottom-up digital innovation, reduced reaction time for identifying and implementing new digital technologies, shortened decision-making processes, and increased flexibility. It also enabled the distinct growth of individual profit centers. By 2007, MediaCo’s digital division comprised 28 companies operating in different areas, such as portals, media, entertainment, commerce, and mobile. By 2010, digital brands contributed nearly half of MediaCo’s revenue, while print revenues declined.
Until today, MediaCo is 100% family-owned and decentralized, with profit centers bundling companies by business models and consumer groups. Individual companies operate independently and are responsible for their results, while MediaCo manages the portfolio and selects corporate functions. Its internal venture capital unit supports decentralized growth in tech and media. Around the early 2020s, we observe tentative (re-)centralization efforts in parts of the company’s digital business. Notably, in 2019, the DBU was dissolved, distributing digital assets and responsibilities across other units. As one interviewee noted: ‘Now, every department is digital’. Additionally, digital product efforts were centralized under a newly created Chief Product Officer (CPO) role to enhance synergies and resource efficiency.
Dimension 3 – Changes in IT architecture
The company’s basic IT architecture dates back to the 1970s. Back then, MediaCo initiated an early partnership with the ERP system software partner SAP. Since 1967, MediaCo has operated a corporate IT, which was centrally responsible for all IT-related tasks and IT infrastructure offerings.
With the implementation of the profit center structure in 1995, each profit center was given its own IT department and Chief Information Officer (CIO). These decentral IT departments develop and run the product-related systems, including outsourcing to specialized companies and the use of cloud services. The corporate IT was reorganized into a distinct, autonomous profit center. In this new structure, the corporate IT center acted as a service provider subsidiary that provided IT infrastructure offerings for all profit centers, including server, network, and data center operations, as well as IT support. Furthermore, major systems for accounting, finance, controlling, and HR operations were centralized and supported centrally by corporate IT.
We could reveal two major goals behind the implementation of this new structure. The primary goal was to accelerate the development of digital products and support the provision of analog products. Duplicate developments were consciously accepted, even if these were to be at least somewhat constrained by technology boards. Attempts to use existing content or customer data across company divisions were generally unsuccessful. The second goal of the new structure of the IT architecture was to reduce the costs of the IT systems in the back office. This also involved the enforcement of compliance guidelines, especially for acquired companies.
During the initial considerations about the use of machine learning, it is discussed whether such applications can also be created in such a decentralized manner. The availability of knowledge and training data is seen as a problem of a strictly decentralized solution. In this context, there is renewed discussion as to whether the merging of data should also be pursued.
Dimension 4 – Changes in capabilities
In the pre-internet era, MediaCo’s capabilities for exploring opportunities and risks associated with digital technologies and developing and operating IT systems were fully centralized. With the internet expansion, identifying new technological potentials became crucial, leading all profit centers to build corresponding capabilities, enabling early exploitation of and investment in emerging technologies. MediaCo prioritizes leveraging digital technologies for innovative products and services rather than exploring every new technology in depth. Consequently, while cloud technology was acknowledged, it was not used to its full potential. As one interviewee stated: ‘We are not first movers, but first followers’. Machine learning is handled slightly differently. Due to decentralization, profit centers explore and exploit it variably – some focus on the upsides, others on the downsides of AI for product innovation. Additionally, an AI-focused department was established at the corporate level.
At MediaCo, technology exploration typically occurs in product development and business units rather than IT departments. Due to the need for traditional IT specialists to implement and operate IT solutions, the company employs a mix of internal IT professionals, freelancers, and (external) IT providers. The company develops IT professionals through three strategies: (1) in-house training, (2) external long-term hires, and (3) project-specific (short-term) hires. To foster in-house development of IT professionals and IT capability building, MediaCo employs training methods, including IT courses, webinars, and hackathons. Moreover, the company initiated its own in-house training programs and offered special education opportunities to its employees to foster new innovative ways to create new digital capabilities. This strategy aims at extending IT and digital expertise beyond IT departments, integrating digital capabilities across all business units and profit centers.
Dimension 5 – Changes of the organizational identity
MediaCo’s organizational identity has been challenged and (partially) adjusted, particularly in response to the organizational changes associated with the internet. Our interview data show that while the company’s organizational identity has consistently been characterized by a strong emphasis on technological innovation, the rise of the internet marked a shift in the company’s identity from a media company towards a media-and-tech company.
