Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 31097
Drivers of Digital Product Innovation in Firms: An Empirical Study of Technological, Organizational, and Environmental Factors

Authors: Anne Theresa Eidhoff, Sarah E. Stief, Markus Voeth, Sarah Gundlach


With digitalization increasingly changing the rules of competition, firms face the need to adapt and assimilate digital technologies in order to remain competitive. Firms can choose from various possibilities to integrate digital technologies including the option to embed digital technologies aiming to innovate products or to develop digital products. However, the question of which specific factors influence a firm’s decision to pursue digital product innovation remains unanswered in research. By adopting the Technology-Organization-Environment (TOE)-framework we have designed a qualitative exploratory study including eleven German practitioners to investigate relevant contingency factors. Our results indicate that the most critical factors for a company’s decision to pursue digital product innovation can be found in the technological and environmental dimensions, namely customers, competitive pressure, technological change, as well as digitalization fit. 

Keywords: Digital Innovation, Digitalization, TOE-framework, product innovation

Digital Object Identifier (DOI):

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 1525


[1] M.G. Aboelmaged, “Predicting e-readiness at firm-level: An analysis of technological, organizational and environmental (TOE) effects on emaintenance readiness in manufacturing firms,” International Journal of Information Management, vol. 34, no. 5, pp. 639–651, 2014.
[2] A. Bharadwaj, O.A. El Sawy, P.A. Pavlou and N. Venkatraman, “Digital business strategy: toward a next generation of insights,” MIS Quarterly, vol. 37, no. 2, pp. 471–482, 2013.
[3] M. Fitzgerald, N. Kruschwitz, D. Bonnet and M. Welch, “Embracing digital technology: a new strategic imperative,” MIT Sloan Management Review, vol. 55, no. 2, pp. 1–12, 2014.
[4] J.F. Schrape, „The change of bookselling by digitalization and internet”, original title: “Der Wandel des Buchhandels durch Digitalisierung und Internet” Discussion Paper in: Stuttgarter Beiträge zur Organisationsund Innovationsforschung, University of Stuttgart, Germany, 2011.
[5] Y. Yoo et al., “The Next Wave of Digital Innovation. Opportunities and Challenges - A Report on the Research Workshop, Digital Challenges in Innovation Research, pp. 1–37, 2011. Retrieved from (Last accessed: October 28, 2015.
[6] M. Barrett, E. Davidson, J. Prabhu and S. L. Vargo, “Service Innovation in the Digital Age. Key Contributions and Future Directions,” MIS Quarterly, vol. 39, no. 1, pp. 135–154, 2015.
[7] R.G. Fichman, B. L. Dos Santos and Z. Zheng, “Digital Innovation as a Fundamental and Powerful Concept in the Information Systems Curriculum,” MIS Quarterly, vol. 38, no. 2, pp. 329–353, 2014.
[8] R. Amit and C. Zott, “Value Creation in E-Business,” Strategic Management Journal, vol. 22, no. 6-7, pp. 493–520, 2001.
[9] K. Lyytinen, Y. Yoo,R. and J. Boland Jr, “Digital product innovation within four classes of innovation networks,” Information Systems Journal, vol. 26, no. 1, pp. 47-75, 2016.
[10] H. Chesbrough, “Business Model Innovation. It’s Not Just about Technology Anymore,” Strategy & Leadership, vol. 35, no. 6, pp. 12– 17, 2007.
[11] L.G. Tornatzky and M. Fleischer M, The Process of Technological Innovation. Lexington, MA. Lexington Books, 1990, pp. 15-46.
[12] T. Oliveira and M.F. Martins, “Literature review of information technology adoption models at firm level,” The Electronic Journal Information Systems Evaluation, vol. 14, pp. 110–121, 2011.
