The Digital Undertow: How the Corollary Effects of Digital Transformation Affect Industry Standards

Abstract

Scholarship on digital transformation has centered on how waves of digitalization have moved through industries, producing strategic changes within and across firms and enabling new forms of value creation. In this paper, we argue that different but no less important processes of digital transformation are generated by the undertow produced by these waves. This digital undertow, a corollary effect of waves of digitalization, profoundly influences how firms operate by transforming the industry standards that coordinate and regulate their core business activities. Using a genealogical approach, we draw on findings from a longitudinal field study in book publishing to theorize the tensions and processes that constitute the digital undertow. We explain that, when waves of digitalization transform firms’ core activities, they unwittingly affect how industry standards correspond with materializations of the phenomena they structure, thus influencing how standards perform in practice. A significant outcome of recent waves of digitalization in the book industry is the loss in correspondence between industry standards and novel digital materializations of the book. This is producing what we refer to as digital displacement, a process that is engendering an existential challenge to the capacity of standards to effectively coordinate and regulate industry operations in the digital age.