From early on, MediaCo’s identity was strongly linked to its family-owned structure and the founder’s personality. While the founder was deeply convinced of MediaCo being a publishing house, he was also very open-minded to new technology. His vision was to develop the publishing house into an international technology-oriented media company. One interviewee, for example, states that ‘the founder proclaimed digitalization with incredible energy in the 1990s. If the founder would have said in the ‘90s: “We’re all farming now and sell potatoes, that’s the business of the future”, then we would all have been farming […]. That’s the beauty of a company that […] is run by a charismatic person. He just said: We’re doing this (digitalization) now, and so it happens’. The founder’s openness to new technology continued through appointed managing directors, described as rooted in publishing yet curious and open to change. Consequently, we observed a shift in the organizational members’ perception of the company’s identity alongside the increasing use of digital technologies, particularly since the late 1990s. Since the 2000s, MediaCo’s organizational identity has evolved into a broad understanding of the company as a modern digital media-and-tech firm.
Moreover, the implementation of the decentralized profit center structure led to a fragmentation of the organizational identity, fostering an entrepreneurial mindset among employees. Successful digitalization of products since the early 2000s cultivated openness but also increased distinctions between profit centers, leading to distinct sub-identities. Employees primarily identify with their profit center, often emphasizing differences from others, a dynamic consciously accepted by management. Recently, tentative steps have been taken to reinforce the company’s overarching identity as a media-and-tech company, potentially indicating an emerging trend towards recentralization.
Tensions, paradoxes, and unintended effects
While the longitudinal reconstruction highlights distinct periods of digital technology–induced change, our data also reveal recurring tensions and unintended consequences that shaped how these periods unfolded. These tensions underscore that MediaCo’s digital change was not a smooth linear trajectory but involved trade-offs, contested interpretations, and ongoing efforts to balance stability and change. Across the case, we identified five recurring tension areas that cut across the deep-structure dimensions and help explain key shifts and adjustments over time.
First, a tension emerges between experimentation and portfolio consolidation. MediaCo’s expansion into digital ventures went along with substantial experimentation at the portfolio level. The firm acquired digital companies with a wide range of business models, some of which were intentionally held for resale, while others were integrated as operational digital businesses within newly created profit centers. This pattern illustrates that digital change unfolds through phases of expansion and selective consolidation rather than through a linear substitution of legacy by digital businesses. It also highlights that digital growth strategies may simultaneously increase strategic options and portfolio complexity, requiring periodic consolidation and reconfiguration.
Second, a tension arises between decentralization and coordination/re-centralization. The profit-center structure enabled entrepreneurial autonomy and accelerated the exploration and exploitation of digital technologies, fostering bottom-up digital innovation and flexible decision-making. At the same time, decentralization created coordination challenges, including duplicate developments and difficulties in leveraging content and customer data across business units. Over time, these unintended consequences became visible in renewed coordination and centralization efforts, for example through the dissolution of the separate digital business unit and the creation of a corporate-level CPO. The debate on machine learning further reinforced this tension, as decentralized exploration confronted the need for shared data governance and integrated capabilities.
Third, with regard to organizational identity, we observe the paradoxical simultaneity of fragmentation and cohesion. The decentralized setting also fostered distinct unit-level cultures and sub-identities, which was consciously accepted by management. However, this plurality simultaneously created an ongoing need for an overarching organizational identity that provides coherence across the group. As MediaCo increasingly framed itself as a media-and-tech company, identity work became an important element of re-stabilizing the organization’s deep structure after periods of fundamental change. This tension underscores that stabilization is not merely structural but also interpretive, requiring ongoing efforts to maintain a shared sense of ‘who we are’ across heterogeneous units.
Fourth, and closely related, tensions occurred with respect to legacy pillars vs digital dominance. Even as MediaCo’s revenue base shifted toward digital products and platforms, parts of the legacy business remained strategically and symbolically important. This hybrid configuration required balancing the stabilization of traditional pillars with continued expansion into digital ventures, illustrating that digital change can unfold through the coexistence of legacy and digital value creation rather than through full replacement. Such coexistence can enable continuity and resource generation, while also producing ongoing tensions regarding strategic attention, identity, and investment priorities.
Finally, tensions can be identified regarding technology as trigger vs contested interpretation. While the internet was widely perceived as a transformative ‘game changer’ and served as a clear trigger for deep-structure reconfiguration, more recent technologies such as machine learning/artificial intelligence are interpreted less uniformly. This contestation highlights that technological developments do not automatically translate into transformation; rather, they become triggers through managerial sensemaking and the formation (or lack) of interpretive consensus. In this way, the case illustrates how agency and interpretation shape whether technological change remains incremental or escalates into an open phase of fundamental reconfiguration.
