IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v223y2026ics0040162525004548.html

Phygital dynamic capabilities: Microfoundations and their reversed interplay

Author

Listed:
  • Moi, Ludovica
  • Pusceddu, Gianluca
  • Cabiddu, Francesca

Abstract

The convergence of physical and digital worlds—referred to as “phygital”—is reshaping how organizations develop and deploy strategic capabilities. While previous research has mainly focused on customer experience (CX), little is known about the organizational capabilities enabling firms to operate effectively in these phygital ecosystems. Adopting a dynamic capabilities (DCs) perspective, this study examines how firms sense opportunities, seize them, and reconfigure resources within phygital ecosystems. Building on Baskerville et al.'s (2020) notion of “ontological reversal”, we position phygital as a distinct form of DC extending beyond CX to impact operational, technological, and structural dimensions. Drawing on an exploratory case study of Webidoo Store, this study investigates how firms develop phygital dynamic capabilities (PDCs), the ability to identify opportunities across physical and digital layers, orchestrate hybrid resources, and transform operations by integrating digital intelligence with physical components into a cohesive, data-driven ecosystem. We identify the microfoundations (MFs) of PDCs across individuals, processes, and structure, uncovering mechanisms by which PDCs are created, expressed and transformed. Moving beyond a CX-centric view, this study provides a theoretical foundation for phygital capability development, and managerial insights on how organizations can strategically orchestrate and reconfigure hybrid resources to achieve competitive advantage in an evolving digital-physical landscape.

