Disentangling the ‘digital’: A critical review of information technology capabilities, information technology–enabled capabilities and digital capabilities in business research

Abstract

Business and management scholars have always placed a strong emphasis on the study of capabilities. As digital technology moves from the back office to the forefront of digital innovation and transformation, organizations increasingly recognize the vital role of their digital‐related capabilities. Yet, despite the attention, substantial confusion remains in the cross‐disciplinary management and business literature, caused by conflating related, yet distinct, constructs: information technology (IT) capabilities, IT‐enabled capabilities and digital capabilities. Our objective in this article is twofold. First, we analyse the capability literature across business research areas to identify weaknesses, contradictions, controversies or inconsistencies regarding ‘IT’ and ‘digital’ constructs. We do so by conducting a theory‐driven critical review encompassing 360 studies in fields ranging from accounting to strategy. Second, our article advances a theoretical framework that clarifies the differences across IT capabilities, IT‐enabled capabilities and digital capabilities. It also provides solid ground for future inquiry by ensuring reliable knowledge accumulation while pointing research attention to unique and novel research questions.