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Digitalization and organizational capabilities: a mechanism-based integrative review
Sen Jia1, Khai Wah Khaw1, Yiqi Zhou2
1School of Management, University of Science Malaysia, George Town, Malaysia.
Purpose:
This study addresses the fragmented understanding of how digitalization shapes organizational capabilities by identifying and synthesizing the underlying mechanisms.
Methods:
A mechanism-based systematic literature review was conducted on 116 core studies published in Q1 journals between 2015 and 2024. A structured multi-stage screening and classification process was applied to identify key mechanisms and their interrelationships.
Results:
The findings reveal four mechanism families-enabling, cognitive, collaborative, and adaptive-and twelve sub-mechanisms explaining how digital structures, cognition, and collaboration interact to reconfigure organizational capabilities. Three dominant causal chains-enabling → adaptive, cognitive → adaptive, and collaborative → adaptive-are identified. Based on these results, the Digital Capability System (DCS) is proposed, conceptualizing capability evolution as a recursive, multi-level, and boundary-spanning system.
Discussion:
This study contributes by moving beyond linear antecedent-outcome models and advancing a mechanism-based, multi-level perspective on digital capability development. It also identifies key research gaps, including static treatments of infrastructure, output-biased innovation measures, and cross-level inconsistencies, and provides an agenda for future research and practical guidance for designing digitally enabled capability systems.
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