Strategizing in a digital world: Overcoming cognitive barriers,reconfiguring routines and introducing new organizational forms

As digital technologies such as cloud and edge computing, machine learning, advanced artificial intelligence (AI), and the internet of things (IoT) unfold, traditional industries such as telecoms, media, entertainment, and financial services are being reconfigured and new sectors are emerging. In this new competitive landscape we observe new organizational forms and new business models, including the emergence of platforms and multi-sided markets. This emergence has required a strategic response from incumbent firms, including both well-established firms and some first-generation digital enterprises. With these advances in digital technology, the very nature of strategy is changing. Fundamentally, the use of digital technologies may provide new opportunities for efficiency gains, customer intimacy, and innovation. However, without the right mindset for change, appropriate digital routines, and structural changes, digital transformation efforts will fail. We therefore present a framework for strategizing in this new digital competitive landscape that underscores the importance of the interplay between (1) the cognitive barriers faced by managers when trying to understand this new digital world and envision new digital business models, (2) a need to reconfigure and extend digital routines, and (3) new organizational forms that are better equipped to creating value and gaining competitive advantage. From this framework of essential pillars, we derive four journeys of digital transformation for companies that were formed in the pre-digital economy. We also describe the management roles required by top, middle, and frontline managers, depending on whether the digital migration is evolutionary or transformative and whether the firm is responding to or attempting to shape the ecosystem. Although digital transformation is technically all about technology, the more important issue is how companies make their way through this strange new digital world in which they find themselves. Ultimately digital transformation is as much about strategizing as it is about technology.     

Knowledge management in consultancy-involved process improvement projects: cases from Chinese SMEs

Abstract

Knowledge management (KM) is considered as an effective strategy to improve organizational performance. In its application to small and medium enterprises (SMEs), resource constraints mean that exploitation of knowledge from external sources is often needed. This study explores practical KM issues encountered by Chinese SMEs when working with management consultants to introduce new business improvement practices. A comparative case study is conducted focusing on two consultancy-involved process improvement projects in Chinese manufacturing SMEs. The case results suggest a clear KM strategy is needed at the outset of the project and SME managers and employees need to play a proactive role in the learning and adoption of new knowledge. The research is novel in that it is the first study to explore knowledge management and the notion of liminality within the context of consultancy-involved Chinese SME improvement projects. The paper culminates with two research propositions that require further empirical study.     

市场导向与组织绩效的关系:组织学习与创新的影响——珠三角地区企业的实证研究

近年来,市场导向的企业文化被认为是企业取得竞争优势的关键因素,但外国学者的实证研究却一直怀疑这一命题。改革开放以来,我国许多企业开始引入市场导向的管理观念,然而这种观念是否以及如何影响企业的绩效?国内外学术界尚未发表以中国内地数据为基础的实证结果,也就是说我国企业倡导以市场为导向的经营理念有一定的盲目性。本文以我国珠三角地区企业等为调查对象,对市场导向是否以及如何通过组织学习和组织创新影响组织的绩效进行实证研究。结果表明(:1)市场导向并不直接影响组织的绩效(;2)市场导向对组织学习有显著的直接影响,对组织创新没有显著的直接影响(;3)组织学习对技术创新和管理创新都有显著的直接影响(;4)市场导向通过组织学习对组织创新有显著的间接影响(;5)管理创新对组织绩效有直接正面的影响,技术创新并不直接影响组织的绩效(;6)组织创新可分为管理创新和技术创新,技术创新对管理创新有显著的正面影响(;7)组织学习通过影响组织创新进而间接影响组织绩效(;8)市场导向会通过影响组织学习,进而影响组织创新,并最终影响组织的绩效。管理创新在“市场导向—组织学习—组织创新—组织绩效”链中起到了至关重要的作用,是提升组织绩效的瓶颈。     

The role of absorptive capacity and innovation strategy in the design of industry 4.0 business Models - A comparison between SMEs and large enterprises

