Identity discrepancy in digital transformation: The case of a technology company

Recent information systems (IS) studies have explored the relationship between organizational identity and digital transformation (DT), focusing either on the original identity or the new identity. However, at the early stages of DT, these identities often coexist, and neglecting one may introduce bias. To address this gap, our study investigates how identity discrepancy—the misalignment between the original and new identity—impacts DT success. Through an in-depth case study of TechCo (a pseudonym), a Chinese technology firm, we demonstrate that identity discrepancy contributed to DT failure by triggering reckless expansion and excessive innovation. These actions, in turn, led to identity ambiguity and severe financial difficulties. Our findings advance the literature on DT and organizational identity by revealing the mechanisms through which identity discrepancy fosters ambiguity and undermines transformation efforts. • Identity discrepancy, the gap between a firm’s new and original identity, is common in digital transformation. • Identity discrepancy may doom digital transformation by spurring reckless expansion and excessive innovation. • Reckless expansion and excessive innovation worsen identity ambiguity, aggravating financial problems.