Management and Information

Technology after Digital

Transformation

With the widespread transformation of information into digital form through-

out society – firms and organisations are embracing this development to adopt
multiple types of IT to increase internal efficiency and to achieve external visi-
bility and effectiveness – we have now reached a position where there is data in
abundance and the challenge is to manage and make use of it fully. This book
addresses this new managerial situation, the post-digitalisation era, and offers
novel perspectives on managing the digital landscape.
The topics span how the post-digitalisation era has the potential to renew
organisations, markets and society. The chapters of the book are structured in
three topical sections but can also be read individually. The chapters are struc-
tured to offer insights into the developments that take place at the intersection
of the management, information systems and computer science disciplines. It
features more than 70 researchers and managers as collaborating authors in 23
thought-provoking chapters.
Written for scholars, researchers, students and managers from the manage-
ment, information systems and computer science disciplines, the book presents
a comprehensive and thought-provoking contribution on the challenges of man-
aging organisations and engaging in global markets when tools, systems and
data are abundant.

Peter Ekman is an associate professor of marketing at Mälardalen University

and deputy dean of the Swedish Research School of Management and IT hosted
by Uppsala University. His research focuses on firm digitalisation within busi-
ness networks and service ecosystems, often in a sustainability or globalization
context.

Peter Dahlin is an associate professor of business at Mälardalen University,

Sweden, and honorary visiting scholar at the University of Exeter, UK, and is
affiliated to the Business School. His research interests include applied analyt-
ics, network analysis and business performance.

Christina Keller is the dean of the Swedish Research School of Management

and IT at Uppsala University and professor in informatics at Lund University
School of Economics and Management. Her main research interests include
online learning, design science research and information systems in healthcare.
Routledge Studies in Innovation, Organizations and Technology

Sustainable Innovation
Strategy, Process and Impact
Edited by Cosmina L. Voinea, Nadine Roijakkers and Ward Ooms

Management in the Age of Digital Business Complexity

Edited by Bill McKelvey

Citizen Activities in Energy Transition

User Innovation, New Communities, and the Shaping of a
Sustainable Future
Sampsa Hyysalo

How Ideas Move

Theories and Models of Translation in Organizations
John Damm Scheuer

Managing IT for Innovation

Dynamic Capabilities and Competitive Advantage
Mitsuru Kodama

Technological Change and Industrial Transformation

Edited by Vicky Long and Magnus Holmén

Sustainability, Technology and Innovation 4.0

Edited by Zbigniew Makieła, Magdalena M. Stuss and Ryszard Borowiecki

Management and Information Technology after Digital Transformation

Edited by Peter Ekman, Peter Dahlin and Christina Keller

For more information about this series, please visit: www.routledge.

com/Routledge-Studies-in-Innovation-Organizations-and-Technology/
book-series/RIOT
Management and Information
Technology after Digital
Transformation

Edited by
Peter Ekman, Peter Dahlin
and Christina Keller
First published 2022
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2022 selection and editorial matter, Peter Ekman, Peter Dahlin
and Christina Keller; individual chapters, the contributors
The right of Peter Ekman, Peter Dahlin and Christina Keller to be
identified as the authors of the editorial material, and of the authors
for their individual chapters, has been asserted in accordance with
sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical,
or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks
or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record has been requested for this book

ISBN: 978-0-367-61276-4 (hbk)

ISBN: 978-0-367-62878-9 (pbk)
ISBN: 978-1-003-11124-5 (ebk)
DOI: 10.4324/9781003111245

Typeset in Times New Roman

by codeMantra
Dedicated to
Lars Engwall
Professor emeritus at the Department of Business Studies,
Uppsala University
The first chairman of the Swedish Research School of
Management and IT
Contents

List of figures xi
List of tables xiii
List of contributors xv
Preface xxiii
Foreword xxv

1 Perspectives on management and information technology after

digital transformation 1
PE T E R E K M A N , PE T E R DA H L I N A N D C H R I S T I NA K E L L E R

2 Digital transformation: towards a new perspective for large

established organisations in a digital age 8
A L A N W. BROW N

PART 1
The transformation of society and markets 21

3 Managing digital servitization: a service ecosystem perspective 23

DAV I D S ÖR H A M M A R , BÅ R D T RON VOL L A N D
C H R I S T I A N KOWA L KOWSK I

4 Caught on the platform or jumping onto the digital train:

challenges for industries lagging behind in digitalisation 33
PE T E R E K M A N , M AGN US BE RGL I N D A N D S T E V E N T HOM P S ON

5 Digitalisation for sustainability: conceptualisation,

implications and future research directions 43
E L E NA A NA S TA SI A D OU, L I N DA A L K I R E A N D J I M M I E RÖN DE L L
viii Contents
6 Reaching new heights in the cloud: the digital transformation of
the video games industry 53
K E V I N WA LT H E R A N D DAV I D S ÖR H A M M A R

7 Hyper-Taylorism and third-order technologies: making

sense of the transformation of work and management in
a post-digital era 63
C H R I S T OF F E R A N DE R S S ON , LUC I A C R E VA N I , A N E T T E
H A L L I N , CA ROL I N E I NGVA R S S ON , C H R I S I VORY, I N T I JO SÉ
L A M M I , E VA L I N DE L L , I R I NA P OP OVA A N D A N NA U H L I N

8 Why space is not enough: service innovation and service

delivery in senior housing 72
PE T T E R A H L S T RÖM , G ÖR A N L I N DA H L , M A R KUS F E L L E S S ON ,
B ÖR J E B J E L K E A N D F R E DR I K N I L S S ON

9 Challenges in implementing digital assistive technology in

municipal healthcare 81
A N N S V E N S S ON , L I N DA BE RGKV I S T, C H A R L O T T E BÄC C M A N
A N D S USA N N E DU R S T

PART 2
Managerial and organisational challenges 91

10 Modern project management: challenges for the future 93

K L A S S U N DBE RG , BI RGE R R A PP A N D C H R I S T I NA K E L L E R

11 Managing the paradoxes of digital product innovation 105

F R E DR I K S VA H N A N D BE N DI K BYG S TA D

12 When external reporting goes social: new conditions for

transparency and accountability? 119
C E C I L I A GU L L BE RG

13 Robotic process automation and the accounting profession’s

extinction prophecy 129
M AT T H I A S HOL M S T E D T, F R E DR I K J E A N S ON A N D
A NGE L I NA SU N D S T RÖM

14 Managing digital employee-driven innovation: the role of

middle-level managers and ambidextrous leadership 138
I Z A BE L L E BÄC K S T RÖM A N D PE T E R M AGN US S ON
 Contents ix
15 Digital gamification of organisational functions and emergent
management practices 149
E DWA R D GI L L MOR E

16 Leveraging digital technologies in Enterprise Risk Management 159

JA S ON C R AW FOR D A N D JA N L I N DVA L L

PART 3
Framing digitalisation 173

17 The end of business intelligence and business analytics 175

M AT T H I A S HOL M S T E D T A N D PE T E R DA H L I N

18 ‘Deleted User’: signalling digital disenchantment in the

post-digital society 185
C R I S T I NA GH I TA , C L A E S T HOR É N A N D M A RT I N S T OJA NOV

19 The role of boundary-spanners in the post-digitalised

multinational corporation 195
H E N R I K DE L L E S T R A N D, OL OF L I N DA H L
A N D JA KOB W E S T E RG R E N

20 The effect of digital transformation on subsidiary influence

in the multinational enterprise 206
NOUSH A N M E M A R , U L F A N DE R S S ON , PE T E R DA H L I N A N D
PE T E R E K M A N

21 Understanding information system outsourcing in the digital

transformation era: the business-relationship triad view 217
C E C I L I A E R I XON A N D PE T E R T H I L E N I US

22 Transforming the management/profession divide: the use of the

red–green matrix in Swedish schools 228
A N T ON B OR E L L , JOH A N K L A A S SE N , ROL A N D A L MQV I S T A N D
JA N L ÖWS T E D T

23 Integrating research in master’s programmes: developing

students’ skills to embrace digitally transformed markets 238
T ODD DR E N NA N , C E C I L I A T H I L E N I US L I N DH A N D
E M I L I A ROV I R A NOR DM A N

Index 249
Figures

10.1 A comparison between the stages in traditional and agile

project management (adapted from Keller et al. 2017) 97
10.2 How uncertainty and complexity favour different
approaches for project management (adapted from
Lensges et al. 2018: 29) 99
10.3 Factors favouring different approaches to project
management 103
13.1 Number of RPA-related publications in Google Scholar 133
16.1 The technologies, boundaries and dimensions of ERM 162
17.1 Trends in the use of the concepts BI and BA 179
19.1 A common view of boundary-spanners 198
20.1 The relationship between the subsidiary’s activity portfolio
and its influence within the MNE 210
20.2 The impact of digital transformation on subsidiary
influence through internal embeddedness 213
21.1 Four types of IS outsourcing business-relationship triad
(inspired by Vedel, Holma and Havila 2016: 144) 223
22.1 Example of an RG matrix 232
23.1 Representation of the effect of digitalisation on the
questionnaire construction process 242
Tables

4.1 Industrial digitalisation barriers 35

6.1 Summary of business model innovations and technological
advancements in the three eras 60
10.1 The PMBOK guide: a guide to the project management
body of knowledge 94
11.1 Paradoxes of digital product innovation and constituent
tensions between innovation regimes 110
13.1 Perceptions of occupations that will disappear in future
(BBC.com) 130
13.2 Accounting tasks in a two-by-three matrix (authors’ own
representation) 132
14.1 Comparison of the two sites based on the number of
employee ideas that have been submitted to the joint
digital innovation platform 143
Contributors

Petter Ahlström, PhD and CEO of CLA Sweden AB, is an advisor, entrepre-
neur and researcher whose interest is in the areas of real estate econom-
ics, management control, organisation, strategy, service management
and innovation. He now runs a company in concept for senior housing
and services.
Linda Alkire is an assistant professor of marketing at Texas State University.
Her research explores transformative service research and technology in
services. She is an editorial director of the Journal of Service Management
and an associate editor of the Journal of Services Marketing and the Ser-
vice Industries Journal. She is also co-chair of SERVSIG.
Roland Almqvist is a professor at Stockholm Business School, Stockholm
University. His research is mainly oriented to management control in the
public sector, with a special focus on the outcomes of New Public Man-
agement in public sector organisations. His current research is focused
on the next phase of management control in the public sector.
Elena Anastasiadou is a PhD candidate at Mälardalen University and in
the Swedish Research School of Management and IT. She has a mas-
ter’s degree in international marketing from Mälardalen University and
is currently studying actor engagement in a sustainability context within
business networks.
Christoffer Andersson is a PhD candidate in the Department of Organiza-
tion and Management at Mälardalen University. His research interest is
in use of digital technology to automate work and how digital technology
changes the way knowledge about work is produced.
Ulf Andersson is a professor at Mälardalen University, an adjunct professor
in BI Norwegian Business School and an elected fellow of the Academy of
International Business. His research centres on multinational enterprise
subsidiaries, external embeddedness, knowledge transfer, and power and
network theory. He has published over 80 articles, books and book chap-
ters on these issues.
xvi Contributors
Charlotte Bäccman is an assistant professor of psychology in CTF (Service
Research Centre), Karlstad University. Her research focuses on how dig-
italisation can assist behaviour changes to promote better health and
well-being. Her interest spans from the individual level to societal and
health care institutions.
Izabelle Bäckström is an assistant professor of industrial innovation and
management at Lund University, Sweden. Her research interests include
innovation management more generally and, particularly, non-R&D in-
novation and new forms of collaborative organisation of innovation in
both private and public entities.
Linda Bergkvist is an assistant professor of information systems in the
Karlstad Business School and CTF (Service Research Centre), Karlstad
University. Her research focuses on digitalisation and special business
developments based on information technology and implementation and
adoption of digital technology. She has long experience in teaching, re-
search and collaborations in the area of digitalisation.
Magnus Berglind is a PhD candidate at Mälardalen University and as-
sociated to the Swedish Research School of Management and IT. He
has a master’s degree in industrial engineering and management from
Linköping University and experience of business development in several
multinational enterprises. He is currently conducting field studies fo-
cused on systemic sustainability transition from a multi-level perspective.
Börje Bjelke, MD, PhD, is a professor and specialist in geriatrics at Oslo
University. His basic science training was in neuroscience and extracel-
lular biochemical signal transduction. He has conducted research in the
field of experimental brain damage and repair using MRI and nanotech-
nology. His clinical interest is in geriatrics and memory clinic activity.
He held research positions at the Karolinska Institutet, the Robert Wood
Johnson Med School, and Rutgers and Copenhagen Universities. His
current research is on “Optimised Ageing.”
Anton Borell is a doctoral candidate in the Stockholm Business School,
Stockholm University. His research interest is in management control in
public sector settings, with a focus on the interplay among welfare, new
public management and accounting in the public sector.
Alan W. Brown is a professor in digital economy in the University of Exeter’s
Business School. His research focuses on agile approaches to business trans-
formation and the relationship between technology innovation and business
innovation in today’s rapidly evolving digital economy. He has published
five books and numerous papers on software engineering, systems design
and digital business transformation. He appeared in the apolitical.co 2018
list of the world’s 100 most influential people in digital government.
 Contributors xvii
Bendik Bygstad is a sociologist and a professor in the Department of In-
formatics at the University of Oslo and is an adjunct professor in the
Norwegian School of Economics. His main research interests are digital
innovation, the relationship between information systems and organisa-
tional change, and critical realism as theory and method.
Jason Crawford is an assistant professor in the Department of Business
Studies, Uppsala University. His research interests are enterprise risk
management, strategy, management control and cognition. He is part of
a European research network, involved in several research projects and
was recently awarded the Wallander Scholarship for his research.
Lucia Crevani is an associate professor in business administration and is
head of research in Industrial Economics and Organisation at Mälard-
alen University. Her research critically explores the sociomateriality of
emerging processes of organising and leadership, to contribute to in-
creased social justice and inclusion at work.
Henrik Dellestrand was awarded his PhD degree from Uppsala University,
Sweden, in 2010. Currently, he is an associate professor of international
business in the Department of Business Studies, Uppsala University. He
is interested in management issues in multinational enterprises, with a
particular focus on headquarter–subsidiary relations.
Todd Drennan is a PhD candidate at Mälardalen University and is enrolled
in the Swedish Research School of Management and IT. He has a mas-
ter’s degree in international marketing from Mälardalen University and
currently studies the cross-border purchasing behaviour of consumers
online, in relation to the internationalisation of small- and medium-sized
enterprises.
Susanne Durst is a professor of management and head of the Unit Organi-
sation and Management in the Department of Business Administration
at Tallinn University of Technology. Her research interests include small
business management, knowledge (risk) management, innovation man-
agement and sustainable business development. Before joining academia,
she worked with private enterprises.
Cecilia Erixon is an assistant professor at Mälardalen University and an
alumnus of the Swedish Research School of Management and IT.
Dr Erixon returned to academia after spending some time working in the
software industry and since then she has been conducting research on the
effects of information technology on business relationships, with a focus
on the role played by information system providers in business networks.
She collaborates frequently with regional business partners, and these
projects have provided both theoretical insights and led to undergraduate
courses in digital business development.
xviii Contributors
Markus Fellesson is an associate professor in business administration at
Karlstad Business School and the Karlstad University Service Research
Centre. His research investigates the development of service concepts
and a strategic service perspective in organisations, industries and soci-
ety. He has studied the consequences of this perspective for service work
and customer behaviour.
Cristina Ghita is a PhD candidate studying information systems in the De-
partment of Informatics and Media at Uppsala University. Her research
focuses on the points of convergence between users and technology,
which result in digital disconnection practices. She is interested, also, in
new materialism theoretical frameworks and every-day ethnographies of
technology use.
Edward Gillmore is an assistant professor of strategy and director of the
business administration bachelor’s programmes at Jonkoping Interna-
tional Business School. Before pursuing an academic career, he worked
as a communications professional for several technology multinationals
in Sweden and the UK. His research focuses on strategic practices and
digitalisation transformation in multinational enterprises.
Cecilia Gullberg is a senior lecturer in business administration at Södertörn
University. Her research covers many facets of accounting, including
both accounting per se and the social processes underlying the produc-
tion and use of accounting. She is particularly interested in how digital
technologies reshape the conditions for accounting and accountability.
Anette Hallin is a professor of organisation and management at Åbo
Akademi University and Mälardalen University. She is the director
of DIGMA, a six-year research programme focused on digitalisation
of management. She has a long-standing interest in sustainable pro-
cesses of organising, for example, managing cities, projects and change –
particularly in the post-digital era.
Matthias Holmstedt is a senior lecturer and head of accounting at Mälard-
alen University. His research focuses on business development and in-
cludes studies related to decision-making and accounting information.
He was previously a financial manager and controller, and his teaching
focuses on statistical analysis and management control.
Caroline Ingvarsson is a postdoctoral researcher, on a three-year research
scholarship, and senior lecturer in organisation and management at
Mälardalen University. She is interested in work organisation processes,
specifically location-independent processes, in a post-digital era.
Chris Ivory is a professor of technology and organisation in the Faculty of
Business and Law at Anglia Ruskin University. He is also the director
of the Innovation and Management Practice Research Centre (IMPact).
His research focuses on sustainable futures in both work and technology.
 Contributors xix
Fredrik Jeanson is a lecturer at Mälardalen University. He has studied pro-
fessions related to management accounting and teaches management ac-
counting, financial accounting and management control. He also works
on internationalisation of both students’ and faculty exchanges in vari-
ous management fields.
Johan Klaassen is a doctoral candidate studying management at Stockholm
Business School, Stockholm University. His research is on technology
use in professional work. His forthcoming thesis is on digitalisation in
school organisations and examines teachers’ work and how it is changing
with the introduction of different types of digital technologies.

Christian Kowalkowski is a professor of industrial marketing at Linköping

University, Sweden. His research interests include service growth strat-
egies, service innovation, business-to-business customer solutions and
subscription business models. He is servitisation editor for the Journal
of Service Management and an associate editor of the Journal of Services
Marketing.

Inti José Lammi is a postdoctoral researcher and senior lecturer in organi-

sation and management at Mälardalen University. His research interest
is in empirical and theoretical investigation of how work and managerial
practices are reconfigured in a post-digital age.

Göran Lindahl is a professor of architecture and civil engineering at Chal-

mers University of Technology, and is head of Division Building Design
and director of the Centre for Healthcare Architecture. He has worked in
both academia and public client organisations. His research focuses on
design processes, facilities management and project management, often
in a healthcare context.
Olof Lindahl was awarded his PhD from Uppsala University, Sweden, in
2015. He is an associate senior lecturer in international business in the
Department of Business Studies, Uppsala University. His research re-
volves around the management of knowledge in multinational corpora-
tions, internationalisation and reshoring, and innovation and policy in
the antibiotics industry.

Eva Lindell is a researcher and senior lecturer in business administration

at Mälardalen University. Her research focuses mainly on the effects of
digitalisation on the labour market with a particular interest in the flexi-
bilisation of work.

Jan Lindvall is an associate professor in the Department of Business Stud-

ies, Uppsala University. His research interests are in management,
decision-making and business intelligence/analytics. He has extensive
experience in these areas as a consultant and a public speaker, in both
industry and the public sector.
xx Contributors
Jan Löwstedt is a professor in the Stockholm Business School, Stockholm
University, and co-founder of the Swedish Research School of Manage-
ment and IT. He has been conducting international comparative research
projects and has a special research interest in the processes of organisa-
tional change and the interplay between technology, people and organi-
sations, and in work–life development.
Peter Magnusson is chair professor at Karlstad University, Sweden, and is
affiliated to the Service Research Centre. His research focuses on innova-
tion management and servitisation. He has published in leading journals,
including Journal of Product Innovation Management, Journal of Service
Research and Journal of the Academy of Marketing Science.
Noushan Memar is a lecturer at Mälardalen University and a PhD candidate
in the Swedish Research School of Management and IT, and affiliated
with the Nordic Research School of International Business. Before re-
turning to the academy, she worked for a few years in marketing. Her re-
search focuses on subsidiary management and mandating consequences
in multinational enterprises.
Fredrik Nilsson is a professor of business studies, especially accounting, at
Uppsala University. He was previously a professor of economic infor-
mation systems at Linköping University. He is also the chairman of the
Swedish Research School of Management and IT. His research focuses
on how different information systems (e.g., related to financial account-
ing, management control and production control) are designed and used
in formulating and implementing strategies.
Irina Popova is a lecturer in human resources management and organiza-
tional behaviour in the Faculty of Business and Law at Anglia Ruskin
University. In 2017, after completing her PhD on start-up incubation, she
joined the DIGMA project as a research fellow. She is interested in digi-
tal, wider organisational and personal transformation.
Birger Rapp is a professor emeritus in economic information systems at
Linköping University. He helped found the Swedish Research School of
Management and IT, and was its first dean. He is currently an acting
professor at the Institute for Management of Innovation and Technology
(IMIT), and his research focuses on information technology and change.
Jimmie Röndell is an assistant professor of marketing and academic director
of the international business studies programmes at Mälardalen Univer-
sity. His research focuses on actor roles, resource integration and value
co-creation related to digitalisation and sustainability developments
within service ecosystems. He previously studied the music and gaming
industry and is currently engaged in research on smart buildings and
their related services.
 Contributors xxi
Emilia Rovira Nordman is an associate professor of international marketing
at Mälardalen University and an affiliated research fellow at the Stock-
holm School of Economics. Her fields of specialisation include the ef-
fects of personal interaction on the internationalisation of small- and
medium-sized enterprises and international new ventures.
David Sörhammar is an associate professor of marketing at the Stockholm
Business School. He currently supervises three PhD students enrolled
in the Swedish Research School of Management and IT. His research
interests include service innovation, co-creation and user innovations,
and he is currently working on the interplay between digitalisation and
servitisation.
Martin Stojanov is a PhD candidate in information systems in the Depart-
ment of Informatics and Media at Uppsala University. His research fo-
cuses on datafication in public health, and he has conducted empirical
research on self-tracking and public health surveillance.
Klas Sundberg is a senior lecturer in business administration at Dalarna
University, and director of the School of Education, Health and Social
Studies, also at Dalarna University. His research focuses on management
control and accounting in different contexts.
Angelina Sundström is a senior lecturer at Mälardalen University. She is in-
terested in accounting and product development-related issues, and her
current research focuses on product deletion. She has also been involved
in education research with a specific focus on gamification.

Fredrik Svahn is an associate professor at the University of Gothenburg and

researcher in the Swedish Centre for Digital Innovation. He has a back-
ground in industry and experience in the defence, telecommunications
and automotive sectors. His research addresses digital innovation in in-
cumbent firms, including studies of organisational capability, platform
design, generativity and innovation strategy.
Ann Svensson is an associate professor of information systems at University
West, Sweden, and director of the Health Academy West. Her research
focuses on digitalisation and business development and includes knowl-
edge management, learning and collaboration, in both public healthcare
organisations and private businesses.
Fredrik Tell is a professor and chair of business studies at Uppsala Uni-
versity. He is also deputy chairman of the Swedish Research School of
Management and IT. His research involves strategic temporal work and
the relationship between the future and the present, development of or-
ganisational knowledge and capabilities, intellectual property rights
and markets for technology, digitalisation and changing organisational
xxii Contributors
routines, temporary and distributed organisational forms in innovation
and multinational management during change.
Peter Thilenius is a professor of business studies, especially international
business, at Uppsala University, Sweden. His research interests are in
business relationships at the intersection of various marketing and inter-
national business fields, with a special focus on the impact of information
technologies on business in an industrial setting.
Cecilia Thilenius Lindh is an associate professor of business administration
at Mälardalen University. Her research focuses on the areas of industrial
economics, marketing and digitalisation, especially the industry business
relationships of business-to-business enterprises and e-commerce in in-
ternational consumer markets.
Steven Thompson is a professor of management in the Robins School of
Business at the University of Richmond. He conducts research on the
value-creating potential of various forms of information technology and
their related services in the areas of healthcare and the real estate sector.
Claes Thorén is an associate professor of information systems in the De-
partment of Informatics and Media, Uppsala University, Sweden. His
research primarily addresses the intersection between informatics and
cultural studies, particularly with regard to digitalisation, and what con-
stitutes a meaningful technological encounter for individuals, groups
and organisations.
Bård Tronvoll is a professor of marketing in Inland Norway University of
Applied Sciences, and the CTF-Service Research Centre at Karlstad
University, Sweden. His research interests include marketing theory, ser-
vice innovation, customer complaining behaviour/service recovery and
digital transformation/servitisation.
Anna Uhlin is a PhD candidate in the Department of Organization and
Management at Mälardalen University. Her research interest is in the
work organisation processes and practices and how inclusion is accom-
plished in contemporary work life.
Kevin Walther is a PhD candidate in the Department of Business Studies at
Uppsala University. Prior to starting his doctoral studies, he was work-
ing in the cloud computing and digital payments industry. His current
research interests include internationalisation in a digital context and the
video games industry.
Jakob Westergren is a PhD candidate in international business in the De-
partment of Business Studies at Uppsala University. His research inter-
ests include the impact of distance-based and technology-mediated work
for actors such as boundary-spanners. He enjoys pondering on the role of
philosophical pessimism in business studies.
Preface

Management and Information Technology after Digital Transformation is a

book about the transformative effects and outcomes digitalisation has on
organisations, markets and society. The chapters constituting the book offer
different perspectives on digital transformation, in the intersection of man-
agement and information technology. This has been possible thanks to the
great contributions and commitment from a large number of researchers.
We, the editors of this volume, would like to extend our sincere grati-
tude to everyone who submitted a text in response to our call for chapters.
Furthermore, we would like to thank all reviewers, who made sure that all
chapters could benefit from constructive peer reviews.
The team at Routledge – Guy Loft, Julia Pollacco and Matthew
Ranscombe – offered a fantastic platform for these texts to reach the right
audience and has guided us through the process. The book benefited from
initial comments from several domain experts and received financial sup-
port from the Swedish Research School of Management and IT. We are very
grateful for all this input and support helping this book to be published.
Finally, we hope that you will find the chapters inspiring, challenging and
rewarding to read.

Peter Ekman Peter Dahlin Christina Keller

Hallstahammar Exeter Lund
June 2021 June 2021 June 2021
Foreword

It is winter in 2002 and one of us is on a bus, together with fellow supervi-

sors and PhD students. We are on our way to the Gimo Mansion in north-
ern Uppland. In 2000, the Swedish government granted funding to start
the Swedish Research School of Management and IT. We feel like pioneers,
embarking on a journey of discovery into partly unknown territory. The
old and very traditional Gimo mansion provides a fitting contrast with the
vibrant intersection between management and information technology we
plan to study. Although the group is small, expectations are high that we
will achieve a lot together.
Almost 20 years later, memories of the conference in Gimo are remarkably
clear, although much has changed. The leadership provided by Professors
Lars Engwall (Chairman) and Birger Rapp (Dean) saw the school expand
rapidly in its first ten years (Dahlin and Ekman 2012), a development that
continued under the guidance of the Deans Professor Pär Ågerfalk and later
Professor Christina Keller. Today, the school, hosted by Uppsala University,
embraces 12 tertiary member-institutions that are located across Sweden.
Since the inception of the school, and according to its latest annual report,
263 PhD students have been enrolled, including 83 current doctoral candi-
dates. A total of 119 doctoral and 53 licentiate theses have been defended
successfully (The Swedish Research School of Management and IT 2020).
This background demonstrates that the longevity and success of the
research school mirrors the general and favourable development of prac-
tice and research in the intersection between information technology and
management. These developments are similarly very visible in the contri-
butions to this edited volume. The editors’ efforts to combine contributions
and authors that reflect current developments in the area of management
and information technology are impressive. This edited collection includes
23 chapters and over 60 authors, many of whom have connections to the
research school. The chapters discuss the latest findings in a field that –
like the Swedish research school – has matured, but remain more vibrant
and important than ever. In the following paragraphs, we reflect on some of
these general developments and tendencies.
xxvi Foreword
At the start of the new millennium, information technology seemed to
promise new and significant improvements in the management of organ-
isations. Some of these possible improvements had been discussed for a
long time (see, for example, Haig 2001). We now know that not all of these
expectations have been met. At the same time, we have seen unexpected
developments in some areas that could not have been dreamt of two dec-
ades ago. Information technology has permeated society and has become
such a natural part of everyday life that we sometimes overlook its existence.
However, from time to time, we are reminded acutely about its importance,
for example, if mail servers go down or if we are unable to log into and use
a digitalised support system. We are also seeing, perhaps most visibly in
social media, the force of information technology to create a sense of what
is and is not true. It is fascinating, but perhaps, and more so, also terrify-
ing. There are countless other examples of these developments, which reveal
how information technology has changed our private and professional lives
irreversibly. As clearly indicated by the contributions in this volume, there
is great value in discussing the processes, effects and challenges associated
with digital transformation.
The force of digital transformation and its impact on society have led,
also, to an increased need for researchers to specialise to remain at the
knowledge frontier. The increasing sophistication of theories and empirical
methods affect researchers’ publication strategies and create strong incen-
tives for knowledge specialisation and formalisation of disciplines. These
developments are not unique to the broad field of information technology
and management; they are occurring in science more generally (Whitley
1984; Engwall and Hedmo 2016). However, in this particular context, there
is a need to combine knowledge from several disciplines to achieve in-depth
understanding of the processes, effects and implications related to the rapid
development of advanced technical solutions and information technology
applications. For example, the almost eternal question of how to coordi-
nate knowledge and action in organisations continues to attract interest
(Tell 2011). Some implications are discussed in this volume. Through an im-
pressive breadth and depth of contributions, the book discusses knowledge
and the challenges related to management using information technology,
through a multitude of approaches. It provides new insights at the intersec-
tion between management and information technology.
A long-term perspective on management and information technology,
unsurprisingly, reveals that there is a continuing and strong interest in the
effects of digital transformation, and we expect this interest to persist. The
use of big data and especially artificial intelligence (AI) will likely drive this
interest and these developments. Some observers are referring to the Fourth
Industrial Revolution in relation to the societal and economy-wide upheaval
envisaged (Schwab 2017; Li et al. 2021). Based on this, we foresee increased
interest in the performativity of information technology, which will re-
quire careful theoretical analysis of the intersection between information
 Foreword xxvii
technology and relevant social practices and organisational routines. Al-
though in academia information technology solutions have for long been
considered major actors (Kjellberg and Sjögren 2020), the ontological sta-
tus of these artefacts has evolved from being abstract to becoming more
concrete. There is a need to study digital transformations from several per-
spectives; we consider the perspective of the intersection between manage-
ment and information technology, adopted in this volume, to be especially
promising.
Finally, we want to express our sincere appreciation of the work under-
taken by both the editors of and the contributors to this volume. It will un-
doubtedly attract a wide audience and make a significant contribution to the
field of management and information technology. We are especially grateful
to Professor Emeritus Lars Engwall, who was instrumental in establishing
and developing the Swedish Research School of Management and IT. As
Chair and Deputy Chair we have always appreciated his strong support for
all our undertakings. We are delighted, therefore, that the editors have cho-
sen to dedicate this book to Lars Engwall and, by doing so, to acknowledge
his huge importance to the development of the research school and the field
in Sweden and abroad.
Fredrik Nilsson
Professor of Business Studies, especially
Accounting, Uppsala University
Chairman of the Swedish Research School of
Management and IT

Fredrik Tell
Professor of Business Studies, Uppsala University
Deputy chairman of the Swedish Research School of
Management and IT

References
Dahlin, P. and Ekman, P. (eds) 2012. Management and Information Technology:
Challenges for the Modern Organization. Routledge studies in innovation, organ-
ization and technology. New York: Routledge.
Engwall, L. and Hedmo, T. 2016. The organizing of scientific fields: The case of
corpus linguistics. European Review 24(4): 568–591.
Haigh, T. 2001. Inventing information systems: The systems men and the computer,
1950–1968. The Business History Review 75(1): 15–61.
Kjellberg, H. and Sjögren, E. 2020. Actor-network theory: Delight in the details. In
Eriksson-Zetterquist, U., Hansson, M. and Nilsson, F. (eds). Theories and Per-
spectives in Business Administration. Lund: Studentlitteratur: 247–270.
Li, D., Liang, Z., Tell, F. and Xue, L. 2021. Sectoral systems of innovation in the era
of the fourth industrial revolution: An introduction to the Special Issue. Indus-
trial and Corporate Change 30(1): 123–135.
Schwab, K. 2017. The Fourth Industrial Revolution. London: Portfolio Penguin.
xxviii Foreword
Tell, F. 2011. Knowledge integration and innovation: A survey of the literature. In
Berggren, C., Bergek, A., Bengtsson, L. and Hobday, M. (eds). Knowledge In-
tegration and Innovation: Critical Challenges Facing International Technology-
Based Firms. Oxford: Oxford University Press: 20–58.
The Swedish Research School of Management and IT. 2020. Annual Report for the
Academic Year 2019/2020. Uppsala: Uppsala University.
Whitley, R. 1984. The Intellectual and Social Organization of the Sciences. Oxford:
Oxford University Press.
1 Perspectives on management
and information technology
after digital transformation
Peter Ekman, Peter Dahlin and Christina Keller