Technological innovations often lead to redesigns in the business models of established companies, requiring them to incorporate new external knowledge into internal activities. Against this background, this study integrates the concepts of business model design, absorptive capacity, and innovation strategy into a novel research model, which analyzes the redesign of established business models in response to the emergence of Industry 4.0. Industry 4.0, also known as the Industrial Internet of Things, constitutes a contemporary research context that is highly relevant for corporate practice but scarcely regarded in management literature until now. The article contains an analysis of data from 221 German industrial enterprises, conducted through structural equation modeling, with separate data for small and medium-sized enterprises (SMEs) and large enterprises. First, the results indicate that the acquisition, assimilation, transformation, and exploitation of knowledge from the environment enable companies to engage in both exploratory and exploitative innovation strategies. Furthermore, the paper includes an evaluation of the role of exploratory and exploitative innovation strategies that reflects in efficiency-centered and novelty-centered business model designs. The distinct characteristics differentiating SMEs from large enterprises are also explained. The implications of absorptive capacity on innovation strategies, which influence the redesign of extant business models, are discussed from a research and managerial perspective.     

Gender and Personality Differences in Self- and Other Ratings of Business Intelligence

This paper is concerned with people's understanding of, and self-estimation on, various new 'business intelligences' and aims to examine whether these estimates were systematically related to personality dimensions. A total of 184 adult working participants completed a three-part questionnaire that measured their 'big five' personality traits (NEO-FFI), various beliefs about intelligence and also their own and their boss's estimated overall IQ score and scores on eight multiple business intelligences. Males rated their overall IQ as well as their cognitive, creative and political intelligence as significantly higher than females. Females rated their boss's overall, emotional and organizational IQ significantly higher than did male participants. Participants believed they had higher emotional, but lower political, organizational and network intelligence than their boss. Regressions indicated that only one of the eight estimated business intelligences (cognitive intelligence) was related to overall (total, general) estimated intelligence in self, boss or boss's boss. Regressing the big-five personality factors onto each of the self-estimates showed openness-to-experience was positively, and agreeableness negatively, related to most of the estimates. Those who had taken an intelligence test tended to giver higher self-estimates on overall intelligence. Implications of these results for business life are considered.     

A Knowledge Framework Underlying Process Management*

Organizations are increasingly implementing process‐improvement techniques like Six Sigma, total quality management, lean, and business process re‐engineering to improve organizational performance. These techniques are part of a process management system that includes the organizational infrastructure to support the improvement techniques. The knowledge‐based view of a firm argues that organizational knowledge is the source of competitive advantage. To the extent that the process management system enables knowledge creation it should be a source of competitive advantage. This study investigates the underlying framework and factors of a process management system that lead to organizational knowledge creation. Prior studies have considered knowledge creation in process improvement, but none have considered the role of the process management system. Specifically, the study uses the case study method to investigate multiple levels (organization level and project level) of two firms using Six Sigma as their chosen process management system. Analysis of the cases reveals that the leadership creates a supportive infrastructure enabling process‐improvement techniques to effectively create organizational knowledge. Interestingly, focusing on decision‐making tools and methods may not be effective without developing a supportive infrastructure. The proposed framework provides a basis for organizational leaders to think about how to design and implement a process management system to better enable knowledge creation in organizations.     

Beyond the purely commercial business model: Organizational value logics and the heterogeneity of sustainability business models

The business model has been conceived as a commercial logic of value proposition, creation, exchange and capture. However, its underlying conceptual structure of an organizational value logic holds promise also for application beyond a purely commercial context, for partially commercial and even noncommercial organizations. This paper unlocks this potential by conceptualizing homogeneous and heterogeneous organizational value logics shaped by a variety of institutional logics. Homogeneous value logics are dominantly shaped by individual institutional logics, such as the value logic of businesses shaped by an institutional logic of the commercial market, or that of a churches shaped by an institutional logic of religion. Heterogeneous value logics, however, are co-shaped by two or more institutional logics. The application of these concepts is exemplified in the context of sustainability business models, which are built on a heterogeneous value logic that combines elements from commercial, sustainability, welfare and government logics. The paper contributes to the business model discussion by extending it to partially commercial and noncommercial organizations; by creating a conceptual space between value logics and institutional logics; and by proposing the meta-logic of value proposition, creation, exchange and capture, a novel analytical tool for the study of organizations shaped by plural institutional logics.     