Case discussion and conceptual synthesis
Discussion of the case
Our case analysis reveals that MediaCo has had a strong focus on technology since its beginnings and embarked on positioning itself for the digital age by implementing digital technologies at a very early stage. However, over time, the exploration and exploitation of digital technologies led to organizational changes of varying magnitudes and impacts on the company itself (see Figure 3).
Starting as a ‘pre-digital organization’, in its early days, MediaCo focused on the exploitation of analog technologies (analog phase). From its founding in 1903, the company utilized the potential of new technologies to develop its business, starting with analog print technology, and expanded its core production services, shifting the company towards being more content-driven.
With the emergence and spread of early digital technologies, the company began to explore their potential for improving its business. The first phase of change (approximately 1960–1990) was triggered by the availability of mainframes and PCs (change to data processing). It can be described as changing from an ‘analog’ into a ‘data processing-enabled’ company. The utilization of the computer has primarily been focused on improving and enhancing the production process of an already existing product portfolio rather than transforming the products themselves. The IT department was recognized as a major asset for leveraging IT-enabled improvements. The deep structure remained largely stable.
With the advent of the internet, MediaCo faced a new phase of change (change to internet). In contrast to the first change phase, this phase is characterized by several fundamental decisions and changes. The internet can be seen as an inflection point in MediaCo’s digital journey. The founder’s perception of the internet as a game-changer triggered a situation where the company’s established deep structure was called into question and fundamentally rethought. In this phase (approximately 1990–2000), the company utilized digital technologies to digitize and enhance products, develop digital innovations, and create new digital business models, accompanied by profound structural alterations. During this time, MediaCo invested high amounts of money and time towards large transformation initiatives, aimed at acting adequately towards the significant opportunities or critical threats that emerge from new digital technologies. Digital technologies, and the internet in particular, were intended not only to increase efficiency but also to fundamentally alter the company itself. The company’s deep structure was subject to change.
The first phase (change to data processing) aligns with what is described as ITOT in the literature. While this change phase was characterized by numerous smaller, incremental changes, it reveals that the company's core and its deep structure for generating business remained largely stable and unchanged during this time. Therefore, this phase can be regarded as a convergence period through the lens of PEM, where digital technologies are intended to help achieve greater efficiency and effectiveness.
The second phase (change to internet), in contrast, fulfills all the characteristics of a DT as described in the literature. Both the value proposition and the organizational identity were fundamentally questioned and subject to change. (However, in contrast to the argument of Wessel et al. (2021), we did not see the emergence of a new identity but rather an extension of the already existing previous organizational identity – from a media towards a media-and-tech company – and a fragmentation of the overall organizational identity, as discussed by Graf et al., 2023a) Referring to PEM, this change phase can be regarded as a punctuation phase, leading to fundamental directional decisions and accompanied by rapid and discontinuous changes in the organization’s overall setting. Especially during the period between the mid-1990s and the early 2000s, we can observe significant alterations in all five dimensions of the deep structure. With the development of the first content websites in the mid-1990s and the increasing expansion of digital business offerings since the 2000s, the foundation was laid for a changed product portfolio. In 1995, it followed the restructuring towards profit centers. This was accompanied by the division between corporate IT and several decentralized IT departments for each profit center and the decentralized development of digital capabilities. Not least, the decentralization also led to an initial fragmentation of the organizational identity, then to an increasing synthesis of an extended organizational identity as a ‘media and tech company’ since the 2000s. Taken together, the pivotal changes concerning the company’s deep structure occur over a time span of 10 to 15 years (early 1990s to early 2000s).
From the 2000s until the 2020s, we see no further fundamental changes in the deep structure. Rather, the decisions made become sedimented. Therefore, by the mid-2000s at the latest, the transformative punctuation phase appears to have gradually given way to a re-stabilization of the deep structure. From this point onwards, the company increasingly focused on consolidating and solidifying the new setting, indicating a gradual shift toward closure in the sense of deep-structure re-stabilization.
