Re-examining path dependence in the digital age: The evolution of connected car business models

René Bohnsack, Hannes Kurtz and André Hanelt

Research Policy, 2021, vol. 50, issue 9

Abstract: Proliferating digitalization affects the evolution of business models across contexts and challenges firms’ established innovation trajectories. Prior work on organizational path dependence suggests that firms experience decreasing option spaces over time and ultimately arrive at lock-in situations that prevent them from reacting to changing environmental conditions. Contemporary business practice, however, challenges these assumptions, as firms—even industrial-age incumbents—appear to be able to escape lock-ins and restore choices. One potential explanation for this could be the flexible nature of digital technologies that are increasingly integrated into business models during digitalization. To explore how and why this process affects organizational path dependence, we conducted a longitudinal multiple case study on connected car business models. We derive four business model archetypes adopted by different companies in the automotive industry and by new entrants, and we describe their evolution over time. We find that the growing integration of digital technologies into business models increases the number of possible pathways and can help to break path-dependent behavior. Based on our findings, we challenge and extend established knowledge on organizational path dependence with regard to key tenets, such as initial conditions and lock-ins, and provide a nuanced perspective on path dependence's resource- and cognition-based foundations.

Keywords: Path dependence; Digital technologies; Business model evolution; Digital business models; Automotive industry (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0048733321001281
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:50:y:2021:i:9:s0048733321001281

DOI: 10.1016/j.respol.2021.104328

Access Statistics for this article

Research Policy is currently edited by M. Bell, B. Martin, W.E. Steinmueller, A. Arora, M. Callon, M. Kenney, S. Kuhlmann, Keun Lee and F. Murray

More articles in Research Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().