Data analytics effects in major league baseball

The use of data analytics has enjoyed resurgence over the last two decades in professional sports, businesses, and the government. This resurgence is attributable to Moneyball, which exposed readers to the use of advanced baseball analytics by the Oakland Athletics, and how it has resulted in improved player selection and game management. Moreover, it changed managerial vocabulary, as the term “Moneyballing” now commonly describes organizations that use data analytics. The first research question that this study examines is whether the organizational knowledge related to baseball data analytics has provided any advantage in the competitive Major League Baseball (MLB) marketplace. The second research question is whether this strategic advantage can be sustained once this proprietary organizational knowledge becomes public. First, I identify “Moneyball” teams and executives, i.e., those who rely on baseball data analytics, and track their pay/performance over time. Next, using econometric models, I analyze whether these “Moneyball” teams and GMs, have enjoyed a pay-performance advantage over the rest of MLB, and whether this advantage persists after the information becomes public.     

A resource-based view on SMEs regarding the transition to more sophisticated stages of industry 4.0

The integration of small and medium-sized enterprises (SMEs) within the concept Industry 4.0 represents one of its main challenges, as they play a vital part in industrial value chains that shall be digitized from suppliers to the end customer. However, what the implementation stages for Industry 4.0 in SMEs should be as well as the respective resources for achieving the next stage are scarcely understood. In response, this paper proposes a framework using a resource-based review for Industry 4.0 implementation according to the stage of development in SMEs, created between researchers, policy makers, and 354 manufacturing SMEs in the province of Gipuzkoa (Basque Country, Spain). The paper applies a mixed-method approach, combining qualitative (interviews) and quantitative elements (survey data). The results are used to develop a model with four stages of SMEs that are characterized by having distinct preconditions and conditions for Industry 4.0. Thereupon, the required measures to achieve the next stage of Industry 4.0 implementation are derived. This highlights Industry 4.0 for SMEs as a process with different stages toward achieving sustainable competitive advantage and offering insight into how the different resources operate. The high importance and advanced position regarding industrial value creation and SMEs in Gipuzkoa allows to generalize and transfer the findings to other European regions.     

Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal

In this qualitative study, we explore how incumbent firms in traditional industries build dynamic capabilities for digital transformation. Digital transformation has been defined as the use of new digital technologies, such as mobile, artificial intelligence, cloud, blockchain, and the Internet of things (IoT) technologies, to enable major business improvements to augment customer experience, streamline operations, or create new business models. In making sense of digital transformation, we discovered that leaders in various industry circles use the term inconsistently to describe various strategizing and organizing activities; in addition, the term has gained limited scholarly attention as a context for study of strategic change. Drawing on senior executives' experiences with leading digitalization projects at incumbent firms, we propose a process model comprising of nine microfoundations to reveal the generic contingency factors that trigger, enable, and hinder the building of dynamic capabilities for digital transformation. Our findings reveal that digital transformation is an ongoing process of using new digital technologies in everyday organizational life, which recognizes agility as the core mechanism for the strategic renewal of an organization's (1) business model, (2) collaborative approach, and eventually the (3) culture.     

Creating value through offshore outsourcing: An integrative framework

This article proposes an analytical framework to explain value creation through offshore outsourcing by addressing a key question: How do firms create value by outsourcing their business functions to foreign external providers? The growing prevalence of offshore outsourcing as a dominant business practice in global business makes this question worthy of further research attention. Situated within the organizational design literature, our proposed value creation framework also draws from strategic resource management, disintegration, location-specific resourcing, and externalization (D–L–E) and contingency perspectives. Our analysis shows that firms embarking on offshore outsourcing create value by effectively managing their internal and external resources in accordance with a changing global environment. The framework has significant implications for theory and practice and suggests avenues for further research.     

Knowledge retention in ERP implementations: the context of UK SMEs

Abstract

Knowledge retention (k-retention) is vital for various enterprise resource planning (ERP) implementations in small and medium-sized enterprises (SMEs), though it is a highly demanding and challenging task. The aim of this paper is to investigate different types of approaches to k-retention and factors influencing k-retention in SMEs. Our study adopts a grounded theory approach with cases based on 12 ERP implementations in UK SMEs. We analyze our data using thematic analysis. The findings reveal specific elements that support the k-retention of ERP package knowledge and business process knowledge. These elements are: k-retention tools, documentation, human capital and the understanding of k-retention challenges. In addition to insights from these aspects, our study reveals two additional factors (project management and organizational culture) that influence ERP package k-retention and business process k-retention. Based on these findings, we develop an ERP k-retention (EKR) framework that can be utilized by SMEs which are considering implementing ERP systems, to facilitate knowledge retention during implementation.     