Recently, since the early 2020s, we observe cautious considerations towards recentralization in several dimensions of the deep structure, e.g., with respect to the organizational structure or a more cohesive organizational identity. This, not least, relates to the ongoing discourse about machine learning within the company. It is vibrantly discussed whether machine learning has to be perceived as a trigger for a new phase of fundamental change (period of punctuation), similar to the internet or not. As of now, no far-reaching decisions have been made. Until now, the company’s deep structure still remains relatively stable. However, it remains open whether machine learning might spark a new phase of fundamental transformative change, again affecting the organization’s deep structure.
Towards a meta-concept of digital change
Against the backdrop of our case analysis, in the next step, we refer our observations to our theoretical frame, aiming at analytically abstracting these insights towards a theory-guided conceptualization of a meta-concept of digital change. We could reveal that MediaCo has gone through two phases of digital-induced organizational change. While both phases were triggered by new digital technologies, they differ regarding the impact on the organization’s deep structure. In the first phase, the deep structure in the core was not changed. In contrast, in the second phase the deep structure was questioned and significantly changed in various dimensions. From these empirical patterns, we retroductively infer that the key condition for moving from a relatively stable to an open phase is not the emergence of a technology per se, but the enactment of a ‘game-changer’ interpretation that legitimizes questioning deep-structure choices. Conversely, closure becomes plausible once these deep-structure choices are settled and the new configuration is re-stabilized.
Referring to the established IS-concepts, the first phase can be characterized as ITOT, while the second aligns with DT. Regarding the third concept of digital company, it can be assumed that the successful adoption of the internet, based on the organization’s fundamental changes in its deep structure, transformed MediaCo into a digital company, now able to fully exploit the potential of this technology at scale. From the perspective of PEM, in the first phase, the deep structures remain relatively stable and organizational changes were primarily driven from the back office, aiming at optimization and increasing efficiency. Incremental changes (especially in processes) enabled the company to handle data processing without deeply transforming the organization itself. Hence, this phase can be characterized as a ‘period of convergence’. On the contrary, the second phase led to a revisit of the company’s deep structure and caused various fundamental changes. Accordingly, this phase can be regarded as a ‘period of punctuation’. Both phases of organizational change were driven by digital technologies, but only the internet was perceived as a major topic and game-changer by the company’s leadership, which resulted in the assumption that significant changes are necessary to handle this technology. This circumstance highlights the important aspect that digital technologies do not automatically spark organizational changes, but it is the respective perception by management that leads to decisions that affect the organization as a whole more or less.
Furthermore, from a theoretical perspective, it can be argued that the transformative period of punctuation, representing DT, moved toward closure once the fundamental choices concerning the deep structure’s dimensions were taken. 3 What followed was a new period of re-stabilization in which the new setting became consolidated (period of convergence). In this sense, the company increasingly approximated what can be conceptualized as the status of a digital company, characterized by its ability to continuously manage digital innovations without fundamentally reconfiguring its deep structures. To date, the company is in a relatively stable phase again, where primarily incremental changes occur. In this view, we observe two phases of digital change, where the deep structures remain relatively stable (until the 1990s and since the 2000s). Whereas in the period between the 1990s and 2000s, organizational changes occurred that fundamentally affected the organization’s deep structure. Nevertheless, it is clear that machine learning could be the trigger, initiating a new period of punctuation, sparking transformative changes in the organization’s deep structure, if perceived as the next ‘game-changer’ by top management, making a different organizational setting appear necessary.
By using the PEM as a unifying theoretical lens that enables us to relate the established concepts of digital technology-induced organizational change to one another, we derive an encompassing concept that describes the processual structure of the change brought about by new digital technologies in companies. Abstracted from our empirical analysis, we can distinguish between more incremental and more transformative phases of digital change. This distinction resonates with the PEM’s logic of ‘period of convergence’ versus ‘period of punctuation’, as well as with the differences between ITOT and DT. For our meta-concept of digital change, we adopt the terms ‘relative stable phase’ – representing a period of convergence, respectively, ITOT – and ‘open phase’ – representing a period of punctuation, respectively, DT, for better accessibility and more consistency. Empirically, we operationalize this distinction by assessing whether digital technology–induced change remains largely within established deep-structure choices or whether fundamental directional decisions affect multiple deep-structure dimensions, depending on whether the organization’s deep structures are affected or not. This wording reflects our empirical observations and emphasizes that stability is always relative, as change is a permanent ongoing endeavor. At the same time, it avoids a deterministic reading that is sometimes associated with ‘punctuation’ by foregrounding the interpretative and agentic role of managers in framing new technologies as potential triggers of transformative change. In this vein, ‘open’ does not imply that all dimensions of the deep structure change simultaneously, but that fundamental choices become subject to managerial deliberation and may be reconfigured to varying degrees. Conversely, ‘relatively stable’ denotes phases in which deep-structure choices remain stable in essence, while adaptation continues primarily within these established choices. Accordingly, in a relatively stable phase, change primarily takes the form of incremental adaptations that build upon the established deep structure, whereas in an open phase the deep structure is actively questioned and often altered to some extent. Triggers initiating such an open phase are technological developments that top management interprets as pivotal for the company, making significant reconfiguration appear necessary. The open phase reaches closure when major decisions on the deep structure are settled and no further significant changes in these dimensions occur.