Information technology (IT) has had profound effects on people, organi-

sations and society at large, and the solutions it brings have evolved from
requiring specialist handling to being accessible to the majority of the pop-
ulation and being used regularly in everyday life. Over the decades, the spot-
light has been on different forms of IT, which has developed from e-mail
and the worldwide web being novelties at one point in time to the current
frontier with artificial intelligence and big data. Views related to the effect
of digitalisation on businesses range from a “silver bullet,” promising rev-
olutionary results, to claims that digitalisation has had very little impact
on business. For example, the article “Reengineering Work: Don’t Auto-
mate, Obliterate” by Michael Hammer, which was published in the Har-
vard Business Review in 1990, points out that efficient digitalisation is not
just about letting IT automate existing routines. Rather, companies should
use the capabilities offered by IT to transform their business processes. His
article can be seen as an early contribution to the idea of Business Process
Reengineering, which emphasises the enabling effects of digitalisation and
was adopted by many organisations in the 1990s. Around the turn of the
new century and following the financial crisis, many organisations became
strongly cost-oriented and resulted in digitalisation being considered pri-
marily as a cost rather than a strategic benefit and source of competitive
advantage. For instance, Nicholas Carr’s (2003) article, entitled “IT Doesn’t
Matter,” also published in the Harvard Business Review, argues that organi-
sations should not seek to be IT leaders; rather, they should invest in already
well-established IT solutions and adopt a “follow, don’t lead logic.”
In the past few decades, we have witnessed consolidation of global IT
firms, greater reliance on cloud solutions and virtualisation and increased
sophistication of technologies being adopted and used in organisations.
These changes can be described as the result of digital transformation. Dig-
italisation can be defined as “a sociotechnical process of applying digitising
techniques to broader social and institutional contexts that render digital
technologies infrastructural” (Tilson et al. 2010: 749). Legner et al. (2017:
301) distinguish between digitalisation and digitisation: “While digitiza-
tion puts emphasis on digital technologies, the term digitalization has been

DOI: 10.4324/9781003111245-1
2 Peter Ekman et al.
coined to describe the manifold sociotechnical phenomena and processes
of adopting and using these technologies in broader individual, organiza-
tional, and societal contexts.” Various forms of digitalisation have been
steadily implemented since the global recession around the millennium. The
importance of digitalisation has been underlined and the process has inten-
sified during the Covid-19 pandemic, as a result of the restrictions on social
interaction and travel (Financial Times 2020).
Evidence of digitalisation can be seen almost everywhere, but its long-term
effects remain difficult to fully grasp. It is not difficult to see that digitalisa-
tion has changed our everyday lives through the provision of new innovative
services (Barrett et al. 2015), restructuring of both national and interna-
tional infrastructures (e.g., the travel and banking industries; Sharma et al.
2020; Worthington and Welch 2011) and the opening up of education systems
through massive open online courses (MOOCs; Martin 2012). How we inter-
act with one another has changed due to the use of smartphones and social
media (Alaimo et al. 2020), and smart homes are providing new opportuni-
ties for how we live and how society is structured (Shin et al. 2018). At the
same time, digitalisation has changed the way organisations are structured
(Baptista et al. 2020) and how professional activities are performed (Sennett
1999), and has promoted the development of new business models (Kavadias
et al. 2016). While the effects of digitalisation on people and their homes are
very evident, its effects on organisations can be less visible but are subject of
much academic research.
This book is a result of continuous research by and recurrent discussion
among researchers active at the intersection of the management and infor-
mation systems disciplines, who are interested in the effects of digitalisa-
tion on management practice and theory. Researchers have always been
fascinated by new phenomena and have an ongoing interest in evidence of
change. Organisations are in a state of constant flux – including incorpo-
ration of various IT – and this constant change needs to be acknowledged
(Gaskin et al. 2014). In management-oriented research, cross-sectional stud-
ies as well as longitudinal studies are used to create an understanding of the
history, the present and the future. The chapters in this edited collection are
based on work conducted by over 60 researchers, who are jointly reflecting
on and drawing insights from their ongoing research into the integration of
management practices with IT, which is both a cause and an effect of digital
transformation. Despite some outstanding progress, this transformation is
far from complete. Therefore, rather than focusing on the process of digi-
talisation, our intention, in this book, is to highlight the opportunities and
challenges that accompany or follow digital transformation. Regardless of
whether digital transformation is seen as an enabler or a cost, its potential
value and benefits depend on entrepreneurial and well-managed integration
with the organisation and its goals.
The chapters in this book work to condense the researchers’ insights
into how digitalisation has changed, and is changing, organisations, their
 Management after digital transformation 3
markets, and the society at large. Some chapters discuss what is causing
organisations to lag in this development and why some would like to with-
draw from the digitalised world. Taken together, the chapters in this book
offer a smorgasbord of perspectives on and insights into the management
of IT after digital transformation. They cover multiple industries and span
across the individual, organisational and societal levels. They show that the
digitalised landscape is no longer an unexplored territory but one that pre-
sents a variety of experiences, opportunities and challenges for individuals,
organisations and societies.
The book is organised into three sections, and the chapters in each sec-
tion have a common theme. Each chapter is aimed at inspiring managerial
thinking, providing insights into digitalisation and its potential transform-
ative effects and suggesting directions for future research. The chapters
in this book should be appreciated by professionals searching for a fresh
perspective on managerial practices, MBA students working on their cap-
stone projects and graduate students preparing for a career in the frontline
of digital transformation. The chapters in this book do not need to be read
sequentially; each is written as a stand-alone text. To emphasise the man-
agerial perspective, each chapter concludes with a short takeaway section
that summarises the implications.
To start this collection of insightful texts, we invited Alan Brown, Pro-
fessor in Digital Economy at the University of Exeter, to reflect on the
challenges and opportunities organisations face through and after digital
transformation. Chapter 2 “Digital transformation: towards a new perspec-
tive for large established organisations in a digital age” frames the topic in
an excellent way and should make the reader well prepared for a continued
dive into different perspectives on management and information technology
after digital transformation. It is followed by three parts focusing on (1) the
transformation of society and markets as a result of digitalisation, (2) mana-
gerial and organisational challenges related to digitalisation and (3) framing
digitalisation.

1.1 Part 1 – The transformation of society and markets

The section starts with Chapter 3 “Managing digital servitization: a service
ecosystem perspective,” by David Sörhammar, Bård Tronvoll and Chris-
tian Kowalkowski. The authors suggest that digitalisation should be seen
as taking place in ecosystems, which require firms to manage both weak
and strong relationships with other actors. Thus, digitalisation affects value
creation among stakeholders, which is best understood from a systemic per-
spective. Chapter 4 “Caught on the platform or jumping onto the digital
train: challenges for industries lagging behind in digitalisation” is by Peter
Ekman, Magnus Berglind and Steven Thompson and discusses the reasons
why some industries are lagging in terms of digitalisation. Chapter 5 “Dig-
italisation for sustainability: conceptualisation, implications and future
4 Peter Ekman et al.
research directions” by Elena Anastasiadou, Linda Alkire and Jimmie
Röndell argues that digitalisation and sustainability should be linked in or-
der to achieve the highest potential value and highest market transformation
potential. Kevin Walther and David Sörhammar offer a retrospective odys-
sey through the gaming industry and discuss the close relationship between
technological and business model innovations in Chapter 6 “Reaching new
heights in the cloud: the digital transformation of the video games industry.”
Chapters 7–9 suggest that the dominant view of labour in modern markets
needs to be updated. Chapter 7 by Christoffer Andersson, Lucia Crevani,
Anette Hallin, Caroline Ingvarsson, Chris Ivory, Inti Lammi, Eva Lindell,
Irina Popova and Anna Uhlin is entitled “Hyper-Taylorism and third-order
technologies: making sense of the transformation of work and management
in a post-digital era.” Chapter 8 entitled “Why space is not enough: service
innovation and service delivery in senior housing” is by Petter Ahlström,
Göran Lindahl, Markus Fellesson, Börje Bjelke and Fredrik Nilsson and
discusses how digitalisation allows seniors to become co-creators of their
own well-being. In a similar context, Chapter 9 by Ann Svensson, Linda
Bergkvist, Charlotte Bäccman and Susanne Durst, entitled “Challenges in
implementing digital assistive technology in municipal healthcare” con-
cludes Part 1 by discussing digitalisation in the context of healthcare.

1.2 Part 2 – Managerial and organisational challenges

The second section elaborates on the managerial and organisational chal-
lenges that emerge after digital transformation. It is introduced by Klas
Sundberg, Birger Rapp and Christina Keller in Chapter 10 “Modern project
management: challenges for the future” where they argue about the need
for new project management methods that can adapt to a situation of rapid
technological change and flexibility. They discuss how traditional and more
modern (agile) project management methods can be combined into hybrid
methods, as a means to deal with the needs of contemporary digitalisation.
Chapter 11 “Managing the paradoxes of digital product innovation” by Fre-
drik Svahn and Bendik Bygstad examines how product innovation practices
must go hand in hand with digital innovation, which they concede is a dif-
ficult task. In Chapter 12 “When external reporting goes social: new con-
ditions for transparency and accountability?” Cecilia Gullberg elaborates
on how the characteristics of accounting, which, traditionally, have been
periodic, holistic and historical, are changing to become continuous, frag-
mented and forward-looking. These changes are being promoted by use of
social media which are having an effect on transparency and accountability.
Chapter 13 “Robotic process automation and the accounting profession’s
extinction prophecy,” written by Matthias Holmstedt, Fredrik Jeanson
and Angelina Sundström, addresses the transformation of the accounting
profession as the digital transformation progresses. Chapter 14 “Manag-
ing digital employee-driven innovation: the role of middle-level managers
 Management after digital transformation 5
and ambidextrous leadership” by Izabelle Bäckström and Peter Magnusson
analyses the factors for success or failure in the process of integrating idea
management systems to deal with employee’s ideas about new products and
services. In Chapter 15, “Digital gamification of organisational functions
and emergent management practices,” Edward Gillmore presents the case
of gamification whose introduction changed the managerial practices in an
organisation. Part 2 concludes with Chapter 16 “Leveraging digital technol-
ogies in Enterprise Risk Management” by Jason Crawford and Jan Lindvall
who argue that, by leveraging digital technologies to enhance risk computa-
tion, interpretation and coordination, enterprise risk management can play
a valuable business partnering role in the organisations.

1.3 Part 3 – Framing digitalisation

Part 3 includes chapters that discuss different ways to frame digitalisation
and its transformative effects. It starts with Chapter 17 “The end of busi-
ness intelligence and business analytics” by Matthias Holmstedt and Pe-
ter Dahlin, who discuss how the concepts of “business intelligence” and
“business analytics” have become obsolete and are limiting organisations’
creation of value using analytics, after digital transformation. In Chap-
ter 18 “‘Deleted User’: signalling digital disenchantment in the post- digital
society,” Cristina Ghita, Claes Thorén and Martin Stojanov observe the
“r/nosurf” community and derive some lessons related to how humans
might react to the agency challenges raised by digitalisation. Henrik Dell-
estrand, Olof Lindahl and Jakob Westergren in Chapter 19 “The role of
boundary-spanners in the post-digitalised multinational corporation” dis-
cuss the effects of digitalisation on the role played by individuals or units
in multinational corporations that act as boundary-spanners and facilitate
knowledge transfer within and beyond the organisation. Chapter 20 “The
effect of digital transformation on subsidiary influence in the multinational
enterprise” also focuses on international enterprises, and the chapter’s au-
thors, Noushan Memar, Ulf Andersson, Peter Dahlin and Peter Ekman,
continue the discussion on how digitalisation affects global organisations.
In Chapter 21 “Understanding information system outsourcing in the digi-
tal transformation era: the business-relationship triad view” Cecilia Erixon
and Peter Thilenius discuss information system outsourcing and why it is
not enough to consider just the outsourcing firm and the information sys-
tem provider. They propose a triad view, which includes other business
partners, in order to understand the full effects of the outsourcing deci-
sion. Chapter 22 “Transforming the management/profession divide: the
use of the red–green matrix in Swedish schools” by Anton Borell, Johan
Klaassen, Roland Almqvist and Jan Löwstedt provide some insights from
Swedish schools and an illustrative case that shows that digital transforma-
tion can have unintended consequences. Chapter 23 “Integrating research
in master’s programs: developing students’ skills to embrace digitally
6 Peter Ekman et al.
transformed markets,” is the final chapter in this section in which Todd
Drennan, Cecilia Thilenius Lindh and Emilia Rovira Nordman show how
higher education can exploit the possibilities offered by digitalisation to
enable student learning.

1.4 Concluding remarks

For the engaged and curious reader, given the richness of the field and the
potential exciting future developments, the chapters in this edited collection
are likely to raise more questions than they answer. Although much of the
research on which the chapters in this book are based was carried out before
2020, most texts were written during 2020, when the Covid-19 pandemic lim-
ited our ability to meet in person, discuss our ideas using whiteboards and
gestures and to further our arguments in the ways that scholars have relied
on for thousands of years. Instead, as has been the case for many projects,
this work had to swiftly become a fully digital process, in which all the con-
tributing authors could be involved equally regardless of their geographic
location. This challenging period of the Covid-19 pandemic has resulted in
many impressive examples of continuing and rapid digital transformation
by individuals, organisations and societies. There is no doubt that, in the
coming years, there will be a plethora of similar opportunities and chal-
lenges and further developments. Learning from experience and from the
examples in this book, and challenging established ways of thinking and
doing, will be key for successful management and information technology
after digital transformation.

References
Alaimo, C., Kallinikos, J. and Valderrama, E. 2020. Platforms as service ecosys-
tems: Lessons from social media. Journal of Information Technology 35(1): 25–48.
Baptista, J., Stein, M.K., Klein, S., Watson-Manheim, M.B. and Lee, J. 2020. Digi-
tal work and organisational transformation: Emergent digital/human work con-
figurations in modern organisations. Journal of Strategic Information Systems
29(2): 1–10.
Barrett, M., Davidson, E., Prabhu, J. and Vargo, S.L. 2015. Service innovation in
the digital age: Key contributions and future directions. MIS Quarterly 39(1):
135–154.
Carr, N. 2003. IT doesn’t matter. Harvard Business Review 81(5): 43–39.
Financial Times. 2020. Pandemic boosts automation and robotics, 10 October. Re-
trieved from https://www.ft.com/content/358f6454-e9fd-47f3-a4b7-5f844668817f.
Gaskin, J., Berente, N., Lyytinen, K. and Yoo, Y. 2014. Toward generalizable socio-
material inquiry. MIS Quarterly 38(3): 849–872.
Hammer, M. 1990. Reengineering work: Don’t automate, obliterate. Harvard Busi-
ness Review 68(4): 104–112.
Kavadias, S., Ladas, K. and Loch, C. 2016. The transformative business model.
Harvard Business Review 94(10): 91–98.
 Management after digital transformation 7
Legner, C., Eymann, T., Hess, T., Matt, C., Böhmann, T., Drews, P., Mädche, A.,
Urbach, N. and Ahlemann, F. 2017. Digitalization: Opportunity and challenge
for the business and information systems engineering community. Business and
Information Systems Engineering 59(4): 301–308.
Martin, F.G. 2012. Will massive open online courses change how we teach? Commu-
nications of the ACM 55(8): 26–28.
Sennett, R. 1999. The Corrosion of Character. New York: WW Norton Co.
Sharma, A., Sharma, S. and Chaudhary, M. 2020. Are small travel agencies ready
for digital marketing? Views of travel agency managers. Tourism Management 79,
https://doi.org/10.1016/j.tourman.2020.104078.
Shin, J., Park, Y. and Lee, D. 2018. Who will be smart home users? An analysis
of adoption and diffusion of smart homes. Technological Forecasting and Social
Change 134: 246–253.
Tilson, D., Lyytinen, K. and Sørensen, C. 2010. Research commentary – Digital
infrastructures: The missing IS research agenda. Information Systems Research
21(4): 748–759.
Worthington, S. and Welch, P. 2011. Banking without the banks. The International
Journal of Bank Marketing 29(2): 190–201.
2 Digital transformation
Towards a new perspective for
large established organisations
in a digital age
Alan W. Brown

For more than a decade, industry commentators have heralded the dis-
ruptive forces inherent in the use of digital technology. Yet, for many, par-
ticularly those working within or receiving services from large established
organisations (LEOs), the impact has been much less dramatic. While tra-
ditional ways of working have been automated and digital channels of com-
munication established, the fundamental processes and practices of most
organisations have remained intact. Digital technologies have replaced
manual tools in management and support activities, but few of these have
had significant impact for the creators and consumers of services in large
parts of our economy such as education, utilities, retail, professional ser-
vices and the public sector. They have experienced substantial digitisation
without commensurate digital transformation.
Although corporate leaders have increasingly regarded digital transfor-
mation as essential to their future survival, delivering substantive change
across established businesses and industries has been found to be expensive,
complex and unpredictable. While commonly discussed in boardrooms,
high-profile examples of failed businesses, such as Kodak, Blockbuster
and Nokia, reveal a great deal about the difficulties involved in delivering
organisational change in the face of digital disruption. Leaders in LEOs
understand the need to take advantage of the constant flow of new digi-
tal technologies to automate complex, error-prone manual tasks, to shift
their business towards online channels, to support the dynamic of collabo-
rative virtual teams and to drive Information Technology (IT) departments
to simplify operational tasks through cloud-hosted services (Brynjolfsson
and McAfee 2016). However, they find themselves facing the “innovators
dilemma” (Christensen 1997) of needing to maintain their existing business
practices to satisfy their current clients and operating models while at the
same time revolutionising what they do to deliver for a very different future.
As a consequence, while the digital transformation of commerce and in-
dustry currently underway has the potential to revolutionise core elements
of the organisation’s operating practices and business models, from how
it serves customers to the nature of the products and services it provides,
many internal and external pressures constrain such a strategy to something

DOI: 10.4324/9781003111245-2
 Digital transformation 9
much less radical. Most organisations find themselves trapped between the
low-risk, short-term digital optimisation of today’s ways of working and
the uncertainty that comes from redefining their strategies and operating
models for a substantially different future state. Addressing this challenge is
critical to their future and has been increasingly prioritised in senior lead-
ership strategy.
However, over the past 12 months the urgent need for a change of pace
in this digital shift has become apparent. The Covid-19 pandemic has pre-
cipitated a mass transition to remote working and distributed operations,
driven new approaches to supply chain agility and fostered rapid innova-
tion techniques to bring solutions from idea to delivery in a few days. In all
of these areas, digital technology has been recognised as instrumental in
the response to and recovery from the shockwaves created by the pandemic
(World Economic Forum 2020). Along with ensuring business continuity
through uncertain times, a much broader and deeper transformation of so-
ciety towards substantive digitally powered approaches has been unleashed.
The response has been rapid with claims of several years of progress in
meaningful transformation accomplished within just a few months (McK-
insey 2020). In the absence of viable alternatives, businesses have adjusted
to using digitally derived data to understand the rapidly evolving operating
environment, reshaped working practices to support digital collaboration,
created new online services to monitor product supply and delivery, rewrit-
ten employee and client contracts to support digital forms of engagement
and much more. The way humans work, interact and view the world has
been altered forever, with lasting impacts that go beyond simple conversion
of manual tasks into online, digitised versions of their analogue processes.
In many LEOs, the pandemic has forced open the doors to digital transfor-
mation that, previously, were resolutely closed.
It is not surprising that this new sense of urgency is renewing the emphasis
on digital transformation in every organisation. By building on earlier expe-
riences, organisations are trying to accelerate the journey to a new operat-
ing model in which digital technology supports emerging practices that are
better adapted to a post-pandemic business environment and are aligned
more clearly with the societal values that the pandemic has created. The
commonly heard rallying cry of “Building Back Better” implies more than
a return to business as usual: it promises a digital future that is fairer, more
sustainable and purposeful.
In recognition of this context, this chapter considers digital transforma-
tion against the backdrop of the progress made over the past decade but
reconsidered through a newly emerging post-pandemic lens. It offers a per-
spective on previous approaches to digital transformation by focusing on
three key areas:

• The differing views and perspectives on digital transformation that

form the context for organisational change activities;
10 Alan W. Brown
• The challenges that LEOs undergoing digital transformation will face
as they deliver substantive, meaningful change;
• The opportunities that will help digitally transformed organisations to
succeed as they move beyond their current ways of working.

In much of this chapter, the primary focus is on LEOs. We believe that con-
sideration of the role and impact of digital transformation in LEOs, where
change is inhibited by their size, heritage, complexity and structure, pro-
vides some specific insights. While the observations and analysis we offer
have broad applicability, LEOs form the primary reference point for this
discussion and are used as illustrations throughout this chapter.

2.1 Understanding digital transformation

From the earliest days of computing, there is a long history of use of digital
technologies to support organisations’ operational tasks. Culminating in
the IT revolution, from the 1970s onwards (Perez 2010), the need to digitise
the workplace has been central to business strategy and investment. How-
ever, despite long-term interest in the transformative power of digital tech-
nologies, in practice, the fundamentals of digital transformation remain
widely misunderstood with digital transformation used as an umbrella term
to cover a seemingly endless collection of ideas (McQuivey 2013). The chal-
lenge for most organisations is finding ways to frame digital strategy discus-
sions to enable a consistent, shared understanding of digital transformation
to galvanise a broad constituency.
From a practical perspective, the operational view of digital transfor-
mation emphasises adoption of digital technologies to replace manual
tasks. For example, McKinsey’s global survey in 2015 highlighted that
while “going digital is quickly becoming common practice, or at least
a common mandate, at many companies,” it found that “most execu-
tives say their programs focus on strengthening the existing business”
(McKinsey 2015). This global survey indicated, also, that most compa-
nies receive little value from these initiatives and struggle to understand
and adapt digital technologies to complex, volatile environments. These
findings were reinforced by a 2017 Gartner CEO survey, which concluded
that, while CEOs are becoming better at understanding the benefits of
a digital business strategy, many still align digital transformation with
ongoing e-commerce and digital marketing programs rather than viewing
it more generally, in terms of digital product design, service innovation
or business model redesign, to take advantage of digital platforms and
ecosystems (Gartner 2017).
Academic studies of digital transformation further highlight the broad
interpretation and diffuse focus adopted by organisations. For instance,
a recent review (Vial 2019) identified 23 different definitions of digital
 Digital transformation 11
transformation, across 28 published articles. In general, these definitions
highlighted five common characteristics:

• Applying new digital technologies such as emerging 5G mobile com-

munications, artificial intelligence, cloud-hosted services, blockchain-
managed transactions and connected devices via the Internet-of-Things;
• Allowing major business improvements by increasing the efficiency of ex-
isting business processes and enabling entirely new ones;
• Enhancing customer experience through more accessible and available
online services;
• Streamlining operations by eliminating manual steps and replacing them
with automation and using data to enhance predictive interventions;
• Creating new business model opportunities that encourage innovation in
how value is created, managed, shared and maintained.

Each of these characteristics extends the way the term is applied. Therefore,
in our research, we adopt a broad, intuitive definition that combines the di-
verse viewpoints encountered in both practical and academic studies:

Digital transformation describes a broad set of activities aimed at im-

proving efficiency, value, and outcomes in delivering sustainable change
through the use of digital technologies for the benefit of business, or-
ganizations, individuals, and society.

In addition to the scope of their digital transformation, organisations en-

gaged in change programmes highlight specific actions and priorities in
their approach. Existing studies and our own experience with organisations
undergoing digital transformation reveal three clear traits in how they un-
dertake their work which signal success:

• Strategy: They encourage an experimental approach to the adoption of

digital technology, based on agile design and delivery principles. Work
involving rapid iterations allows multidisciplinary teams to achieve de-
sired outcomes based on frequent feedback from stakeholders and redi-
recting, as necessary, to ensure optimal results.
• Focus: They actively explore digital business model alternatives by in-
vestigating a variety of approaches to value creation, management and
sharing. These business models frequently challenge current thinking
by proposing innovative ways to meet client needs, monetise resources
and scale up adoption rapidly.
• Mind-set: They assist their employees to become more change-ready in
the face of digital disruption. While all organisations can be said to be
in constant flux, digital transformation requires particular attention to
shifts in working practices, decision-making and operations.
12 Alan W. Brown
Finally, in common with all change, it is important to understand that
radical reform requires perseverance. Efforts to deliver digital transforma-
tion programmes at most organisations require substantive, multifaceted
approaches over long periods. They involve not only challenges related to
redesigning the organisation’s operating and business models but also ac-
complishing these changes while the organisation, the digital technology
and the business environment are rapidly evolving. This is not easy, and
there is no single approach that fits every business. As a result, a program-
matic, managed, multi-phased approach is generally adopted to ensure that
everyone, across the organisations involved in the change, understands
where to start, where to go next and how to align their digital transforma-
tion efforts.

2.2 The challenge

The overwhelming feedback from industry reviews and analyses of digital
transformation experiences highlights that the challenges faced range far
beyond technology adoption issues (Tabrizi et al. 2019). Consequently, or-
ganisations engaged in digital change programmes are recognising that the
technology is only one element in the complex set of issues that must be
addressed to succeed in a digital world. In recently formed organisations,
this recognition is pushing many towards new, wholly digital approaches,
involving lightweight processes, minimal investment in capital assets and a
flexible workforce. However, LEOs face a rather different set of challenges.
Careful consideration needs to be given to the migration of existing invest-
ments in staff and equipment, revisions to well-understood operating pro-
cedures and roll-out of enhancements to support mechanisms for existing
and new clients with diverging expectations about the products and services
they consume.
For LEOs, in particular, this involves accurate identification and develop-
ment of the individual and organisational capacities required for successful
change. Research suggests that a focus on technical capabilities is a vital
part but is only one part of the solution. Leaders need to have a broader view
of developmental needs within the digital ecosystem. For LEOs, a healthy
transformation depends as much on human as on technological evolution.

2.2.1 LEOs – why size matters

The past 20 years have seen an intense focus in all organisations on the op-
portunities and challenges related to the use of digital technology. This has
changed how these organisations operate to automate and accelerate day-
to-day activities; provided new insights into what the organisations know
about their products and services, in production and in use; and, often, has
revolutionised the nature of the products and services they deliver to make
them more virtual, personalised and responsive.
 Digital transformation 13
In many cases, the toll on the organisation undergoing this transition is
heavy. In the case of LEOs, several critical tensions have built up – to the
point that a rethinking of their ongoing digital transformation has become
central to their strategy and their success. LEOs are rife with technology-led
change initiatives, agile delivery squads, experiments with new business
models, piloting of cloud-based services and much more. Yet current stud-
ies confirm that executives in LEOs remain confused about how to bring
these activities together, at scale, to achieve meaningful results. In practice,
LEOs are experiencing a growing gap between state-of-the-art use of digital
approaches in small silos and a predominant state-of-the-practice across
large parts of the organisation.
This gap is threatening the organisation’s sustainability in markets that
are being redefined by faster-moving competitors. Beyond digitising their
current products and practices, LEOs need to address several critical
questions:

• How to direct their digital transformation efforts to deliver greater

value while adapting to demands for greater responsibility and sustain-
ability in the delivery and use of existing products and services;
• When to compete in evolving markets where sharing and cooperation
within ecosystems may be a better strategy than directly challenging
market entrants;
• Where to prioritise the drive for greater efficiency in current working
practices through automation, without dehumanising the workplace;
• How to deliver effective leadership for a new workforce generation and
engender flexibility and agility to ensure employees feel engaged, in-
cluded and supported.

Addressing these questions is not just a problem for the individual organ-
isation; it has repercussions for all industries and the whole economy. For
example, in the UK, LEOs (i.e., firms with over 250 employees) are responsi-
ble for over 60% of employment. LEOs include government agencies respon-
sible for national institutions and national infrastructure and third sector
groups that play a critical role in maintaining the UK’s social fabric. Across
these organisations, application and use of digital technologies is forcing a
reskilling of the workforce, threatening the sustainability of existing busi-
ness models and creating a vastly different competitive landscape for new
market entrants. The wide-ranging implications of these changes are evident
in legal activities, such as the UK Digital Economy Bill (UK Government
2017), taxation debates in both the USA and Europe (Sweney 2020) and the
growing unrest about the future implications for employment (Press 2019).
As a result, there are several related concerns that LEOs must address.
First, to accelerate the digital transformation, they need to understand the
relationship between technology innovation and business model innovation.
The move away from current value models, which emphasise traditional
14 Alan W. Brown
approaches to product ownership and use, is providing opportunities for
LEOs to create knowledge frameworks and strategies that highlight the busi-
ness impact of digital technology. Emerging digitally inspired approaches
are increasing the focus on responsible and sustainable techniques, allowing
for shared ownership of assets, usage-based pricing models and mutually
beneficial outcomes from product and service deployment. The impacts of
these approaches are particularly relevant in the manufacturing, health, re-
tail and insurance sectors.
Second, LEOs need to focus on consistency across large parts of their
diverse business portfolio. Managing internal tensions across different
parts of the organisation is distracting and costly. Standardisation is par-
ticularly important in infrastructural areas where cross-cutting concerns
require alignment between product and service delivery to ensure uniform
and systematic application across the digital landscape and across multi-
ple domains. Advances in connected devices, 5G and big data, along with
understanding and addressing security and privacy issues, are particularly
critical to organisational success.
Third, at the personal level, digital technologies have a major impact
on the individuals in the workplace. The automation of manual tasks has
changed the nature of work for many. An organisation’s success requires new
worker skills that emphasise use of digital technologies to ensure fast-paced
adaptability, decision-making agility and collaborative problem-solving.
Furthermore, for many workers, the boundaries between work, home and
leisure activities have become blurred. All of these changes are placing ad-
ditional stress on many aspects of employees’ lives and are changing the
employer–employee relationship and raising significant questions about the
individual’s role in the workplace. While many employees are embracing
the opportunities and freedom enabled by digital transformation, for others
it is confusing. Organisational resilience and sustainability are being inter-
preted more widely and seen as including consideration of how to build a
high-performing workforce while undergoing radical changes to working
practices over extended periods of time.

2.2.2 Digital dilemmas

Meaningful transformation, at scale, involves a wide range of activities
at all levels of the organisation. Work with LEOs, over the past few years,
to explore their digital transformation experiences has highlighted three
high-impact digital transformation dilemmas, each of which demands sig-
nificant attention.
The first dilemma that LEOs face is related to a shift from digitising cur-
rent ways of working to broad adoption of new approaches optimised for
digital products and services. As the “digital maturity” of organisations in-
creases, we are seeing the emergence of a much more complex and subtle
dynamics. Current change management processes are being disrupted by
 Digital transformation 15
greater agility and flexibility and accelerated feedback from all stakehold-
ers, enabled by the digital era.
The second dilemma is caused by the fact that much of the existing re-
search downplays the importance of organisational and cultural inhibitors
to change and, particularly, in the context of LEOs where embedded struc-
tures and deep-rooted practices hinder change and limit the impact that dis-
ruptive ideas can have beyond their originators. The experience of leaders
in LEOs highlights the need to address the broader cross-domain themes
impeding their digital transformation – both in theory and in practice.
Similarly, many organisations have been affected by the speed at which
digital disruption is changing organisational boundaries and emphasising
the importance of considering business ecosystems in LEOs’ strategies.
Business ecosystems are emergent alliances of organisations with no pre-
determined, centralised or hierarchical governance models, which work to-
gether to create and capture value and share it with their customers. These
collaborative systems play an important role in LEO success but are under-
valued by many LEOs.
The third dilemma is related to the increased need for LEOs to under-
stand the fundamental paradox between rapid deployment of emerging
digital technologies to improve working life and the increased volatility,
uncertainty, complexity and ambiguity that accompanies these develop-
ments. Much of the current focus in LEOs is on understanding responsible
approaches to innovation that reduce individual stress, provide individu-
als with greater agency over their personal identity and data and highlight
where trust relationships are being eroded and manipulated within and
across firms and between the firm and the individual. Recent experience
shows a new emphasis on sustainability – of the environment, of people and
of business approaches.

2.2.3 Beyond digital products and services

Much of the focus on the adoption of digital technologies is on product and
service delivery. In production-oriented environments, digital technologies
are becoming critical to how products are created, manufactured, tested
and distributed. However, the adoption of digital technologies has been
shown to have more widespread effects on business and society.
The emergence of digital technologies is triggering dramatic changes to
the nature and structure of many previously established working practices.
Common experience highlights that exploiting an extensive range of digi-
tal technologies in the workplace is allowing organisations to become more
flexible in their hiring, role definition, workforce development and decision-
making processes. For both individuals and teams, increased digitisation
has revolutionised communication, collaboration and creativity and re-
shaped what individuals do, how they spend their time and where they focus
their skills and capabilities.
16 Alan W. Brown
Consequently, deployment of digital technology has opened new possibili-
ties. For most organisations, use of digital technology is not new and the im-
plications of digital technology adoption are evident in primarily three areas:

• Driving operational efficiencies through increased automation of busi-

ness processes to streamline routine activities;
• Connecting multiple stakeholders in business ecosystems to encourage
cooperative approaches to information sharing and new value creation;
• Increasing transparency within and across business silos to redefine
roles and responsibilities for the delivery of products and services.

The dynamics of digital business transformation is demanding a differ-

ent approach from the classic change management methods, traditionally
aimed at moving the organisation from one steady state to another steady
state (Kotter 2014). In contrast, digital transformation takes place in a con-
text of significant volatility, uncertainty, complexity and ambiguity. Speed,
agility and experimentation are highly prized during rapid change and, per-
haps, never more so than today.

