How Do Market Standards Inhibit the Enactment of Digital Capabilities?

A Case Study of Airline Pricing

Abstract

Digital capabilities can improve organizations’ performance by supporting complex decision-making processes. However, when market standards constrain their enactment, the potential benefits promised by digital capabilities do not realize. The paper explores this tension by means of the critical case of a European airline, which had difficulty to enact a novel pricing approach and finds that market standards are entrenched in the airline’s pricing and distribution ecosystem. This causes the organization to focus on local improvements and IT-based workarounds instead of enacting a dramatically new and potentially improved digital pricing capability.

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Acknowledgements

This work was supported by funding from the Deutsche Forschungsgemeinschaft (DFG) Pfadkolleg Research Center at the School of Business and Economics, Freie Universität Berlin. For helpful comments, we thank Prof. Georg Schreyögg and Prof. Jörg Sydow.

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Correspondence to Daniel Fürstenau.

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Accepted after three revisions by Oliver Hinz.

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Fürstenau, D., Cleophas, C. & Kliewer, N. How Do Market Standards Inhibit the Enactment of Digital Capabilities?. Bus Inf Syst Eng 62, 279–287 (2020). https://doi.org/10.1007/s12599-019-00588-1

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Keywords

  • Digital capabilities
  • Market standards
  • Path dependence
  • Pricing
  • Air transport