Regulating “Who We Are”: how EU Sustainability Regulation triggers identity change and shapes (or stalls) strategic transformation in automotive firms

Abstract

This thesis uses the European automotive sector as an illustrative case to examine how firms respond to EU sustainability regulations through the lens of organizational identity. While such regulations aim to drive transformative change, responses often remain compliance-driven and symbolic. Drawing on interviews with OEMs and a sustainability expert, the study finds that identity dynamics shape whether regulation prompts deep, coherent change. It introduces the Strategic Identity Alignment Framework (SIAF), which links regulatory disruption to identity and strategy alignment. The findings offer insights for scholars of sustainability transitions and top managers in legacy industries navigating identity-rooted tensions in strategic transformations.