Technology governance, digital capabilities and strategic renewal: configurational pathways through a cascading capability architecture

Purpose This study aims to develop and test a cascading capability-based model that examines how digital technological infrastructure, technology governance and dynamic capabilities sequentially produce innovation capability, agility capability, strategic adaptability and business model innovation. Design/methodology/approach A two-wave longitudinal design with a two-month interval yielded 300 matched responses from managers across multiple industries. PLS-SEM tested the sequential mediation structure, and fsQCA identified configurational pathways sufficient for each strategic outcome. Findings Dynamic capability and technology governance significantly drive innovation capability, which cascades into strategic adaptability and business model innovation through agility capability as a sequential mediator. Digital technological infrastructure has no significant effect once capability and governance variables are controlled for. fsQCA identifies five equifinal configurations per outcome. Research limitations/implications The two-month interval may not capture the full maturation cycles of capabilities. The multi-industry sample limits the analysis of industry-specific boundary conditions. Practical implications Organizations should prioritize governance design and dynamic capability development over infrastructure investment. Multiple combinatorial pathways exist for strategic renewal, accommodating organizations at different stages of digital maturity. Originality/value This study specifies and validates a cascading capability architecture through a longitudinal dual-method design, establishing technology governance as a capability-shaping mechanism and resolving contradictions in the IT governance and dynamic capabilities literature.