A Watched Blossom Seldom Blooms: Board Interlocks and Digital Business Model Innovation

Abstract

Digital business model innovation (DBMI) represents a critical yet challenging form of strategic adaptation for firms navigating modern technological changes. This study investigates how the directionality of board interlock ties—whether ties are sent or received—shapes a focal firm’s engagement in DBMI. Drawing on a coevolutionary stochastic actor-oriented model (SAOM) applied to a longitudinal dataset, our baseline results reveal an intriguing asymmetry: receiving ties exert a stronger influence on a focal firm’s DBMI than sending ties. To probe this divergence, we abductively unpack the underlying diffusion frictions spanning attention, interpretation, and validation. The results point to attention friction as the primary bottleneck: when boards face heightened attentional scarcity, such as when firms experience CEO succession or operate under high business diversification, the relative advantage of receiving ties over sending ties is magnified. Our work deepens the understanding of how the directionality of board interlock ties channels organizational learning to foster strategic adaptation in the digital age.