2.3 What matters now

There is little doubt that the Covid-19 pandemic has changed aspects of our
view of the world quite substantially, and, in many respects, the world will
not revert to how it was before. If this crisis has taught us anything, it has
emphasised that the “great dispersion” induced by the pandemic, as charac-
terised by Scott Galloway (2020), means that remote working, agile supply
chains and distributed service delivery are here to stay. Previous notions of
what was stable and could be relied upon have broken down.
LEOs and their operating structures were not designed to cope with the
uncertainty brought by the pandemic. The extraordinary ability, demon-
strated by the majority of LEOs, to evolve rapidly and to continue to oper-
ate, has been seen as huge success by those advocating adoption of new ways
of working powered by digital technologies (Fitzpatrick et al. 2020). As a
result, many of the objections and misunderstandings that were hindering
digital transformation were found to dissolve. Digital transformation initi-
atives have been accelerated to ensure business continuity, keep employees
and clients connected and manage distributed, diverse activities without the
need to travel. Digitisation and digital delivery are at the forefront of the
discussions and plans in all organisations, during 2021 and beyond.
However, more fundamental to digital transformation, the pandemic that
started in 2020 has forced a recalibration of at least three key areas:

• Risk. Many monitoring and assessment scenarios regarded remote,

Internet- connected digital technologies as unproven and a major source
of risk. However, they are now seen as an essential part of risk mitigation
 Digital transformation 17
strategies in times of turbulence. For example, in the case of elderly
care, anyone considering a carehome, long-stay residence or home help
will ask about digital remote sensing support and automated interven-
tions. This digital support is not optional; it has become essential for
survival. In many cases, the risks of not using digital technologies are
much higher than the move to a less familiar digital-first approach.
• Trust. We are not only seeing that our trust in various norms and insti-
tutions has been misplaced, many are also questioning whom to trust
over the things they value most: health, family, businesses, the economy,
and so on. Many more are worrying that their trust is being manipu-
lated at the individual, group and societal level. Somewhat confusingly,
the digital world both increases the ease and speed with which this hap-
pens and helps us to see through it by democratising our ability to find
more information and to find out how third parties are using our per-
sonal information. For many people, this has been a wake-up call and
led to demands for business leaders to have greater skills and knowl-
edge about how to find, assess and act quickly on volatile, conflicting
digitally derived data. Beyond the previous focus on the mechanics of
data privacy via the UK General Data Protection Regulation and other
rules, businesses are realising the importance of business ethics and
their role in decision-making, and the importance of building on this
newfound understanding as they move forward.
• Value. A critical open question is: what will people value when the pan-
demic is over? This has been addressed by leading academics (Mazzu-
cato 2017) and by the former governor of the Bank of England, Mark
Carney, in his 2020 Reith Lectures (Reith Lectures 2020). One issue is
to decide which data we value and how we use them to make better
decisions. Many are understanding, for the first time, the huge impact
of digital technology in reshaping our thinking about the role and in-
fluence of up-to-date, accurate information, from many sources, and
the real-time decision-making that these data support. Never has the
phrase “information is power” been more potent than it is today. In ad-
dition, there is increasing scrutiny of who should be allowed to monetise
our data and with what consequences. Fears have been growing about
the extensive storage of personal data and their use by large companies.
Will these fears now be subsumed by increased pressure to use digital
data to support personalisation of services, allow agile redesign pro-
cesses on the fly and increase individual accountability for behaviour?
The implications for businesses are and will continue to be substantial.

2.4 Takeaway
Organisations face many challenges as they seek to reinvent themselves to
compete in an increasingly digital world. The introduction of digital tech-
nologies across organisations opens opportunities to design new kinds of
18 Alan W. Brown
products and services, produce them using optimised processes, deliver
them in new ways, obtain fresh insights into their impact in use and build
more intimate relationships with consumers. However, as highlighted in this
chapter, successful digital transformation requires attention to several areas:
(i) creating a narrative that is meaningful to the whole organisation, which
emphasises why change is essential and engenders support from key constit-
uencies for a maintained focus on digital transformation; (ii) establishing an
appropriate alignment between technology-led pressures to digitise existing
practices and business-led pressures to design new business models to sup-
port new ways of working; (iii) encouraging meaningful dialogue about the
organisation’s role in a post-pandemic world and its responses to new sets
of values that prioritise responsibility, resilience and sustainability for the
benefit of all. How each organisation addresses these areas will determine
their success in exploiting the opportunities and dealing with the challenges
imposed by a digital world.

Acknowledgement
This work was partially supported by UK Research Grant: EP/T022566/21.

References
Brynjolfsson, E. and McAfee, A. 2016. The Second Machine Age: Work, Progress,
and Prosperity in a Time of Brilliant Technologies. New York: W.W. Norton
and Co.
Christensen, C. 1997. The Innovator’s Dilemma. Boston, MA: HBR Press.
Fitzpatrick, M. et al. 2020. The digital-led recovery from COVID-10: Five questions
for CEOs. McKinsey Digital, 20 April. Retrieved from https://www.mckinsey.
com/business-functions/mckinsey-digital/our-insights/the-digital-led-recovery-
from-covid-19-five-questions-for-ceos [Accessed January 18, 2021].
Galloway, S. 2020. Post Corona: From Crisis to Opportunity. London: Bantam Press.
Gartner. 2017. Gartner survey shows 42 percent of CEOs have begun digital busi-
ness transformation. Gartner Press Release. April 24.
Kotter, J. 2014. XLR8: Building Strategic Agility for a Faster Moving World. Boston,
MA: HBR Press.
Mazzucato, M. 2017. The Value of Everything: Making and Taking in the Global
Economy. London: Penguin Books.
McKinsey. 2015. Cracking the digital code. Retrieved from http://www.mckinsey.
com/business-functions/digital-mckinsey/our-insights/cracking-the-digital-code,
McKinsey, September 2015. [Accessed January 18, 2021].
McKinsey. 2020. How Covid-19 has pushed companies over the technology tip-
ping point. Retrieved from https://www.mckinsey.com/business-functions/
strateg y-and- cor porate-f inance/our-insights/how- covid-19-has-pushed-
companies-over-the-technology-tipping-point-and-transformed-business-forever
[Accessed January 18, 2021].
McQuivey, J. 2013. Digital Disruption: Unleashing the Next Wave of Innovation.
Amazon Publishing.
 Digital transformation 19
Perez, C. 2010. Technological Revolutions and Financial Capital. Cheltenham: Ed-
ward Elgar.
Press, G. 2019. Is AI going to be a jobs killer? Forbes, July 15, 2019. Retrieved from
https://www.forbes.com/sites/gilpress/2019/07/15/is-ai-going-to-be-a-jobs-killer-
new-reports-about-the-future-of-work/ [Accessed January 18, 2021].
Reith Lectures. 2020. The Reith Lectures with Mark Carney. BBC. Retrieved from
https://www.bbc.co.uk/programmes/b00729d9 [Accessed January 18, 2021].
Sweney, M. 2020. UK and Europe renew calls for global digital tax as US quits
talks. The Guardian, June 18. Retrieved from https://www.theguardian.com/
media/2020/jun/18/uk-europe-global-digital-tax-us-quits-talks-tech [Accessed
January 18, 2021].
Tabrizi, B., Lam, E., Girard, K. and Irvin, V. 2019. Digital transformation is
not about technology. Harvard Business Review. Retrieved from https://hbr.
org/2019/03/digital-transformation-is-not-about-technology [Accessed January
18, 2021].
UK Government. 2017. UK. Government, Digital Economy Bill Overview. Janu-
ary 2017. Retrieved from https://www.gov.uk/government/publications/digital-
economy-bill-overview [Accessed January 18, 2021].
Vial, G. 2019. Understanding digital transformation: A review and a research
agenda. Journal of Strategic Information Systems 28(2): 118–144.
World Economic Forum. 2020. COVID-19: How Digital Investments Can Help
the Recovery. Retrieved from https://www.weforum.org/agenda/2020/04/covid-
19-digital-foreign-direct-investment-economic-recovery/ [Accessed January 18,
2021].
Part 1

The transformation of
society and markets
3 Managing digital servitization
A service ecosystem perspective
David Sörhammar, Bård Tronvoll
and Christian Kowalkowski

A decade ago, the strategic focus of many incumbent industrial firms was
a transition towards servitization; a change from a product-centric to a
service-based business model. However, instead, it is digitalisation that is
driving current business development and business transformations, which
has resulted in many incumbents making major strategic investments in
artificial intelligence and cloud-based platforms, for example. A frequent
problem is that, despite all this investment, these digital solutions often do
not meet management’s expectations. This is exemplified by General Elec-
tric’s (GE) problems with Predix, its digital platform. The initiative was
touted as a revolutionary driving force for Industry 4.0. According to GE’s
previous CEO, the initiative would make them one of the top ten software
companies by 2020. Instead, the multibillion investment failed due to var-
ious factors, such as technical complexity and organisational resistance,
which forced GE to spin it off. This highlights the difficulties that can be
experienced by an incumbent industrial firm when implementing digital
technology.
Nevertheless, in most industries across the world interest in “going dig-
ital” has intensified. The expectation is often of a single supplier that will
be the central systems integrator and integrate products and services into a
single unifying digital interface and link it to multiple actors through weak
and strong relationships. Whether this depends on whether the company
is an established manufacturer or a software company that is new to the
industry is often unclear. Many incumbent firms fear that one of the digital
giants, such as Amazon, will enter their market, become central and reshape
the market. However, one of the consequences of incorporating increasingly
advanced digital technologies is convergence among previously distinct in-
dustries. Traditional industrial boundaries become blurred, and new value
configurations emerge, which changes market positions. For example, the
leading international maritime industry standardisation organisation re-
sponsible for annual inspections, with which all vessels either at sea or in
dry-dock are required to comply, recently launched its own predictive main-
tenance digital service solution.

DOI: 10.4324/9781003111245-3
24 David Sörhammar et al.
What is clear is that many firms have no clear roadmap or goals related
to their digital journey. In their efforts to go digital, many companies place
too big a focus on new digital initiatives without understanding what their
benefits will be for their customers. Instead of creating compelling offer-
ings, based on improved customer performance, companies are providing
services free of charge, hoping that the customer will recognise the value
of these digital services and be willing to pay for them. Such a technology-
centric approach creates problems. As the installed base grows, so does the
cost of collecting, storing and managing the incoming data. It becomes in-
creasingly difficult to defend this business model if it is not compensated by
increases in sales of services. Providing the service free of charge reduces
the perceived value of the service, which makes it difficult to persuade the
customer to pay for it when, previously, it was free. Also, most customers
lack the time and ability to interpret and act on the information, which re-
sults in many free services going unused.
An important aspect of digitalisation is that it produces data, which many
argue is “the new oil.” Like oil, data are a resource that can be utilised,
for example, for automation, artificial intelligence and predictive analysis.
In order to master this new “natural resource,” we argue that incumbent
firms must manage digitalisation and servitization. Thus, digitalisation
and servitization should be considered two sides of the same coin of digital
servitization.
In this chapter, we argue that, in the absence of a clear management
focus on how data will create value for customers, an incumbent firm’s
digital servitization journey will fail. We also argue that this journey
goes beyond the individual firm and encompasses integrating resources
among actors embedded within larger structures that form part of the
service ecosystem (Vargo and Lusch 2016). Here, we stress the managerial
need to enable established “analogue” business relationships to migrate
to digital solutions and not to focus only on establishing new business
relationships.
This chapter shows how incumbent firms’ digital servitization jour-
neys are enabled and hindered by the service ecosystem in which they
are embedded, through a network of established and new or somewhat
weak business relationships. We build especially on three published pa-
pers (Sklyar et al. 2019a, 2019b; Tronvoll et al. 2020) and argue that digital
servitization requires the firm to adjust its resource integration pattern,
consisting of a combination of strong and weak business relationships.
Too strong a focus on creating new links to digital actors, such as plat-
form providers, and cutting links to previously important suppliers, can
be disastrous. Finally, we argue that digitisation requires firms to become
more, not less, customer-centric than previously. A better understanding
of these aspects would both benefit individual firms and increase the com-
petitiveness of a network consisting of strong and weak relationships more
generally.
 Managing digital servitization 25
3.1 What is digital servitization?
In the business world and business studies, there is a growing emphasis on
digitisation, which, essentially, means transforming analogue into digital,
for example, when the music industry changed from selling long-playing re-
cords to selling CDs. Currently, it would be difficult to find any firm that
had no digital presence. This is resulting in digitisation rapidly becoming
commoditised. To succeed in the market, firms must master digitalisation,
which is significantly broader than the activities that convert analogue to
digital and includes the sociotechnical structures and processes that ac-
company digitisation (Lusch and Nambisan 2015). Digital servitization, as
in utilisation of digital technologies for the transformational processes in-
volved in changing a product-centric to a service-centric business model,
provides new digital opportunities (Sklyar et al. 2019b). Acquisition of
data, such as customer insights, is a necessary but not sufficient condition
for digital servitization. Data are an enabler allowing firms to make major
business improvements by finding new ways to provide value-creating and
revenue-generating opportunities by co-creating new (digitalised) service
offerings to their customers; from back-office efficiency to reconfigured pro-
duction, distribution and service operations (Sklyar et al. 2019b). Data also
allow firms to compete in increasingly complex markets.

3.2 Towards digital servitization

Our research shows (Sklyar et al. 2019a, 2019b; Tronvoll et al. 2020) that, to
enable a transition towards digital servitization, an incumbent firm must
address and overcome internal and external resistance. Internal resistance
may be related to fears about a competency trap. To harness the potential
of digital servitization, the firm requires new competencies, which, in turn,
may require the recruitment of new data-savvy employees. This can lead to
a distinction between traditional service employees with contextual skills
and competencies and new employees with technical competencies. There is
a danger that management will come to rely too heavily on technical skills
and downplay contextual skills. This can create fears about unemployment
among employees with contextual skills, which can feed resistance within
the organisation. For example, if an engineering/mechanical-driven com-
pany with long-standing industry skills begins to recruit data analysts with
statistical skills, the loss of contextual knowledge can reduce the firm’s abil-
ity to deliver services. The transition towards digital servitization requires
a combination of technical and contextual skills; neither type, on its own,
is enough.
Another source of internal resistance is the different sales focus. Tradi-
tionally, incumbent firms formulate budgets and annual sales targets based
on sales of physical goods such as a paper mill or aircraft engines. For ex-
ample, they sell services as additions to these physical goods in the form of
26 David Sörhammar et al.
maintenance or spare parts. A digital servitization focus reverses the roles of
goods and services. The objective becomes to sell service contracts, related
to predictive maintenance or uptime. These contracts may include relevant
machines. This changes the revenue stream from a majority of upfront pay-
ments from the sale of machines, to a steady revenue stream spread over a
number of years. The change from products to services can produce internal
resistance from sales representatives who can foresee their changing annual
reward structures. Another source of resistance comes from the change of
focus from hardware to software in R&D departments. In Tronvoll et al.’s
(2020) study, the firm had to rewrite job descriptions and change the job
locations of numerous employees in order to manage the internal resistance.
This might be considered an extreme example, but the firm’s management
believed that the adjustment towards digital servitization required such a
radical change.

3.3 Service ecosystem perspective on digital servitization

Data on customers’ use (e.g., actual usage of an engine) are essential for
creating new digital servitized offerings. To create and deliver digital ser-
vitization offerings, such as remote monitoring and software customisation,
means that machines, technologies and other resources, previously consid-
ered operand resources (traditionally considered physical resources such as
natural resources, which cannot act on their own but are perceived as facil-
itators or enablers), are increasingly capable of adjusting to their environ-
ment as operant resources (traditionally considered to be human resources
able to take the initiative and act on their own) in value creation (Akaka
and Vargo 2014). From this perspective, data become a resource when they
are exchanged, integrated and used by any number of actors within a re-
mote service offering. At the same time, digital technologies have become
smarter, incorporate more human-like capabilities and, increasingly, are
able to act without human intervention (Maglio and Lim 2018). Consider-
ing technology as an operant resource allows the incumbent firm to extend
its ability to reconfigure its resources to integrate into their service offer-
ings, for example, information technology’s capacity to enable and facilitate
knowledge sharing and coordination (Nambisan 2013).
Traditionally, many incumbent firms are organised in silos, with each de-
partment responsible for its own budget. Here, we argue that data, which
are harvested and stored in a cloud and not used, are a cost rather than a
resource, because their value emerges only in their use. Compared to other
types of resources, data can be reused and spread without losing their value;
in fact, paradoxically, they gain in value from being used by many. To reap
the benefits of digital servitization involves recognising that the marginal
cost of making already-collected data available to other internal and ex-
ternal actors is close to zero. Gaining value out of data, thereby enabling
the transition to digital servitization, requires breaking the silo mentality
 Managing digital servitization 27
within an organisation and enabling other departments to use already col-
lected data. It shows, also, that this transition process must permeate the
whole firm and beyond.
Digital servitization entails boundary-spanning activities, such as col-
laboration with internal and external actors (customers, data cloud sup-
pliers etc.), in order to create digital service offerings. A fruitful context
and unit of analysis for digital servitization become the service ecosystem,
which offers a multi-actor, systems view of value co-creation, emphasising
the integration of resources. A service ecosystem can be defined as a “rel-
atively self-contained, self-adjusting system of resource integrating actors
connected by shared institutional arrangements and mutual value creation
through service exchange” (Lusch and Vargo 2016: 161). This perspective
adopts a systemic, dynamic and contextual understanding of resources and
their use, in which the value of a resource depends on how it is integrated
with other resources and on how that integration is perceived by the bene-
ficiary (Tronvoll 2017). To sustain an ecosystem over time requires the ac-
tors to give permission for the integration of resources through exchanges.
Each time an actor integrates resources, it is likely to learn, which makes
each iteration slightly different. Thus, resource integration involves incre-
mental changes to the involved actors and their perception of operand and
operant resources (Kowalkowski et al. 2012); these changes can be under-
stood as structural adjustments (Evans 1989), which render the ecosystem
self-adjusting. However, radical changes are a more direct concern for in-
cumbent firms seeking to adjust resource integration patterns in the service
ecosystem towards digital servitization.
Resource integration is not accidental; rather, institutions coordinate how
resources are integrated (Edvardsson et al. 2014) by specifying “the rules of
the game” (North 1990: 4). An institution is “any structure or mechanism of
social order and cooperation governing the behavior of a set of individuals
within a given human community” (Miller 2014: 514). The role of institu-
tions, then, is to provide guidelines for action and to prohibit or constrain
certain activities and interactions among the engaged actors. Institutions
rarely act in isolation but tend to operate as nested and interrelated sets of
institutions (institutional arrangements) that govern the actors (Lawrence
and Suddaby 2006), by, for instance, constraining and enabling resource
integration. Institutional arrangements are manifested through both formal
constraints, such as rules and laws, and informal constraints, such as norms
and conventions. An understanding of the institutional rules provides a ho-
listic understanding of how resource integration is coordinated in a service
ecosystem.
For an incumbent firm’s ability to adjust the needed resource integra-
tions towards digital servitization, the service ecosystem’s institutionalised
rules may prohibit change or blind the actors to potential new ways to
co-create value from the new or altered resources. To enable this requires
adjustments to the institutional arrangements for exchange. However,
28 David Sörhammar et al.
a shift in the underlying rules of the system can be problematic for any
firm and almost impossible for the individual firm. It requires alterations
to long-standing business relationships and might also necessitate new re-
lationships. Understanding these aspects is critical for understanding the
complexity of the transition towards digital servitization in service eco-
systems, since the structure drives the behaviours within the system, and
any shift in the system’s underlying rules can provide significant leverage
for change.
All business activities in a service ecosystem are linked through a process
of resource integration between some long-standing business relationships
and some newer or weaker business relationships. The long-standing busi-
ness relationships are based on a continuous exchange between the same
actors relevant to both parties. Over time, the actors learn to utilise the
heterogeneous resources of the other more effectively and more efficiently.
On the positive side, these repeated activities foster trust, enabling the
firms to adapt their internal processes and routines to better match the
other’s resources. The more they are required to adapt, the stronger
the ties between the actors (Granovetter 1973). Here incumbent firms are
likely to encounter a paradox in their pursuit of digital servitization; re-
source integrations that resulted in success in the traditional domain may
become “core rigidities” (Leonard-Barton 1992) that work to constrain
this transformation. This is the negative side to strong ties. They become
institutionalised rules that determine which resources it would be valuable
to integrate and how best to integrate them, which can obstruct or create
resistance, leading to “incumbent inertia” (Lieberman and Montgomery
1988) related to technology-driven change. This incumbent inertia inevita-
bly constrains structural opportunities such as the transformation towards
digital servitization.
Newer business relationships and relationships involving a low level of
activity are seen as having only a minor influence on the firm’s business
activities. These relationships take the form of weak ties between the actors
(Granovetter 1973). It is by integrating potential resources, in the absence
of predefined institutionalised arrangements regarding how they should be
integrated and their value, that firms can learn new ways to combine or
unbundle and re-bundle (Normann 2001) these potential resources into new
resource integration patterns. Thus, weak ties are important for enabling
more radical change related to establishing a new exchange relationship
with internal or external suppliers, customers or other stakeholders.
All resource integrations within a service ecosystem occur between
strongly or weakly connected actors, within a network where all the actors
are linked to a number of strong and weak resource-integrating actors.
This means that all the actors in the ecosystem are dependent on the re-
sources controlled by other actors – both for their own strategic benefit and
for the viability of the ecosystem as a whole. Taken together, these strong
and weak ties form resource-integrating patterns in the service ecosystem,
 Managing digital servitization 29
and, in turn, these patterns enable the formation of the institutional ar-
rangements, which facilitate and coordinate resource access and create
behaviours. The firm can adjust the institutional arrangements towards
digital servitization by changing the strength of its resource integration
relationships.

3.4 Managing a transition towards digital servitization

An important aspect of digital servitization is that its execution requires
more actors than the individual firm. For example, remote monitoring
of internal and external product conditions requires user data to be fed
into the firm’s service operation. This, in turn, often requires the firm
forging relationships with actors new to the industry. Research shows sev-
eral new forms of collaboration, including partnerships with data cloud
and digital platform suppliers (Sklyar et al. 2019a). An incumbent firm
also has numerous well-established relationships with suppliers and cus-
tomers. Suppliers that previously had a low impact on service delivery
might now become more important, and vice versa. This might be due
to data analysis of customers’ machine usage that reveals that a tiny and
standardised part decreases its life significantly. Then, modification to
that specific part would be beneficial for all suppliers. However, asking
a strongly or weakly linked supplier to undertake product development
that will lead to lower sales of its product is likely to be met with some
resistance. The solution might be that the firm and the supplier embark on
a joint R&D project to resolve the issue. It can be seen that every change
to the strength of a specific relationship has an overarching effect on all of
the firm’s relationships.
Digitalisation of the service operation also creates a situation where some
established relationships may be less relevant or not relevant at all. This
could apply to a firm with a customer who loses huge amounts of money
every time the machine is down, such as a drill on an offshore oil platform.
In this case, service speed is crucial and includes transportation to the facil-
ity. In these situations, strong relationships with transportation companies,
car rental firms, airlines, helicopter owners and so on are vital for rapid
service delivery. However, if most services can be managed at a distance,
this will affect the relationships with transportation companies, which are
likely to weaken.
According to this logic, to enable digital servitization, an incumbent firm
must reconfigure its structure of strong and weak ties. It might be tempting
to reduce stronger relationships and interact only with weakly connected
or new, previously unrelated, actors since strong ties are embedded in the
old, institutionalised contextual knowledge of how to integrate resources
efficiently and effectively. In the case of weak ties, where institutionalised
rules of exchange are less well established, they allow for more radical ways
to integrate resources. Weakly linked actors can see the operant properties
30 David Sörhammar et al.
of new technologies – that is, as resources that produce effects – whereas
strongly linked incumbent firms tend to perceive these technologies as op-
erand resources to be acted on (Lusch and Nambisan 2015). We agree that
technologies and its value are socially constructed (Orlikowski 1992) by the
institutional rules within the ecosystem.
However, creating a new digital solution with the help of weakly linked
actors and offering it only to new customers is a high-risk venture and
means that the firm has no established ways of integrating resources and
no customer insights. Inability to overcome these hurdles might be one rea-
son why many incumbent firms retain their established relationships. For
example, although Kodak invented the digital camera in 1975, it did not
exploit its innovation. Instead, it continued to work on perfecting the pro-
cess of developing physical film. Actors, such as Apple, with weak links to
the photographic industry, but who gained contextual insights from digital
technologies, exploited this development, which disrupted and reshaped the
industry. Our research suggests that for a firm to transform towards digital
servitization it requires adjustment to the firm’s institutional arrangements
in the service ecosystem, which is not an easy task.
We use an example from Sklyar et al. (2019b) to show how digital serviti-
zation transformation can be managed. The firm started by formulating a
strategic intent, which was formalised within the organisation in a white
paper co-authored by several managers at different hierarchical levels. This
white paper set out how the future would look for the industry, but worked,
also, as a game plan for the firm transformation needed to achieve that fu-
ture. The next step was developing a holistic understanding of the adjust-
ments needed to its resource integration patterns in order to implement the
plan. This included finding ways to adjust the structure of their weak and
strong links. It required a clear intent (the white paper) for the firm to un-
derstand the service ecosystem’s underlying institutional arrangements and
allow it to overcome core rigidities and enable digital servitization. This
strategic intent also allowed the firm to forge some new relationships with
digital platform providers and data analytics actors, which, previously, were
external to the service ecosystem. Insights and positive examples from these
previously perceived weak or absent relationships provided an understand-
ing of the concrete ways in which the firm could provide value to customers
better than through its long-established relationships. In turn, this allowed
the firm to overcome core rigidities and alter the content of these relation-
ships. It was crucial for the transformation that these strong ties could be al-
tered; without this possibility, the digital service transformation would have
been unsuccessful. Hence, a strategy based on changing the institutional
arrangement of the ecosystem is needed for the firm to achieve a transi-
tion towards digital servitization. However, this rarely requires abandon-
ing all strong relationships. Rather, a greater focus should be on adjusting
the meanings of certain resources and resource practices within established
relationships.
 Managing digital servitization 31
3.5 Takeaway
We argue that the transition towards digital servitization requires a pur-
poseful and coordinated effort to manage the firm’s strong and weak ties in
the service ecosystem. There may be a need to create new relationships or
strengthen existing weak relationships, especially with technical firms, such
as cloud suppliers or digital platform developers. However, it is imperative
that incumbent firms recognise that going digital does not mean that they
can cut all of their strong links; they need to investigate which will continue
to be important for creating value to their customers. Otherwise, the firm
risks becoming data-driven but lacking any contextual competence, knowl-
edge or skills critically needed to solve customers’ problems. Therefore, a
digital servitization transformation requires maintaining a balance between
weak and strong relationships linked to value creation for customers and
other key stakeholders in the ecosystem.

References
Akaka, M. and Vargo S. (2014). Technology as an operant resource in service (eco)
systems. Information Systems and e-Business Management 12(3): 367–384.
Edvardsson, B., Kleinaltenkamp, M., Tronvoll, B., McHugh, P. and Windahl, C.
(2014). Institutional logics matter when coordinating resource integration. Mar-
keting Theory 14(3): 291–309.
Evans, P. (1989). The state as problem and solution: Predation, embedded au-
tonomy, and structural change. In The State: Concepts in the Social Sciences,
Hall, J.A. and Ikenberry G.J. (eds). Milton Keynes: Open University Press:
386–423.
Granovetter, M. (1973). The strength of weak ties. The American Journal of Sociol-
ogy 78(6): 1360–1380.
Kleinaltenkamp, M., Brodie, R.J., Frow, P., Hughes, T., Peters, L.D. and Worat-
schek, H. (2012). Resource integration. Marketing Theory 12(2): 201–205.
Kowalkowski, C., Persson Ridell, O., Röndell, J.G. and Sörhammar, D. (2012). The
co-creative practice of forming a value proposition. Journal of Marketing Man-
agement 28(13–14): 1553–1570.
Lawrence, T.B. and Suddaby, R. (2006). Institutions and institutional work. In
Handbook of Organization Studies (2nd ed.), Clegg, S.R., Hardy, C., Lawrence,
T.B. and Nord, W.R. (eds). London: Sage: 215–254.
Leonard-Barton, D. (1992). Core capabilities and core rigidities: A paradox in man-
aging new product development. Strategic Management Journal 13(1): 111–125.
Lieberman, M.B. and Montgomery, D.B. (1988). First-mover advantages. Strategic
Management Journal 9(1): 41–58.
Lusch, R.F. and Nambisan, S. (2015). Service innovation: A service-dominant logic
perspective. Management Information Systems Quarterly 39(1): 155–175.
Maglio, P.P. and Lim, C. (2018). Innovation and smart service systems. In A Re-
search Agenda for Service Innovation, Gallouj F. and Djellal F. (eds). Northamp-
ton, MA: Edward Elgar Publishing: 103–115.
Miller, S. (2014). Social institutions. In The Stanford Encyclopedia of Philosophy,
Zalta, E. (ed.). Stanford, CA: Stanford University Press: 514–518.
32 David Sörhammar et al.
Nambisan, S. (2013). Information technology and product/service innovation: A
brief assessment and some suggestions for future research. Journal of the Associ-
ation for Information Systems 14(4): 215–226.
Normann, R. (2001). Reframing Business: When the Map Changes the Landscape.
New York, NY: John Wiley and Sons.
North, D.C. (1990). Institutions, Institutional Change and Economic Performance.
New York, NY: Cambridge University Press.
Orlikowski, W.J. (1992). The duality of technology: Rethinking of the concept of
technology in organizations. Organization Science 3(3): 398–427.
Scott, W.R. (2008). Institutions and Organizations: Ideas and Interests (3rd ed.).
Thousand Oaks, CA: Sage.
Sklyar, A., Kowalkowski, C., Sörhammar, D. and Tronvoll, B. (2019a). Resource
integration through digitalisation: A service ecosystem perspective. Journal of
Marketing Management 35(11–12): 974–991.
Sklyar, A., Kowalkowski, C., Tronvoll, B. and Sörhammar, D. (2019b). Organizing
for digital servitization: A service ecosystem perspective. Journal of Business Re-
search 104: 450–460.
Tronvoll, B. (2017). The actor: The key determinator in service ecosystems. Systems
5(2): 38.
Tronvoll, B., Sklyar, A., Sörhammar, D. and Kowalkowski, C. (2020). Transforma-
tional shifts through digital servitization. Industrial Marketing Management 89:
293–305.
Vargo, S.L. and Lusch, R.F. (2016). Institutions and axioms: An extension and up-
date of service-dominant logic. Journal of the Academy of Marketing Science
44(1): 5–23.
4 Caught on the platform or
jumping onto the digital train
Challenges for industries
lagging behind in digitalisation
Peter Ekman, Magnus Berglind
and Steven Thompson

Digitalisation has reshaped the business landscape such that many indus-
tries are now characterised by high degrees of connectivity, automation and
interactivity. While some sectors, such as the media, music and gaming in-
dustries, are almost fully digitalised, others, such as construction and real
estate, are lagging behind. This chapter aims to identify the factors that
cause digitalisation lags in some industries. The discussion focuses primar-
ily on the commercial real estate sector and includes firms that own, de-
velop, maintain and lease commercial property. The commercial real estate
industry is financially strong but, historically, conservative with respect to
adopting new technologies and systems to support operations (Ekman et al.
2021) and is a good case to study the phenomenon of digitalisation inertia.
In this chapter, we discuss the features of this industry that are observable
in other less digitalised industries and discuss their impact on technology
adoption. We offer some suggestions for future research to better under-
stand the phenomenon of industry-wide delayed digitalisation.

4.1 Waves of digitalisation

The effect on the business landscape of implementation of Information
Technology (IT) and its transformative effects on many industries have
been the subject of research for several decades. Some industries were early
adopters of IT; in others, its effects have been less profound. In fact, it is
possible to identify “waves” of digitally driven market changes which have
had impacts on various industries over time. For example, the organisa-
tional effects of business process reengineering (Hammer 1990) and just-
in-time and lean production supported by Enterprise Resource Planning
(ERP) systems (Davenport 2000) began to be felt in the manufacturing and
production industries in the late 1970s while the transformative effects of
e-commerce emerged in the retail sector in the late 1990s and the early 21st
century (Srinivasan et al. 2002). Over the past decade, search engines such as
Google and social media platforms such as Facebook and Instagram have
transformed the advertising and communications functions in a number of

DOI: 10.4324/9781003111245-4
34 Peter Ekman et al.
different industries (Buzeta et al. 2020). These consecutive waves of tech-
nology disruption and rapid emergence of the Internet of Things (IoT) and
artificial intelligence (Jeyaraj and Zadeh 2020) are forcing business leaders
to continuously evaluate their IT strategies and address the far-from-simple
question of “What should we do?”
In his famous and hotly debated Harvard Business Review article, entitled
“IT doesn’t matter,” which was written shortly after the burst of the dot.com
bubble, Nicholas Carr (2003) recommended firms to “follow, don’t lead” in
the context of investment in and utilisation of IT. His basic argument was
that IT had become a commodity and firms should wait for the emergence
of standardised solutions rather than searching for digital innovations. The
logic was that IT innovation was expensive and, since technology can be
copied easily, IT offered no long-term competitive advantage. This resulted
in a widespread belief that IT was a necessary cost but one that did not add
value to the business. IT expenditure was considered overhead expenditure,
and some organisations set limits on its extent; even large industrial firms
limited IT costs at the expense of market adaptivity (Ekman et al. 2020).
The increased availability of commercial off-the-shelf solutions that fol-
lowed predefined standards led to the diffusion of information systems that
handled both internal and external processes. These systems were initially
designed to support office administration; later, large-scale ERP systems
digitised operational business processes across entire organisations. Over
time, other business functions such as customer relationship management
and customer self-service were digitised. More recently, organisations have
acquired the skills needed to exploit software as a service, platform as a
service and infrastructure as a service solution (Mohamed and Pillutla
2014). These so-called cloud solutions help organisations to minimise the
costs associated with buying, maintaining and protecting the IT and sys-
tems needed to conduct business. In many industries, today’s business firms
bear no resemblance to their 1980s’ counterparts. However, not all indus-
tries have been able to benefit fully from these transformations, and, in this
chapter, we elaborate the factors that have caused the commercial real estate
industry to lag behind many other industries with respect to digitalisation.
While many industries have been fundamentally transformed and are
benefiting from connected and integrated information systems, spanning
both the supplier and customer sides and supporting most major business
processes, some industries have been left behind. They have been left on the
platform, watching the digitalisation train leaving the station. So why did
some of these industries not jump aboard the train? Our research shows that
there are at least four reasons for their being left behind: (1) the persistence
of siloed IT systems (i.e., data are not shared), (2) lack of de facto data stand-
ards, (3) paucity of large dedicated software suppliers and (4) widespread
use of firm-specific IT solutions.
There tend to be three steps involved in the journey to adoption of digitali-
sation, which, as they become more technologically intensive, most industries
 Industries lagging in digitalisation 35
follow sequentially. The first step entails digitising of all vital activities, which
makes it possible to save, extract and analyse data related to all core business
processes. The second step is to integrate and manage the data gathered as
a result of completing the first step. Data integration enables firms to assess
the impact of the performance of one business function on other areas of
the business, for example, the ability to answer questions such as “how does
poor supply chain management influence customer retention?” The third
step involves the firm’s ability to utilise IT to make strategic and operational
transformations to the business. To a large extent, the commercial real estate
industry has achieved the first step; most new buildings are equipped with
technology that generates large amounts of operational data. However, there
are few instances of data integration and even fewer of IT use to transform
operations, support managerial decision-making and make strategic changes.

