The Impact of Digital Leadership on the Dynamic Capabilities in Micro-startups: A Case Study in China

Dynamic capabilities are essential for micro-startups to identify and exploit opportunities in the era of digitalization. Entrepreneurs must exercise their digital leadership to enhance organizational dynamic capabilities, particularly in fragile micro-startups with weak structures and unclear work routines. The case study adopted a constructivist grounded theory to explore how entrepreneurs adopt their digital leadership to influence the micro-startups’ dynamic capabilities in China. Semi-structured interviews were conducted with 15 entrepreneurs managing micro-ventures in the digital sectors in East China. Five themes were identified to interpret the impact: 1) opportunities beneath the uncertainty, 2) constraints evoke breakthroughs, 3) ambition balance furthers entrepreneurship, 4) maintaining entrepreneurship in flux, and 5) shared vision engines the entrepreneurship team. The study broadens the theoretical understanding of digital leadership and dynamic capabilities. It also provides digital practitioners with insights to improve their leadership, benefiting the survival and development of micro-startups within the digital context.