Digital “x”: Beyond Bounded Rationality, Toward a Theory of Bounded Imagination

Digital is increasingly affixed to known concepts across different management disciplines – for example digital innovation, digital disruption digital strategy – in essence digital “x”. We advance the theory of bounded imagination as a conceptual lens for illuminating conceptualization of digital “x”, and a delineation between digital from digitization and digital from digitalization. We specifically argue that the advances in digitization has largely diminished the core challenges of bounded rationality (time, knowledge, and resources). However, the next cognitive frontier is bounded imagination, which is the challenge for digitalization. The proposed theory of bounded imagination provides conceptual clarity for engaging with the digital “x” phenomenon in future research. We further articulate the implications for innovation managers by outlining bounded imagination milestones for digitalization.