4.2 What delays industry digitalisation?

The above discussion provides some background information on the evolu-
tion of IT and digitalisation of the firms in many industries. However, some
industries are less technologically sophisticated; diffusion of digital inno-
vation in these sectors is slower and is being hampered by both internal or-
ganisational factors and market factors. The barriers to their digitalisation
fall into two broad categories: (1) an ill-fitting business logic and (2) market
complexity. Table 4.1 summarises these aspects which are discussed in more
detail in the succeeding sections.

Table 4.1 Industrial digitalisation barriers

Barrier Aspect Example

Poor Non-generic Real estate companies tend to have small numbers

business company of employees but substantial financial assets; that
logic fit structure is, in terms of employee numbers they are similar
to medium-sized enterprises, but in terms of
market value they resemble large enterprises.
Discontinuous Design, construction and maintenance phases of
value chain buildings (i.e., facilities) are separate activities
performed by completely different organisations.
Structural Modern buildings conform to current regulatory
efficiency standards.
Complex Infrastructural Many buildings are old and conform to earlier, not
market legacy current regulatory standards.
Immature Lagging IT developments means there is a lack
suppliers of software options and mature technology
suppliers.
End-user The landlord (facilities owner) is the knowledge
characteristics holder; individual tenants may be unaware of the
opportunities for improvement or the benefits
that process digitalisation might provide.
36 Peter Ekman et al.
4.2.1 Poor business logic fit
Business logic fit depends on the industry’s organisational and industry
characteristics. In the case of the commercial real estate sector, each firm
is distinct from its competitors because it is defined by its specific real es-
tate assets. This results in a non-generic company structure. The real estate
industry is based on the principle of an asset manager (landlord) who man-
ages the asset (the facility and its surroundings) and other actors (tenants)
who lease the rights to use the facility. Thus, it involves the management
of a physical building and its use, in return for a payment, by others for
their own business purposes. As a result, the commercial real estate is more
rigidly controlled and contract-based compared to other industries that in-
volve dynamic practices such as upselling and cross-selling. Also, buildings
are immobile, fixed assets, and concepts such as product lifecycle are irrel-
evant (Poleg 2020).
Traditionally, investing in facilities has been considered a safe invest-
ment, and insurance companies, pension funds and alternative investment
funds deposit large portions of their financial holdings in direct ownership
of real estate. Commercial real estate companies’ annual reports show that
their business is capital-intensive and show, also, that investment proper-
ties are often highly leveraged, although the investors benefit from reduced
risks related to certain other aspects. For example, commercial real estate
companies do not have high inventory costs, require minimal administra-
tive staff and have little need for investment in R&D. The small number of
staff members include technicians and engineers, who focus on maintain-
ing the property, and customer support and marketing/sales personnel who
deal directly with current and prospective tenants. For example, in 2018, one
of Sweden’s largest commercial real estate companies had turnover of more
than €600 million and a property portfolio valued at approximately €15 bil-
lion, but had only around 300 employees. In contrast, the Swedish subsidi-
ary of the pharmaceutical company, AstraZeneca, had only a slightly higher
turnover but had almost 6,000 employees. Thus, real estate companies tend
to be capital-resource-intensive but require minimal human resources. This
factor, along with minimal inventory, little or no R&D costs and assets with
extremely long product lifecycles, makes the commercial real estate industry
atypical compared to most other industries. These differences likely explain
why commercial real estate companies cannot exploit standardised solutions
and why large IT suppliers have not prioritised the commercial real estate in-
dustry. Also, as Kytömäki (2020) highlights, property companies often have
limited business development resources and find digitalisation projects and
change management problematic, which discourages digitalisation efforts.
The second characteristic of an ill-fitting business logic is what we call a
broken value-chain, which characterises the commercial real estate industry
and results from differences between the construction and facilities manage-
ment processes. The first break occurs in the building planning phase; the
 Industries lagging in digitalisation 37
building construction process is completely separate from how the build-
ing ultimately is used. Most real estate companies have only a sketchy idea
about what the building will be used for, and, over the building’s lifetime,
this use will almost certainly change. Buildings are designed by architects,
who are given guidelines about the eventual use of the property, which they
try to match to a location. The construction of the building is in the hands of
a construction company that subcontracts to various suppliers to complete
the building. Therefore, the construction process is a relatively short epi-
sode in the building’s lifecycle. The completed building is handed over to the
property owner. Use of IT and data during building construction is focused,
primarily, on ensuring the building meets statutory and national regula-
tion and satisfies voluntary sustainability certifications. For example, many
real estate companies strive to exceed current environmental requirements
to ensure that ongoing operations are cost-efficient and environmentally
friendly by obtaining both national and international voluntary environ-
mental certification. The main international buildings certifications are the
UK BREEAM (Building Research Establishment Environmental Assess-
ment Method) and the US LEED (Leadership in Energy and Environmental
Design). Both BREEAM and LEED are related to energy efficiency related
to the building’s expected use and energy use and involve an energy rating
(e.g., platinum, gold or silver). Subsequent recertification is based on consid-
eration of changes in annual average temperatures compared to historical
averages, actual use of the building compared to expected use and actual
number of tenants compared to expected numbers of tenants. Essentially,
simulations, conducted using building information modelling software,
provide a set of expectations, and, after a certain number of years, accredi-
tation bodies compare these expectations with real data and, in a somewhat
ad hoc manner, determine whether the structure meets energy efficiency
guidelines based on tenants’ usage.
The process used to evaluate the performance of a building might seem
rudimentary compared to more technologically advanced industries where
evaluations are based on operational data, gathered and analysed in real
time, and where the results affect organisational operations as soon as they
become available. However, it is difficult to predict how the property will
be used by its tenants or the impact on energy use of the temperature set
by the tenant, the weather and other external factors such as availability
of different sources of energy. Given all these uncertainties, commercial
real estate firms opt for low-tech, retrospective analysis of building perfor-
mance, which provides little incentive to invest in sophisticated technology
and software to enable real-time monitoring and intervention.
In other industries, the product supplier will continue to assist the cus-
tomer with offers of complementary services. For example, car dealerships
offer extended warranties and automobile service deals. However, those
complementary services are not offered by the construction companies
that serve the real estate industry. In this case, the interaction between the
38 Peter Ekman et al.
construction company and the real estate firm is minimal once the building
has been completed and handed over. Renovations to the building are not
likely to be needed for several decades and may not be conducted by the
original construction company. Thus, there are few incentives for construc-
tion companies to keep track of the building’s performance beyond what
is required by the statutory guidelines in place at the time of construction.
The third characteristic of a poor business logic fit is the presence of
structural efficiency. Manufacturing firms strive for operational efficiency
by optimising their production processes. This involves extensive use of IT
to monitor output and quality and to minimise waste and underutilisation
of resources. However, once constructed, buildings require minimal moni-
toring and assessment. While manufacturing firms must focus on producing
a certain output of a specific quality, buildings are designed to accommo-
date a certain number of people and to meet specific indoor quality meas-
urements. Therefore, provided the building’s tenants do not diverge from
the agreed use and occupancy of the building, it is likely to meet their effi-
ciency requirements in perpetuity. Given the static nature of buildings and
their ability to meet tenant expectations over long periods of time without
renovations or other interventions, collection, storage and analysis of large
amounts of data are not a priority. As a result, facilities management re-
search related to digitalisation makes little reference to analysis of big data
(Bröchner et al. 2019). The inherent structural efficiency of buildings and
their persistence over time are disincentives for investment in IT.

4.2.2 Complex market

The second barrier to industry transformation through digitalisation is market
complexity. The first dimension to this is the legacy infrastructure. Buildings
are expected to persist for several decades. Over the lifetime of the structure it
may house different types and numbers of tenants, who use it for different pur-
poses, for example, as professional office space, warehouse or storage space,
as a manufacturing facility or as a server farm. The use and market value of
a building are also affected by developments that occur in its location. As a
result, large commercial real estate companies engage in what they describe
as “urban development.” Attracting other high-end landlords and tenants to a
location can increase the value (or yield) of an asset (building), whereas reloca-
tion of other business to other areas can reduce the asset’s value.
The decision to change the building’s technological infrastructure or
carry out renovations will depend on developments in the building’s loca-
tion. Real estate companies that manage several buildings with different
infrastructure legacies will be unable to implement a common information
system. For example, buildings in large cities such as Stockholm, Sweden’s
capital city, are updated frequently with new technologies or retrofitted to
enable technology and data integration.
The second dimension of market complexity is the number of IT suppliers
offering standardised software. Software standards are important because
 Industries lagging in digitalisation 39
they allow digitalisation of business processes and subsequent integration
of data to support operational and analytical initiatives. In the case of com-
mercial real estate, most software is offered by what can be best described
as immature suppliers, that is, young, entrepreneurial companies without a
large customer base. These suppliers of software and IT solutions for the real
estate sector are known in the industry as PropTechs or property technology
companies (Kirk 2019). However, the property IT supplier landscape is frag-
mented and includes a patchwork of small firms and no de facto standards
to enable system integration similar to that achieved in other industries.
The third dimension of market complexity is end-user characteristics.
Industry-wide change can result from both push and pull effects; that is, the
change might be due to new supplier offerings or might be the result of cus-
tomer demand. In the case of commercial real estate, customer management
resembles the type of customer exchanges typical of the utilities industries
such as electricity and Internet services. The building is considered by its
owner and tenants to be a value in itself, resulting in the real estate company
focusing, primarily, on facilities management and much less on added value
and customer care (Anker and van der Voordt 2017). Also, compared to
users in other industries, building end-users’ expectations are low. A build-
ing’s indoor climate is dictated by national regulation; the interior design
and structural features of the building tend to be related to the location and
cost of leasing the facility. Building services tend to be related, mainly, to
correcting building faults, for example, replacing broken windows.
The characteristics of the commercial real estate industry’s end-users
have been studied in relation to their energy use and interest in energy man-
agement systems. Strengers (2014: 24) article refers to “Resource Man” who

is interested in his own energy data, understands it, and wants to use
it to change the way he uses energy. He responds rationally to price
signals and makes informed decisions based on up-to-date and detailed
data…. He is both in control of his energy consumption and assigns this
control to technologies to manage on his behalf.

Much of the research estimating tenants’ engagement in monitoring and

controlling their energy use suggests that only a few are interested in invest-
ing time in this activity. Any digitalisation related to commercial property is
the responsibility of the landlord who must decide whether adoption of new
technology and its related transformative effects will pre-empt the future
needs and expectations of tenants (Ekman et al. 2016).

4.3 Learning from laggards

This chapter discussed the case of the real estate industry and the possibility
of obtaining value from digitalisation to improve maintenance efficiency,
advance sustainability efforts and offer new services to tenants. While many
of these technological developments can be expected to follow the same
40 Peter Ekman et al.
trajectories observed in other industries (e.g., Shapiro and Varian 1999), the
commoditisation of IT, the rapid incorporation of technologies developed
in other industries and the lowered cost of data communication may result
in technological “leapfrogs” who develop transformative services that were
unthinkable in the real estate industry ten years ago. Tracing the process
behind such transformations and the affected stakeholders can reveal new
diffusion patterns and offer managerial insights on how to enable industries
with limited digitalisation benefits reach a more mature state.
In the real estate industry, digitalisation and sustainability are inseparable
(Bröchner et al. 2019). The construction and operation of buildings account
for a large part of developed countries’ energy and resources use, which makes
any large-scale improvements critical. The early adoption by a Swedish real
estate firm of real-time digital solutions allowed a 40% reduction in energy
utilisation and costs. Tenants who downloaded an app allowing them to see
their energy usage in real time achieved an additional 10% cost reduction. So-
lar Photovoltaic (PV) energy systems are an example of a technology-driven
sustainable business practice. Landlords describe the suppliers of solar PV
systems as diffusing new knowledge in the market and providing tenants with
information about energy generation. Some landlords are introducing “green
leases” and involving use of technology to increase sustainability (Ekman
et al. 2016; Hinnells et al. 2008). Also, real estate companies are facing increas-
ing pressure from governments, the financial market and their own tenants
to reduce carbon emissions, which is requiring landlords to collect the neces-
sary information. Some smart solutions, related to building security and car
parking facilities, are increasing both environmental sustainability and social
well-being (Atkin and Brooks 2015; Al-Turjman and Malekloo 2019).
However, it is important that the hype surrounding digitalisation should
not deter real estate industry firms from pursuing lower-cost changes, such
as upgrading of physical infrastructure or changed practices, which also
provide value. For example, while a smart indoor climate control system can
maintain a comfortable inside temperature at low-cost, the low-carbon al-
ternative might be a less strictly controlled indoor and a more relaxed dress
code, for example, allowing office workers to wear shorts during heat-waves
or encouraging them to wear warm clothes in the winter. Understanding
the benefits, challenges and risks related to sustainability and digitalisation
needs more investigation in the context of industries that are lagging in their
digitalisation efforts.
Finally, industry digitalisation should be examined from a holistic per-
spective. Different industries will require different solutions. Real estate
customers who digitalise their business are likely to require smaller or tem-
porary premises. Commercial real estate firms are not likely to offer digital
places for tenant work and sales. Instead, they may focus on the features
that emphasise the real-world experience over digital enhancements. In
some industries, digitalisation may provide less value or be counterproduc-
tive, socially irresponsible or environmentally undesirable. Digitalisation
 Industries lagging in digitalisation 41
raises questions about integrity, security, energy use and deskilling. In the
real estate industry, increased use of sensors, cameras and digital services
is providing landlords with increasingly varied tenant user data, highlight-
ing issues related to tenants’ privacy and data security. The infrastructure
required to collect data increases energy use and carbon footprint. While
technological advances seem inevitable, it will be difficult to digitise some
functional areas in some industries.
Further research into these aspects will require use of different theoreti-
cal lenses and analytical methods. Study designs could range from a focus
on trailblazer organisations and technological opinion leaders (i.e., micro
level), to interest groups and communities (meso level), to larger business
networks and the ecosystems that are forming in society (macro level). Po-
tential theoretical frameworks include institutional theory (Ekman et al.
2021), multilevel perspective (Geels 2011), business network theory (Ritter
et al. 2004) and service ecosystem (Sklyar et al. 2019). The plethora of un-
explored research questions could be addressed via analytical or empirical
modelling or qualitative methods.

4.4 Takeaway
While highly digitalised industries are the most frequent focus of academic
research, studying industries that lag in terms of digitalisation could provide
a more nuanced view of digital transformation. Exploring the tipping point
of digitalisation in these industries – emerging from the dominant business
logic or current market structure – could offer managerial and theoretical
insights into how companies would prosper in a digitalised world.

Acknowledgement
The work in this chapter was financed, in part, by the Swedish Energy
Agency project 44749-1 and, in part, by Eskilstuna municipality though the
project Sörmlandskontraktet.

References
Al-Turjman, F. and Malekloo, A. 2019. Smart parking in IoT-enabled cities: A sur-
vey. Sustainable Cities and Society 49. doi.org/10.1016/j.scs.2019.101608.
Anker, J.P. and van der Voordt, T. 2017. Facilities Management and Corporate Real
Estate Management as Value Drivers. London: Routledge.
Atkin, B. and Brooks, A. 2015. Total Facility Management, 4th Edition. Chichester:
Wiley.
Bröchner, J., Haugen, T. and Lindkvist, C. 2019. Shaping tomorrow’s facilities man-
agement. Facilities 37(7/8): 366–380.
Buzeta, C., De Pelsmacker, P. and Dens, N. 2020. Motivations to use different social
media types and their impact on consumers’ online brand-related activities (CO-
BRAs). Journal of Interactive Marketing 52: 79–98.
42 Peter Ekman et al.
Carr, N. 2003. IT doesn’t matter. Harvard Business Review 81(5): 41–49.
Davenport, T.H. 2000. Mission Critical: Realizing the Promise of Enterprise Sys-
tems. Boston, MA: Harvard Business Press.
Ekman, P., Raggio, R.D. and Thompson, S.M. 2016. Service network value co-
creation: Defining the roles of the generic actor. Industrial Marketing Manage-
ment 56: 51–62.
Ekman, P., Thilenius, P., Thompson, S. and Whitaker, J. 2020. Digital transfor-
mation of global business processes: The role of dual embeddedness. Business
Process Management Journal 26(2): 570–592.
Ekman, P., Röndell, J., Kowalkowski, C., Raggio, R.D. and Thompson, S.M. 2021.
Emergent market innovation: A longitudinal study of technology-driven capa-
bility development and institutional work. Journal of Business Research 124:
469–482.
Geels, F.W. (2011). The multi-level perspective on sustainability transitions: Re-
sponses to seven criticisms. Environmental Innovation and Societal Transitions
1(1): 24–40.
Hammer, M. 1990. Reengineering work: Don’t automate, obliterate. Harvard Busi-
ness Review 68(4): 104–112.
Hinnells, M., Bright, S., Langley, A., Woodford, L., Schiellerup, P. and Bosteels,
T. 2008. The greening of commercial leases. Journal of Property Investment and
Finance 26(6): 541–551.
Jeyaraj, A. and Zadeh, A.H. 2020. Evolution of information systems research: In-
sights from topic modeling. Information and Management 57(4): 103207.
Kirk, N.J. 2019. Embracing PropTech. Journal of Property Management 84(1): 32–35.
Kytömäki, O. 2020. Digitalization and Innovation in the Real Estate and Facility
Management Sectors – An Ecosystem Perspective. Licenciate thesis. Stockholm:
KTH Royal Institute of Technology.
Mohamed, M.A. and Pillutla, S. 2014. Cloud computing: A collaborative green plat-
form for the knowledge society. VINE – Journal of Information and Knowledge
Management 44: 357.
Poleg, D. 2020. Rethinking Real Estate: A Roadmap to Technology’s Impact on the
World’s Largest Asset Class. Brooklyn, NY: Palgrave Macmillan.
Ritter, T., Wilkinson, I.F. and Johnston, W.J. 2004. Managing in complex business
networks. Industrial Marketing Management 33(3): 175–183.
Shapiro, C. and Varian, H.R. 1999. The art of standards wars. California Manage-
ment Review 41(2): 8–32.
Sklyar, A., Kowalkowski, C., Tronvoll, B. and Sörhammar, D. 2019. Organizing for
digital servitization: A service ecosystem perspective. Journal of Business Re-
search 104: 450–460.
Srinivasan, S.S., Anderson, R. and Ponnavolu, K. 2002. Customer loyalty in
e-commerce: An exploration of its antecedents and consequences. Journal of
Retailing 78(1): 41–50.
Strengers, Y. 2014. Smart energy in everyday life: Are you designing for resource
man? Interactions 21(4): 24–31.
5 Digitalisation for sustainability
conceptualisation, implications
and future research directions
Elena Anastasiadou, Linda Alkire
and Jimmie Röndell

In recent years, academics and business managers alike have acknowledged

that digitalisation is not a future issue but is present and ongoing and is
transforming everyday practices. Specifically, digitalisation is causing the
most significant changes to organisations around the world, since the indus-
trial revolution (Yüksel and Sener 2017). These transformations are creating
both challenges and opportunities – for individuals, businesses and society.
Digitalisation is the use of digital technology to create value in new ways
(Gobble 2018). In this chapter, value is understood as a positive or negative
change in the well-being or viability of a particular actor/system (Vargo and
Lusch 2004) and can be manifested in various forms, for instance, in the
form of sustainability. Sustainability refers to the ability to balance social
equity, environmental protection and economic growth, which have been
described as the “triple-bottom line” (Elkington 1997). Recent major soci-
etal problems, such as climate change (Mende and Misra 2020) and service
exclusion (Fisk et al. 2018) among many others, are requiring companies to
be more efficient, to be smarter and transformative in order to have an up-
lifting sustainable impact on people, society and our planet. We argue that
digitalisation can facilitate this.
Although sustainability is attracting more attention than in the past, as
a field, it is developing more slowly than the field of digitalisation. At the
same time, the world is becoming more interconnected and technologically
controlled, but despite extant research on the use of Artificial Intelligence
(AI) and robots (e.g., Wirtz et al. 2018), we know little about their impact on
people and the planet. We also need to know more about how digitalisation
could increase sustainability. We believe that these knowledge gaps arise, in
part, because most business research in relation to value creation (e.g., sus-
tainability) based on digitalisation considers that the firm, single-handedly,
creates and delivers value to its customers. We argue that this view provides
only a limited picture of both sustainability and digitalisation as well as
their benefits because it excludes other actors and resources that participate
actively in the value creation process. In turn, this view reduces the poten-
tial sustainable value generated by firms’ activities and resource integra-
tion (Vargo and Lusch 2011). Finally, most previous work on digitalisation

DOI: 10.4324/9781003111245-5
44 Elena Anastasiadou et al.
focuses on the technology – social media, robots, the Internet of Things
(IoT) – resulting in a gap of a more abstract view of digitalisation and its
relation to sustainability.
In this chapter, we address the need to consider sustainability in relation
to the digitalisation process by introducing the concept of digitalisation for
sustainability. To define this concept, we first provide an overview of dig-
italisation, including its possibilities and problems, and then address sus-
tainability. Section 5.3 links digitalisation and sustainability and provides a
practical example. Finally, in the last section, future research opportunities,
managerial implications and conclusions are presented.

5.1 Digitalisation
Although the so-called digital revolution began at the turn of the century,
technological innovation and the trend towards greater digitalisation have
increased exponentially only in the most recent few years. This increase has
been fuelled by demands for more time-effective and cost-effective processes
that have resulted in more digitalisation and automation (Dotoli et al. 2017).
Digitalisation has become a buzzword and, often, is used interchangeably
with digitisation. The two letters separating “digitalisation” from “digiti-
sation” however make a great difference. Digitisation describes the pro-
cess of shifting from analogue to digital forms; in other words, digitisation
takes an analogue process and changes it to a digital form without making
modifications to the process. Many companies claim they engage in digital-
isation, but they are actually digitising instead. Thus, they are conducting
the same activities but converted to digital form, for example, the “paper-
less office.” Some organisations consider the switch from fax machines to
emails and digital signatures as digitalising their business. These companies
would seem to subscribe to the old adage that you can’t teach an old dog
new tricks; in other words, they believe that people will not abandon long-
established habits and practices. However, digitalisation offers much more
than the ability to transforming paper documents into PDFs, for example.
Digitalisation transforms business models and market practices, changes
the ways people work and combines new resources leading to innovation
in ways which earlier would have been impossible. To achieve these trans-
formations appropriate tools and digital technology such as the IoT, big
data, robotics, automation, social media and digital platforms are required
(Foerster-Metz et al. 2018). Digitalisation can enhance the ability to create
value (e.g., sustainability) and enable new ways to address the needs of other
actors (Lenka et al. 2017). These opportunities, enabled by digitalisation, fa-
cilitate integration of (formerly nonrelated) resources as well as engagement
and interaction between these “new” resources and the relevant actors.
Hence, when resources are viewed and combined in new ways, new digi-
tally facilitated solutions emerge, resulting in the development of enhanced
service provision and experienced value (Skålén et al. 2015). Digitalisation,
 Digitalisation for sustainability 45
which is able to offer new solutions and contribute to innovation, is now
being called on to enhance sustainability as part of a sustainable business
logic, where sustainability transcends from being an add-on to becoming
part of the core business.

5.2 Sustainability
The “going green” phenomenon has driven companies, worldwide, to con-
tinuously consider their environmental and social capabilities and to inno-
vate to protect society and the environment while, also, increasing business
performance. The World Commission on Environment and Development
(1987), also known as the Brundtland Report, defines sustainable develop-
ment as the ability to meet present needs, without diminishing the ability
of future generations to meet their needs. This implies that sustainability is
related to resource efficiency, people’s well-being along with fair and equi-
table service provision. In 2015, the United Nations (UN) proposed a new
global agenda, which promoted triple bottom line-thinking as enabling a
more sustainable path (i.e., delivering social, environmental and economic
sustainability) for governments, companies and other actors to collaborate
to achieve sustainable development (Howard-Grenville et al. 2017). Sustain-
ability refers, also, to the preservation of well-being over long, even infinite,
periods of time (Kuhlman and Farrington 2010).
Although sustainability efforts are growing, it is becoming more complex
and more difficult to assess levels of sustainability:

A farmer, who plants tomatoes and potatoes, can estimate the conse-
quences of his work pretty easily – on the soil, on people, on the envi-
ronment. But a trader, who uses millions of data from around the globe
and acts based on algorithms, cannot.
(Osburg 2017: 3)

As our world becomes ever more interconnected and service ecosystems be-
come more open and collaborative, digitalisation as a means of enhancing
sustainability is ever more crucial. Digitalisation has both positive and neg-
ative potential in relation to facilitating sustainability practices to benefit
both people and our planet in general and to contribute to reducing nega-
tive impacts of human activities (Gijzen 2013). Digitalisation can increase
the sustainability of social, environmental and economic aspects (Helbing
2012). The transformative character of sustainability will allow adaptations
to the opportunities and risks introduced by digitalisation. Thus, digitalisa-
tion works to both change and shape sustainability (Seele and Lock 2017).
Digitalisation has consequences, also, for transparency and accountabil-
ity by providing new ways to organise, observe and regulate sustainability
(Heemsbergen 2016). As the world becomes more digitalised, more ser-
vices, such as media, commerce, banking, education and healthcare, will
46 Elena Anastasiadou et al.
be delivered online. Sustainability and digitalisation will thus have major
impacts on our world and how we conceive it.
However, digitalisation is not a panacea that will automatically improve
life; one of the results of digitalisation is that it enforces the use of electronic
devices which produce electronic waste (e-waste). In addition, the design of
new digital services rarely considers sustainability perspectives. Although
we do not know whether it is more sustainable to store data using cloud
software, the growth of these digital service continues to rise. However,
cloud services involve huge use of electricity. Therefore, moving comput-
ing capacity and local storage to a cloud service may not be sustainable;
it may merely mean that the environmental burden has switched location.
Companies need to critically assess their digitalisation choices from the
perspective of their sustainability. For instance, a particular digital tech-
nology might seem the most sustainable choice at a particular time, but,
over the long run, some other digital technology might be more sustaina-
ble. Also, a digital technology that would appear to be sustainable could
entail unobservable impacts and produce large amounts of waste. In some
cases, a new digital technology might be more hazardous, from a sustaina-
bility perspective, than a non-digital solution. Take the example of books;
many are available in digital format using new digital services. An e-book,
which saves on use of physical materials, might be considered a more sus-
tainable solution, but this ignores, for example, the devices for reading the
e-book and the energy used to provide the service. Thus, a holistic view is
required to assess the sustainability of one solution compared to another
and to identify the threats and possible negative impacts of that solution.
Overall, a more nuanced understanding of digitalisation and sustainability
is needed if we are to achieve the sustainability benefits and avoid the pit-
falls of digitalisation.

5.3 Digitalisation for sustainability

In line with the above, we define digitalisation for sustainability as creation
of sustainable value aided by digitalisation. Adoption of digitalisation for
sustainability allows the firm better control over its processes, maintaining
corporate costs low and enabling a more sustainable business logic (New-
lands 2017). For firms that provided sustainable digital technologies and
systems to their customers, co-development of solutions without digitali-
sation was impossible. For instance, digitalisation for sustainability of the
energy industry could lead to less or no use of fossil fuels and result in in-
creased environmental sustainability. Such a change requires collaboration,
innovation and experimentation in the areas of energy storage, distribution
and consumption, and transformation of the business model. Newly em-
powered actors (e.g., employees, customers and suppliers) and digital tools
(e.g., software and digital platforms) make such changes possible and allow
orchestration of the activities required for their implementation.
 Digitalisation for sustainability 47
A practical example of digitalisation for sustainability involves a real es-
tate company based in Stockholm, Sweden. The company, whose tenants
are commercial companies, developed a platform which we describe here
as a climate portal. The purpose of the climate portal was to engage the
company’s tenants in a joint effort to increase the sustainability of their
firms and the buildings. Access to this digital service required the signing
of a green lease which is a form of a sustainability proposition in current
use in the real estate sector. The green lease takes the form of a commercial
landlord–tenant contract and states that the partners shall jointly strive to
achieve more sustainable use of the buildings and its facilities. The climate
portal had a positive impact on landlord–tenant collaboration, and most of
the tenants signed a green lease agreement. This illustrative case indicates
that the digitalisation of a company’s processes – with the integration of new
tools and resources such as the climate portal that embeds sustainability –
becomes a new value proposition. Sustainable value propositions, enabled
by digitalisation, make it possible for both firms and their customers to en-
gage and integrate resources in ways not previously possible, in order to
increase sustainability outcomes such as reduced energy use, a healthier in-
door environment and increased well-being.
Thus, digitalisation for sustainability can become the means to offer new
resources and engage actors in new ways, resulting in increased value out-
comes. Digitalisation for sustainability allows firms to map their service
ecosystem and identify likeminded actors to engage and collaborate with,
in order to develop new, sustainable value propositions. Digitalisation for
sustainability enables new ways of working and the creation of new business
models. In the case of problem-solving, digitalisation for sustainability can
facilitate new ways of including “new” actors and resources and, thus, ena-
ble the development of novel value propositions that provide new means to
address important societal challenges.
However, digitalisation for sustainability also entails a number of chal-
lenges. A major issue related to digitalisation for sustainability is lack of
knowledge, expertise and skills of actors. Many customers lack the technical
knowledge to allow them to benefit fully from digitalisation for sustainabil-
ity. In addition, many providers have neither the resources nor the exper-
tise required to fully develop sustainable digital technologies and transform
their business models. New sustainable digital technologies and the process
of business model transformation entail some costs and investment risks.
Engaging in digitalisation for sustainability is resource-demanding and
time-consuming with no guarantee of success and provides more long-term
than immediate benefits. In many companies, employees and other actors
often resist change due to lack of knowledge and understanding of the value
proposition. Similar to the introduction of any new process, digitalisation
for sustainability is accompanied by challenges. However, it is important to
focus on the advantages, the value potential and long-term benefits of digi-
talisation for sustainability. Some managerial implications and suggestions
48 Elena Anastasiadou et al.
for coping with the challenges related to digitalisation for sustainability are
provided in Section 5.5.

5.4 Future research opportunities

In linking digitalisation to sustainability, with the exception of work on so-
cial innovation and sustainability innovation, most research tends to focus
on environmental sustainability. Although an environmental focus is un-
deniably important and responds to calls to save the planet, it is equally
important to consider all three dimensions of sustainability (i.e., social eq-
uity, environmental protection and economic growth). Acting in a more en-
vironmentally friendly way does not automatically yield more sustainable
economic and social outcomes. Thus, future research should study digitali-
sation for sustainability from a triple-bottom-line perspective.
There is also a lack of research that connects technological development
to a sustainable business logic and services. Interdisciplinary research
(Gustafsson and Bowen 2017) and service research collaborations (Fisk
et al. 2020) are required to address these complex phenomena, drawing on
lessons from service design, transformative service research, transforma-
tive consumer research, social innovation, social entrepreneurship and in-
formation systems fields. This complexity cannot easily be tackled by one
research stream. In addition, insights from midrange theory are necessary
to understand the everyday practices and challenges involved in service in-
clusion and actor engagement within digitalisation and sustainability. Thus,
we would suggest more collaborations between research and practice.
Previous research links digitalisation to co-creation of value, understood
as the perceived value that the firm can provide to consumers (or other ben-
eficiaries; Howell et al. 2018). This would seem problematic since the estab-
lished view on the possibilities of digitalisation in relation to sustainability
does not consider new ways of involving customers and other actors in the
firm’s activities. Future research should approach digitalisation for sustain-
ability, as well as digitalization and sustainability separately, from a more
explicit value co-creation perspective and explore actor engagement and re-
source integration within this context.
Also important is the inclusion of other actors, such as beneficiaries, in
the development of new sustainable digital services (Ekman et al. 2016).
Future research should explore actor engagement using digital tools (e.g.,
engagement platforms and value propositions). Including more actors in
the value co-creation processes enhances value alignment among them,
which results in better chances for increased value experiences and a faster
diffusion of digital services. This also affects the impact of digitalisation
for sustainability on institutions (in the form of cognitive, cultural, nor-
mative and regulatory frames) and our understanding of actor behaviours
in the service ecosystem following the introduction of digitalisation for
sustainability.
 Digitalisation for sustainability 49
5.5 A step-by-step guide for managers
Companies should not simply replace existing activities with digital technol-
ogies to achieve, for example, the paperless office, considered a fundamental
of digitisation. To improve competitiveness and sustainability, companies
need to make gradual changes towards digitalisation for sustainability, tak-
ing into consideration the wider service ecosystem. Therefore, we suggest
the following steps related to the challenges and opportunities that digitali-
sation for sustainability could provide for the firm.