整合能力与企业绩效：商业模式创新的中介作用

经济全球化的背景下,企业为了构建竞争优势,获取更好的绩效,开始利用整合能力和商业模式创新应对多变的外部环境。然而,当前研究对于两者之间存在何种联系的认识是模糊的。针对理论研究的缺陷,基于动态能力的理论视角,通过分析商业模式创新对整合能力与企业绩效的中介作用,揭示企业整合能力和商业模式创新促进企业绩效提高的内在机制,采用中国6省1市319个企业样本数据,运用线性回归的统计方法对理论假设进行实证检验。研究结果表明,整合能力和商业模式创新都对企业绩效具有正向的促进作用,同时整合能力与企业绩效之间存在着一定的中间机制。整合能力通过提高组织变革和价值创造效率两个方面促进商业模式创新,而商业模式创新作为中间纽带将整合能力与企业绩效联系起来。企业的整合能力越高,越有利于开展商业模式创新,进而促进企业绩效的提高。研究揭示了整合能力和商业模式创新共同促进企业绩效提高的内在理论机制,打开了能力与绩效间关系的“黑箱”,对于中国企业开展商业模式创新具有重要的实践指导意义。     

Business models and organization design

Despite a voluminous literature, business model research continues to be plagued with problems. Those problems hinder theory development and make it difficult for managers to use research findings in their decision-making. In our article, we seek to make three contributions. First, we clarify the theoretical foundations of the business model concept and relate them to the five elements of a business model: customers, value propositions, product/service offerings, value creation mechanisms, and value appropriation mechanisms. A clear definition of a business model enables theory to develop systematically and provides coherent guidance to managers. Second, we suggest that value configuration is a contingency variable that should be included in future theorizing and model building. Each of the elements of a business model is affected by a firm's value configuration depending on whether the firm is a value chain, value shop, or value network. Third, we link business models to organization design. We show how organization design is affected by value configuration and how new collaborative organizational forms enable open and agile business models. We derive the implications of our analysis for future research and management practice.     

开放型商业模式NICE属性与价值创造关系的实证研究

企业竞争优势或价值创造的源泉在哪里,或者企业绩效异质性的成因是什么?这一问题一直是战略管理领域的研究焦点。移动互联网时代,企业纷纷通过重塑商业模式来实现转型升级或跨界发展,并将其作为价值创造和竞争优势的一种重要来源。因此,本文旨在以开放型商业模式为研究对象,探讨其内在属性与价值创造之间的关系。首先,本文阐述开放型商业模式的内涵及构成;接着,识别出其内在属性特征,即新颖性(N)、锁定性(I)、互补性(C)、效率性(E);同时,重点借助战略网络理论、新木桶理论、平台经济学等理论基础论证NICE与价值创造间的关系及背后的作用机理,提出理论假设;最后,运用调查问卷和结构方程模型的方法实证检验,且演绎结论的管理含义。本文所使用的数据来源于中国最大的服务交易平台:猪八戒网和EMBA、MBA、EDP等项目课堂。研究表明,开放型商业模式新颖性与企业价值正相关、互补性与顾客价值正相关、效率性与企业价值和伙伴价值均呈正相关关系;而新颖性与顾客价值及伙伴价值正相关;互补性与企业价值及伙伴价值呈正相关关系等结论未得到印证。本文的研究回答了"企业竞争优势或价值创造源泉在哪里?"这一问题,并且本文的理论机理分析和实证结论有利于指导企业创新商业模式并获取竞争优势的战略决策。     

The influence of organizational identification on organizational knowledge management (KM)

Information technology (IT) outsourcing vendor organizations contain isolated business units whose creation and sustenance greatly facilitate business operations. But they also introduce important challenges for organizational knowledge management (KM). In this paper, based on 7 months of intensive field-work at India Inc., a leading Indian IT firm, we looked at how members’ identification with two organizations, their own and their client organization, influences their compliance with an organizational KM initiative. The findings show that members have difficulties in complying with the expectations of the organizational KM initiative owing to a stronger identification with their client organizations. At the same time, they comply readily with KM initiatives at the business unit level. The findings show that KM managers at India Inc. use the help of middle level managers in the business units in their efforts to improve members’ compliance with organizational KM. Theoretical and managerial implications of the study are discussed.     