The derived meta-concept of digital change is visualized in Figure 4. Meta-concept of digital change.
A company can be in a relatively stable phase or in an open phase. In the first case, the deep structure remains largely unchanged. Although change is continuous, it primarily takes the form of incremental adaptations that build upon the company’s established deep structure. If top management perceives a new digital technology as an important and pivotal factor that makes significant changes necessary in order to exploit the potential of this technology, the company enters an open phase. This interpretive shift is translated into organizational action through strategic decision-making, such as the initiation of transformation initiatives, the allocation of substantial resources, and the reconfiguration of structures and governance arrangements. However, this interpretative shift is not purely cognitive, but often initiated and accompanied by various sensemaking and negotiation processes across the organization. Through decisions and actions, the perceived technological ‘game changer’ becomes institutionalized and destabilizes the existing company’s scaffold. During the open phase, the company’s deep structure is actively questioned and rethought, and eventually altered to varying degrees across its dimensions. Once the basic decisions regarding the deep structure have been settled, the company gradually transitions into another phase of relative stability, characterized by the consolidation and solidification of the new setting of the deep structure.
The distinction between relatively stable and open phase is intended as a heuristic at the level of the overall organization and its dominant deep structure configuration. In complex, multidivisional firms, different business units or domains may simultaneously operate in different modes (e.g., one unit undergoing an open phase of DT while another remains in an ITOT-like mode of incremental change). Such parallel and partially overlapping dynamics do not contradict our concept; rather, they point to a promising avenue for future research that extends the meta-concept to multi-level and multi-unit settings. Such parallel and partially overlapping dynamics can be understood as reflecting heterogeneity and asynchronous change across units within the same organization.
Our meta-concept of digital change integrates the previously established concepts of ITOT and DT. In doing so, we respond to recent calls to integrate the proliferating ‘Digital X’ perspectives in IS research (Baiyere et al., 2023) and to move beyond binary framings of digital versus IT by considering their joint organizing logics (Baiyere et al., 2025). The open phase (right side of the figure) always corresponds with the DT approach as a holistic and far-reaching digital technology-induced organizational change. Therefore, the arrow from DT to this phase is solid. When a company enters this phase for the first time, it typically establishes a specialized organizational setting, including DIUs, digital divisions, and CDOs. However, due to new digital technology developments, a company can also enter an open phase again. Until now, little is known about companies entering the open, transformative phase a second time. We do not know how a company will handle DT a second time.
In contrast, ITOT corresponds with the relatively stable phase (left side of the figure), characterized by incremental changes induced by digital technology. In comparison to ITOT and DT, the concept of the digital company has so far been viewed less and, above all, not from a process perspective. However, the understanding developed so far shows that a digital company is characterized by the fact that it is able to manage digital innovations continuously and, therefore, without changing the deep structure. It stands to reason that after resetting the deep structures (closure of DT), a company reaches the status of a digital company, able to exploit the potential of the respective digital technology by small, incremental changes on the basis of its deep structure. Analogous to ITOT, we therefore term this phase ‘digital-enabled organizational transformation’. 4 Some companies founded in the pre-digital age may be able to achieve this status. Digital-born companies start directly in this status. Thus, both concepts, ITOT and digital company, are assigned to the relatively stable phase, however, the arrows are dashed because this phase corresponds to different concepts.