• It is important to establish what digitalisation for sustainability means

for the firm in relation to the wider service ecosystem. Different com-
panies have different goals and ideas related to business model trans-
formation, which highlights the importance of a clear vision and
understanding extending throughout the organisation, to set the basis
for a successful digitalisation for sustainability process.
• Companies should assess the need for sustainability in relation to their
internal capabilities and their business models and explore how digital-
isation could help them. When addressing sustainability issues, com-
panies should balance their profits with identification of new business
opportunities. Less is more might be a helpful maxim; full utilisation of
new digital capabilities is required in order to achieve more using less,
that is, using fewer “new” tools and involving lower levels of investment.
• Digitalisation would allow the firm to map its service ecosystem to iden-
tify actors and external resources that could potentially be included in
their sustainability processes and facilitate exchanges and development
of new or existing resource combinations with new or existing actors.
An understanding of current and potential roles in the network would
allow the sharing of beneficial resources.
• Companies should communicate their new sustainable digital value
propositions and highlight their sustainability value potential to other
ecosystem actors such as employees, customers, suppliers and partners.
This communication must be balanced; it must demonstrate that digi-
talisation for sustainability is not just an idea – it must also be practised
(do the “talk” and do the “walk”). Providing information on new initia-
tives encourages the engagement of other actors. Although it is good to
take initiatives in regard to sustainability efforts, it is not necessary to
drive such changes single-handedly.
• The firm must ensure that all the actors involved are kept informed and
have the necessary knowledge to understand the new digital service.
Failure to do this will result in employee resistance, lack of actor (e.g.,
customer) engagement and poor sustainability outcomes.

To sum up, the key to successful digitalisation for sustainability depends

on close collaboration among a variety of actors with the same objective.
50 Elena Anastasiadou et al.
This has been highlighted in many studies (see Pagani and Pardo 2017), and
digitalisation would seem to offer a lot in the context of enhancing sustain-
ability. Identifying external resources and gaining access to them is crucial.
It seems that competitiveness will rely on greater digitalisation for sustain-
ability. In partnerships that include more actors in the firm’s core business,
knowledge sharing and open innovation activities will increase sustainabil-
ity outcomes substantially. Integrating the resources from multiple actors
enabled by digitalisation would seem to improve activities related to ad-
dressing complex phenomena such as climate change and service inclusion.
It is important, also, to note that companies’ integration of digital technol-
ogies has a long-term perspective and is part of a bigger sustainability strat-
egy rather than ad hoc adoption. A clear digitalisation for sustainability
strategy, embedded in the firm’s core activities, such as sustainability and
new service development, will allow adoption of new digital technologies to
achieve firm goals.
Digitalisation for sustainability will involve major changes in the firm’s
efforts to provide social well-being, reduce environmental impact and im-
prove economic performance and will change the business logic (e.g., actors
and resource constellation). Companies must consider the longevity and ad-
aptability of the digital technologies they intend to adopt and choose sus-
tainable digital technologies that can be adapted and connected to other
systems. Sustainability must be viewed from a system and network perspec-
tive, taking account of the firm’s position in the wider service ecosystem.
Finally, the firm’s ongoing value creation strategy must be oriented to col-
laborative/engagement thinking, embracing a mind-set where the company
sees other ecosystem actors as part of the ongoing value creation and not
merely as entities at the receiving end. This will allow the firm to embrace
the possibilities offered by digitalisation for sustainability.

5.6 Takeaway
This chapter has shown that digitalisation is not just about being faster and
cheaper; it is also about enhancing other types of value. We have tried to
link digitalisation and sustainability, by introducing the concept of digitali-
sation for sustainability and proposing a more open and collaborative view
of digitalisation for sustainability as an alternative to the myopic focus on
the implementation of technology. We also discussed some research oppor-
tunities and implications for practice.

Acknowledgement
The work in this chapter was financed, in parts, by the Swedish En-
ergy Agency project 44749-1, Eskilstuna Municipality though the project
Sörmlandskontraktet, and by the Swedish Research School of Management
and IT.
 Digitalisation for sustainability 51
References
Dotoli, M., Fay, A., Miskowicz, M. and Seatzu, C. 2017. Advanced control in fac-
tory automation: A survey. International Journal of Production Research 55(5):
1243–1259.
Ekman, P., Raggio, R.D. and Thompson, S.M. 2016. Service network value co-
creation: Defining the roles of the generic actor. Industrial Marketing Manage-
ment 56: 51–62.
Elkington, J. 1997. Cannibals with Forks: The Triple Bottom Line of 21st Century
Business. Oxford: Capstone Publishing Limited.
Fisk, R.P., Alkire, L., Anderson, L., Bowen, D., Gruber, T., Ostrom, A.L. and
Patrício, L. 2020. Elevating the human experience (HX) through service research
collaborations: Introducing ServCollab. Journal of Service Management 31(4):
615–635.
Fisk, R.P., Dean, A.M., Alkire, L., Joubert, A., Previte, J., Robertson, N. and
Rosenbaum, M.S. 2018. Design for service inclusion: Creating inclusive service
systems by 2050. Journal of Service Management 29(5): 834–858.
Foerster-Metz, U.S., Marquardt, K., Golowko, N., Kompalla, A. and Hell, C. 2018.
Digital transformation and its implications on organizational behavior. Journal
of EU Research in Business 30: 1–14.
Gijzen, H. 2013. Development: Big data for a sustainable future. Nature 502(7469): 38.
Gobble, M. 2018. Digitalization, digitization, and innovation. Research-Technology
Management 61(4): 56–59.
Gustafsson, A. and Bowen, E.D. 2017. The curious case of interdisciplinary research
deficiency: Cause or symptom of what truly ails us? Journal of Business Research
79: 212–218.
Heemsbergen, L. 2016. Digital age: From radical transparency to radical disclosure:
Reconfiguring (in) voluntary transparency through the management of visibili-
ties. International Journal of Communication 10(1): 138–151.
Helbing, D. 2012. The future of ICT knowledge accelerator towards a more resilient
and sustainable future. In Why Society Is a Complex Matter, Ball, P. (Ed.). Berlin:
Springer: 55–60.
Howard-Grenville, J., Davis, J., Dyllick, T., Joshi, A., Miller, C., Thau, S. and Tsui,
A.S. 2017. Sustainable development for a better world: Contributions of leader-
ship, management and organizations. Academy of Management Discoveries 3(1):
107–110.
Howell, R., Van Beers, C. and Doorn, N. 2018. Value capture and value creation:
The role of information technology in business models for frugal innovations in
Africa. Technological Forecasting and Social Change 131(6): 227–239.
Kuhlman, T. and Farrington, J. 2010. What is sustainability? Sustainability 2(11):
3436–3448.
Lenka, S., Parida, V. and Wincent, J. 2017. Digitalization capabilities as enablers of
value co-creation in servitizing firms. Psychology and Marketing 34(1): 92–100.
Mende, M. and Misra, V. 2020. Time to flatten the curves on COVID-19 and climate
change. Marketing can help. Journal of Public Policy and Marketing 40(1): 1–3.
Newlands, N. 2017. Future Sustainable Ecosystems. Boca Raton, FL: Taylor and
Francis Group.
Osburg, T. 2017. Sustainability in a digital world needs Trust. In Sustainability in a
Digital World: New Opportunities through New Technologies (CSR, Sustainability,
52 Elena Anastasiadou et al.
Ethics and Governance), Idowu, S.O. and Schmidpeter, R. (eds). Berlin: Springer:
3–19.
Pagani, M. and Pardo, C. 2017. The impact of digital technology on relationships in
a business network. Industrial Marketing Management 67: 185–192.
Seele, P. and Lock, I. 2017. The game-changing potential of digitalisation for sus-
tainability: possibilities, perils, and pathways. Sustainability Science 12(183):
183–185.
Skålén, P., Gummerus, J., von Koskull, C., & Magnusson, P. (2015). Exploring value
propositions and service innovation: a service-dominant logic study. Journal of
the Academy of Marketing Science 43(2), 137–158.
Vargo, S.L. and Lusch, R.F. 2011. It’s all B2B … and beyond: Toward a systems per-
spective of the market. Industrial Marketing Management 40(2): 181–187.
Vargo, S. L., and Lusch, R.F. (2004). Evolving to a new dominant logic for market-
ing. Journal of Marketing 68(1), 1–17.
Wirtz, J., Patterson, P.G., Kunz, W.H., Gruber, T., Lu, V.N., Paluch, S. and Mar-
tins, A. 2018. Brave new world: Service robots in the frontline. Journal of Service
Management 29(5): 907–931.
World Commission on Environment and Development (1987). Our Common Future.
Oxford: Oxford University Press.
Yüksel, A.N. and Sener, E. 2017. The reflections of digitalization at organizational
level: Industry 4.0 in Turkey. Journal of Business, Economics and Finance 6(3):
291–300.
6 Reaching new heights in
the cloud
The digital transformation of
the video games industry
Kevin Walther and David Sörhammar

Digitalisation has enabled business model innovations in many industries.

Netflix has changed the way we consume series and movies, Spotify has
changed the way we consume music, and podcasts and Instagram have re-
defined how we share pictures and stories with our friends. All of these dig-
itised services have transformed traditional haptic experiences into digital
user experiences, based on the business model innovations in their respec-
tive industries.
As numerous companies undergo digital transformation, it is important
to draw attention to the business model innovations that precede this tran-
sition, since “a better business model will beat a better idea or technology”
(Chesbrough 2007: 12). In this chapter, we study business model innovation
by tracing the digital transformation of the video games industry. US mar-
ket data show that, in 2009, 80% of all video games were sold in physical
format. In 2018, 83% of video game sales are constituted of digital units
(Statista 2018). Digitalisation is leading to new business models, such as
micro-transactions, sales of digital goods and subscription services. In this
chapter, we discuss the digital transformation of the video games industry,
with a focus on the business model innovations and technological advance-
ments involved.
We especially build our arguments on the business model innovation
concept, considered as driving digital transformation. We then identify the
main business model innovations in three distinct time periods – the pre-
digital, digital transformation and post-digital periods – and identify what
we consider to be the significant business model innovations and technolog-
ical advancements that disrupted the video games industry. The pre-digital
era focuses, mostly, on physical arcade games. In the digital transforma-
tion era, games shifted from physical cartridges and discs to virtual goods.
The post-digital era is characterised by digital giants battling for supremacy
over cloud gaming services. Finally, we argue which business model innova-
tion is required to facilitate digital transformation. It underlines that digital
transformation does not stop with the online distribution of a product or
service.

DOI: 10.4324/9781003111245-6
54 Kevin Walther and David Sörhammar
6.1 Business model innovation
The literature on business model innovation has increased hugely since the
early 2000s but is often criticised for its lack of a unifying theoretical foun-
dation (Foss and Saebi 2017). Numerous definitions of different business
model innovation types have been proposed (see Foss and Saebi 2017, for
an overview). However, we would argue that a business model innovation
comprises two dimensions. A business model can be considered the set of
the firm’s decision-making variables, related to the creation, delivery and
capture of value (Wirtz et al. 2016). Business model innovation can consist
of adaptations to a previous business model (Geissdoerfer et al. 2018), in
order to create, maintain or reinforce competitive advantage, based on new
ways of satisfying customer demand (Chesbrough 2007).
What level of adaptation or change to the business model is needed for it
to be considered a business model innovation (see Foss and Saebi 2017, for
an overview)? We subscribe to Zott and Amit’s (2017) argument that adjust-
ments to the business model should focus on four interlinked aspects: nov-
elty, lock-in, complementarity and efficiency. Novelty refers to the degree of
newness of the idea; lock-in refers to those elements of the system that in-
crease customer loyalty; complementarity refers to value-enhancing effects
among the different business model elements (e.g., payment systems that
enhance the purchase experience); and efficiency refers to processes that
provide users with more seamless or faster access to the service or product.
From the perspective of the drivers of digital transformation model, Zott
and Amit’s (2017) four aspects need to be considered in the context of tech-
nological advancements. We argue that technology is an enabler but also
forces the firms in an industry to innovate in order to survive. Thus, de-
spite the many impressive technological advancements that have occurred,
it is important to bear in mind that technological advancement, on its own,
is not at the heart of business model innovation and does not guarantee
success. However, technological advancements provide novelty and, thus,
are a key element of business model innovation. We would stress, also, the
influence on business model innovation of the dynamic nature of the con-
text (Lindgardt et al. 2015). These contextual properties highlight the im-
portance of a particular industry and its unique characteristics; however, a
successful business model innovation by a specific firm can affect the entire
industry profoundly.

6.2 The three business model innovation eras in the video

games industry
From an empirical perspective, to study business model innovation requires
an in-depth understanding and detailed consideration of the industry con-
texts. Based on industry reports and research works such as those of Mc-
Neil (2019), Harris (2014) and Newman (2017) and our personal interest and
 Reaching new heights in the cloud 55
ongoing research projects, we identified three distinct business model peri-
ods related to the video games industry: pre-digital, digital transformation
and post-digital. We highlight the significant technological and business
model innovations in each era to provide insights into how the industry’s
digital transformation is driven by continuous business model innovations
and technological advances.

6.2.1 Pre-digital period

The precursor of the emergence of the video games industry in the early
1970s was the gambling industry and, specifically, Irving and Martin Brom-
ley’s father-and-son business, which sold and installed slot machines in the
United States. During the early 1950s, the US government had introduced
new laws that restricted gambling. However, Martin Bromley realised that
these laws did not apply to the many US military bases that had been es-
tablished in East Asia after the Second World War. The Bromleys bought
old slot machines that had been installed in the United States and installed
them in US military bases overseas. Their business became so lucrative that
Martin Bromley set up the production company, Service Games Enterprises
(later known as SEGA), in Japan, soon after, changing their production
from slot machines to skill-based, electromechanical game machines (such
as pinball machines). Although these machines were coin-fed, like slot ma-
chines, they did not involve payouts and, therefore, were unaffected by the
US gambling laws and could be installed in US as well as in the European
market (McNeil 2019).
In this period, another business model innovation occurred in the games
industry. Nolan Bushnell and Ted Dabney had a shared interest in computer
science and pinball machines. They developed a machine that used video
circuitry to mimic the functions of a computer and combined this with
simple game elements. In 1972, Bushnell and Dabney launched their stand-
alone Pong arcade game machine (digital ping-pong). The business model
for their newly founded company, Atari Inc., focused on installing their ar-
cade machines in pubs and shopping malls. Their arcade machines were fed
by coins, like a pinball machine, but enabled users to play a particular video
game. Their arcade machines became hugely successful, and their success
was exploited by SEGA, Nintendo and others companies, which released
their own arcade machines during the 1970s (Newman 2017; McNeil 2019).
The emergence and success of arcade machines, especially in shopping
malls, attracted the interest of department stores and led to business models
designed to draw the crowd attracted by these arcade machines into their
stores. In 1975, Sears, the US department store chain, made a deal with
Atari to create and deliver 150,000 Home Pong Console units. This forced
Atari to update its business model from being a provider to becoming a
supplier. The console, which was called Sears Tele-Games, sold out quickly,
triggering Atari to release its own updated version of the console in 1976.
56 Kevin Walther and David Sörhammar
These developments led to the whole video games industry adjusting their
business models to accommodate home consoles, which brought the mall
arcade machine experience to people’s living rooms. However, technical
limitations meant that all of these early consoles were “one-game-systems.”
One of the firms that had copied Atari’s successful arcade machines busi-
ness model was the Japanese company, Nintendo, which also began to de-
velop video games consoles. In 1985, there were three major players in the
console business, Atari with its Atari 7800, SEGA with its Sega Master Sys-
tem and Nintendo with its Nintendo Entertainment System. All three firms’
business models had built on technical developments, which had allowed
them to separate their consoles from the games. This allowed them to reap
revenue from selling consoles and selling games on cartridges, designed
for their particular consoles. These consoles became so popular that the
firms could not keep pace with the demand for new games, which led to the
founding of many independent game studios and game publishers. In turn,
this led to another business model innovation; game publishers made deals
with game developers, and the resulting games were sold to all three console
manufacturers. Nintendo, the market leader, adjusted its business model
and forced game developers to sign exclusivity contracts if they wanted their
games to be played on Nintendo’s consoles. This changed Nintendo’s busi-
ness model, and the firm became both a hardware producer and a publisher.
Nintendo’s exclusive franchises, such as “The Legend of Zelda” and “Su-
per Mario,” left Atari and Sega struggling; neither was able to adjust its
business model to become a publisher of a similarly successful game brand
(Harris 2014; McNeil 2019).
Nintendo, unintentionally, became responsible for the emergence of
a new firm in the console business, Sony, which later became one of Nin-
tendo’s biggest competitors. Nintendo wanted to respond to SEGA’s Mega
Drive console and games that were stored and played on CD-ROMs. This
new technology did not trigger a major adjustment to the business model,
but it increased storage capacity and allowed enhanced graphics and sound.
To capitalise on this new technology, Nintendo had contracted the Japanese
electronics firm, Sony, to develop a CD-ROM console. However, disagree-
ment about how the revenue would be shared caused Nintendo to break the
deal. Sony decided to continue developing the prototype and, in September
1995, released its own console under the name PlayStation. Sony under-
mined SEGA’s business model, by selling its PlayStation for roughly $100
less than SEGA’s new console, Saturn. They exploited the fact that users
could play the same games on these two consoles; SEGA had no exclusivity
clause, and both firms used the same CD-ROM technology. Users saw no
point in paying for Saturn, with the result that Sony’s PlayStation became
the winner. Nintendo did not release a CD-ROM extension and continued
to use cartridges to store the games for their consoles (Edge Magazine 2009;
McNeil 2019).
 Reaching new heights in the cloud 57
6.2.2 Digital transformation period
Until the mid-1990s, consoles tended to dominate the gaming landscape.
However, this changed in 1995 when Microsoft released its Windows 95 op-
erating system, which included a graphical interface and the DirectX tech-
nology, which pioneered the new 3D technology. Windows 95 made playing
games on a Personal Computer (PC) much smoother and easier. This did not
involve a radical change to the gaming business model since PCs used the
CD-ROM technology that was incorporated in most consoles, which made
it easy for game developers and publishers to launch their games for PCs.
However, the emergence of LAN (Local Area Network) parties in the late
1990s had a profound impact on the video game industry business model.
This allowed several PCs to be connected via a LAN, which allowed several
gamers to play the same game either with or against one another.
LANs and LAN parties quickly made shared gaming very popular.
Clearly, this sharing of games among consumers was not legal and had a
negative effect on the business model for the actors in the industry, since it
meant loss of revenue for game publishers and developers. However, the US
game developer/publisher, Valve, instead saw an opportunity for a business
model innovation. In 2003, it released its own digital marketplace, Steam.
Initially, Valve used Steam to digitally distribute its own games, but then
allowed distribution of games from other developers onto its platform. After
a rather slow start, in 2010, Steam had a huge user base. Traditional pub-
lishers (e.g., Origin [EA], Epic Store [Epic Games], Uplay [Ubisoft] etc.) and
console manufacturers (e.g., PlayStation Store [Sony] and Windows Store
[Microsoft]) all tried to copy Valve’s successful business model with their
own online stores. However, the success of Steam meant that Valve’s busi-
ness model had given it a near monopoly position for virtual distribution on
PCs. Conservative estimates give Steam a market share of more than 70%
and US$4.3 billion revenue for Valve in 2017 (The Economist 2019b).
Over the years, Valve continuously adapted its business model, and its
current Steam platform provides additional revenue from commercially dis-
tributed add-ons, in-game items and power-ups. This kind of within-game
monetisation has resulted in some negative feedback from players and led
to legal interventions in some countries. “Pay-to-win” mechanics and “loot-
boxes,” where players are asked to pay for superb or randomly generated
in-game items, are reminiscent of earlier mechanised gambling such as
Bromley’s slot machines. The in-game items, especially those used by the
popular football simulation, FIFA, were also subject to investigation by the
gambling committees in several countries (The Economist 2017).
The huge success of digital platforms did not put an end to piracy. In fact,
faster broadband speeds and cheaper Internet prices have encouraged pi-
racy. The fight against piracy, increased broadband access around the world
and the promise of ever higher revenues have forced many industry actors
to adjust their business model and shift to subscription-based models. One
58 Kevin Walther and David Sörhammar
of the earliest and probably best-known subscription-based successes was
Blizzard Entertainment’s 2004 release of their online role-play game, World
of Warcraft. Would-be players were required to pay a monthly subscrip-
tion fee; at the time of writing, World of Warcraft has millions of monthly
paying players. Another common business model innovation was to offer
the base game for free and encourage players to buy additional content and
virtual content such as clothing or weapons. The most famous example of
this “freemium” or “free-to-play” model is Epic’s Fortnite Battle Royale
(The Economist 2020b).

6.2.3 Post-digital transformation period

The main business model innovation in the current post-digital transforma-
tion era of the video games industry is the subscription model and the focus
on games as a digital service, often described as the “Netflix-for-gaming”
model. However, the comparison with Netflix ignores the sophisticated in-
teraction and streaming technology required for video games. Gaming re-
quires low latency and vast bandwidth as playing requires both incoming
and outgoing data, whereas streaming a film requires only one-way data.
Streaming games using cloud technology require state-of-the-art infrastruc-
ture (e.g., 5G technology) and are technically more difficult to develop and
maintain than streaming videos (Forbes 2019).
The first such business model innovation was Microsoft’s launch of Game
Pass in 2017. This game subscription service currently gives subscribers ac-
cess to more than 250 games on the Xbox console and Windows PC. It still
requires the games to be downloaded, so it is not (yet) the seamless experi-
ence of streaming a film on Netflix. In September 2020, Game Pass had 15
million subscribers (The Economist 2019a; Microsoft 2020).
Google responded by launching Stadia in November 2019. Stadia allows
access to games through streaming technology enabled by cloud technol-
ogy. It does not require the user to invest in costly hardware, in the form of
a gaming PC or console; its games can be streamed on any device (e.g., a PC,
a TV monitor, a tablet or a smartphone). At the time of writing, the service
was limited to a few Google and Samsung devices and included only a small
number of games, which has been the subject of some criticism from early
adopters (Grey 2019; The Economist 2019a). However, Microsoft can be con-
sidered to be building on Stadia’s business model and adjusting its Game
Pass. In September 2020, Microsoft launched a subscription game stream-
ing service called xCloud. This service gives full access to Microsoft’s Game
Pass library and enables streaming using Microsoft’s cloud technology.
Moreover, (so far) this allows seamless game playing on its Xbox console,
android tablets or smartphones (Engadget 2020). Several others of the tech
giants are competing to provide players with a seamless cloud gaming ser-
vice (e.g., Nvidia [GeForce Now]) or a cloud gaming service including access
to a game library (e.g., Amazon [Luna] or Tencent and Huawei [START]).
 Reaching new heights in the cloud 59
This “battle of the technology giants” indicates that this business model will
have a significant impact on the gaming industry.
Obviously, innovating the business model towards a subscription-based
service that enables seamless streaming of games on any device requires
heavy investments in infrastructure, development and content. Only the
largest firms, such as Google, Microsoft, Amazon, Tencent and Sony, which
can afford these heavy investments in server farms and game content, will
be battling for cloud gaming leadership in this post-digital transformation
era. The situation is reminiscent of the video game industry in the 1980s,
when Nintendo extended its business model to become both a hardware
producer and a publisher. The strategy of becoming a game publisher and
feeding its services with exclusive content led Microsoft in September 2020
to buy ZeniMax Media and its publisher Bethesda games for $7.5 billion.
This major acquisition was a shock to the video games industry and means
that Microsoft has extended its business model; it now includes some of the
most prominent game franchises and 23 in-house game development studios
producing content for its Game Pass and xCloud services (Microsoft 2020).
Strengthening its gaming portfolio and, thus cloud gaming services, has al-
lowed Microsoft to benefit, also, from economies of scope since Microsoft
is combining its largest revenue driver “server products/services” with its
fourth largest revenue driver “gaming” (The Economist 2020a).
To conclude, a constant supply of new games that attract new subscribers
and retain existing subscribers is crucial to support the game libraries and/
or cloud gaming services of the digital giants. Major acquisitions of large
game developers by the digital giants, such as ZeniMax and Microsoft, are
likely to become more frequent in the near future. The video streaming mar-
ket shows a similar trend; the competition between Netflix, HBO, Disney
and so on boosted the production of new TV series and movies and acquisi-
tion of producing firms (The Economist 2019a).

6.3 Discussion
This chapter has addressed a significant question for businesses today – how
to innovate business models to achieve firm growth in the digitalisation era.
Overall, for nearly 50 years, the video game industry has been at the fore-
front in terms of capitalising on new technology and innovating its business
models. The reason for business model innovation has been described as
“when the game gets tough, change the game” (Lindgardt et al. 2015). We
focused on what we considered the most significant business model innova-
tions in the video game industry.
We would stress that new technology, on its own, is not a game changer;
it must be linked to a business model innovation. An example of a technol-
ogy that lacks a business model innovation is virtual reality headsets. They
attracted much media attention but are relatively high-priced and lack game
content to attract gamers. The absence of a major business model innovation
60 Kevin Walther and David Sörhammar
has left this technology far from reaching expectations (The Economist
2020c). For digitally transformed industries, such as the computer gaming
industry, cloud technology holds immense potential. Several firms of this
industry have been involved in different business model innovations in the
form of different cloud subscription services. In our ongoing research pro-
ject, we have had the opportunity to talk to many developers and industry
experts. The managing director of a large Swedish game publisher told us
that his firm is expecting and planning for a huge increase of the gaming
population worldwide thanks to cloud gaming subscriptions. Cloud gaming
will make ownership of dedicated gaming hardware obsolete and streaming
will be enabled through the cloud which will open up entirely new markets.
Our linking in this chapter of three video games development periods has
traced the business model innovations towards the current business model
in the post-digitalisation era. The insights from this chapter should be help-
ful to firms in other industries undergoing digital transformation. We hope
that we have shown that contemporary business model innovations do not
occur in a vacuum; rather, they are part of a long history of business model
innovation and technical advancements. Table 6.1 summarises what we con-
sider the main business model innovations and technological advancements
in each era and offers an overview of the digital transformation of the video
games industry and the post-digital transformation era.

Table 6.1 Summary of business model innovations and technological

advancements in the three eras

The pre-digital The digital The post-digital

transformation era transformation era transformation era

Business model • “Insert coin” • Selling (physical) • Subscription

innovation/ slot machines games for PC and service to access
major “Game • Setting console/building virtual game
Changers” up arcade up strong game libraries
machines in franchises • Cloud gaming
hotspots (pubs, • Distributing services
shopping malls) games virtually • Gaming on any
• Consumers (digital device with a
can buy their platforms) screen
own Home • Generating
Entertainment revenue from
Systems, no virtual goods
longer confined (Freemium
to playing model)
in pubs and • Games as a
shopping malls service rather
• Consumers can than a product
buy additional
games for their
game console
 Reaching new heights in the cloud 61
The pre-digital The digital The post-digital
transformation era transformation era transformation era

• Royalties
for console
manufacturers
from game
sales on
cartridge/disc
Technological • Development • PCs with • Worldwide
advancement of arcade graphical increase in
machines using interface Internet access and
a combination (Windows 95) high broadband
of pinball and • Multiplayer coverage
oscillation gaming through • Cloud technology/
technology LAN network server farms
(1960s/1970s) • Internet
• “One game • New generations
systems” (1970s) of consoles (e.g.,
• Home consoles PlayStation 2-4)
(1980s onwards)
• CD-ROM
Drive (1990s)

6.4 Takeaways
This chapter offers two main takeaways. First, it shows that business model
innovations need to be linked to continuous technological innovation. The
video games industry is a good example of the intertwining of these aspects
over time. We have shown that external technological advancements can
force firms to adjust their business models, but that, sometimes, the tech-
nology needs to be adapted to fit the current business model innovation.
Second, we have highlighted that business model innovation related to a
digitally transformed industry mostly involves subscription-based revenue
streams linked to cloud-based technologies. The insights in this chapter
could help other industries undergoing digital transformation to reformu-
late their business model innovations in similar ways. The video games
industry can be considered a technology and business model innovation
forerunner as can be seen in the cases of digitally transformed sectors such
as music (Spotify), movies (Netflix) and photography (Instagram).

References
Chesbrough, H. 2007. Business model innovation: It’s not just about technology
anymore. Strategy and Leadership 35(6): 12–17.
Edge Magazine. 2009. The making of: PlayStation. Edge Magazine. April 29, 2009
edition.
Engadget. 2020. Microsoft XCloud will offer over 150 Xbox games when it goes live
tomorrow. https://www.engadget.com/microsoft-xbox-xcloud-game-streaming-
game-pass-ultimate-150917167.html (accessed January 4, 2021).
62 Kevin Walther and David Sörhammar
Forbes. 2019. Why game streaming needs 5G. Forbes Magazine. November 30, 2019
edition.
Foss, N.J. and Saebi, T. 2017. Fifteen years of research on business model innova-
tion: How far have we come, and where should we go? Journal of Management
43(1): 200–227.
Geissdoerfer, M., Vladimirova, D. and Evans, S. 2018. Sustainable business model
innovation: A review. Journal of Cleaner Production 198(October): 401–416.
Grey, J. 2019. Stadia might be one of Googles best products – eventually. Wired
Magazine. November 2019 edition.
Harris, B. 2014. Console Wars: Sega vs Nintendo – and the Battle that Defined a Gen-
eration. Camden, London, Atlantic Books Ltd.
Lindgardt, Z., Reeves, M., Stalk, G. Jr. and Deimler, M. 2015. Business model in-
novation: When the game gets tough, change the game. In Own the Future: 50
Ways to Win from the Boston Consulting Group, edited by Deimler, M., Lesser,
R., Rhodes, D. and Janmeiaya, S. Hoboken, NJ, John Wiley & Sons Inc: 291–298.
McNeil, S. 2019. Hey! Listen!: A Journey through the Golden Era of Video Games.
London, Headline Publishing Group.
Microsoft. 2020. Microsoft to acquire ZeniMax Media and its game publisher
Bethesda Softworks. https://news.microsoft.com/2020/09/21/microsoft-to-acquire-
zenimax-media-and-its-game-publisher-bethesda-softworks/ (accessed January
4, 2021).
Newman, M. 2017. Atari Age: The Emergence of Video Games in America (1st Ed.).
Cambridge, MA: MIT Press.
Statista. 2018. U.S. computer and video game sales – digital vs. physical 2018. https://
www.statista.com/statistics/190225/digital-and-physical-game-sales-in-the-us-
since-2009/ (accessed January 4, 2021).
The Economist. 2017. Video games could fall foul of anti-gambling laws. The Econ-
omist. December 7, 2019 edition.
The Economist. 2019a. Mortal Kombat – Google launches its game-streaming plat-
form. The Economist. November 21, 2019 edition.
The Economist. 2019b. Fortnite’s developer is entering the retail business. The
Economist. March 14, 2019 edition.
The Economist. 2020a. Microsoft and tech competition – is tech getting more com-
petitive? The Economist. October 22, 2020 edition.
The Economist. 2020b. Tencent has used stealth to become a gaming superpower.
The Economist. June 13, 2020 edition.
The Economist. 2020c. Headset technology is cheaper and better than ever. The
Economist. October 1, 2020 edition.
Wirtz, B., Pistoia, A., Ullrich, S. and Göttel, V. 2016. Business models: Origin, de-
velopment and future research perspectives. Long Range Planning 49(1): 36–54.
Zott, C. and Amit, R. 2017. Business model innovation: How to create value in a
digital world. GfK Marketing Intelligence Review 9(1): 18–23.
7 Hyper-Taylorism and
third-order technologies
Making sense of the
transformation of work and
management in a post-digital era
Christoffer Andersson, Lucia Crevani,
Anette Hallin, Caroline Ingvarsson, Chris Ivory,
Inti José Lammi, Eva Lindell, Irina Popova
and Anna Uhlin

Since the mid-1970s, automation and, latterly, digital technology, have be-
come a focus for investment and innovative effort (Woodcock and Graham
2019), forming the basis for a new industrial revolution (Brynjolfsson and
McAfee 2014; Schwab 2017). While digital technologies can serve multiple
social and industrial ends, such as creating a “sharing economy” (Sunda-
rarajan 2016), the primary focus of development and investment, similar
to earlier industrial revolutions, is to increase productivity and efficiency.
In other words, the current technical development is closely entwined with
dominant ideas about how work should be performed and for whose benefit.
The most recent iteration of digital technologies, so-called third-order tech-
nologies, includes technologies that communicate directly with each other
without human involvement (Floridi 2013) and are designed, specifically, to
perform tasks previously performed by human workers. Their effects are
being felt in service delivery, production and management.
In this chapter, we propose that the search for productivity and efficiency,
through the implementation and use of third-order digital technologies, is
leading to a shift in how both work and management are understood. We
argue that this shift draws on and reinforces a Taylorist logic in the design of
work, where the norms of rationality and the division of labour are crucial.
In addition, this shift has consequences in allowing for a different construc-
tion of work.
Building on a sociomaterial framework that foregrounds both the social
and material dimensions of work, we treat ideas – such as Taylorism – and
materials – such as third-order technologies and other technologies – as
constitutively entangled (Orlikowski 2007). Through this lens, we suggest
that classical Taylorist ideas about how work ought to be organised and
managed are being transformed as new technologies emerge.

DOI: 10.4324/9781003111245-7
64 Christoffer Andersson et al.
We discuss two types of situations that reflect how third-order digital
technologies are re-enforcing a Taylorist logic: when technologies are de-
signed to take the position of workers and when they are designed to take the
position of managers. Drawing on empirical examples of these situations,
we discuss how hyper-Taylorism can be interpreted as altering how work
and management are understood and the consequences of this changed
understanding.