Suggested Citation

  • Moi, Ludovica & Pusceddu, Gianluca & Cabiddu, Francesca, 2026. "Phygital dynamic capabilities: Microfoundations and their reversed interplay," Technological Forecasting and Social Change, Elsevier, vol. 223(C).
    • Handle: RePEc:eee:tefoso:v:223:y:2026:i:c:s0040162525004548
    DOI: 10.1016/j.techfore.2025.124423
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162525004548
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2025.124423?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Teppo Felin & Nicolai J. Foss & Koen H. Heimeriks & Tammy L. Madsen, 2012. "Microfoundations of Routines and Capabilities: Individuals, Processes, and Structure," Journal of Management Studies, Wiley Blackwell, vol. 49(8), pages 1351-1374, December.
    2. Oliveira, Mariana & Zancul, Eduardo & Salerno, Mario Sergio, 2024. "Capability building for digital transformation through design thinking," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    3. Annosi, Maria Carmela & Capo, Francesca & Appio, Francesco Paolo & Bedetti, Ivan, 2023. "Unveiling micro-foundations of digital transformation: Cognitive models, routines, and organizational structures in agri-food SMEs," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    4. Jon Iden & Bendik Bygstad, 2025. "Sociotechnical micro-foundations for digital transformation," European Journal of Information Systems, Taylor & Francis Journals, vol. 34(2), pages 367-382, March.
    5. Chloé Alexandre & Aurélie Toillier & Sophie Mignon, 2022. "Exploring the Nature of Dynamic Capabilities and Enabling Environments for Service Innovation in the Global South: The Case of Digital Agro-advisory Services in Burkina Faso 1," Post-Print hal-04726364, HAL.
    6. AlNuaimi, Bader K. & Kumar Singh, Sanjay & Ren, Shuang & Budhwar, Pawan & Vorobyev, Dmitriy, 2022. "Mastering digital transformation: The nexus between leadership, agility, and digital strategy," Journal of Business Research, Elsevier, vol. 145(C), pages 636-648.
    7. Gensler, Sonja & Rangaswamy, Arvind, 2025. "An emerging future for digital marketing: From products and services to sequenced solutions," Journal of Business Research, Elsevier, vol. 190(C).
    8. Pangarkar, Aniruddha & Arora, Vibha & Shukla, Yupal, 2022. "Exploring phygital omnichannel luxury retailing for immersive customer experience: The role of rapport and social engagement," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    9. Scuotto, V & Nicotra, M. & Del Giudice, M. & Krueger, N. & Gregori, G.L., 2021. "A microfoundational perspective on SMEs’ growth in the digital transformation era," Journal of Business Research, Elsevier, vol. 129(C), pages 382-392.
    10. Sonali K. Shah & Kevin G. Corley, 2006. "Building Better Theory by Bridging the Quantitative–Qualitative Divide," Journal of Management Studies, Wiley Blackwell, vol. 43(8), pages 1821-1835, December.
    11. Felix Arndt & Peter Galvin & Rob Jansen & Gerardus Lucas & Peiran Su, 2022. "Dynamic capabilities: New ideas, microfoundations, and criticism," Post-Print hal-04686333, HAL.
    12. Andrejs Čirjevskis, 2022. "Exploring Coupled Open Innovation for Digital Servitization in Grocery Retail: From Digital Dynamic Capabilities Perspective," JRFM, MDPI, vol. 15(9), pages 1-12, September.
    13. Annarelli, Alessandro & Battistella, Cinzia & Nonino, Fabio & Parida, Vinit & Pessot, Elena, 2021. "Literature review on digitalization capabilities: Co-citation analysis of antecedents, conceptualization and consequences," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    14. Chiara Bartoli & Costanza Nosi & Alberto Mattiacci & Francesca Bertuccioli, 2023. "Consumer–brand relationship in the phygital age: a study of luxury fashion," Italian Journal of Marketing, Springer, vol. 2023(4), pages 429-450, December.
    15. Wided Batat, 2021. "How augmented reality (AR) is transforming the restaurant sector: Investigating the impact of “Le Petit Chef” on customers’ dining experiences," Post-Print hal-04455601, HAL.
    16. Chirumalla, Koteshwar, 2021. "Building digitally-enabled process innovation in the process industries: A dynamic capabilities approach," Technovation, Elsevier, vol. 105(C).
    17. Dinuka B. Herath & Shelley Harrington, 2023. "Saying yes to mess: disorganization as an antecedent to dynamic capabilities," Review of Managerial Science, Springer, vol. 17(5), pages 1539-1558, July.
    18. Chloé Alexandre & Aurélie Toillier & Sophie Mignon, 2022. "Exploring the nature of dynamic capabilities and enabling environments for service innovation in the global south: The case of digital agro-advisory services in Burkina Faso," Post-Print hal-05179375, HAL.
    19. Hang T. T. Nguyen & Hanh Song Thi Pham & Susan Freeman, 2023. "Dynamic capabilities in tourism businesses: antecedents and outcomes," Review of Managerial Science, Springer, vol. 17(5), pages 1645-1680, July.
    20. Matarazzo, Michela & Penco, Lara & Profumo, Giorgia & Quaglia, Roberto, 2021. "Digital transformation and customer value creation in Made in Italy SMEs: A dynamic capabilities perspective," Journal of Business Research, Elsevier, vol. 123(C), pages 642-656.