Our concept also provides suggestions towards the question of DT’s duration. In the academic discourse, it is discussed controversially whether DT should be understood as a completable endeavor or as a permanent condition of fundamental organizational change in light of ever-faster developments of new digital technologies. With our concept, we argue that rather than an ultimate endpoint, digital change unfolds alternating relatively stable phases of incremental adaptation and open phases of transformative reconfiguration. This is not least important because an open phase not only comes with significant uncertainties, both internally and externally, but also incurs substantial resources. Thus, it is rather improbable that a company will permanently be able to fundamentally transform itself, not least because of the associated costs and lack of efficiency and effectiveness. However, our concept also implies a dynamic feedback loop: outcomes of an open phase, such as reconfigured deep structures, newly built capabilities, and established governance routines, shape how subsequent digital technologies are perceived and acted upon. In particular, organizations that have previously undergone an open phase may develop ‘transformation capabilities’ (Warner and Wäger, 2019) that influence the ability to mobilize and govern a subsequent open phase. Thus, later cycles of digital change may unfold differently in terms of speed, scope, and governance, even though the core logic of deep-structure destabilization and re-stabilization remains applicable.
Contribution and conclusions
Theoretical contributions
The major result of this paper is a process-oriented meta-concept for structuring pre-digital companies’ digital change process. It describes the processual sequencing of alternating ‘relatively stable phases’ and ‘open phases’ of a company in the context of the availability of new digital technologies. Relatively stable phases are characterized by the fact that a company moves within the framework of its given deep structure, that is, the portfolio of products and their business models, organizational structure and power distribution, IT architecture, capabilities, and organizational identity remain unchanged in essence. In an open phase, the different dimensions of the deep structure are questioned, and (more or less fundamentally) changes are made in individual or all dimensions. These changes, in sum, significantly alter the company as a whole. Open phases are triggered by a company (i.e., the company leaders) viewing the opportunities and risks associated with a new digital technology to be so fundamental that far-reaching, transformative changes are necessary. An open phase reaches its closure when the discussion about the deep structure has come to an end, and basic directional decisions are made. We derived our meta-concept by empirically reconstructing and analytically abstracting the digital journey of a media company over a period of 70 years.
We do not claim to develop a new theory. Rather, our contribution lies in relating different but largely unconnected concepts into a coherent theory-guided meta-concept. The literature on the digital change of companies has so far mainly included the concepts of ITOT and DT. As previously understood, ITOT describes a change process based on incremental changes within a company. What has been framed as characteristic so far has been the focus on the digitalization of processes and the focus on the IT department as a driver. DT, by contrast, describes a change process that also entails fundamental changes in an organization, not least transforming the organization itself. It has remained ambiguous how fundamental these changes had to be; the range of suggestions ranged from questioning the value proposition and organizational identity to the necessity of changing them. What has been defined as characteristic of DT was the establishment of a special, temporary organization. Our meta-concept of digital change proposed here relates and integrates these two perspectives by mobilizing the core theoretical logic of the PEM, namely, the distinction between phases of incremental change and phases of punctuation/transformative change, and the criterion of deep-structure reconfiguration as the defining mechanism of transformation.
At the same time, we deliberately go away from commonly discussed organizational instantiations of ITOT and DT (e.g., specific IT departments, ERP-centered programs, or dedicated digital units), because such structures may vary widely across firms, contexts, and the specific digital technology at play. Instead, our meta-concept focuses on the underlying organizing logic of digital change and provides a theoretically grounded approach for distinguishing incremental adaptation from transformative reconfiguration. It also shows a way in which the newly developed concept of a digital company can be classified and thus related to the concepts of ITOT and DT. Hence, our meta-concept integrates the established concepts of ITOT and DT and the emerging concept of a digital company into an overarching concept of digital change by using the PEM, and its implied focus on challenging an organization’s deep structure, as a unifying theoretical lens. In addition, drawing on a structuration-theoretical understanding of technology and organizing, we conceptualize triggers as interpretive and agentic accomplishments: digital technologies become transformative triggers only when top management frames them as consequential and enacts this interpretation through strategic decisions and organizational reconfiguration. Therefore, our concept provides a theoretically founded proposal for specifying the mode and magnitude of digital technology-induced organizational change and explains when, why, and in which sequence each concept becomes salient.
This integrative perspective challenges some dominant paradigms in the discourse on digital change in three important ways: First, we specify that a digital transformation is not automatically triggered by the emergence of any digital technology. Rather, triggering means that the top management of one specific company interprets a new technology as a game-changer that requires fundamental reconfiguration. Second, we conceptualize the closure of a transformation phase, thereby challenging the notion of DT as a permanent condition and emphasizing instead that relatively stable phases alternate with transformative, open phases of digital technology-induced organizational change. Third, we rethink the idea of ‘digital company’ in light of pre-digital companies. Instead of regarding it as a static state, we add a second perspective and understand it as the outcome of a process in which deep structures have been reconfigured. A ‘digital company’, in this view, has entered another relatively stable phase, after going through an open phase of digital change.
