Digitalization and organizational capabilities: a mechanism-based integrative review

Purpose This study addresses the fragmented understanding of how digitalization shapes organizational capabilities by identifying and synthesizing the underlying mechanisms. Methods A mechanism-based systematic literature review was conducted on 116 core studies published in Q1 journals between 2015 and 2024. A structured multi-stage screening and classification process was applied to identify key mechanisms and their interrelationships. Results The findings reveal four mechanism families—enabling, cognitive, collaborative, and adaptive—and twelve sub-mechanisms explaining how digital structures, cognition, and collaboration interact to reconfigure organizational capabilities. Three dominant causal chains—enabling → adaptive, cognitive → adaptive, and collaborative → adaptive—are identified. Based on these results, the Digital Capability System (DCS) is proposed, conceptualizing capability evolution as a recursive, multi-level, and boundary-spanning system. Discussion This study contributes by moving beyond linear antecedent–outcome models and advancing a mechanism-based, multi-level perspective on digital capability development. It also identifies key research gaps, including static treatments of infrastructure, output-biased innovation measures, and cross-level inconsistencies, and provides an agenda for future research and practical guidance for designing digitally enabled capability systems.