    21. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    22. Cristina Mele & Tiziana Russo Spena & Marialuiza Marzullo & Irene Bernardo, 2023. "The phygital transformation: a systematic review and a research agenda," Italian Journal of Marketing, Springer, vol. 2023(3), pages 323-349, September.
    23. Abatecola, Gianpaolo & Breslin, Dermot & Kask, Johan, 2020. "Do organizations really co-evolve? Problematizing co-evolutionary change in management and organization studies," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    24. Chirumalla, Koteshwar & Leoni, Luna & Oghazi, Pejvak, 2023. "Moving from servitization to digital servitization: Identifying the required dynamic capabilities and related microfoundations to facilitate the transition," Journal of Business Research, Elsevier, vol. 158(C).
    25. David J. Teece, 2012. "Dynamic Capabilities: Routines versus Entrepreneurial Action," Journal of Management Studies, Wiley Blackwell, vol. 49(8), pages 1395-1401, December.
    26. Constance E. Helfat & Margaret A. Peteraf, 2003. "The dynamic resource‐based view: capability lifecycles," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 997-1010, October.
    27. Batat, Wided, 2021. "How augmented reality (AR) is transforming the restaurant sector: Investigating the impact of “Le Petit Chef” on customers’ dining experiences," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    28. Mele, Cristina & Hollebeek, Linda D. & Di Bernardo, Irene & Russo Spena, Tiziana, 2025. "Unravelling the customer journey: A conceptual framework and research agenda," Technological Forecasting and Social Change, Elsevier, vol. 211(C).
    29. Berbel-Vera, Jose & Barrachina Palanca, Mercedes & Gonzalez-Sanchez, Maria Beatriz, 2022. "Key CDO functions for successful digital transformation: Insights from a Delphi study," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    30. Batat, Wided, 2024. "Phygital customer experience in the metaverse: A study of consumer sensory perception of sight, touch, sound, scent, and taste," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    31. Gamage, Thilini Chathurika & Tajeddini, Kayhan & Liyanaarachchi, Gajendra & Gnanapala, Athula, 2025. "The personal paradox matrix: understanding and mitigating customer tensions in phygital marketing," Journal of Business Research, Elsevier, vol. 199(C).
    32. Ghouri, Arsalan Mujahid & Mani, Venkatesh & Haq, Mirza Amin ul & Kamble, Sachin S., 2022. "The micro foundations of social media use: Artificial intelligence integrated routine model," Journal of Business Research, Elsevier, vol. 144(C), pages 80-92.
    33. Kroh, Julia & Globocnik, Dietfried & Schultz, Carsten & Holdhof, Frederike & Salomo, Søren, 2024. "Micro-foundations of digital innovation capability – A mixed method approach to develop and validate a multi-dimensional measurement instrument," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    34. Chloé Alexandre & Aurélie Toillier & Sophie Mignon, 2022. "Exploring the Nature of Dynamic Capabilities and Enabling Environments for Service Innovation in the Global South: The Case of Digital Agro-advisory Services in Burkina Faso," Journal of Innovation Economics, De Boeck Université, vol. 0(3), pages 241-273.
    35. Khurana, Indu & Dutta, Dev K. & Singh Ghura, Amarpreet, 2022. "SMEs and digital transformation during a crisis: The emergence of resilience as a second-order dynamic capability in an entrepreneurial ecosystem," Journal of Business Research, Elsevier, vol. 150(C), pages 623-641.
    36. Del Vecchio, Pasquale & Secundo, Giustina & Garzoni, Antonello, 2023. "Phygital technologies and environments for breakthrough innovation in customers' and citizens' journey. A critical literature review and future agenda," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    37. Constance E. Helfat & Margaret A. Peteraf, 2015. "Managerial cognitive capabilities and the microfoundations of dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 831-850, June.
    38. Ostadi, Bakhtiar & Barrani, Leila & Aghdasi, Mohammad, 2024. "Developing a strategic roadmap towards integration in Industry 4.0: A dynamic capabilities theory perspective," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    39. Linde, Lina & Sjödin, David & Parida, Vinit & Wincent, Joakim, 2021. "Dynamic capabilities for ecosystem orchestrationA capability-based framework for smart city innovation initiatives," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    40. Dubois, Anna & Gadde, Lars-Erik, 2002. "Systematic combining: an abductive approach to case research," Journal of Business Research, Elsevier, vol. 55(7), pages 553-560, July.