In addition to these major contributions, the paper makes four particular points. Firstly, by comparing the well-established concepts of ITOT and DT and relating them to the newly emerging concept of digital company, we provide a sophisticated foundation for integrating different, so far largely unrelated research streams in IS that deal with the question of managing digital technology-induced organizational change.
Second, by referring to the PEM, which was previously mainly applied to IT implementation in the context of technologies, we now offer a promising theoretical lens for integrating these different concepts. Moreover, we suggest that an organization’s deep structure is a core criterion for distinguishing between the magnitude of digital technology-induced organizational change. Only when the organization’s deep structure is questioned and challenged, a true organizational transformation in the sense of DT is triggered. This implies that digital technologies continuously drive organizational change in the sense addressed by the concepts of ITOT and digital company. However, these changes do not necessarily result in a fundamental transformation (changes in the deep structure). While previous academic debate primarily focused on whether the emergence of a new organizational identity is a fundamental defining criterion of DT (Graf et al., 2023a, 2023b; Wessel et al., 2021), shifting the focus to the organization’s deep structure offers a broader and more comprehensive perspective. As one dimension of the deep structure, organizational identity plays a crucial role, but it is not the sole factor in understanding the extent of digital technology-induced organizational change.
Third, our conceptualization of the deep structure dimensions highlights the IT architecture as an important element of the deep structure of companies for the first time. This ties in with the connection between business solution and technical solutions that is fundamental to the concept of digital innovation (Orlikowski, 1992; Wiesböck and Hess, 2020). It also highlights how important a company’s IT architecture has become.
Finally, the paper also addresses the frequently raised call for a longitudinal view of digital change (Carroll et al., 2023a; Currie et al., 2024). Even with a retrospective longitudinal research design, collecting data by repeated measurements at multiple time points is often virtually unfeasible in research practice, in particular, for an observation period over decades. Our case study, therefore, combines archival data with recent interview data. Taking an abductive/retroductive research approach using systematic sampling offers a suitable way of reconstructing an analytically structured history of the company’s digital change. The case study presented describes the digital change of a company over 70 years, particularly triggered by mainframes and PCs and then by the internet, and supplements this with a review of the first forms of use of digital technologies in the 1960s. By oscillating between theoretical concepts and empirical analysis from our case study, we were able to analytically abstract from the concrete case to derive a general meta-concept of digital change.
Practical implications
Our concept carries several practical implications for managers navigating the digital change by serving as a diagnostic tool. First and overall, our concept helps practitioners to diagnose an organization’s current phase of digital change and to select the right concept of digital change in a specific situation. Until now, it wasn’t really clear which concept is appropriate under which conditions. Our concept provides a structured diagnostic logic that clarifies whether an organization is in a relatively stable phase or an open phase, and which managerial paradigm (ITOT, DT, or digital company) is appropriate under these conditions. Beyond diagnosing the current phase, the meta-concept suggests that managers should deliberately build transformation capabilities (e.g., governance routines, digital capabilities, and architectural flexibility) during open phases, as these shape the interpretation of subsequent technologies and the governance of future phases of digital change.
Second, our concept provides strategic clarity by delineating what qualifies as a true DT. Only when management perceives the necessity to question and reconfigure the deep structures of the company to be able to handle the potential of a new digital technology, we speak of DT. This allows managers to distinguish between situations that call for incremental optimization within existing structures and those that require a fundamental reconfiguration of the organization, thus avoiding both overreaction to minor technological trends and underestimation of major shifts.
Third, a manager learns that DT is not a permanent issue. DT is a temporary phase of fundamental organizational reconfiguration that comes to a closure, turning to a relatively stable phase. This insight enables managers to anticipate the trajectory of a transformation journey, to deliberately define the desired endpoint in terms of the organization’s envisioned deep structure, and to manage the DT program toward this strategic target setting. In doing so, they can better align resources, governance mechanisms, and leadership attention with the magnitude of change required.