7.1 The post-digital era, third-order technologies and

algorithms
Successive decades have witnessed widespread diffusion of digitising tech-
niques to a wide range of social and institutional contexts, to the extent that,
now, digital technologies are largely taken for granted (Tilson et al. 2010).
According to Orlikowski and Scott (2016, p. 88), society, work, management
and other forms of organising “always entails the digital.” Western societies,
in particular, are moving into what has been termed a post-digital era, in
which digital technologies have become ubiquitous, intertwined with per-
sonal as well as organisational life and, generally, are perceived as normal
(Cramer 2015; Pepperell and Punt 2000; Reeves 2019).
The technologies themselves have become less visible. What Floridi (2013)
describes as “third-order technologies” work within existing processes, col-
lecting data autonomously – without human involvement – and acting on
this information. Unlike first-order technologies, which allowed humans to
interact directly with the natural world (e.g., the plough, the axe and the
saddle), or second-order technologies which allowed humans to interact
with technologies using other technologies (e.g., a key that interacts with
a lock), third-order technologies, once designed, push humans away from
the action (Floridi 2013). To achieve this, these technologies depend heavily
on algorithms. Algorithms are abstract representations of computational
procedures and constitute the operational logic of third-order technologies
(Dourish 2016), which, today, are more autonomous than in the past.
Third-order technologies have attracted huge interest and major finan-
cial investment, making the developers of these technologies drivers of
the post-digital era (Woodcock and Graham 2019). However, it has been
pointed out that the use of new technologies is a question not only of tech-
nology but also, and perhaps most importantly, of how work is organised,
managed and performed (Brynjolfsson and McAfee 2014; Schwab 2017). As
will be discussed below, although third-order technologies might push the
human out of its operations, third-order technologies exist in relation to
work, which means that algorithms extend beyond the technology itself.

7.2 Classic Taylorism

Taylorism has been a dominant force in the organisation of work. Intro-
duced in Frederick Winslow Taylor’s (1911) seminal book The Principles of
 Hyper-Taylorism in the post-digital era 65
Scientific Management, Taylorism builds on ideals of scientific and rules-
based rationality underpinned by the imperative of efficiency. It involves the
optimisation of production through the development of sets of rules for the
execution of work. The rules themselves are derived through direct observa-
tion and scientific analysis of production processes, the subsequent design
and planning of work and the top-down allocation of tasks to workers de-
pending on their individual skill sets (Rylander Eklund and Simpson 2020).
The ultimate aim of scientific management was to transfer the craft knowl-
edge and know-how of workers to managers, in the form of clear formal in-
structions for the performance of work tasks (Zuboff 1988). While managers
retain responsibility for planning and controlling work, workers retain only
responsibility for robotic execution of tasks (Zuboff 1988). Taylorism gives
rise, quite deliberately, to the deskilling of workers, since individual workers
need only to master a limited set of skills; those needed for the particular,
delimited production or assembly (Braverman 1974; Lysgaard 1961).
While Taylor thought that scientific objectivity and fairness would in-
spire workers to excel and to be better integrated with management and
the organisation, the opposite occurred. The work-design approach, which
also included efficiency targets pursued relentlessly by managers, merely
highlighted the very different interests and positions of workers compared
to managers (Lysgaard 1961; Zuboff 1988). A hallmark of Taylorism is its
focus on time-and-motion studies, involving careful observation of the per-
formance of work deemed central to the gathering of scientific knowledge
(Taylor 1911). Having determined how to perform a task, where, at what
time and within what timeframe, Taylorism results in the worker being tied
to a specific place, often close to a particular machine.
While often presented as a management model or management philoso-
phy, Taylorism can be understood, also, as a way of producing knowledge
about work. As described above, Taylorism builds on the idea that work can
be conceived as a series of interrelated, but discrete activities, which can
be subjected to scientific scrutiny. From its beginnings, Taylorism assumed
that, if measured carefully enough, all aspects of work could be fully ex-
plicated and grasped by managers. Consequently, putting the ideas of Tay-
lorism to use implied a particular way of imagining and configuring work,
workers and managers.
From a sociomaterial perspective, which seeks to shed light on the effects
of both the social and material dimensions of work and organising (Gherardi
2016a, 2016b; Orlikowski and Scott 2008), it is clear that Taylorism was more
than an idea. For it to come together, production technologies, scientific
measurement and data collection techniques, an emerging management
cadre, new investment possibilities in and around mechanisation and, later,
the emergence of markets large enough for mass-produced goods were all
important. Put differently, Taylor’s ideas, the technologies involved and the
wider conditions were part of a sociomaterial assemblage that allowed the
production of different kinds of knowledge about work and, thus, its differ-
ent organisations.
66 Christoffer Andersson et al.
We next examine the post-digital era and the experiences of both workers
and managers within the shifting assemblage of Taylorism, promoted by the
introduction of third-order technologies. Based on empirical illustrations,
we discuss how third-order technologies provide a new materiality, which
invigorates Taylor’s ideas, leading to what we call “hyper-Taylorism.”

7.3 When digital technologies are designed to take the position

of the worker
Robots are commonplace in manufacturing. On the shop-floor of one firm
we studied, a large international steel company, producing high-quality
steel equipment, robots perform much of the work previously performed by
humans. The shop-floor is constructed as a series of cells, each constituting
a “mini-factory,” consisting of a robot and two or three machines that per-
form various operations, such as lathing, routing, welding and threading
of the steel. The workers, now called “operators,” feed the cells with data
and materials and monitor the progress of the work and the health of the
machines. This monitoring activity is not based on watching the machine
but on observing computer displays, positioned outside the cell, for exam-
ple, in the coffee area. The operators are responsible, also, for cleaning the
machines and replacing failing parts. The machines are capable of draw-
ing attention to potentially faulty parts before they become problematic.
The duties of workers who previously physically operated the machines now
include engagement in meetings and discussions about plant-related issues
such as efficiency and safety.
However, third-order automation technology is not limited to blue-collar
work. In a Swedish municipality, we observed white-collar administrative
workers, previously engaged in second-order digitised work, such as moving
data between systems, structuring data or processing data in order to make
decisions, had been replaced by Robot Process Automation (RPA). The RPA
does the work of linking together and analysing data from different sources.
Consequently, former frontline officers in public authorities, the street-level
bureaucrats traditionally at the operational core of government (Bovens and
Zouridis 2002), have been substituted by robotic administrative workers,
with a narrow focus on discrete work processes they have been programmed
for (Lindgren et al. 2019). Similar to our manufacturing study, we noted the
emergence of new roles for public administrators. When the RPA technol-
ogy was implemented in the municipality’s economy unit, the administrator
who had previously done the work, was given the task of “robot caretaker.”
The human administrator’s role was refocused on cases deemed too difficult
for the RPA technology (i.e., unique cases where adaptation to the algorithm
would not have been cost-effective) and any errors that occurred.
The limits of robot third-order workers is that, while designed to usurp
the human worker, they are only able to perform routine tasks according
to clear rules (Floridi 2013), that is, tasks that are digitally legible (Wood-
cock and Graham 2019). Algorithms are able to deal effectively only with
 Hyper-Taylorism in the post-digital era 67
predictable worlds (worlds that are legible to the robot); factory shop-floors
constitute ideal environments (as long as there are no breakdowns), as do
clients with standard and predictable needs. Work that is digitally legible
allows the creation of formal, rules-based knowledge that can be expropri-
ated from workers. Similar to what occurred in 1920s’ time studies in man-
ufacturing, we observed professional workers, such as social workers, being
filmed, timed and interrogated in order to generate algorithmic representa-
tions of their work. The more hard-won tacit skills of keeping the factory
process running even if some machines are not working optimally, or deal-
ing with a claimant with an unusual combination of needs, or one who sim-
ply struggles to communicate what those needs are, remain the province of
the human.
Thus, we see that, rather than being simply substituted by third-order
technologies, workers are being repositioned as caretakers and tasked with
ensuring the technologies work properly. Also, the human workers’ tasks,
time and space are no longer tightly controlled by managers; the human
worker is required to adjust to the machines. Some workers have expressed
a preference for predictable manager algorithms as opposed to less reliable
human managers (Woodcock and Graham 2019).
The removal of humans from decision-making facilitates more efficient
delivery of work. However, in some cases, the technology has changed the
nature of the work’s output. While more efficient and expedient, services,
in particular, are accompanied by a strikingly different ‘understanding’ of
the work itself. Services delivered without human intervention tend, for ex-
ample, to underemphasise the holistic and interpersonal logic of care work
(Laurent 2008). These elements cannot be translated into digital inputs that
an automated case system can incorporate into its algorithmic procedure.

7.4 When digital technologies are designed to take the role

of the manager
If work is digitally legible (Woodcock and Graham 2019), third-order tech-
nologies can calculate the optimal sequence of a worker’s tasks, when they
should be executed, how long they should take and where each worker needs
to be at a particular point in time. In other words, third-order technologies
can take on the role of manager.
In an environmental services department in a UK municipality we stud-
ied, a digital portal which allowed citizens to report environmental issues,
such as an abandoned bike or graffiti, was implemented. The portal linked
directly to software that then allocated work tasks to employees via their
smartphones. Task completion was reported directly to the system. In ef-
fect, managers were removed from the process.
There are many platforms available to control work minutely, which are
replacing not only workers’ but also managers’ jobs. Routing systems that
direct drivers to the most efficient route, systems to control the work of re-
pair technicians, platforms enabling outsourcing of work to freelancers,
68 Christoffer Andersson et al.
care assistants, taxi drivers and cleaners are all examples that remove even
the need for employment contracts (Woodcock and Graham 2019). Some
of this software is highly sophisticated and already available to, for exam-
ple, UK police forces. The software assesses crime incident reports and au-
tomatically dispatches suitably qualified police officers to the incident. At
the incident site, other software directs the officer to collect information
deemed pertinent. Thus, although workers have their decision-making au-
tonomy reduced, the need for managers is reducing increasingly.
The efficacy of the technology for routine decision-making suggests that
many middle managers will become redundant (Frey and Osborne 2017).
However, it could mean a shift in managers’ responsibilities from responsi-
bility for planning and control of work to a ‘softer’ human resources-type
role. Identifying the right mix of staff skills to sustain an efficient organisa-
tion and support competitive advantage will require strategic and creative
thinking.
Following the introduction in factories, of scientific management and au-
tomation, before the digital age, some factory owners found that workers
welcomed machines, at least those that took on some of the physically hard
work. However, some workers found the resulting work intensification in-
tolerable (Zuboff 1988). It could be argued that these issues might be salient
today. Staff retention, motivation and reward will pose new challenges for
management skills under hyper-Taylorism. Even in seemingly humanistic
operations, such as social services, managers will need to acquire a new,
more systematic understanding of the work performed in their organisation,
to ensure the right balance of technology and human oversight, critical for
service quality. They will need, also, to build new relations and alliances
with software developers and information and communication technology
professionals. Workers previously considered support staff may be the own-
ers of the knowledge required to change how the work is performed, by re-
programming third-order technologies. For example, police forces in the
UK that adopted sophisticated software for storing and interrogating crime
data found that support staff needed familiarity with enquiry languages to
overcome the limitations of the data structure.

7.5 Hyper-Taylorism and its consequences

The promise of efficiency has ensured wide-spread diffusion of third-order
technologies in our post-digital societies. At the same time, it has opened
the door to a new form of Taylorism that we call hyper-Taylorism. The ana-
lytical capacity unleashed by embedded sensors, and the seemingly limitless
data storage and computational capacity, is on a different level from the
time-study engineer equipped with a clipboard, stop-watch and mechanical
calculator (Brynjolfsson and McAfee 2014).
We have proposed that hyper-Taylorism describes a technology-enhanced
Taylorism in the post-digital era. Just as Taylorism reconfigured how work,
 Hyper-Taylorism in the post-digital era 69
workers and managers should be understood for the sake of efficiency, we
see a change in how contemporary work is understood. The concept of
hyper-Taylorism shifts the focus to another level compared to the concept of
“digital Taylorism,” for example. Digital Taylorism is the term that has been
used to describe the codification and digitisation of knowledge in knowl-
edge work through the use of second-order digital technologies, such as the
industrialisation and standardisation of services (Brown et al. 2010). How-
ever, in a post-digital era, third-order technologies have become an integral
part of how work is performed and managed. These new technologies are
providing a specific way of enhancing an analytical understanding of work
that supersedes Taylorism – both pre-digitalisation and in digital form.
More specifically, the assumption that knowledge about work is something
that can be made explicit, quantified, expropriated and used to plan work
can now be materialised in the form of third-order technology algorithms.
Thus, algorithms provide a materiality for both the representation and
performance of work based on these representations. We have shown that
when algorithms in third-order technologies perform work, they can replace
both workers and managers. In both cases, the tenets of Taylorism are al-
tered, but they are also enhanced and expanded. As workers, these technol-
ogies perform what has been planned in a specific way; as managers, these
technologies are able to find an analytical optimisation of what needs to be
done, how, where and when.
In contrast to Taylorism, under hyper-Taylorism, managers are no longer
in a privileged position as the coders, storers and transferers of knowledge
about work. Instead, the new technologies do all of these tasks. Although
Frederick Taylor, when he developed his idea, may not have considered this
possibility, in the post-digital era, entities that are actually more efficient at
computing do exist. The scientific knowledge of work, previously possessed
by human managers, is now possessed by digital technologies, making the
presence of the humans with knowledge about work redundant.
Having characterised what we have seen taking place in the post-digital
era, we next examine the consequences of hyper-Taylorism. First, workers’
tasks, time and space are either very closely surveilled by or are dependent
on algorithms. This applies particularly to the case of workers taking care
of the technology. In other words, the workers’ room for action is heavily
constrained by the technology. Second, once the ‘best way’ of performing
the work has materialised, parts of organising become ‘rigid’ as work or
management is performed in a particular, often sequential, way. This re-
quires other parts of the organisation to adjust, by performing a different
type of work, that is, caring for and repairing (either workers or machines).
Third, humans lose the possibility to negotiate work. As Floridi (2013)
discusses, after the third-order technology has been designed and devel-
oped, humans have become the caretakers of the technology, responsible for
monitoring the loop and enabling smooth performance. While this might
be considered as organisational members having to use higher-level skills,
70 Christoffer Andersson et al.
which some regard as an improvement, the use of these skills is demanded
by technological needs and there is no possibility for discussing or negotiat-
ing the distribution of the work.
Fourth, a crucial consequence of hyper-Taylorism concerns the mean-
ingfulness of work. Taylorism always primarily valued efficiency of work,
which has been detrimental to both workers and their experience of work
(Lysgaard 1961; Zuboff 1988), and there are few indications that this will
change under hyper-Taylorism. After all, the algorithms of these technol-
ogies do not necessarily reflect on or support what humans consider to be
meaningful. In addition, as their traditional role changes, managers’ per-
ceptions of their well-being may be discussed.

7.6 Takeaways
In this chapter, we suggested that the new, so-called third-order technologies
have transformed Taylorism, and we outlined the potential consequences of
this transformation. There are two main takeaways from this chapter. First,
when technologies are implemented, the work that humans do changes; that
is, implementation of technology does not lead, necessarily, to job losses.
Second, this change affects not only how the work is performed but also how
‘work’ is understood. This change is subtle and can be difficult to identify,
but we would argue that it needs to be taken into account when planning and
proceeding with implementation of new technologies. It might involve new
job descriptions or purposeful and continuous consideration of the evolving
nature of work practices. To summarise, there is more to post-digital work
than what can be measured or translated into algorithmic form.

Acknowledgement
This research was carried out within the Digitized management – what can
we learn from England and Sweden? programme, financed by FORTE (grant
no: 2016-07210).

References
Bovens, M., and Zouridis, S. 2002. From street-level to system-level bureaucracies:
How information and communication technology is transforming administrative
discretion and constitutional control. Public Administration Review 62(2): 174–184.
Braverman, H. 1974. Labor and Monopoly Capital – The Degradation of Work in the
Twentieth Century. New York, NY: Monthly Review Press.
Brown, P., Ashton, D., and Lauder, H. 2010. Skills are not enough: The globalisa-
tion of knowledge and the future UK economy, UKCES Praxis Paper No. 4, UK
Commission for Employment and Skills, Wath-upon-Dearne.
Brynjolfsson, E., and McAfee, A. 2014. The Second Machine Age: Work, Progress,
and Prosperity in a Time of Brilliant Technologies. New York, NY: W.W. Norton &
Company.
 Hyper-Taylorism in the post-digital era 71
Cramer, F. 2015. What is ‘Post-Digital’? In Postdigital Aesthetics, edited by David
M. Berry and Michael Dieter, 12–26. London: Palgrave Macmillan.
Dourish, P. 2016. Algorithms and their others: Algorithmic culture in context. Big
Data and Society 3(2): 1–11.
Floridi, L. 2013. Technology’s in-betweeness. Philosophy and Technology 26(2):
111–115.
Frey, C.B., and Osborne, M.A. 2017. The future of employment: How susceptible
are jobs to computerisation? Technological Forecasting and Social Change 114:
254–280.
Gherardi, S. 2016a. Sociomateriality in posthuman practice theory. In The Nexus of
Practices, edited by Allison Hui, Theodore Schatzki and Elizabeth Shove, 38–52.
Abingdon: Routledge.
Gherardi, S. 2016b. To start practice theorizing anew: The contribution of the con-
cepts of agencement and formativeness. Organization 23(5): 680–698.
Laurent, V. 2008. ICT and social work: A question of identities? In The Future of
Identity in the Information Society, edited by Simone Fischer-Hübner, Penny
Duquenoy, Albin Zuccato, and Leonardo Martucci, 375–386. Boston, MA:
Springer.
Lindgren, I., Madsen, C.Ø., Hofmann, S., and Melin, U. 2019. Close encounters of
the digital kind: A research agenda for the digitalization of public services. Gov-
ernment Information Quarterly 36(3): 427–436.
Lysgaard, S. 1961. Arbeiderkollektivet: en studie i de underordnedes sosiologi. Oslo:
Universitetsforlaget.
Orlikowski, W.J. 2007. Sociomaterial practices: Exploring technology at work. Or-
ganization Studies 28(9): 1435–1448.
Orlikowski, W.J., and Scott, S.V. 2008. Sociomateriality: Challenging the separa-
tion of technology, work and organization. Academy of Management Annals 2(1):
433–474.
Orlikowski, W.J., and Scott, S.V. 2016. Digital work: A research agenda. In A Re-
search Agenda for Management and Organization Studies, edited by Barbara
Czarniawska, 88–96. Cheltenham: Edward Elgar Publishing.
Pepperell, R., and Punt, M. 2000. The Postdigital Membrane: Imagination, Technol-
ogy and Desire. Bristol: Intellect Books.
Reeves, T. 2019. A postdigital perspective on organisations. Postdigital Science and
Education 1(1): 146–162.
Rylander Eklund, A., and Simpson, B. 2020. The duality of design(ing) successful
projects. Project Management Journal 51(1): 11–23.
Schwab, K. 2017. The Fourth Industrial Revolution. New York, NY: Crown Publish-
ing Group.
Sundararajan, A. 2016. The Sharing Economy: The End of Employment and the Rise
of Crowd-Based Capitalism. Cambridge, MA: The MIT Press.
Taylor, F.W. 1911. The Principles of Scientific Management. New York, NY:
Harper & Bros.
Tilson, D., Lyytinen, K., and Sørensen, C. 2010. Research commentary – Digital
infrastructures: The missing IS research agenda. Information Systems Research
21(4): 748–759.
Woodcock, J., and Graham, M. 2019. The Gig Economy: A Critical Introduction.
Cambridge: Polity.
Zuboff, S. 1988. In the Age of the Smart Machine. New York, NY: Basic Books.
8 Why space is not enough
Service innovation and service
delivery in senior housing
Petter Ahlström, Göran Lindahl, Markus
Fellesson, Börje Bjelke and Fredrik Nilsson

The housing environment is our everyday space and place. It is in this space
that we create memories and manifest ourselves through design, furnishing
and location. The housing environment affects who we are and what we can
do. It provides a means to achieve personal well-being and what we consider
to be a good life. Therefore, we need to pay attention to the space available
to us and our ability to make use of it. In this chapter, we discuss how the
value of space (manifested in the building and its related services) can be in-
creased for seniors. We show that digital services are important in this value
creation process. We focus on the context of Sweden.
Good living conditions and working environments, combined with regu-
lar exercise, have contributed to creating a relatively healthy elder genera-
tion in Sweden, where 93% of seniors are aged 75 years (or older) and are in
good health; only 7% are multi-diseased (Eklund-Grönberg et al. 2009, with
reference to policy document). Hence, this group of seniors have the ability
to affect their quality of life and living conditions – both individually and in
society at large. This is the starting point of our discussion on the develop-
ment of senior housing solutions (i.e., the building and its services).
It can be difficult for the housing industry to develop a good understand-
ing of the needs of the growing population of relatively healthy seniors and
to use that knowledge to develop buildings and services that create value
for them (Abramsson 2015; Ahlström 2008). Cooperation among traditional
sectoral borders (e.g., real estate developers, service providers and informa-
tion technology firms) is required to identify novel ways to integrate build-
ings and physical resources with services. This type of collaboration can
be problematic (Pirinen 2016); however, digital services and the associated
technologies can be a catalyst of such developments (Akaka and Vargo 2014;
Ekman et al. 2016).
Below we elaborate on some of the challenges related to this endeavour
by discussing service innovation and service delivery in senior housing.
We provide several examples of the possibilities offered and the problems
raised by digital services in the development we envisage. Our approach
spans different and overlapping scientific disciplines which each contrib-
ute a unique perspective. We also cite some practical experiences from the

DOI: 10.4324/9781003111245-8
 Why space is not enough 73
senior housing industry. We believe strongly that a holistic and integrative
approach is needed to explain why space is not enough in this context.
The chapter is structured as follows. Section 8.1 describes the “new” sen-
iors and their characteristics. Section 8.2 discusses the role of housing for
well-being. Section 8.3 focuses on digital services in senior housing. Sec-
tion 8.4 discusses service innovations and service delivery. We conclude in
Section 8.5 with a discussion of why space is not enough and provide some
takeaways from our investigation.

8.1 The “New Seniors”

We use the term “new seniors” to highlight that this group is both increas-
ing in size and is different from earlier elder groups. Medical science claims
that, according to our genetic profile, we can expect to achieve 85 years of
age. Our lifestyles are a crucial determinant for achieving an older age. In
theory, our lifespan is estimated to be around 125 to 135 years; thereafter,
according to the medical scientists, 100% mortality prevails. By the year
2060, the proportion of elderly people (i.e., those aged over 60 years) in the
Swedish population is expected to reach approximately 25%.
From an international perspective, average life expectancy in Sweden is
high. At the time of writing, it is 81 years for men and 84 years for women.
In 2014, Statistics Sweden (SCB) estimated that 500,000 Swedes were aged
80 years or older and forecast that, by 2040, this number would have in-
creased to 1,000,000.
The data show, also, that the elderly are a relatively well-off group (Kelfve
and Abramsson, 2017; SOU 2015:85). Although individual variations are sig-
nificant, it is reasonable to assume that there is a relatively large group of
people – the “new seniors” – who are better-off financially and healthier
than previous generations of elderly people in Sweden (see Jonsson 2018;
Rizzuto et al. 2012). Therefore, we can assume that good health and the
accumulation of wealth are drivers of senior housing development (Gud-
mundsson 2017; Salo 2019).
For most people, ageing with dignity, good health and with an independ-
ent lifestyle is desirable. Unfortunately, many seniors face involuntary lone-
liness that causes depression, malnutrition and so on. Fortunately, these
effects can be avoided through adaptations to care processes, buildings and
services (Luanaigh and Lawlor 2008), including digital services (Hasan and
Linger 2016; Pekkarinen et al. 2019). These solutions related to senior hous-
ing have the potential to support quality of life and well-being.

8.2 Senior housing and well-being

Housing environment plays a fundamental role in our lives. As already
noted, spaces and places are where our lives are manifested. Housing re-
search has adopted a range of perspectives from design, including viewing
74 Petter Ahlström et al.
housing as a right as well as a market commodity. This body of work sug-
gests that physical space affects the housing experience (i.e., our living con-
ditions and our feelings) and, ultimately, our quality of life.
Research shows that the housing experience is influenced not only by
physical space but also by social interaction with others, access to various
services and so on (Aubert-Gamet and Cova 1999; Rosenbaum and Mas-
siah 2011). Notably, digital services have propelled the rapid development
towards an extended understanding of what constitutes space (e.g., a build-
ing). This is because digital services have worked to reduce the spatial con-
straints traditionally associated with access services, resources and social
interactions and, at the same time, being embedded in new spatial configu-
rations. Digital services have turned our homes into workplaces, cinemas,
libraries and shops and enabled remote control of heating, kitchen utilities,
lights and so on. Reciprocally, if there were no spaces in which to apply
these functions, these digital services would not have been developed.
For the new seniors, well-being seems to be related to the ability to expe-
rience and act and, especially, to how elderly people experience the useful-
ness of housing solutions (Lindenfalk and Imre 2019; Verma 2019). Of prime
importance are how they experience safety and the ability of suppliers to
adapt functions to suit seniors’ needs. Currently, this experience is related
largely to digital services, from functions such as management of lighting to
managing to book a visit from a maintenance technician. The experience is
also related to more traditional technical, functional and aesthetic qualities
of the senior housing solution.
All of the technical functions discussed above are related to how the built
environment is structured, technically organised and serviced. In other
words, the building’s technical status affects facilities management and, ul-
timately, running costs. The technical aspects of the building and its mainte-
nance also directly affect how seniors experience the building. For example,
it is relatively easy to design and deliver an effective and – construction-wise –
sophisticated entrance to a building employing all available digital services
(e.g., entrance communication and security solutions). However, if there are
no benches in the entrance to allow seniors to sit before entering or leaving
the building, this can be a cause of dissatisfaction. Similarly, when and how
snow is cleared in the winter has multiple consequences for seniors (e.g., lack
of access, risk of slipping, reduced possibilities to go outside).

8.3 Digital services in senior housing

In contemporary service and marketing research, value is considered to
be created by resources being combined, integrated and applied by end-
users (Grönroos and Voima 2013) within complex systems of actors and re-
sources (Lusch and Vargo 2014). Therefore, in the context of senior housing,
a service perspective is in line with the notion of space as multifaceted and
 Why space is not enough 75
unfolding. The service perspective complements this view by emphasising
the centrality and capacity of the housing user, and the importance of view-
ing resources, such as buildings and services, as a means to create value
in daily life processes and not as ends in themselves. This is particularly
important when considering the introduction of digital services (see Pekka-
rinen et al. 2019) which have the potential to alter the way seniors interact
with other resources and other people. For example, a digitalised booking
and surveillance system that regulates the density of people in hallways and
common areas would reduce exposure of seniors to viruses.
This example shows, also, that space is a place where digital and other
types of services are enacted. Inevitably, we are “somewhere” when we use
or co-create a service. If we transfer this reasoning to a senior housing con-
text, the co-creation of services would contribute to an experience of service
excellence. Thus, service delivery is co-created, and this co-creation is what
creates value for the senior. This argumentation is reflected in the model
proposed by Lindenfalk and Imre (2019) which considers value creation to
be down to choice. The authors claim that, if the senior chooses not to use
a digital service or chooses to use it in a way that was not intended, this will
be harmful to the co-creation. They conclude that the senior’s understand-
ing of a digital service is reflected in their experience of its value (see also
Pekkarinen et al. 2019). This implies that digital services can be viewed and
appreciated differently. Furthermore, co-creation is related to the space and
place in which it is delivered. Hence, a digital service will be experienced
differently depending on whether it is delivered in your home or in a hospi-
tal, for instance.
Digital services can also be viewed as either directly targeting physical re-
sources or assisting the use and experience of these resources. For example,
a digital service to control the lights in a building might be designed from
a supporting or a monitoring perspective. The ability to manage one’s own
lights remotely differs fundamentally from their management by a facilities
support centre and has different implications for the well-being and quality
of life. Successful service innovation requires integrating digital services in
senior housing in such a way that services are experienced as a supporting
function that doesn’t violate privacy or individual control or perceived as
out of reach (Gudmundsson 2017; Salo 2019) or inaccessible. In addition,
a senior who is capable and active might consider digital services used to
help people with special needs as something that is not value-creating. This
applies, also, to the design of physical facilities in senior housing. In line
with the model in Lindenfalk and Imre (2019), a spatial solution can be ex-
perienced as a possibility or as a hindrance. A children’s playground can be
experienced as enjoyable when you are able to choose whether to enjoy it;
in contrast, it can be a nuisance for someone confined to their apartment
and unable to choose the extent of their exposure to the sound of happily
playing kids.
76 Petter Ahlström et al.
8.4 Service innovation and service delivery in senior housing
From the discussion so far, it follows that the value of senior housing solu-
tions come from how well they fit with and support the individual/personal
needs of seniors. Commercially, this requires a shift away from well-
delineated traditional housing products towards a holistic experience of the
entire customer process. This shift in perspective has two consequences:
First, service innovation and value creation become multidimensional,
transcending organisational borders and involving a multitude of actors.
The value creation experience related to senior housing derives from a
network of resources and services, ranging from the building’s architec-
tural and functional qualities – via maintenance, domestic and home care
services – to the availability of additional resources and services (e.g., res-
taurants, shops, transportation and cultural activities). Less tangible re-
sources, such as friends and neighbours, are also important for the outcome
of the value-creating process. All of these resources can be derived from
private sources (self, family, friends), from the market in the form of goods
and services (which in themselves are combinations of resources) and from
various public sources. Together, these resources form dynamic and contin-
uously evolving configurations that enable the daily life of the seniors and
determine its quality. Importantly, these configurations (or service systems,
see Vargo et al. 2008), and the value they give rise to, ultimately are defined
from the seniors’ point of view. However, innovative actors can enhance the
value-creating capacity of the system by reconfiguring it and adding new
resources. Senior housing that caters for the complex needs of age optimisa-
tion is an example of such innovative reconfigurations.
Second, value is created in use, when resources are integrated and de-
ployed by users in their consumption activities (Grönroos and Voima 2013).
Seniors create value by using the senior housing resources in their daily
lives in combination with other resources such as digital services. Thus, it is
within the context of their daily lives that senior housing solutions become
valuable to users. In line with the view on age and ageing discussed previ-
ously, the service perspective positions senior users not as a passive recipient
of predefined values delivered by some other but as competent and active
subjects, capable of developing their own unique value-creating processes
with the help of the resources available to them. Thus, what is provided is
the opportunity for quality of life, not actual quality of life, and the oppor-
tunity for capable seniors to realise this quality.
However, this is not to imply that the benefits depend on the senior user
or that there is no room for service-oriented entrepreneurship and business
development within the sector. On the contrary, we see an urgent need for
business actors who are able to envision and implement innovative service
concepts at the systems level across functional and organisational borders
and with the senior customer as an active partner and not as a passive recip-
ient. Co-creation based on new service concepts and business models will be
 Why space is not enough 77
an important facilitator of such development. These new concepts are often
driven by novel digital services, that is, innovations that reconfigure both
the service system in terms of resources and the actors’ roles, including the
role of a senior housing customer. A service perspective helps to structure
these novel concepts and points to various ways that companies can become
more involved in and contribute better to customers’ value creation pro-
cesses, rather than being mere providers of resources.
As already pointed out, digital services can be a significant driver of these
developments and in several ways. Of particular importance are digital ser-
vices that directly support and strengthen the capacity of seniors to engage
actively in value creation, that is, to actually use the resources available
(Pekkarinen et al. 2019; Yang et al. 2015). Well-designed digital services
that integrate seamlessly into the daily lives of seniors might work to off-
set some of the physical and mental impairments that accompany old age
and which otherwise would make a particular housing solution unsuitable.
Furthermore, several of the resources known to contribute to quality of life
for seniors are dispersed in personal and societal networks and may not
be commercially available, but must be provided by the seniors themselves.
Therefore, digital services that actively stimulate customer value creation
activities and integration of the resources are crucial from a strategic com-
pany perspective and for enhanced quality of life. This can include security-
enhancing technologies (e.g., physical surveillance and health-monitoring
technologies) and platforms to manage the complexities of the resource net-
work and tools enabling internal and external communication and social-
isation (e.g., Hasan and Linger 2016; Karlsen et al. 2019; Pekkarinen et al.
2019). Such digital services have the potential not only to provide value-in-
use but also to increase and capture the overall value- creating capacity of
the senior customer.

8.5 Why space is not enough

A basic function of our spaces is to enable and support quality of life for
seniors. This does not occur serendipitously; rather, it has been given con-
sideration when planning the built environment. The spaces used and how
they are managed will affect the extent to which they enable or support the
intended outcomes. Based on the biological and lifestyle-based conditions
prevailing in the environment, different behaviours and uses will develop
(Saarloos et al. 2009). Access to social meeting places provides opportunities
for social activity, an important factor in a dynamic living environment for
supporting quality of life for seniors. To accommodate this broad impact of
the physical environment, we have drawn on insights and experiences from
different fields of research and practice. We highlighted the dynamics of
ageing which set biological age against the theoretical optimal age. We de-
scribed this as “age optimisation,” a concept that links knowledge between
different fields such as geriatrics and health, service design, architecture and
78 Petter Ahlström et al.
real estate economics in order to lay the foundations for innovative service
development and delivery in senior housing.
Even the most basic functional aspects of housing have relevance for use
of senior housing for age optimisation. The width of door frames, size of
bathrooms, number of stairs, lighting and ease of orientation are a few such
functional aspects. We would stress the usability concept to describe sen-
ior housing and that, ultimately, the value of a specific functional aspect
is related to how well it satisfies the user. Along these lines, digital services
can add to the usability of a housing solution, as a feature in its own right
and as a supportive and enabling tool that increases seniors’ capacity to
use other resources. As housing-related digital services become integrated
in our everyday living, their usability becomes crucial, not only for how a
particular housing configuration is functioning but also for well-being more
generally (Carlsson and Walden 2015). This highlights that for a digital ser-
vice to contribute to value creation it is required that it be adapted to the
needs of seniors, which should be achieved through their participation in a
co-creation process that encompasses not only the use of service but also its
design and planning phases (Gudmundsson 2017; Pirinien 2016; Salo 2019).
It is important, also, to recognise that many digital service solutions fo-
cus on supporting social interaction through message and picture manag-
ing techniques, an approach that might be seen as reducing the need for
physical social interaction. However, it should rather be considered as one
among several ways of “meeting,” where the place and space are a part of
the digital service that supports social interaction. In other words, even dig-
itally mediated social interactions require a physical setting that is at the
same time defined and redefined by digital services attached to it. Similar
to digital services in general, availability of digitally mediated social inter-
actions adds value to spaces rather than diluting it. Were this not so, there
would be no value to be gained from the use of social media platforms and
applications, and simple text messaging would be sufficient.
This brings us back to research on facilities management – one of today’s
big challenges, that is, how to facilitate co-creation and value in use for new
seniors and, in so doing, contribute to service innovation and delivery. In
this chapter, we have argued that the complex processes of optimised ageing
and seniors’ well-being require system-thinking and holistic solutions that
put the seniors centre stage and make them responsible for their own value
creation. We identified digital services as a key enabling factor for service
innovation and delivery within this field that offers opportunities for both
traditional housing service providers and new entrants to the market.

