Abstract
Despite an increasing scholarly effort to integrate institutional theory into strategic management, we still know little about how organizations balance conformity and differentiation when they are pressured to come up with innovation. Drawing on the recently proposed perspective of optimal distinctiveness, we use a comparative case study among German premium car manufacturers to assess how organizations within this group strategically position their electrification strategies in the midst of regulatory and competitive pressures. We identify integrative and compensatory positioning as two strategic levers by which these organizations try to achieve competitive differentiation via their innovation strategies. We also reveal patterns in the relation between these levers and which circumstances predict their use. Our study contributes to the understanding of organizational responses to conflicting demands, the innovation strategies of incumbents, and the role of optimal distinctiveness in this process.
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