Fourth, open phases of transformative organizational change (DT) can return. Even if the structures that have been built are suitable for handling a particular digital technology (or class of technologies), they may not be suitable for newly emerging digital technologies. The current question is, for example, whether the structures required to cope with the internet are also sufficient to explore the opportunities and risks of machine learning. For managers, this raises the strategic dilemma of whether the organizational structures that proved adequate will also suffice to absorb the opportunities and risks of new technologies, or whether fresh transformative change efforts will be necessary, leading to a new DT. Our concept supports managers in continuously reassessing whether emerging technologies constitute incremental challenges or require a renewed open phase of transformation. Moreover, our approach emphasizes the agentic role and perception of management for this process.
Finally, companies should take into account that digital technologies play a double role in digital change. They can be triggers for questioning the deep structure, but the IT architecture itself is an essential part of the organization’s deep structure, and thus subject to change. Changing IT architecture is therefore as important as challenging the reconfiguration of other dimensions of the deep structure (e.g., business models or organizational structures). From a managerial perspective, this highlights the importance of actively shaping IT architecture as a strategic asset.
Taken together, the meta-concept of digital change provides managers with a diagnostic process perspective that helps them navigate. It supports reflection on where the company currently stands, when a transformation is necessary, when incremental adaptation is sufficient, and how to deliberately shape both open and relatively stable phases in order to exploit the potential of digital technologies while maintaining organizational resilience.
Limitations and further research
Based on the analytical reconstruction of different phases of digital technology-induced organizational change in a media company, we developed a meta-concept of digital change. We acknowledge that our case study depicts a company that has successfully gone through an open phase of fundamental change driven by digital technologies, commonly discussed as DT. However, we hope that the lessons we have learned are also helpful for companies that are still ‘in’ this open phase. Since we do not know whether our particular case company will continue to be successful in digital change in the future, our contribution relates less to the specific implementation in our case but rather to the overall understanding of digital change. The company’s further digital journey and its success would be an interesting topic for research. Beyond this, of course, our study has several limitations that need to be taken into account, simultaneously offering a huge number of starting points for future research.
Since our focus was on integrating existing concepts of digital technology-driven change into a cohesive concept, we did not explicitly address structural constraints, strategic approaches, or micro-political dynamics that may emerge in the different phases of digital change. In particular, we abstracted from a detailed empirical reconstruction of the processual mechanisms through which managerial interpretations of new digital technologies are translated into organizational decisions and actions. Future research could therefore examine how power dynamics, governance, resistance, IT alignment, or resource constraints shape the trajectory and specific gestalt of digital change, as well as how interpretive consensus forms and how sensemaking and negotiation processes contribute to the initiation of open phases and the destabilization of organizational deep structures, thereby refining and expanding our concept. In addition, our meta-concept focuses on the dominant deep structure configurations at the level of the overall organization. Examining hybrid, parallel, or overlapping states, where different business units might simultaneously operate in different phases of digital change within the same organization, would further enhance the applicability of the meta-concept to complex, multidivisional firms. Another direction could be to understand what (weak) signals are, and whether a digital technology is perceived as so fundamental that it triggers a questioning and reconfiguration of the deep structure. Another direction could be to examine what are appropriate structures for companies if they are in a second open phase of digital-driven change.
One particular limitation of our study concerns the way in which we used the case material. While conducting a single case study, our aim was primarily not to develop a rich and idiosyncratic account of one company’s digital journey. Rather, we employed the longitudinal reconstruction of MediaCo’s digital technology-driven changes as an analytical basis for abstraction toward a more general theory-guided concept of digital change. Hence, the strength of our study lies not in statistical generalization, but in providing an analytically grounded perspective that can inform future theorizing.
Moreover, our case is situated in the media industry, coming with contextual particularities that need to be acknowledged. The media industry is particularly interesting in the context of digital change, as companies in this realm have long been exposed to rapidly changing consumer behavior and were therefore forced to intensively engage with the opportunities and risks of emerging digital technologies at an early stage (Hess and Constantiou, 2018). Consequently, media companies are often considered one step ahead of organizations in other industries (Hess, 2014). We acknowledge that companies in other industries may face different triggers, speeds, and intensities of digital change. Nevertheless, because our approach abstracts from the specific case to conceptualize at the level of organizational change intensity and deep structure dynamics, we argue that the meta-concept of digital change we propose is applicable beyond the media industry. This opens up another promising avenue for future research by examining how relatively stable and open phases of digital change unfold in industries with different characteristics, speeds, and regulatory environments.
Footnotes
Ethical considerations
Ethical approval was not required.
Consent to participate
All interview participants provided written informed consent for participation and recording before the interviews began.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Data Availability Statement
Not possible to share data due to confidentiality and anonymity.