Abstract
Today, firms increasingly need to strategically manage their digital innovation while aligning it with their strategic behaviors (i.e., entrepreneurial and sustainability orientations). Given the lack of previous research on alignment and digital innovation, our study explores and tests how a firm's sustainability and entrepreneurial orientations influence digital innovation. Given that firms can implement diverse digital technologies, we study how digital technologies applied in the firm moderate the orientations' effects on digital innovation. Following strategic alignment theory, we build a model that assumes positive and negative alignment effects. We test our model using primary and secondary data including 350 cases from manufacturing firms. Our findings reveal that a sustainability orientation improves digital innovation. Yet, its positive effect declines when the firm has a greater entrepreneurial orientation. Surprisingly, the positive effect of a sustainability orientation declines as well when the firm implements a greater set of digital technologies. Consequently, our study contributes counterintuitive insights towards understanding that ‘the more is not necessarily the better’.
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