8.6 Takeaway
Senior housing supports the well-being of seniors by making physical and
social resources available. We have shown how digital services contribute
to these developments. First, they increase the resources available. Second,
 Why space is not enough 79
they increase the capacity of seniors to integrate resources and take advan-
tage of the value-creating opportunities offered by senior housing solutions.
Thus, seniors have a crucial role to play as active co-creators of their own
well-being and contributors to both service innovation and service delivery.
Although digital services have provided seniors with the means to interact
and meet, this does not mean that the physical space has lost its impor-
tance. On the contrary, as digital services become essential in seniors’ lives,
they need to be integrated in physical spaces. This is where the actions and
memories that shape the lives of seniors take place, and digital services have
the potential to both create and deliver new services that will enhance their
experience. The integration of digital services with physical space is an im-
portant and inseparable component of service innovation and delivery in
senior housing.

References
Abramsson, M. 2015. Äldres bostadsval och preferenser – en sammanställning av ak-
tuell forskning (ʻElderly housing choices and preferences – a compilation of current
researchʼ). Nationella institutet för forskning om äldre och åldrande (NISAL),
Institutionen för samhälls- och välfärdsstudier, Linköping University.
Ahlström, P. 2008. Strategier och styrsystem för seniorboendemarknaden (ʻStrategies
and control systems for the senior housing marketʼ). Linköping: Institutionen för
ekonomisk och industriell utveckling, the Institute of Technology at Linköping
University.
Akaka, M.A. and Vargo, S.L. 2014. Technology as an operant resource in service
(eco)systems. Information Systems and e-Business Management 12(3): 367–384.
Aubert-Gamet, V. and Cova, B. 1999. Servicescapes: From modern non-places to
postmodern common places. Journal of Business Research 44(1): 37–45.
Carlsson, C. and Walden, P. 2015. Digital wellness for young elderly: Research meth-
odology and technology adaptation. In Proceedings of the 28th Bled eConference
#eWellBeing, June 7–10, 2015, Bled, Slovenia.
Eklund-Grönberg, A., Köhler, M., Ekdahl, A., Modin, S. and Sjöberg, A. 2009. Bät-
tre vård för multisjuka äldre. Läkartidningen 106(40): 2512–2513.
Ekman, P.C., Raggio, R.D. and Thompson, S.M. 2016. Service network value
co-creation: Defining the roles of the generic actor. Industrial Marketing Man-
agement, 56(July): 51–62.
Grönroos, C. and Voima, P. 2013. Critical service logic: Making sense of value crea-
tion and co-creation. Journal of the Academy of Marketing Science 41(2): 133–150.
Gudmundsson, M. 2017. Aging-in-place with ICT: A qualitative study of senior cit-
izen users’ perception and acceptance towards smart home technology. Unpub-
lished Master’s Thesis, Linnaeus University, Växjö.
Hasan, H. and Linger, H. 2016. Enhancing the wellbeing of the elderly: Social use of
digital technologies in aged care. Educational Gerontology 42(11): 749–757.
Jonsson, H. 2018. Äldres boendeekonomi (‘Elderly’s housing economics’), Boverket,
Rapportnummer 2018:19, Karlskrona.
Karlsen, C., Moe, C.E., Haraldstad, K. and Thygesen, E. 2019. Caring by telecare?
A hermeneutic study of experiences among older adults and their family caregiv-
ers. Journal of Clinical Nursing 28(7–8): 1300–1313.
80 Petter Ahlström et al.
Kelfve, S. and Abramsson, M. 2017. Äldres materiella förhållanden (ʻThe material
conditions of the elderly’). In Abramsson, M., Hydén L.-C. and Motel-Klingebiel,
A. (eds), Vem är den äldre – Äldrebilder i ett åldrande Sverige (‘Who is the elderly?
Pictures of the elderly in an aging Sweden’). Nationella institutet för forskning
om äldre och åldrande (NISAL), Institutionen för samhälls- och välfärdsstudier,
Linköping University, pp. 15–24.
Lindenfalk, B. and Imre, Ö. 2019. Narratives of value co-creation: Elderly´s under-
standing of their own role in the value creation process. In Proceedings of the 27th
European Conference on Information Systems (ECIS), June 8–14, 2019, Stockholm
and Uppsala, Sweden.
Luanaigh, C.Ó. and Lawlor, B.A. 2008. Loneliness and the health of older people.
International Journal of Geriatric Psychiatry 23(12): 1213–1221.
Lusch, R.F. and Vargo, S.L. 2014. The Service-Dominant Logic of Marketing: Dia-
log, Debate, and Directions. London: Routledge.
Pekkarinen, S., Melkas, H. and Hyypiä, M. 2019. Elderly care and digital services:
Toward a sustainable sociotechnical transition. In Toivonen, M. and Saari, E.
(eds), Human-Centered Digitalization and Services (Vol. 19). Singapore: Springer,
pp. 259–284.
Pirinen, A. 2016. The barriers and enablers of co-design for services. International
Journal of Design 10(3): 27–42.
Rizzuto, D., Orsini, N., Qiu, C., Wang, H.-X. and Fratiglioni, L. 2012. Lifestyle,
social factors, and survival after age 75: Population based study. British Medical
Journal, doi.org/10.1136/bmj.e5568.
Rosenbaum, M.S. and Massiah, C. 2011. An expanded servicescape perspective.
Journal of Service Management 22(4): 471–490.
Saarloos, D., Kim, J.-E. and Timmermans, H. 2009. The built environment and
health: Introducing individual space-time behavior. International Journal of En-
vironmental Research and Public Health 6(6): 1724–1743.
Salo, S. 2019. Technological solutions for an ageing population: New perspectives
and opportunities for business development. Unpublished Master’s Thesis,
Hämeenlinna University Centre.
SOU 2015:85. 2015. Bostäder att bo kvar i. Bygg för gemenskap i tillgänglighetssmarta
boendemiljöer (ʻHousing to stay in. Build for togetherness in accessibility-smart liv-
ing environments’), Stockholm.
Vargo, S.L., Maglio, P.P. and Akaka, M.A. 2008. On value and value co-creation:
A service systems and service logic perspective. European Management Journal
26(3): 145–152.
Verma, I. 2019. Housing design for all? The challenges of ageing in urban planning and
housing design – The case of Helsinki. Diss. 123/2019. Helsinki: Aalto University
School of Arts, Design and Architecture, Department of Architecture.
Yang, Q.Z., Miao, C.Y. and Shen, Z.Q. 2015. Digital services innovation for aging-
in-place. In Proceedings of 2015 IEEE International Conference on Industrial En-
gineering and Engineering Management (IEEM), (pp. 659–573), December 6–9,
2015, Singapore.
9 Challenges in implementing
digital assistive technology in
municipal healthcare
Ann Svensson, Linda Bergkvist, Charlotte
Bäccman and Susanne Durst

9.1 Digital assistive technology and healthcare

Globally, we face challenges related to finding the means to meet the needs
of an increasing number of persons in need of healthcare. An ageing popu-
lation and the number of people living with chronic disease and/or disabil-
ities have led to higher healthcare costs, which will continue to increase in
future decades. Also, many older people are wanting to continue to live in-
dependently at home for as long as possible. The use of digital assistive tech-
nology (DAT) is considered a solution to these challenges (Johansen and
Van den Bosch 2017; WHO 2018). DAT provides the healthcare sector with
a range of digital solutions, such as safety alarms, camera surveillance and
medication reminders, to facilitate the everyday lives of both older people
and people in need of care (Gücin and Berk 2015; Svensson 2020). Several
studies show that DAT contributes to longer life and greater ability to live
independently (e.g., Flandorfer 2012; Öberg and Rolfer 2017). According to
Glomsås et al. (2020), DAT contributes to several healthcare aspects, which
create value for its users, such as safety, security, wellness, mobility, social
and cultural contact and participation, and contribute to their treatment
and care.
As research on DAT implementation is in its infancy, the implications of
DAT have yet to emerge. For example, little is known about how to incor-
porate DAT in work processes to create value. A recent study by Bäccman
et al. (2020) shows that the user value of DAT differs across user groups,
which highlights the importance of investigating DAT and its usefulness
from different user perspectives in order to fully understand its value. How-
ever, any implementation is accompanied by challenges. In the healthcare
context, healthcare personnel may fear being replaced, which could cause
resistance to DAT and its implementation (Tiwari et al. 2010). Health-
care organisations’ lack of facilitation of learning and development may
also impede different actors’ perception of the value created by DAT (e.g.,
Shubber et al. 2018; Gjellebæk et al. 2020a, 2020b). To address the multiple
challenges involved, the technology implementation literature (e.g., Ross
et al. 2016) stresses the necessity of early involvement of key actor groups

DOI: 10.4324/9781003111245-9
82 Ann Svensson et al.
(e.g., patients, personnel and managers) in the implementation process.
Hence, a multi-actor perspective would allow a better understanding of how
different actor groups perceive DAT and the issues that arise in the different
phases of the implementation process and especially in the early phases of
implementation.
The aim of this chapter is to enhance the current understanding of the
early (preparation) phase of DAT implementation and to investigate the
challenges experienced by different actor groups in municipal healthcare.

9.2 The cases – the Nordic context for digital assistive

technology implementation
The chapter is based on two independent case studies. Both were part of
a longitudinal project on DAT implementation in Swedish and Norwegian
municipalities.
The Swedish and Norwegian healthcare systems are similar in their or-
ganisation and structure. The healthcare services are publicly owned and
operated and financed through taxes; this approach to public healthcare
is described as the Scandinavian or Nordic Model (Kemp and Hvid 2012).
In both countries, municipalities are responsible for the provision of care
services, including homecare, regardless of the resident’s age, gender or so-
cioeconomic status. Thus, the main responsibility for elderly care is at the
municipal level.
Both case studies have a multi-actor perspective and include: older peo-
ple who need regular care by a person and/or DAT, either in their homes
or in assisted living facilities; healthcare personnel, that is, individuals
working on the frontline with older people, with skills and competences
for using DAT (henceforth personnel); healthcare managers, that is, indi-
viduals responsible for the planning of personnel and/or DAT implemen-
tation and use (henceforth managers); and information technology (IT)
staff, responsible for the technological platform enabling the DAT. The
IT staff are responsible, also, for supporting the implementation and use
of DAT.
One of the cases focuses more on the general preparedness phase, in which
some of the actors had experience of DAT and some did not. This case was
aimed at exploring the challenges related to change management, as well
as challenges experienced by different actor groups and their attitudes to
implementation of DAT, for example, surveillance cameras and e-commerce
solutions. The other case involved the introduction and testing of a spe-
cific new DAT, a robotic shower, and was aimed at understanding users’
expectations and experience of DAT and identifying challenges related to its
implementation. Despite their slightly different focus, both cases involved
the early preparatory implementation phase where the prevailing conditions
were exploratory.
 Digital assistive technology 83
9.3 Implementation of digital assistive technology
The introduction of DAT in elderly care is aimed at improving and sustain-
ing quality of life for older people, but its introduction provides opportuni-
ties as well as challenges at both the individual and the organisational levels
(Glomsås et al. 2020). For example, the introduction of DAT may affect work
practices. Indeed, the influence on existing work practices is the single most
important factor in DAT implementation success. Personnel may lack the
knowledge and skills needed to fully utilise the DAT (Dugstad et al. 2019).
At the organisational level, DAT may change the structures and processes
related to the provision of services. Many studies within the healthcare area
employ the Technology Acceptance Model (TAM; Davis 1989) or some ver-
sion of it to understand how technology is adopted within healthcare (e.g.,
Yarbrough and Smith 2007; Aggelidis and Chatzoglou 2009; Shubber et al.
2018). However, these studies focus mostly on the implementation and adop-
tion of IT. Bäccman and Bergkvist (2019) argue that the TAM may not be
appropriate for all types of DAT since the technology may change the ser-
vice provision work and daily routines. In their paper, the authors not only
show the transformative impact of DAT on healthcare for older people but
also show how this transformation increases the difficulty among personnel
to anticipate and understand needs. A study by Gjellebæk et al. (2020a) em-
phasises professionals’ attitudes to digitalisation and considers DAT to be
a barrier to successful implementation. Another aspect is fear that the tech-
nology will replace human contact. Several studies show that both person-
nel and older users prefer personal contact to DAT (Hofmann 2013). Older
people are susceptible to social isolation, and many fear that technology
will increase their feeling of loneliness and social isolation. However, Bäc-
cman and colleagues (2019, 2020) found that interpersonal contact did not
disappear – it just changed.
It seems that DAT can involve a transformation to the work situation and
the service provision that goes beyond mere adoption of a technological
solution. Hence, we argue that a new mind-set, new work practices and new
roles and professions are needed for successful digital transformation of
healthcare. Implementation of DAT is about transformation and can be dis-
ruptive (Bäccman and Bergkvist 2019; Dugstad et al. 2019; Bäccman et al.
2020; Svensson 2020).
It is important to know how the disruptive nature of the DAT affects its
adoption and implementation. One of the most popular frameworks used
to study implementation of healthcare solutions is the Consolidated Frame-
work for Implementation Research (CFIR) (Damschroder et al. 2009). CFIR
has been shown to be useful to guide the implementation process of various
interventions in healthcare settings (Ross et al. 2016). It includes five main
categories. Innovation characteristics refers to the adaptability of the tech-
nology to the local context and its complexity in use situations; inner set-
tings refers to the general fit between the technology and the organisation;
84 Ann Svensson et al.
contextual settings refers to legislation and standards; and individual char-
acteristics refers to attitudes, beliefs, skills and abilities. The fifth category
includes the phases of the implementation process. These five categories have
persisted over time in relation to explaining the difficulties involved in im-
plementing e-health applications (Ross et al. 2016). However, we know little
about their role in the case of implementation of DAT more broadly.
DAT implementation is a complex process in which many aspects play
vital roles. DAT has been perceived as novel and hard to adopt since it dis-
turbs and changes prevailing work practices and daily routines. Also, DAT
transforms care and nursing work to a profession that requires technologi-
cal skills. In addition, the implementation of healthcare interventions often
lacks a strategic plan related to the diffusion of the DAT, which complicates
its adoption in work practices and daily routines (Desveaux et al. 2019).
Therefore, we argue that research on technology implementation in health-
care needs to be more nuanced to suit the context of DAT implementation.
We argue, also, that due to the disruptive nature of DAT, in the early phase
of the implementation process, the role of actor groups will be particularly
important. By investigating how different actor groups perceive DAT and
their experience of implementing DAT, this chapter contributes to filling
these knowledge gaps. In addition to confirming previous research (e.g.,
Ross et al. 2016; Hamblin 2020), this chapter provides new insights into the
early phase DAT implementation challenges, at both the organisational and
individual levels, and as a complex innovation. It shows how the absence of
standards and policies can hamper the collaboration across actor groups
required to implement a disruptive technology such as DAT.

9.4 Challenges to the implementation of digital assistive

technology
The two cases provide insights into the preparatory phase, that is, the phase
immediately preceding actual implementation. The presentation and dis-
cussion are inspired by the CFIR categories (Damschroder et al. 2009) of
complex innovation characteristics, external policy and incentives, organi-
sational characteristics and individual characteristics.

9.4.1 Complex innovation characteristics

End-user input in the design and development of DAT facilitates adoption
of the technology (Ross et al. 2016). Thus, users should be provided with
opportunities for involvement in the context, to promote empowerment,
democratisation and job satisfaction among personnel (Glomsås et al. 2020).
However, we found that DAT often is implemented without user involve-
ment, which can result in the users experiencing difficulties related to its
operation and interfaces which are difficult to learn or are not intuitive.
In the worst case, this leaves the user unable to master the technology. It is
 Digital assistive technology 85
important to consider the user’s technological readiness since this has im-
plications for adoption. In our study, some of the older people did not own a
smartphone of any kind. Also, the instructions for using the DAT were not
adapted to the local context, as demonstrated by the implementation studies
of a surveillance camera (see Section 9.4.3).
One of the main factors for technology adoption failure is that users find
the technology difficult to use (e.g., Dugstad et al. 2019), and this was evi-
dent in our study. The user interfaces need to be simple and intuitive. The
IT staff stresses that DAT has to be easy to learn and to use and reliable.
Now there are too many pitfalls in trying to implement a new DAT, and the
IT staff has to support both the older people and the personnel working
with the DAT. Ease of use can be a barrier to user acceptance and promote
a negative attitude towards the DAT (Gjellebæk et al. 2020a).

9.4.2 External policy and incentives

The reason for introducing DAT in municipal healthcare is obvious and
is related to both economic and social gains in terms of quality of life
(Glomsås et al. 2020). Managers expressed the desire to implement more of
DAT features to increase safety and independence for older people. How-
ever, successful implementation depends on the conditions in the wider en-
vironment, beyond the municipality, for example, the digital infrastructure.
Not all older people have access to broadband or the digital identification
applications required by some Internet-based services. Thus, provision of
DATs to all older people is impossible due to unequal societal differences
(cf. Hamblin 2020). Conditions can vary across municipalities, and manag-
ers are not always aware of the situation in their municipality.
Since DAT is a new technology, responsibility for decisions about its im-
plementation and the type of DAT to use are somewhat unclear. This is
another barrier to DAT implementation. Absence of a DAT strategy results
in confusion related to who can prescribe a DAT (managers, occupational
therapists or some government department) and how it will be financed. The
municipalities do not have access to the full range of DATs available, and
some are provided by the regional healthcare organisations, for example,
many cognitive aid technologies.
In line with the review by Ross and colleagues (2016), our cases confirm
that the absence of standards, legislation and policies hamper the imple-
mentation of DAT. Standards provide personnel with information about
how to manage patient data and to ensure integrity and safety and informa-
tion on professional liability and how data can be transferred between or-
ganisations and systems. Confidentiality and privacy issues were mentioned
by IT staff as posing problems. In particular, system-driven access to infor-
mation and communication and sharing of information have been found
to be difficult in a wide range of healthcare organisations, from hospitals
to primary healthcare, municipality healthcare and pharmacies. Our cases
86 Ann Svensson et al.
show that lack of standards and policies on aspects such as confidentiality,
information sharing and storage hamper not only the implementation of
DAT but also the collaboration across different actors and between organ-
isations and systems.

9.4.3 Organisational characteristics

DAT seems to have a transforming effect on work practices, a finding that
contrasts with research on the implementation of e-health applications (Ross
et al. 2016), which stresses the importance of a fit between the technology
and existing work practices. However, this transformation requires support
from managers and a well-constructed work practice strategy (Gjellebæk
et al. 2020b). We observed the implementation of surveillance equipment to
replace some face-to-face visits and save on long car journeys. The surveil-
lance equipment promised increased efficiency and greater safety and secu-
rity for older users. However, there was a lack of clarity about the response
to an alarm and lack of consideration that some might be false alarms. The
increasing number of alarm signals and how to deal with them with the
current workforce caused a major worry for managers. It would seem that
DAT cannot completely replace personnel visits and that, in the absence of
a new work organisation, the introduction of new technology can add to the
current workload rather than reducing it.
Thus, municipalities face major issues in the implementation and adop-
tion of DAT (Gjellebæk et al. 2020a). At the very least, it requires a detailed
implementation plan, and it may also involve a total reorganisation to cre-
ate a structure that allows for the learning and collaboration necessary to
implement the DAT successfully. Also, since the use context of the DAT
will vary (e.g., an assisted living facility, a specific area of care, a specific
population), the actors involved may face different challenges depending on
the context and the provisions, which may require implementation plans
designed around, or adapted to, specific user needs based on the types of
services an organisation may provide.
Another challenge related to the organisation implementing the DAT can
be a competence gap. Working in the healthcare sector increasingly involves
use of technology, but personnel’s technological skills vary. Managers are
aware that some may perceive DAT as a threat and fail to see the oppor-
tunities it provides (Svensson 2020). Lack of competence to use DAT cre-
ates a precarious situation, since the personnel are responsible for making
sure that the DAT has a positive effect on older users. However, when older
people and their kin request for DAT-oriented services, it forces manag-
ers to design and implement DAT-driven work practices even when they
are fully aware of the lack of technological competence of the personnel
in the healthcare organisation. The IT staff responsible for supporting the
personnel may again lack knowledge about the care context; this knowl-
edge gap highlights the importance of teaching the care personnel about
 Digital assistive technology 87
how to use the technology to its optimum potential in service provision.
It is possible that the introduction of DAT may require municipal healthcare
organisations to learn or acquire a new set of technology skills to achieve
complete transformation of service provision. Despite their different com-
petences and technological skills, all the actor groups in our cases stressed
the importance of access to knowledge and information for the implemen-
tation of DAT (cf. Ross et al. 2016). Successful implementation of DAT and
improving the efficiency with which it is used call for creating and sustaining
a tech-oriented work environment that helps personnel learn to use tech-
nology to the optimum level and provide services efficiently; this is some-
thing new to the healthcare sector (Gjellebæk et al. 2020b). The competence
gap and fast technological development create a situation where it is diffi-
cult to rearrange work practices and create opportunities for personnel to
learn about the DAT (Gjellebæk et al. 2020b). It is possible that the existing
boundaries between different professional competencies, technology and
healthcare may need to be integrated to form a new healthcare profession.
Municipal healthcare organisations will need to develop new skills and
competences or upskill (or unlearn) extant skills and competences to in-
crease the likelihood of successful implementation of DAT (Wilbert et al.
2018). The lead staff at the municipality level and human resources de-
partment staff should identify the conditions required for a learning and
knowledge-sharing work culture, which brings together different actor
groups to produce a shared vision. Different skills will be required to en-
able an overall implementation strategy combined with a top management
mandate related to strategy.

9.4.4 Individual characteristics

As already mentioned, the different users in municipal healthcare have dif-
ferent technological skills and competences and very few personnel have
deep knowledge about types of DAT and how it could increase and support
quality of life for older people. Many older users in our case studies had
no experience of DAT and were not comfortable with using digital devices.
However, both the older people and the personnel were generally positive
about technology and the implementation of DAT in particular. The most
positive attitudes were among younger personnel and those with previous
experience of working with DAT (Gjellebæk et al. 2020a). Personnel with the
opportunity to co-create their work practice with the DAT were especially
positive and engaged (Dugstad et al. 2019).
The organisational-level competence gap was emphasised by the person-
nel themselves; they recognised the need for education and training in how
to use and manage the DAT. This relies, currently, on a peer-to-peer system;
a few personnel receive specific training and are responsible for training
colleagues. Since attitudes to DAT can vary, the success of this method also
varies since negative attitudes can get passed on (Gjellebæk et al. 2020a).
88 Ann Svensson et al.
However, in most cases, personnel had to work out for themselves how to
use the DAT and rely on information obtained from the Internet.
Continuous information reduces worry and misconceptions about DAT
and its uses and emphasises that individual involvement is important for
successful implementation (Gjellebæk et al. 2020a). It is important that
actor groups are able to continuously communicate and collaborate, that
information flows are open and transparent and that users can monitor im-
plementation of each specific DAT (Gjellebæk et al. 2020b). Thus, in line
with knowledge management theory, continuous creation, sharing and up-
dating of knowledge and information, should be a natural part of the learn-
ing process (Svensson and Durst 2020).
To reap the intended value of DAT requires the resolution of various
individual-level challenges. They include information flow, and provision of
education and training in different DAT, to allay fear and compensate for
inexperience, both of which can have a negative effect on the adoption of
DAT (Gjellebæk et al. 2020a). The likelihood of success will increase if all
actor groups are involved in implementation from the beginning since this
seems to increase rates of actor acceptance and engagement (Bäccman et al.
2020).

9.5 Takeaway
By studying DAT implementation from a multi-actor perspective, this
chapter adds to the understanding of technology implementation and re-
search in healthcare. By focusing on the people involved in the implemen-
tation process, the cases discussed in this chapter provide new insights that
could help overcome some of the challenges associated with technology
implementation. By investigating different actor groups and their specific
challenges and roles, this chapter adds to the understanding of the prereq-
uisites for the successful implementation of DAT. DAT transforms not only
work practices and daily routines but also the entire healthcare profession,
from being primarily concerned with caring and nursing, to a profession
involving technological skills. Successful digitalisation of healthcare re-
quires a new mind-set, new work practices and new roles and professions.
The challenges identified could serve as enablers and/or inhibitors in this
transformation and provide insights into how DAT implementation can be
managed.

Acknowledgements
The authors thank the Karlstad Health and Care Administration in Swe-
den and the personnel and residents in an assisted living facility for their
cooperation and participation. The authors also thank the managers and
professionals in the municipalities of Fyrbodal, Sweden and Viken, Nor-
way. The project was supported by the European Regional Development
 Digital assistive technology 89
Fund through Interreg Sweden – Norway. We are grateful to Catharina
Bjørkquist, Nina Fladeby, Camilla Gjellebæk, Kerstin Grundén, Lena G
Larsson and Helena Vallo Hult for their help with collecting the data.

References
Aggelidis, V.P. and Chatzoglou, P.D. 2009. Using a modified technology acceptance
model in hospitals. International Journal of Medical Informatics 78(2): 115–126.
Bäccman, C. and Bergkvist, L. 2019. Welfare technology and user experience:
A study of seniors’ expectations on and first impressions of a robotic shower.
Proceedings of the 52nd Hawaii International Conference on System Sciences, Hon-
olulu: University of Hawaii at Manoa: 4297–4306.
Bäccman, C., Bergkvist, L. and Kristensson, P. 2020. Elderly and care personnel’s
user experiences of a robotic shower. Journal of Enabling Technologies 14(1): 1–13.
Damschroder, L.J., Aron, D.C., Keith, R.E., Kirsh, S.R., Alexander, J.A. and Low-
ery, J.C. 2009. Fostering implementation of health services research findings into
practice: A consolidated framework for advancing implementation science. Im-
plementation Science 4(1): 1–15.
Davis, F.D. 1989. Perceived usefulness, perceived ease of use, and user acceptance
of information technology. MIS Quarterly 13(3): 319–340.
Desveaux, L., Soobiah, C., Bhatia, R.S. and Shaw, J. 2019. Identifying and over-
coming policy-level barriers to the implementation of digital health innovation:
Qualitative study. Journal of Medical Internet Research 21(12): e14994.
Dugstad, J., Eide, T., Nilsen, E.R. and Eide, H. 2019. Towards successful digital
transformation through co-creation: A longitudinal study of a four-year imple-
mentation of digital monitoring technology in residential care for persons with
dementia. BMC Health Services Research 19(1), 366: 1–17.
Flandorfer, P. 2012. Population ageing and socially assistive robots for elderly: The
importance of sociodemographic factors for user acceptance. International Jour-
nal of Population Research, 829835: 1–13.
Gjellebæk, C., Svensson, A. and Bjørkquist, C. 2020a. The dark sides of technology –
barriers to work-integrated learning. In Augmented Cognition. Human Cognition
and Behavior, edited by Schmorrow, D.D. and Fidopiastis, C.M., 69–85, Switzer-
land: Springer Nature.
Gjellebæk, C., Svensson, A., Fladeby, N., Bjørkquist, C. and Grundén, K. 2020b.
Management challenges for the future digitalisation of healthcare services. Fu-
tures 124(102636): 1–10.
Glomsås, H.S., Knutsen, I.R., Fossum, M. and Halvorsen, K. 2020. User involve-
ment in the implementation of welfare technology in home care services: The ex-
perience of health professionals – A qualitative study. Journal of Clinical Nursing
29(21–22): 1–13.
Gücin, N.Ö. and Berk, Ö.S. 2015. Technology acceptance in health care: An integra-
tive review of predictive factors and intervention programs. Procedia − Social and
Behavioral Sciences 195: 1698−1704.
Hamblin, K. 2020. Technology and social care in a digital world: Challenges and
opportunities in the UK. Journal of Enabling Technologies 14(2): 115–125.
Hofmann, B. 2013. Ethical challenges with welfare technology: A review of the liter-
ature. Science and Engineering Ethics 19: 389–406.
90 Ann Svensson et al.
Johansen, F. and van den Bosch, S. 2017. The scaling-up of neighbourhood care:
From experiment towards a transformative movement in healthcare. Futures 89:
60–73.
Kemp, A. and Hvid, H.S. (Eds.) 2012. Elderly care in transition: Management, mean-
ing and identity in work – A Scandinavian perspective. Copenhagen: Copenhagen
Business School Press.
Öberg, A.D. and Rolfer, B. 2017. Välfärdsteknologi handlar inte om teknik utan
om människor – tekniksprång i nordisk demensvård. Nordens välfärdscenter
[Digital assistive technology is not about technology but about people – disruptive
technology in Nordic Dementia Care], http://nordicwelfare.org/PageFiles/41831/
Demens-inspirationsha%cc%88fte- webb.pdf (accessed December 10, 2019).
Ross, J., Stevenson, R.L. and Murray, E. 2016. Factors that influence the implemen-
tation of e-health: A systematic review of systematic reviews (an update). Imple-
mentation Science 11(1), 146: 1–12.
Shubber, M., Östlind, T., Svensson, A. and Larsson, L.G. 2018. Acceptance of video
conferencing in healthcare planning in hospitals. Proceedings of 24th Americas
Conference on Information Systems, New Orleans, LA.
Svensson, A. 2020. Identifying motives for implementing eHealth by using activity
theory. Sustainability 12(4), 1298: 1–11.
Svensson, A. and Durst, S. 2020. Implementing digital assistive technology in
healthcare: Which work-related knowledge matters? In Digital Ecosystem and
Business Transformation: Individual, Organizational and Societal Challenges, ed-
ited by Za, S., Braccini, A.M., Lazazzara, A. and Virili, F., 1–14, Switzerland:
Springer Nature.
Tiwari, P., Warren, J. and Day, K.J. 2010. Some non-technology implications for
wider application of robots assisting older people. Health Care and Informatics
Review Online 14(1): 2−11.
WHO (World Health Organization). 2018. Ageing and health, Retrieved from
https://www.who.int/news-room/fact-sheets/detail/ageing-and-health (accessed
October 12, 2020).
Wilbert, J., Durst, S., Ferenhof, H. and Selig, P. 2018. Unlearning at the individual
level: An exploratory case study in a high power distance country. Journal of In-
novation Management 6(2): 17–39.
Yarbrough, A.K. and Smith, T.B. 2007. Technology acceptance among physicians:
A new take on TAM. Medical Care Research and Review, 64(6): 650–672.
Part 2

Managerial and
organisational challenges
10 Modern project management
Challenges for the future
Klas Sundberg, Birger Rapp and Christina Keller

Digitalisation can be regarded as “a sociotechnical process of applying digitizing

techniques to broader social and institutional contexts that render digital tech-
nologies infrastructural” (Tilson et al. 2010: 749). As digitalisation and digital
transformation have become a common, often ubiquitous, part of our society,
we argue the need for new approaches to project management to adapt to a
situation of rapid technological development and flexibility. This flexibility is
evident in agile project methods, such as eXtreme Programming (Beck and
Andres 2005) and Scrum (Schwaber and Beedle 2002), although project man-
agement methods developed during the 1960s and are still in use. In 1969, the
U.S. Project Management Institute published A Guide to the Project Manage-
ment Body of Knowledge (PMBOK Guide) which has served as the standard
for project management since that time (Tonnquist 2018). However, the “agile
manifesto” changed how Information Technology (IT) projects (Gustavsson
2019) were viewed, and agile became the dominant way to manage such pro-
jects. The success of agile methods has led to researchers and practitioners
applying them in other project contexts. These attempts have shown varying
results. It seems that agile methods have some limitations when applied to
non-software sectors because of the different requirements related to control
system tightness (Merchant and Van der Stede 2007) in organisations. Large
and complex organisations tend to demand more stringent control procedures
which are not coherent with agile methods (Boehm and Turner 2005).
This chapter examines how traditional project management can learn from
agile methods and identifies the factors that are critical for successful use of
project management methods. It discusses the alternative hybrid project man-
agement as an opportunity for industries where agile methods are not appro-
priate. The chapter concludes by highlighting the most favourable contexts
for traditional, agile and hybrid project management, based on literature.

10.1 Traditional project management

Traditional project management is based on the project management model
proposed in the PMBOK Guide (Tonnquist 2018). This is a plan-and- control-
driven model, which includes five project phases and ten knowledge areas
(see Table 10.1).
DOI: 10.4324/9781003111245-10
 94

Table 10.1 The PMBOK guide: a guide to the project management body of knowledge

Knowledge area processes Phases

1. Initiation 2. Planning process 3. Executing 4. Monitoring and 5. Closing process

process groups groups process groups controlling process groups
groups

1. Project integration Develop project Develop project Direct and Monitor and Close project or
management charter management plan manage project control project phase
Klas Sundberg et al.

work work
Perform
integrated
change control
2. Project scope Plan scope management Validate scope
management Collect Requirements Control scope
Define scope
Create a work breakdown
structure (WBS)
3. Project time Plan schedule Control schedule
management management
Define activities
Sequence activities
Estimate activity
resources
Estimate activity
duration
Develop schedule
4. Project cost Plan cost management Control costs
management Estimate costs
Determine budget
5. Project quality Plan quality management Perform quality Perform quality
management assurance control
Control quality
6. Project human resource Plan human resource Acquire project
management management team
Develop project
team
Manage project
team
7. Project Plan communication Manage Report
communications management communication performance
management Control
communication
8. Project risk Plan risk management Control risks
management Identify risks
Perform qualitative risk
analysis
Perform quantitative risk
analysis
Plan risk response
9. Project procurement Plan procurement Conduct Control Close
management management procurement procurement procurement
10. Project stakeholder Identify Manage stakeholder Manage Control
management stakeholders engagement stakeholder stakeholder
engagement engagement
Modern project management 95
96 Klas Sundberg et al.
The five project phases are executed sequentially with no iteration. In
traditional project management, planning, monitoring and control are sig-
nificant project manager and project team responsibilities and tasks. Tradi-
tional project management focuses on two main project phases –a. planning
and b. monitoring and control – which encompass the main project activi-
ties. Planning includes 25 activities, and monitoring and control include 13
activities. Execution, which refers to actual project performance, includes
only eight activities. In traditional project management, there is a basic as-
sumption that the project has a project owner who can take decisions about
the project based on regularly reported information.

