Chapter 2: Theoretical framework
2.1 Forcing Change on Business Structure
In the global economy, companies use many different ways of organizational structures and types of operations through which they can maintain a stable interior environment. A basic conflict problem is to understand in what direction of management an organization is aiming to, what behavior of the workers wants, what attitudes it wants to encourage, and what goals want to accomplish. If a company explores all that kind of questions then it can design its structure and encourage the suitable development of the cultural values.
If we want, to sum up with the literature review we must mention the theory in the different ways of organizational structure which refer to the principles of administration. At the functional figure, we deal with a situation in which a company produces its goods or services at a large volume and with a relevant low cost. Moreover, we should say that firms who successfully use the functional structure have as main objective the development of appropriate attitudes to workers. The most important element is that on this type of structure we deal with a grouping of various jobs into sections. The divisional structure occurs when departments are grouped together based on similar organizational outputs in contrast to what we said before in the functional approach.
A combination of the above structures is the basic idea of the meaning of the third figure. The matrix structure is a mixture of both functional and divisional forms which simultaneously take part in the same organization. As we proceed in the literature we face the next type of structure which refers to the team approach. It helps managers in a way to representative authority, force responsibility to lower levels, and be more pliable and responsive in the competitive global environment At last but not least we deal with the virtual network approach in which the organization may be viewed as a central hub surrounded by a network of outside specialists
Depending on the organizational structure managers make decisions based whether the outcome of their enterprise could deliver value to its customer through the benefits of their products. Nevertheless, in order to survive in a very competitive environment, every firm must develop a strategic program which will lead them to the path of the corporate excellence. The crucial point for them is to use an innovative strategy which could give their workers the ability to continuously transform knowledge and ideas into new products, processes, and systems for the benefit of the firm. They could also exploit their skills with a business strategic model for which could redefine their industry.
Moreover, we could say that strategies give the platform to the firms by defining the mission and the vision but also highlight the key characteristics such as strengths or weaknesses of the company. Additionally, besides the strategic part, companies measure performance from different activities similar to its rivals in order to remain competitive and having successful achievements. There are many different perspectives which examined by the corporations during the evaluation time such as the business approach to process change, the key messages which engage to the customers and the unstoppable competition. Therefore to make the right adjustments and to adopt the right strategic vision its crucial part for designing a new business model. In the process of business change, every company should revise all the crucial factors in order to find and redesign their differentiation policy and their outperformance.
Many companies have not a clear perception of the quality progress that training and development could impute to the business performance. Nowadays enterprises are more interested in eliminating costs and expenses in order to survive from the European crisis. Organizations are in need to create a learning culture in order to help their employees to accomplish the goals that have been established. Companies must prepare their workers, developing successful program training for them in order to recognize the future leaders who will give the absolute advantage to the company to reach profitability.
Finally, we must notify that quality is also a basic perspective of improving the identity of a company, enhancing not only inside but also outside the enterprise environment. Quality standards play an increasingly important role in the development of competitiveness and profitability. In recent decades, issues related to the relationship of quality and sales have received special attention throughout the business world. As early as the 1950s, Japanese companies were the first companies that started to realize the benefits of quality and tried to adapt by asking the help of many gurus of quality between them and the W. Edwards Deming. The ultimate objective of TQM is to ensure that the entire organization is focused on customer needs and trying to meet their demands .
2.2 Why digital: The digital revolution
Nowadays the basic problem for every company is to understand the value and the meaning of the digital idea. The main topic of every discussion is that we are facing the digital era which has given us a platform to reach the suitable levels of information and knowledge. Enterprises are more interested in eliminating costs and expenses in order to survive from the European crisis. Successful companies are those that can understand the strong influence of customers in quality, financial and sales issues. Organizations must be prepared to deal with several levels or types of digital development having as a goal to make a clear business direction by using a digital vision that defines the way forward.
At first, we must appreciate that the project of a more digital development is not an easy accomplishment. Actually, it is a very challenging decision for every company. The most common trap is that generally, firms pay attention to short-time investments that give them profitable results with minimum risk. From its creation, an enterprise adopts a particular business model that helps them design a value creation program and constitute the suitable mechanism of development
The last few years around the world has been created 2.5 quintillion bytes of data (90% of the data has been created in the last two). This data comes from everywhere: from posts to social media sites, digital pictures and videos, purchase transaction records, etc) .Therefore it is critical for the firms to understand how digital revolution creates value for customers in ways which could lead them to the business success. Organizations need to adjust in the new age in order to survive and succeed as their business activities, processes and technologies change in a world of increasing crisis.
