Organizational identity meets digital transformation: understanding the interplay between transformation and identity in Industry 5.0

Purpose This study explores the relationship between digital transformation and organizational identity, arguing that understanding this relationship is essential for organizations actively seeking to effectively navigate and adapt to the complex changes proposed by Industry 5.0 to reshape modern business and organizational dynamics. Design/methodology/approach A systematic literature review was conducted to examine the bidirectional relationship between digital transformation and organizational identity. Findings The analysis reveals that digital transformation and organizational identity continuously influence each other and identity shifts can both drive and be driven by technological change. Moreover, Industry 5.0 emphasizes human-centric and sustainable principles, requiring organizations to adapt their core sense of “who they are” to remain resilient and purpose-driven. Originality/value This study offers novel insights into the role of organizational identity in the digital transformation process. By examining the role of identity theory in digital transformation and applying an entity-relationship model to map the dynamic interplay, this study extends the discussion beyond the technology-centric lens of Industry 4.0 into the human- and sustainability-focused paradigm of Industry 5.0. Therefore, the contributions of this study are twofold. It offers suggestions for identity realignment strategies and provides an agenda for five future research avenues: Identity dynamics, Employee perception and stakeholder, Structures and cultures, Impact of technology and Measurement. Each offers unique opportunities to deepen the understanding of DT and OI.