Two entrepreneurial firms, a digital disruption, and different responses: the role of organizational mission and experiential computing digital options

Abstract

Two leading digital entrepreneurial firms responded to a digital disruption differently. One adapted, whereas the other stagnated and eventually went bankrupt. In this inductive multi-case study, we strive to understand how they came to do so. Through constant comparison analysis between data, emerging theory, and existing literature, we develop a nuanced theoretical model suggesting that for entrepreneurial firms, having an abstract mission and pursuing diverse digital options actually constrain firms’ ability to respond to a digital disruption. But a specific mission and selective options enable adaptive agility. Overall, our emergent process theory highlights critically overlooked entrepreneurial firms, which are increasingly facing disruptions from powerful, established firms. Our emergent theory also prompts us to reconsider the conventional wisdom that digital options inherently enable agility.