Subsidiary power,cultural intelligence and interpersonal knowledge transfer between subsidiaries within the multinational enterprise

We propose that individual-level knowledge transfer between subsidiaries within a multinational enterprise depends on the perceived relative power of the subsidiary and the cultural intelligence of individuals. Using a sample of 333 research and development (R&D) subsidiary employees of foreign Multinational Enterprises (MNEs) in India, we find that the perceived subsidiary power has a direct positive significant effect on knowledge sharing, and an indirect significant effect, through organizational identification, on knowledge seeking. Further, cultural intelligence moderates the effect of organizational identification on knowledge seeking, and the indirect effect of the perceived subsidiary power on it. The findings highlight the role of organizational identification and cultural intelligence in explaining the impact of the perceived subsidiary power on interpersonal knowledge transfer within the MNE.     

Framing the multifaceted nature of design thinking in addressing different innovation purposes

Scholars and practitioners acknowledge the role of design, and specifically design thinking, as a driver of innovation and change. Design thinking is gaining attention in the business community beyond the traditional product innovation realm and is increasingly promoted as an engine for the creation of novel user experiences, new businesses, strategic transformation, organizational and cultural change. Is it reasonable to assume that the same set of practices fits such a broad range of applications equally well? This study addresses how design thinking applications are differently framed when addressing diverse innovation purposes. Specifically, we compare two purposes: innovation of solutions, encompassing traditional product and service development projects, and innovation of direction, encompassing strategic and organizational renewal projects. Based on data collected from 146 design thinking projects conducted by European consulting firms we investigate the relationships between the design thinking practices adopted and the value generated by the projects. We then analyze how these relationships vary depending on the purpose of the innovation project, namely whether focused on innovating solutions or direction. The results show that different purposes indeed call for different practices. In projects aimed at innovating solutions, market value is positively related to capturing current user needs and envisioning future society. Conversely, in projects aimed at innovating direction, market value is positively related to challenging current assumptions.     

Extending the pursuit of flow (lean) management to encompass sales,general and administrative functions

Abstract

Operations management tends to be treated independent of other business functions—the silo syndrome. In this article, we call for operations management (OM) to broaden its perspective by strengthening linkages with other functions of the business, thereby to realize competitive advantages and strategic integration, as well as to avoid resource misallocation. The issues involved are presented and tested by examining the effects of intermeshing sales, general and administrative (SG&A) expenditures with customer-centred flow manufacturing, the latter being measured by system inventory as surrogate for customer lead time. In doing so, we designate trends in total inventory as the independent variable—representative of a dominant target of flow/lean management—and trends in SG&A expenditures as the output variable. The research tasks are enabled by inventory and SG&A data being widely available in companies’ audited financial statements. Such hard data offers methodological and validation advantages over, say, opinion-based survey research. The research adds bulk to existing flow/lean management theory and can be helpful in inducing primary business functions (e.g. OM, finance, sales and marketing) and sub-functions (such as SG&A and management accounting) to engage in cross-functional efforts in the cause of flow-oriented process improvement and company competitiveness.     

Managerial challenges of Industry 4.0: an empirically backed research agenda for a nascent field

The increasing intelligence of products and systems, their intra-company cross-linking and their cross-company integration into value creation networks is referred to as Industry 4.0. Academics and practitioners, largely agreeing on the global importance of this proclaimed industrial revolution, have published many contributions on the topic. Research, however, is rather focused on investigating single technologies in quite specific application domains and largely neglects the profound managerial challenges underlying Industry 4.0. Given the recent plea for a more active contribution from the management science community, we strive to establish Industry 4.0 as a challenging but promising field for management research, and aim to assist scholars in engaging with the topic. Therefore, we first gather and analyze extant contributions by means of a systematic literature review and synthesize the information gained into 18 managerial challenges of Industry 4.0 falling into six interrelated clusters: (1) strategy and analysis, (2) planning and implementation, (3) cooperation and networks, (4) business models, (5) human resources and (6) change and leadership. Considering that Industry 4.0 is still an emerging topic and publications may therefore not always be found in highly ranked journals, we aimed to increase the confidence in our findings and triangulated our data by conducting an online survey of industry experts and academics that allows us to qualify the identified challenges in terms of importance and future research need. On this basis, we present an empirically backed research agenda and suggest fruitful avenues for future research in three basic categories: practice-enhancing research, knowledge-enhancing research, and high-impact research.