    41. Alexander, Bethan & Varley, Rosemary, 2025. "Retail futures: Customer experience, phygital retailing, and the Experiential Retail Territories perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 82(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daliborka Witschel & Julian Marius Müller & Kai-Ingo Voigt, 2023. "What Takes the Wind out of Their Sails? A Micro-Foundational Perspective of Challenges for Building Dynamic Capabilities Towards Digital Business Model Innovation," Schmalenbach Journal of Business Research, Springer, vol. 75(3), pages 345-388, September.
    2. Atzmon, Morane Batya & Vanderstraeten, Johanna & Albers, Sascha, 2022. "Small-firm growth-enabling capabilities: A framework for young technology-based firms," Technovation, Elsevier, vol. 117(C).
    3. Seyedesmaeil Mousavi & Bart Bossink & Mario van Vliet, 2019. "Microfoundations of companies' dynamic capabilities for environmentally sustainable innovation: Case study insights from high‐tech innovation in science‐based companies," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 366-387, February.
    4. Altintas, Gulsun & Ambrosini, Véronique & Gudergan, Siegfried, 2022. "MNE dynamic capabilities in (un)related diversification," Journal of International Management, Elsevier, vol. 28(1).
    5. Schriber, Svante & Löwstedt, Jan, 2018. "Managing asset orchestration: A processual approach to adapting to dynamic environments," Journal of Business Research, Elsevier, vol. 90(C), pages 307-317.
    6. Chen, Yantai & Luo, Haibei & Chen, Jin & Guo, Yanlin, 2022. "Building data-driven dynamic capabilities to arrest knowledge hiding: A knowledge management perspective," Journal of Business Research, Elsevier, vol. 139(C), pages 1138-1154.
    7. Papadopoulos, Thanos & Pattanayak, Sirsha & Ramkumar, M., 2025. "Exploring the impact of metaverse adoption on sustainability outcomes in retail organizations: A dynamic capabilities view perspective," Technological Forecasting and Social Change, Elsevier, vol. 217(C).
    8. Nabil Ghantous & Damien Chaney & Fabienne Chameroy & Sophie Jeanpert & Maryline Schultz, 2025. "Omnichannel Reconfiguration Capabilities in Franchising: A Meso‐Foundations Analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(4), pages 2431-2447, June.
    9. Khurana, Indu & Dutta, Dev K. & Singh Ghura, Amarpreet, 2022. "SMEs and digital transformation during a crisis: The emergence of resilience as a second-order dynamic capability in an entrepreneurial ecosystem," Journal of Business Research, Elsevier, vol. 150(C), pages 623-641.
    10. Huikkola, Tuomas & Kohtamäki, Marko & Ylimäki, Juho, 2022. "Becoming a smart solution provider: Reconfiguring a product manufacturer's strategic capabilities and processes to facilitate business model innovation," Technovation, Elsevier, vol. 118(C).
    11. Kazadi, Kande & Lievens, Annouk & Mahr, Dominik, 2016. "Stakeholder co-creation during the innovation process: Identifying capabilities for knowledge creation among multiple stakeholders," Journal of Business Research, Elsevier, vol. 69(2), pages 525-540.
    12. Quan Anh Nguyen & Gillian Sullivan Mort, 0. "Conceptualising organisational-level and microfoundational capabilities: an integrated view of born-globals’ internationalisation," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-23.
    13. Sebrek, Szabolcs S. & Romme, A. Georges L. & Kosztyán, Zsolt T., 2025. "How to create dynamic capabilities: A design science study," Technovation, Elsevier, vol. 143(C).
    14. Hong Chen & Sujinda Popaitoon & Atthaphon Mumi, 2025. "Investigating corporate entrepreneurship strategy through digital transformation: a dynamic capabilities perspective," Journal of Innovation and Entrepreneurship, Springer, vol. 14(1), pages 1-27, December.
    15. Desirée Knoppen & Louise Knight, 2022. "Pursuing sustainability advantage: The dynamic capabilities of born sustainable firms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1789-1813, May.
    16. Abel Duarte Alonso & Seng K. Kok & Seamus O'Brien, 2019. "Understanding Approaches To Innovation Through The Dynamic Capabilities Lens: A Multi-Country Study Of The Wine Industry," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(06), pages 1-30, August.
    17. Maria Elisavet Balta & Thanos Papadopoulos & Konstantina Spanaki, 2024. "Business model pivoting and digital technologies in turbulent environments," Post-Print hal-04513406, HAL.
    18. Shen, Rui & Guo, Hai & Ma, Hongjia, 2023. "How do entrepreneurs' cross-cultural experiences contribute to entrepreneurial ecosystem performance?," Journal of World Business, Elsevier, vol. 58(2).
    19. Li, Wencan & Wang, Xiao, 2026. "Investigating how digital technology network embeddedness affects small and medium-sized enterprise growth: A dynamic capabilities perspective," Technological Forecasting and Social Change, Elsevier, vol. 223(C).
    20. Yeda Swirski Souza & Anderson Cunha Jesus & Antoni Olivé i Tòmas, 2025. "Microfoundations in international entrepreneurship: an analysis in the video game sector," Journal of Innovation and Entrepreneurship, Springer, vol. 14(1), pages 1-22, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:223:y:2026:i:c:s0040162525004548. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.