In order to understand the digital revolutionâ€™s impact on company success, it is very important to determine what makes a company successful. Successful companies are those who fulfilled the needs of their customers, create a difference that matters and building digital capabilities by delivering value to them through the output of high-quality products
Moreover, organizations understand that the meaning of the sale has changed through the years. Nowadays firms are strong believers of a new approach which conclude not just the selling procedure but also the satisfaction of intangible needs such as customer experience. In order to remain competitive, companies required new ways of leading from the top management in order to adopt an advanced digital approach, which can improve business processes, generate data for the value of their products and minimize the risk of losing customers. Organizations must provide high-quality business decisions which can be supported by adopting suitable business models and develop a new digital vision based on digital opportunities .
Nowadays the primary concern of an enterprise depends on building customer value and satisfaction, which are noted as the crucial points of a customer loyalty. More and more consumers are giving attention to the newly digital factors which are focusing on social media services such as Facebook/ Twitter /blogs/ websites. Companies must use digital survey methods (interviews by e-mail/ review of their product critic etc) in order to gather data that will help them build the trust by giving to the consumer a clear brand promise. Survey methods are commonly used to describe and analyze consumer behavior and helps the company not only to find consumers habit but also give the advantage to prevent any dissatisfaction or complaints from the utilization of their products.
Finally, one of the main issues of every company is to identify the link between the habits of their customer and their purchasing history. Social media constitute a new type of interacting with customers giving advantages such as:
â€¢ specify easier the suitable customer group
â€¢ low cost approach of development
â€¢ faster distribution of information inside and outside the firm
â€¢ instant contact with consumers complaints
Besides the advantages, companies facing risks through digital time:
â€¢ wasted amount of money in a time of crisis
â€¢ rapid spread of incorrect information about their business
â€¢ legal problems about privacy legislation and laws issues (copyright, etc)
2.3 Digital Business Transformation
The definition of transformation according to the Oxford English Dictionary described as a marked change in form, nature, or appearance. Etymologically the term of transformation is derived from Old French (1400) and from Church Latin (transformationem) and means a change of shape, while the term digital is derived from the Latin â€œdigitalis (digitus)â€ which means pertaining to fingers .The definition of digital transformation according to the guardian illustrated as an extensive restructure of a business formation which caused by digital technologies .Transformation is a procedure that affects the entire company. There are three key drivers of transformation: changing consumer demand, changing technology and changing competition .
Digital Business Transformation is considered to be a fairly new scientific approach. The fact is that we can trace digital insights throughout the business formation as a framework for innovation development. In every aspect of our life we deal with a number form of the newest technology such as social media (facebook, twitter), mobile applications (icloud, google play), multi-touch PC-tablets. Nowadays organizations due to the technological development have a big range of inforÂ¬mation in their possession which helps them improve their efficiency and achieve customer experience.
A synopsis of the theory helps us understand that the transformation process is managementâ€™s use of production technology to change the inputs into outputs .According to Deardorff A., outputs are described as the quantity of goods or services produced, in a given time period, by a firm, industry, or country while inputs are anything that is used in a production process, including both the services of primary factors and intermediate inputs.
Nowadays companies no longer suffer from a lack of data. They suffer from a lack of the right data. The best practice for the firms is to realize what makes customers buy things. The main characteristic of the new era is the variety of information\'s which help not only the firms but also the consumers to make the right choices according to their needs. From surveys, it has been observed a link between consumerâ€™s preferences or needs and the potential buying habits. For example, people who preferred some activity, such as listen to a specific type of music, provide different market tendency. By analyzing customer behavior on social media, it is possible to predict:
a) Their usage of a businessâ€™s products
b) Their level of satisfaction,
c) Anticipate customer needs
d) Promote the name of their brand and business
e) Tell customers about their goods and services
f) Find out what customers think of their business
g) Attract new customers
h) Build stronger relationships with existing customers.
For the firms around the world, it is difficult to proceed with any transformation procedure which will change the way they are doing business until they are fully familiar with the efficiency of the appropriate adjustments. Todayâ€™s organizations are attempting to find the consumers preferences or needs by using digital footprints that customers leave behind in their day-to-day online behavior(by adopting analysis through the internet history, companies can identify which products customer purchased). The key elements for a more targeted transformation procedure are the following:
ï‚§ Choosing the appropriate strategic vision
The transformation failure or success judged according to the desired results. Every business has different types of operations which make them more complexity. Selecting, adjusting or improving their business model could be a crucial stage of their transformation part.