[13] J. Baker, “The technology-organization-environment framework”, in Dwivedi, Y., Wade, M. and Schneberger, S. (Eds), Information Systems Theory: Explaining and Predicting Our Digital Society, Springer, New York, NY, pp. 231-246. 2011.
[14] F. A. Johne and P. A. Snelson, “Success factors in product innovation: a selective review of the literature,” Journal of Product Innovation Management, vol. 5, no. 2, pp. 114-128, 1988.
[15] M. Smith, M. Busi, P. Ball and R. Van der Meer, “Factors Influencing an Organisations’ Ability to Manage Innovation. A Structured Literature Review and Conceptual Model,” International Journal of Innovation Management, vol. 12, no. 4, pp. 655–676, 2008.
[16] R. Srinivasan, G. L. Lilien and A. Rangaswamy, “Technological Opportunism and Radical Technology Adoption. An Application to EBusiness,” Journal of Marketing, vol. 66, no. 3, pp. 47–60, 2002.
[17] V. Sambamurthy and R. W. Zmud, “Research commentary: The organizing logic for an enterprise's IT activities in the digital era—A prognosis of practice and a call for research,” Information Systems Research, vol. 11, no. 2, pp. 105-114, 2000.
[18] R. G. Fichman, The diffusion and assimilation of information technology innovations. R. Zmud, ed. Framing the Domains of IT Management: Projecting the Future through the Past. Pinnaflex Publishing, Cincinnati, USA, 2000.
[19] C. Sandström, M. Magnusson and J. Jörnmark, “Exploring factors influencing incumbents' response to disruptive innovation,” Creativity and Innovation Management, vol. 18, no. 1, pp. 8-15, 2009.
[20] A. Davila, M. Gupta and R. J. Palmer, “Moving Procurement Systems to the Internet: The Adoption and Use of E-Procurement Technology Models,” European Management Journal, vol. 21, no. 1, pp. 11–23, 2003.
[21] B.W. Wirtz, A. Pistoia, S. Ullrich and V. Göttel, “Business Models: Origin, Development and Future Research Perspectives,” Long Range Planning, in press, 2015.
[22] M. Obal, “Why Do Incumbents Sometimes Succeed? Investigating the Role of Interorganizational Trust on the Adoption of Disruptive Technology,” Industrial Marketing Management, vol. 42, no. 6, pp. 900–908, 2013.
[23] S. L. Jarvenpaa, B. Ives, "Executive Involvement and Participation in the Management of Information Technology," MIS Quarterly, vol. 15, no. 2, pp. 205-227, 1991.
[24] F. Damanpour and S. Gopalakrishnan “Theories of organizational structure and innovation adoption: the role of environmental change,” Journal of Engineering and Technology Management, vol. 15, no. 1, pp. 1-24, 1998.
[25] M. E. Porter and J. E. Heppelmann, “How Smart, Connected Products Are Transforming Competition,” Harvard Business Review, vol. 92, no. 11, pp. 1–23, 2014.
[26] X. Vives, “Innovation and Competitive Pressure,” The Journal of Industrial Economics, vol. 56, no. 3, pp. 419-469, 2008.
[27] S. Mithas, A. Tafti and W. Mitchell, “How a Firm’s Competitive Environment and Digital Strategic Posture Influence Digital Business Strategy,” MIS Quarterly, vol. 37, no. 2, pp. 511–536, 2013.
[28] G. D. Pires, J. Stanton and P. Rita, “The internet, consumer empowerment and marketing strategies,” European Journal of Marketing, vol. 40, no. 9/10, pp. 936-949, 2006.
[29] H. C. Lucas, R. Agarwal, E. K. Clemons, O.A. Sawy and B. Weber, “Impactful Research on Transformational Information Technology. An Opportunity to Inform New Audiences,” MIS Quarterly, vol. 37, no. 2, pp. 371–382, 2013.
[30] C. Fuchs and M. Schreier, “Customer empowerment in new product development,” Journal of Product Innovation Management, vol. 28, no. 1, pp. 17-32, 2011.