Upgrading adaptation: How digital transformation promotes organizational resilience

Abstract

This study explores how digital transformation can promote organizational resilience when incumbent firms face crises. We examine the intersection of digital transformation and resilience-seeking processes through two longitudinal case studies of incumbent firms designated as “essential businesses” during the COVID-19 pandemic. We analyze 72 crisis adaptations the firms implemented during the crisis to understand how previously underutilized digital capabilities upgraded each firm's ability to adapt to mitigate stakeholder risks and engage in resilience-seeking rather than advantage- or opportunity-seeking. We identify five digital capabilities—virtual access, virtual collaboration, data-driven decision-making, algorithmic reprogrammability, and assisted decision-making—that arose from technologies acquired to enable digital transformation before the crisis. We discuss the concept of resilience opportunities and contribute to the literatures on digital transformation and organizational resilience.