Limitations and improvements of digitalization, two sides of the same coin

Virtualization technologies for product development are increasingly reshaping organizational dynamics and transforming traditional practices across industries. This study explores the impact of virtualization on product development in the luxury fashion industry. We conducted a longitudinal case study from 2015 to 2023 on an Italian company specializing in the engineering and production of high-fashion garments (ALPHA). The study highlights how the gradual adoption of virtualization technologies in product development is linked to the emergence of four key organizational tensions: (1) increased optimization versus reduced organizational flexibility and diversity, (2) increased collaboration versus loss of focus, (3) increased demand for digital skills versus reduced reliance on traditional experience-based skills, and (4) increased openness versus control. These tensions arise not only from the physical phenomena digitized by the technology but also from how these phenomena relate to the representations created by the technology itself. This misunderstanding of virtualization has led managers to reorganize work, distancing workers from the physical references of their models, which complicates empirical validation and interpretation. We draw implications for product development virtualization from this case study by examining how structural organizational changes, if not intentionally managed, can lead to outcomes that may not align with business goals