Abstract

The fourth industrial revolution challenges organizations to cope with dynamic business landscapes as they seek to improve their competitive position through rapid and pervasive digitalization of products, services, processes, and business models. As organizations sense and respond to new opportunities and threats, digital innovations are not only meeting new requirements, unarticulated needs, and market demands, they also lead to disruptive transformation of sociotechnical structures. Despite the practical relevance and theoretical significance of digital innovations, we still have limited knowledge on how digital innovation initiatives are rationalized, realized, and managed to improve organizational performance. Drawing on a longitudinal study of digital innovations to improve student success at Georgia State University, we develop a theory of organizational intelligence to help understand how organizations’ digital innovation initiatives are organized and managed to improve their performance over time in the broader context of organizational transformation. We posit that organizational intelligence enables an organization to gather, process, and manipulate information and to communicate, share, and make sense of the knowledge it creates, so it can increase its adaptive potential in the dynamic environment in which it operates. Moreover, we elaborate how organizational intelligence is constituted as human and material agency come together in analytical and relational intelligence to help organizations effectively manage digital innovations, and how organizational intelligence both shapes and is shaped by an organization’s digital innovation initiatives. Hence, while current research on organizational intelligence predominantly emphasizes analytic capabilities, this research puts equal emphasis on relational capabilities. Similarly, while current research on organizational intelligence focuses only on human agency, this research focuses equally on material agency. Our proposed theory of organizational intelligence responds to recent calls to position IS theories along the sociotechnical axis of cohesion and has pronounced implications for both theory and practice.