Institutional embeddedness and dynamic capabilities in human-centric work-time innovation

This paper examines the limited diffusion of work-time innovations in the Italian electricity sector, despite evident institutional pressures. Drawing on qualitative data from interviews, case studies, and a cross-sector focus group, the study reveals that a blend of structural constraints and managerial beliefs shapes organisational inertia in the sector. Managers interpret work-time reform primarily as a tool for talent retention rather than as a lever for innovation. By integrating insights from institutional theory, dynamic managerial capabilities, and socio-technical systems theory, the paper highlights the cognitive and cultural filters through which firms respond to external change signals. The findings contribute to the literature on continuous innovation by expanding its scope to include human-centric, organisational reforms such as working-time flexibility. The study also underscores the need for a broader strategic framing of work-time innovation as a socio-technical endeavour rather than a peripheral human resources concern.