ï‚§ Execution is the key to the transformation process
A main problem for the most companies is not only the process of transformation but also the selection of the appropriate formula which will help them to the execution part. Firms need to rethink not only how to address customer needs but also how to capture value from providing new products and services.
ï‚§ Fulfilled not only the customer demand but also giving special experience through the utilization of their products
Companies need to be more customer-centric in order to understand what consumers really need and adjust their production. The transforming procedure takes a significant amount of time and resources. Every company must have strong guidance from the top management in order to understand what\'s going to happen next and to help employees recognize the advantages of the new technologies usage.
More and more firms are adopting a more digital type of development. As Daft noticed E-business can be defined as any business that takes place by digital processes over a computer network rather than in physical space. For many people digitalization seems to be the key factor for the future of enterprises. These daysâ€™ consumers are affected through the use of digital technologies more than ever and because of that, we could say that we are living the fourth industrial revolution.
2.4 Creation of a digital workplace
In order to survive and modernize their performance, companies should create a new digital form of their workplace. The new digital type of style of operation could help the organization to customize the organizational structure and prepare their employees to emphasize to adopt new ways of performance. An organization which adopts this kind of systems could make their personnel feels more comfortable and productive. In more simple words we could say that a modern digital workplace is a path for a company to deliver a more consumer type of style to their employees in order to operate in a more innovative and flexible environment.
A synopsis of the theory helps us understand that enterprises must focus on the idea of delivering value to their customers and expanding their superior in a greater fraction compared to their rivals. The tendency from the majority of the customers gives us the direction that consumers prefer the products of a company against those of a competitor as long as these products offer higher perceived value than the competitive ones.
The main problem for companies is that they are not facing properly the globalization which has an impact on their procedure of transformation of the workplace. Organizations simplify information flow and use the appropriate policies in order to help workers communicate, operate and share data. The technological development gives a competitive advantage and right tools to enterprises to face strategic goals and maximizes productivity. Moreover, companies must realize the benefits that digital workplace gives to aspects of the associations such as training in which focuses on the challenges of the strategic plan of the company. The digital workplace enable the development of the business, having the necessary alteration of the procedures, innovate the existing staff and attracting new employee with talent.
For an organization, a successful digital workplace must conclude a game plan which helps the company to adjust to the new digital era. Moreover, we could emphasize in the meaning of the digital workplace which gives to a company a business strategy for maximizing employee effectiveness and analyzing the business benefits of consumerization . We must notify that for firms the digitalization of their processes focusing on the appropriate culture which gives them growth opportunities for their employees and aiming for an effective business performance.
The digital workplace also emphasizes to build a critical view for the employees to use technologies which could easily facilitate their work. An effective system has several important consequences not only about where people work, but how the crew is formed and how people operates together to solve immediate problems. Moreover, it can also close the gap of the communication between top management and workers by giving both equal digital accesses on information. Nevertheless, an organization that will be successful in the future will be those who could assimilate the design levels and the management levels which the key factor that it has in common is that they can really simplify working life in an unstable business environment. At the end of the suitable adjustments, a more digital orientation program it will be successful if it can eliminate the barriers between people, workplaces, and technologies and be helpful for the employees to be productive and creative.
The basic advantage for a company to affiliate a digital workplace is that it could be helpful for the top management to identify the benefits which give the development and the training to the entire corporation. In an unstable economic environment, rapid development in technological tools (collaborate using social media) have transformed the workplace and changed the way of communication and collaboration. The digitalization also helps the company to be productive adopting the right tools for their employees in order to deliver the direction of the company, give a guide to the staff to address new or existing challenges and provide business value. For every organization that would need to stay competitive, it must build a digital path with business in order to stay healthy and adjust to the modern type of economic development.
Finally, given the increasing importance for a customer-oriented growth, companies should be able to give customers the appropriate satisfaction of their needs, using marketing tools in order to build the significant source of competitive advantage. The central idea behind the key function of a well-organized marketing research includes different parts of evolution for the company in order to be in a strong position. The emphasis of market research changes the basic role of a company transforms it in a more customer-centric firm.
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