10.2 Agile project management

Agile project management developed in 2001 as a reaction to the rigidity
of the traditional plan-and-control-driven methods. Agile methods focus
on the project team’s ability to enhance value and customer delivery (Beck
et al. 2001). Agile methods are more flexible and more adaptable during the
project and focus more on real outcomes than on pre-planned outcomes
(Rigby et al. 2016). “Making detailed plans only for the next events” is an agile
principle (Gustavsson 2019: 97). The agile manifesto includes the following
priorities:

• Individuals and interaction rather than processes and tools;

• Working project results rather than comprehensive documentation;
• Customer collaboration rather than contract negotiation;
• Responding to change rather than following a plan.

Agile project management is an incremental process that can be readily

adapted to changes to the project and the project environment. The agile
approach to projects is characterised by short cycles and adaptations to
respond to changes and capture the ongoing learning from the project. It
also involves a different time horizon. Whereas traditional project man-
agement includes relatively extended phases, agile project management
focuses on sprints or shorter stages of a predefined length. In situations
where there is considerable uncertainty about what to produce and how to
produce it, an agile approach allows for experimentation and production
of smaller prototypes to allow updates to the final product. The agile pro-
ject management organisation differs from the traditional project manage-
ment organisation; it includes the product owner, the scrum master and the
development teams. The traditional project manager role is taken by the
scrum master, whose job it is to coach the development team and ensure
adherence to the agile methodology. The scrum master’s role is more lim-
ited and involves less responsibility than the traditional project manager
role. In agile projects, the entire development team is responsible for plan-
ning and results. Figure 10.1 compares the phases related to traditional
 Modern project management 97

Monitoring
Traditional project
Initiating Planning Execution and Closing
management controlling

t Build t Build t Build

Tes Tes Tes

De

De

De
iew

iew
iew
sig

sig

sig
Rev

Rev
n

n
Rev
Agile project Sprint 1 Sprint 2 Sprint 3
management

Pla

Pla

Pla
n

n
Launch Launch Launch

Figure 10.1 A comparison between the stages in traditional and agile project man-
agement (adapted from Keller et al. 2017).

project management and agile project management (see, for example, Gus-
tavsson 2019; Keller et al. 2017).
Boehm and Turner (2005: 34) distinguish between agile and traditional
project management, as follows:

An often-overlooked difference between agile and traditional engineer-

ing processes is the way everyday business is conducted. Estimation,
resource loading, and slack calculations can vary significantly. The level
of uncertainty and ambiguity that exists in any evolutionary or iterative
process, particularly in long-term estimates, is most likely higher with
agile approaches. We’re still caught in the certainty/ambiguity conun-
drum; our business processes and infrastructure require near-perfect
predictions of difficult-to-estimate tasks rather than encouraging ex-
perimentation and evolution with knowable short-term results but ac-
cepting of long-term haziness.

10.3 Hybrid project management

Different project management methods involve different problems and
limitations. Successful and sustainable development requires a combina-
tion of disciplined plan-and-control-driven and agile methods. Cooper
and Sommer (2018) consider that the major problems related to the trans-
formation to flexible methods are management scepticism and dedicated
resources to enable the new model. However, the increasing popularity
of agile methods for general project management is resulting in the inte-
gration and combination of methods and what have been called hybrid
methods.
A hybrid method refers to a combination of more than one method to
exploit the respective method’s strengths (Riesener et al. 2018). Empirical
studies show that an agile methodology is not always appropriate, and, in
98 Klas Sundberg et al.
the manufacturing sector – especially the product development process – a
combination of an agile and a plan-driven approach might be optimum. Ac-
cording to Riesener et al. (2018), research on the combined use of agile and
traditional approaches is increasing exponentially.
The success of small agile project management methods is allowing more
ways to integrate agile approaches with more traditional project planning.
One such notion is scaling up. Fitzgerald et al. (2013) present a case study
to show how agile methods can be scaled up to fit with a regulated envi-
ronment. They focus on three particular aspects: first, continuous quality
assurance to ensure regulatory compliance; second, a focus on procedures
related to safety, security and protection regulation. Strict authentication
and password routines, restricted to authorised personnel, allow visibil-
ity in all project phases, which simultaneously provides transparency and
reduces regulatory risks; and third, to achieve end-to-end traceability in
the regulated environment, the development process must be subject to
traceable ongoing product checks and monthly external audits (Fitzgerald
et al. 2013).
Sommer et al. (2015) discuss how to achieve improved product develop-
ment performance using hybrid methods. Many contemporary enterprises
are adopting agile forms of organisational design to increase their agility
more generally. Sommer et al. (2015) argue that manufacturing companies’
product development processes are complex and involve iteration and exter-
nal collaboration and resources, which inflexible plan-and-control-driven
models cannot handle. Their comparative study of a sample of technology-
intensive companies shows that a hybrid process that combines elements
of agile management (at the execution level) with the traditional plan-and-
control-driven model (ay the strategic level) offers a more flexible alterna-
tive than conventional product development. They suggest that industrial
companies can improve their performance by implementing hybrid product
development processes. Sommer et al.’s (2015) study shows that use of agile
tools, visualisation techniques related to communication and knowledge
sharing and incentivising employees are the most important sources of pro-
ductivity improvements.
Lensges et al. (2018) argue that there is a trade-off involved in choosing
traditional or agile or hybrid methods. They propose a 2 × 2 matrix based
on the dimensions of high and low complexity and low and high uncertainty.
They argue that an agile methodology is preferred in situations of high com-
plexity and high uncertainty. However, in the case of low complexity and
low uncertainty, traditional methods perform better. For all other combi-
nations of complexity and uncertainty, a hybrid method works best (see
Figure 10.2). Lensges et al. (2018: 29) consider that “There is still great ben-
efit from detailed early planning, but parts of the project may be too complex
to fully understand at the outset or the client may simply not know enough to
make all needed decisions early.”
 Modern project management 99

Hybrid Agile
High project project
methods methods

Complexity

Traditional Hybrid
project project
Low
methods methods

Low High
Uncertainty

Figure 10.2 How uncertainty and complexity favour different approaches for pro-
ject management (adapted from Lensges et al. 2018: 29).

10.4 Project characteristics

Project contexts differ and include software engineering, product develop-
ment and service management. In this section, we discuss the level of project
complexity and project size and scope in the context of traditional and agile
project management.
To measure the level of complexity, we follow the definition provided by
Baccarini (1996), which states that project complexity depends on the diffi-
culty of the project being undertaken. Complexity can derive from whether
the project uses a new technology, whether the project task is complicated or
whether it involves a high level of integration or links to existing structures.
In highly complex projects, static tools (charts, plans, documentation and
specification) become burdensome (Sommer et al. 2015). The introduction
of agile methods, being based on the notion of flexibility, can not only re-
duce but also handle high complexity. Also, agile methods involve knowl-
edge workers in solving complex problems, making them more involved in
the project creation process (Lensges et al. 2018). Finally, agile methods sup-
port direct communication among people, which enables regular feedback
and evaluations to deal with problems (Diel et al. 2015).
There are several barriers to the implementation of agile processes
(Boehm and Turner 2005). One of these is project size in terms of the num-
ber of personnel involved. Although large and complex organisations can
adopt agile principles and methods, they use them only in small-scale pro-
jects that need smaller teams and smaller project resources and investments.
100 Klas Sundberg et al.
Agile project teams tend to be smaller than traditional project teams. How-
ever, in large organisations, agile teams may be integrated with other teams,
entailing them to work with other experts who are responsible for project
coordination (Hobbs and Petit 2017).
Project scope refers to all the work required to complete the project suc-
cessfully (Tonnquist 2018). The scope for plan-and-control-driven projects
and the scope for agile projects are defined differently. The former’s scope is
predefined in detail in terms of expected outcomes. As for the latter – agile
projects – their scope can change based on changes in customer demand
(Rigby et al. 2016). This represents a potential clash in the adoption of ag-
ile principles by large corporations. For example, a large manufacturing
project often involves a contract signed by the company and the customer,
which specifies project scope (i.e., outcome) and deviations from the terms
of this contract could have legal consequences: “The question as how to use
the flexibility of agile to deliver … by contract remains largely unanswered”
(Hobbs and Petit 2017: 12).

10.5 Obstacles to agility

Jovanovic and Beric’s (2018) meta-analysis shows that the general charac-
teristics of traditional plan-and-control-driven methodologies make them
more appropriate for large and more complex projects, such as military and
manufacturing, and that agile methodologies are more appropriate for IT
projects and small, less complex projects. Hobbs and Petit (2017) analysed
large organisations’ efforts to apply agile methods and found that they faced
difficulties at three levels: with the development team, at the project level
and in the interaction between the project and the organisation. The main
issue for big organisations is how the project interacts with other parts of the
organisation (Sommer et al. 2015). In a special issue on agile development
in IEEE Computer, Williams and Cockburn (2003: 40) state that agile meth-
ods “best suit collocated teams of about 50 people or fewer who have easy
access to user and business experts and are developing projects that are not
life-critical.”
Based on an empirical study conducted at Microsoft, Begel and Nagap-
pan (2007) found that agile methodologies are preferred because they en-
hance communication among team members and allow quick releases and
increased design flexibility. The developers were concerned most about scal-
ing up the agile methodology to projects with more than 20 members, which
can involve too many meetings to coordinate agile and non-agile teams.

10.6 Skills and leadership

A turbulent environment requires organisation members and managers to
have specific capabilities. Appelbaum et al. (2017) highlight the challenges
 Modern project management 101
related to achieving organisational agility. In their literature review, they in-
vestigate the possible ways to combine internal stability with external agility
in order to contribute to general organisational agility, operational perfor-
mance and survival. They suggest that commitment to continuous trans-
formation and agile strategies implies changes at all organisational levels,
from structure to leadership and decision-making to individual skills and
interpersonal relationships.
In the context of the performance of innovation projects, de Oliveira et al.
(2012) suggest that a transformational leadership style is preferable to the
traditional top-down transactional leadership style. A transformational
leader focuses on the group, on long-term progress and on development.
This leadership style rests on four components (de Oliveira et al. 2012):

• Charisma or idealised influence, which generates trust and vision;

• Inspirational motivation, which poses challenge and encourages en-
gagement towards a shared goal;
• Intellectual stimulation, which enables visionary development and crit-
ical analysis to set standards and generate creative solutions;
• Individualised consideration, which treats followers as individuals and
guides their search for self-development.

Transformational leaders tend to be risk-takers and are comfortable with

experimentation. They may use decentralised principles and focus on the
overall goal for the whole team. Appelbaum et al. (2017) underline that
leadership programmes need to focus on transformational capabilities
that allow the members of the organisation or team to better align to agile
principles.
Agile leadership behaviours need to trickle down to lower organisational
levels. Appelbaum et al. (2017) emphasise employee satisfaction as crucial
for organisation performance and customer satisfaction. Leaders need to
promote organisational customer-focused capabilities, such as: coordina-
tion to harmonise information; cooperation to encourage people to work
together in the interests of the customer; and connection to develop rela-
tionships with external actors. Recent empirical research on the IT sector
(Hidayati et al. 2020) highlights the ability to communicate, to commit and
to collaborate as competences required by agile team members.
Thus, we can assume that leadership and employee skills are crucial for
creating changes in agile methods. Management needs to understand and
support and facilitate use of agile methods (Rigby et al. 2016). The right
competences required for the transformation of agile principles should not
be underestimated; this transformation can question the fundamental base
of the traditional organisation. However, the opening up of rigid structures
can introduce freedom and promote training which favour creativity and
long-term survival.
102 Klas Sundberg et al.
10.7 Stakeholders and customers
Stakeholders are individuals or groups who are affected by or who affect a
project (Tonnquist 2018). Examples of stakeholders include customers, con-
tractors, owners, employees and pressure groups. To be successful requires
the project manager to identify stakeholders able to provide input or resolve
questions that arise during the project (Hobbs and Petit 2017). Agile project
management requires attention to actors affected by the project (Gustavs-
son 2019).
The agile manifesto highlights ongoing customer interaction throughout
the project (Beck et al. 2001). While in traditional, sequential project meth-
ods the customer is involved only at certain decision points, agile methods
allow for customer involvement throughout the project (Kärrbom Gustavs-
son and Hallin 2014), which enhances customer engagement and satisfac-
tion. This can be especially useful in an unpredictable environment in terms
of customer preferences and in a situation where the solution options might
change during the project (Rigby et al. 2016).
Agile projects tend to proceed in small steps with continuous delivery to
the customer. This allows for constant evaluation of outcomes and reformu-
lation of goals and milestones (Gustavsson 2019). However, it can have some
drawbacks. First, it requires a very active customer who is fully engaged in
the project. It requires the customer to interact with the project team regu-
larly and throughout the course of the project. If the customer is unable or
unwilling to commit to full involvement, the agile method becomes point-
less (Boehm and Turner 2005). Second, if the project produces high-value
assets, it may be too costly to change direction completely to a new product.
There will be reduced opportunities for adjustments in projects where most
of the project’s resources have been invested in a particular asset. Finally,
if the end-product and its characteristics have been defined in a formal con-
tract with the customer, this leaves little room for changes during the project
(Gustavsson 2019).
Figure 10.3 summarises our discussion of the different dimensions that
influence the choice of planning method. We argue that project dimensions
can range from small and flexible to large and predefined and that organ-
isations can opt for either agile project management or traditional project
management depending on the project dimensions. If all of the dimensions
shown in Figure 10.3 favour only one type of project management, that is,
either agile project management or traditional project management, then
the choice is clear. However, if some dimensions suggest agile methods and
some suggest traditional management, then perhaps hybrid project manage-
ment is the choice.

10.8 Takeaway
Traditional project management is rigid and does not allow for changes or
adaptations while the project is running. This can be problematic especially
 Modern project management 103

AGILE is favoured if... HYBRID is favoured if... TRADITIONAL is favoured if...

SCOPE is SMALL, FLEXIBLE LARGE, PRE-DEFINED

SIZE is SMALL ...project characteristics take on LARGE

COMPLEXITY is HIGH values in the middle of the LOW

UNCERTAINTY is HIGH continum or if they are LOW

PROJECT FOCUS is DELIVERY TO CUSTOMER a combination of agile QUALITY, COST, CONTROL

CUSTOMER INVOLVMENT is HIGH and traditional traits LOW

PROJECT MEMBER INTERACTION is INFORMAL, WHEN IN NEED FORMAL, PLANNED

LEADERSHIP SKILLS NEEDED is INTERACTION-ORIENTED TASK-ORIENTED

DEGREE OF LEGAL REGULATION is LOW HIGH

PORTFOLIO MANAGEMENT is SIMPLE COMPLEX

Figure 10.3 Factors favouring different approaches to project management.

in IT projects. Agile thinking and agile project management allow for short
cycles and a focus on real outcomes and not pre-planned outcomes. In IT
projects it is important to use methods that allow for changes since informa-
tion is diffusing rapidly and is more detailed and more pervasive. However,
some settings will be better suited to traditional methods. Successful and
sustainable development will require both disciplinary plan-and-control-
driven methods and agile methods or a hybrid project management method,
and we are seeing an increase in the use of hybrid methods in line with in-
creased digitalisation.

References
Appelbaum, S.H., Calla, R, Desautels, D. and Hasan, L.N. 2017. The challenges of
organizational agility: Part 2. Industrial and Commercial Training 49(2): 69–74.
Baccarini, D. 1996. The concept of project complexity – A review. International
Journal of Project Management 14(4): 201–204.
Beck, K., Beedle, M., Van Bennekum, A. et al. 2001. Manifesto for Agile Software
Development. Retrieved from http://www.agilemanifesto.org.
Beck, K. and Andres, C. 2005. Extreme Programming Explained: Embrace Change.
Boston, MA: Addison-Wesley.
Begel, A. and Nagappan, N. 2007. Usage and perceptions of agile software devel-
opment in an industrial context: An exploratory study. In First International
Symposium on Empirical Software Engineering and Measurement (ESEM 2007).
Madrid, Spain: IEEE, 255–264.
Boehm, B. and Turner, R. 2005. Management challenges to implementing agile pro-
cesses in traditional development organizations. IEEE Software 22(5): 30–39.
Cooper, R.G. and Sommer, A.F. 2018. Agile–stage-gate for manufacturers: Chang-
ing the way new products are developed integrating agile project management
methods into a stage-gate system offers both opportunities and challenges.
Research-Technology Management 61(2): 17–26.
de Oliveira, M.A., Dalla Valentina, L.V.O. and Possamai, O. 2012. Forecasting pro-
ject performance considering the influence of leadership style on organizational
104 Klas Sundberg et al.
agility. International Journal of Productivity and Performance Management 61(6):
653–671.
Diel, E., Bergmann, M., Marczak, S. and Luciano, E. (2015, October). What is agile,
which practices are used, and which skills are necessary according to Brazilian
professionals: Findings of an initial survey. In 2015 6th Brazilian workshop on
agile methods (WBMA). Pernambuco: IEEE, 18–24.
Fitzgerald, B., Stol, K.J., O’Sullivan, R. and O’Brien, D. 2013. Scaling agile meth-
ods to regulated environments: An industry case study. In 2013 35th International
Conference on Software Engineering (ICSE). San Francisco, CA: IEEE, 863–872.
Gustavsson, T. 2019. Agile Project Management. 1st ed. Stockholm: Sanoma.
Hidayati, A., Budiardjo, E.K. and Purwandari, B. 2020. Hard and soft skills for
scrum global software development teams. In Proceedings of the 3rd International
Conference on Software Engineering and Information Management. Sydney: IEEE,
110–114.
Hobbs, B. and Petit, Y. 2017. Agile methods on large projects in large organizations.
Project Management Journal 48(3): 3–19.
Jovanovic, P. and Beric, I. 2018. Analysis of the available project management meth-
odologies. Management: Journal of Sustainable Business and Management Solu-
tions in Emerging Economies 23(3): 1–13.
Kärrbom Gustavsson, T. and Hallin, A. 2014. Rethinking dichotomization: A criti-
cal perspective on the use of hard and soft in project management research. Inter-
national Journal of Project Management 32(4): 568–577.
Keller, C., Haftor, D., Rapp, B. and Sundberg, K. 2017. Agil projektledning: Något för
alla eller bara för några? MGMT: Management of Information and Technology 4: 5–6.
Lensges, M.L., Kloppenborg, T.J. and Forte, F. 2018. Identifying key agile behav-
iors that enhance traditional project management methodology. Journal of Stra-
tegic Innovation and Sustainability 13(2): 22–36.
Merchant, K.A. and Van der Stede, W. 2007. Management Control Systems: Perfor-
mance Measurement, Evaluation, and Incentives. Harlow: Prentice Hall.
Riesener, M., Dölle, C., Ays, J. and Ays. J. L. 2018. Hybridization of development
projects through process-related combination of agile and plan-driven ap-
proaches. In 2018 IEEE International Conference on Industrial Engineering and
Engineering Management (IEEM). Bangkok, Thailand: IEEE, 602–606.
Rigby, D.K., Sutherland, J. and Takeuchi, H. 2016. Embracing agile. Harvard Busi-
ness Review 94(5): 40–50.
Rother, E. and Baboli, A. 2019. Lean manager in the factory of the future: Case
study in automotive industry. In 2019 IEEE 6th International Conference on Indus-
trial Engineering and Applications (ICIEA). Tokyo, Japan: IEEE, 218–224.
Schwaber, K. and Beedle. M. 2002. Agile Software Development with Scrum. Upper
Saddle River, NJ: Prentice Hall.
Sommer, A.F., Hedegaard, C., Dukovska-Popovska, I. and Steger-Jensen, K. 2015.
Improved product development performance through agile/stage-gate hybrids: The
next-generation stage-gate process? Research-Technology Management 58(1): 34–45.
Tilson, D., Lyytinen, K. and Sørensen, C. 2010. Research commentary – Digital
infrastructures: The missing IS research agenda. Information Systems Research
21(4): 748–759.
Tonnquist, B. 2018. Project Management. 4th ed. Stockholm: Sanoma.
Williams, L. and Cockburn, A. 2003. Agile software development: It’s about feed-
back and change. IEEE Computer 36(6): 39–43.
11 Managing the paradoxes of
digital product innovation
Fredrik Svahn and Bendik Bygstad

Digitalisation holds great promise for new product development. New mate-
rial properties, such as programmability and reproducibility, are promoting
novel functions and services (Yoo 2012) and making heat pumps intelligent,
cars connected and lawn mowers automatic. Digital design tools are trans-
forming prototyping practices (Boland et al. 2007), which, in combination
with technologies such as 3D printing and the Internet of Things, prom-
ise almost indefinite product variation and an opportunity to capitalise on
the ‘long tail’ (Brynjolfsson et al. 2010). Digital platforms are engaging new
stakeholders in innovation (Parker et al. 2016) and allowing firms to capture
value from a range of transactions, rather than relying on a single revenue
stream (Eisenmann et al. 2006).
Ongoing digitalisation motivates product-developing firms to re-
consider how to design, organise, work and make money in a digital
economy, where marginal costs disappear. At the same time, since heat
pumps, cars and lawn mowers are highly physical artefacts, in which
scale economies and commoditisation still matter, existing innovation
practices cannot be abandoned. This leaves incumbent firms in limbo,
between existing product innovation practices and a new, often poorly
understood digital innovation logic (Svahn et al. 2017). Existing research
emphasises that a shift from product innovation to digital innovation
does not resolve this challenge. Rather, digital product innovation – the
use of digital technology for creation and subsequent market introduc-
tion of new, redesigned or substantially improved physical products – is
requiring firms to find working product innovation and digital innova-
tion combinations.
This chapter examines the logics underlying product innovation and
digital innovation and compares these innovation regimes. Section 11.2
discusses the inherent tensions between these regimes by proposing three
paradoxes. Section 11.3 highlights some specific organisational capabilities
required to tackle these tensions between product innovation and digital
innovation.

DOI: 10.4324/9781003111245-11
106 Fredrik Svahn and Bendik Bygstad
11.1 The dual face of digital product innovation
Research on product innovation is mature and relatively stable. It includes
many seminal papers and widely acknowledged concepts. However, research
on digital innovation is quite recent, its contours are somewhat blurred and
its key concepts are being negotiated. In what follows, we review these two
bodies of research in order to compare and identify some inherent tensions
between them.

11.1.1 Product innovation

In product innovation, as we know it from the industrial era, the firm is at
the epicentre of innovation activity. To study technological innovation and
change, the research community has focused, mostly, on incumbent firms
that manufacture complex, but generally homogenous and uniform physi-
cal products. End-users are able to choose among alternative solutions, but
these products are fairly similar. This results in low levels of price differ-
entiation in the market. The existence of a few dominant designs indicates
a strong focus on incremental improvement. In manufacturing settings,
where material supplies are unreliable, production is costly and knowledge
is scarce, such incremental innovation is managed through hierarchical or-
ganisational structure, modular products (Baldwin and Clark 2000) and lin-
ear development processes (Godin 2006). It has been argued that this results
in vertically integrated industries (Chandler 1977) where competitive advan-
tages derive from organisational capability to enforce formal control over
the entire value chain. Another theoretical argument is that vertical struc-
turing offers competitive advantage by reducing transaction costs (William-
son 1979). It is simply cheaper to conduct incremental innovation internally
than to outsource it.
The concept of dominant design is central to product innovation (Suarez
and Utterback 1995). At some point in the evolution of every physical tech-
nology, the industry moves away from a system of ‘made-to-order’ prod-
ucts to standardised, mass-market manufacturing of complex assembled
products (Abernathy and Utterback 1978). Among the several mechanisms
suggested as driving this process (technological compromise, first-mover
advantages, network effects), one explanation stands out: a dominant de-
sign enables economies of scale in supply that can be realised through di-
rect sales of standardised products, where market competition shifts from
functional performance to price (Teece 1986). To leverage these economic
benefits requires the firm to reconsider its organisational structure and pro-
cesses. In particular, scale economies require production systems that are
nearly algorithmic, with well-synchronised product assembly stages, which
allow high-speed throughput (Chandler 1977). This leaves little room for
ambiguity about the overall structure of the product. Therefore, a domi-
nant design emerges from a set of core design concepts, corresponding to
 Digital product innovation 107
the product’s main functions (Henderson and Clark 1990). It also embeds
a general idea of how physical components embody these core design con-
cepts and how they, eventually, are integrated in a product (Baldwin and
Clark 2000). Then, “once any dominant design is established, the initial set
of components is refined and elaborated, and progress takes the shape of
improvements in the components within the framework of a stable architec-
ture” (Henderson and Clark 1990: 14).
Product-developing organisations frequently use modular architectures
to create such stability. By structuring the parts of a system according to the
principles of modularity, they can pay particular attention to the internal
properties of components. They may use this component-level flexibility to
create product families (Sanderson and Uzumeri 1995). On the one hand,
mixing and matching of components feed variety to markets. On the other
hand, a stable, overall system affords supply-side scale advantages as vari-
ants share the burden of development and production.
In markets characterised by a dominant design, competitive advantage
follows from the capability to fine-tune the fitness of a relatively stable over-
all system solution by adapting its different parts (Abernathy and Utterback
1978; Henderson and Clark 1990).
While a modular product strategy offers the flexibility required for recur-
rent changes to the interior of components, it effectively prevents changes to
the overall system structure (Baldwin and Clark 2000). Assumptions about
how the components in a product are related need to be cautious, since they
define how the product could change over time. Design and development
tend to follow strictly linear processes and apply modes of formal control,
which reduces ambiguity about product structure (Godin 2006). That re-
quires an early-stage shift in attention, from functional design to physical
design. When released for production, functional designs are frozen (Bald-
win and Clark 2000). Therefore, product definition is a critical decision,
defining change patterns both within the lifecycle of a product and across
generations (Ulrich 1995). Although preventing change in overall system
structure, modularity has proven a successful approach to handling the
complexity of physical artefacts. Loosely coupled, hierarchically ordered
components are easier to reuse and to reconfigure for new purposes. In fact,
modularity exponentially increases the number of possible configurations
achievable from a given set of inputs, which greatly increases the flexibility
of a system (Baldwin and Clark 2000).

11.1.2 Digital innovation

There is a general consensus that digital innovation refers to “the carry-
ing out of new combinations of digital and physical components to produce
novel products” (Yoo, Henfridsson and Lyytinen 2010: 725). This unique ca-
pability of digital technology fosters boundary-spanning practices, involv-
ing increasing varieties of, largely, uncoordinated innovation sources. As
108 Fredrik Svahn and Bendik Bygstad
a result, innovation becomes a distributed activity (Yoo et al. 2010), which
takes place in networks (Boland et al. 2007) or ecosystems (Hannah and
Eisenhardt 2018; Selander et al. 2013; Tiwana 2015), rather than in corpo-
rate hierarchies. Such distributed value creation “leads to the emergence
of dynamic, non-linear patterns of digital innovation” (Yoo et al. 2010: 3).
These nonlinear, distributed innovation environments do not provide value
by outperforming existing products, but through the establishment of new
value paths (Henfridsson et al. 2018). In that sense, digital innovation cul-
tivates multiplicity and substantial functional variety (Brynjolfsson et al.
2010).
Consequently, digital innovation is associated to significant risk, deriving
from the unpredictable evolution of technologies and markets. To navigate
such volatile environments, where ideas and knowledge derive from exter-
nal sources at the bottom of a market, incumbent organisations need to
organise for agility. Rather than the flexibility to differentiate products over
a range of predefined variants, they need to develop the capability to con-
tinuously “detect and seize market opportunities with speed and surprise”
(Sambamurthy et al. 2003: 238).
Digital innovation calls for new forms of governance and requires the
firm to rethink the trade-off between incentives and authority (Wareham
et al. 2014). It might seem that an incumbent firm could reap the benefits de-
riving from an open ecosystem, without contributing to it, but such oppor-
tunistic behaviour is fallacious. To achieve durable value, which resonates
with the firm’s internal innovation process, it is necessary to engage actively
with external actors (Selander et al. 2013). The creation of mutual value re-
quires concurrent manoeuvring of cooperation and competition forces. In
such coopetitive environments (Hannah and Eisenhardt 2018), explicit con-
tributions provide influence and power.
The variation and uncertainty inherent in digital innovation environments
relate to the absence of marginal costs (e.g., Parker et al. 2016). Production
tools, materials, supply chains, factories and distribution account for the
greater part of the costs of a car or a plane. In contrast, software functions
can be reproduced for free. The economic burden derives almost exclusively
from the fixed costs of development, since software can be realised, shipped
and consumed electronically, without consuming scarce, physical resources.
Essentially, the abundance of critical resources eliminates price as a dom-
inant force in innovation. Ultimately, this promotes markets with infinite
choice, where competitive advantage rests on the capability to attract and
preserve the user base. These markets are identified as economies of scope
in demand, since users reap the advantages of large variation (Gawer 2014).
Demand-side economies of scope generally take the form of a two-sided
market (Eisenmann et al. 2006), in which two groups – normally end-users
and application developers – are attracted to each other by a phenomenon,
identified by economists, as the network effect (Katz and Shapiro 1994). The
value of a particular network depends on the number of users on the other
 Digital product innovation 109
side of the network. For example, game developers focus on communities
offering a critical mass of players, and, similarly, game players favour com-
munities with a bigger variety of games. Therefore, a two-sided market re-
quires strategies related to building and maintaining a user base.
Digital innovation benefits from the presence of platforms (Parker et al.
2016; Tiwana 2015), which have the capacity to “bring together groups of
users in two-sided networks” (Eisenmann et al. 2006: 94). Platform-centric
ecosystems have proved particularly productive when allowed to emerge
relatively freely, in response to the opportunities offered by a general plat-
form. Platforms able to produce such “unprompted change driven by large,
varied, and uncoordinated audiences” have generative capacity (Zittrain
2006: 1980).
Contemporary research finds that layered architecture (Yoo et al. 2010) is
a key enabler of generativity in digital platforms. In contrast to modularity,
at least as practised in traditional product innovation, a layered architecture
does not require the interfaces to be frozen. Instead, designers define and
maintain layers relatively independently from one another. That provides
opportunities for designers to pursue largely unconstrained combinatorial
innovation by gluing together elements from different layers, using a set
of protocols and standards, to create alternative digital products. In this
context, a layered architecture accelerates the recombination of digital re-
sources (Henfridsson et al. 2018).

11.2 Paradoxical tensions in digital product innovation

Product innovation and digital innovation clearly represent different modes
of innovation. We refer to these modes as innovation regimes (e.g., Godoe
2000) to underline that they are shaped by a range of different actors –
human and material – which, together, form a web of highly intertwined
forces that pull in different directions. However, an innovation regime is
constituted, also, by a reasonably stable state – an equilibrium – in which
the different forces act in concert.
Product innovation and digital innovation meet in a process we call dig-
ital product innovation. We define digital product innovation as the use of
digital technology for creation and subsequent market introduction of new,
redesigned or substantially improved physical products. Illustrative exam-
ples are self-driving cars, robotic lawn mowers and remote-controlled heat
pumps. When the two innovation regimes meet, tensions arise (Table 11.1).
Similar to Acquier et al.’s (2017) reliance on paradox to navigate the tensions
inherent in the sharing economy, we use the notion of paradox to concep-
tualise the clash between innovation regimes. We consider these tensions to
be paradoxical in the sense that they are contradictory but “exist simultane-
ously and persist over time” (Smith and Lewis 2011: 382).
Table 11.1 summarises and compares product innovation and digital in-
novation, by outlining a range of traits that are distinctive to a particular
110 Fredrik Svahn and Bendik Bygstad
Table 11.1 Paradoxes of digital product innovation and constituent tensions
between innovation regimes

Product innovation Digital innovation

Organising logic Locus of Firm Ecosystem

innovation
Growth strategy Vertical integration Horizontal integration
Development Linear Nonlinear
process
Uncertainty Flexibility Agility
management
Governance Formal control Informal control
model modes modes
Market Market model Direct sales Two-sided market
dynamics Dominant cost Marginal cost Fixed cost
driver
Competition Price Attention
discriminator
Cost reduction Economies of scale Economies of scope
strategy
Analytical Dominant designs Platforms
framework
Architectural Design focus Physical structures Functional structures
composition Structural Modularisation Layering
principles
Complexity Complexity of Complexity of
focus artefacts problems
Overall objective Reuse of physical Recombination of
components digital resources
Functional Early Late
binding
Ontological Reductionism Emergence
position

regime. While existing research includes such ‘footprints’ of product inno-

vation and digital innovation, it is largely silent about how to combine these
regimes. That is, it does not discuss how to deal with the tensions that arise
when manoeuvring the two regimes simultaneously. Table 11.1 foregrounds
these tensions and presents three inductively derived paradoxes – organising
logic, market dynamics and architectural composition – that enclose them.
In what follows, we introduce the three digital product innovation para-
doxes and propose three organisational capabilities that managers need to
develop to master them.

11.2.1 Organising logic: functional decomposition versus

self-organisation
In product development, the firm is at the locus of innovation, and it organ-
ises to reflect product structure and development processes. However, the
 Digital product innovation 111
flexibility of a modular architecture depends on upfront definition of the or-
ganisational structure. To exercise formal control over linear development
processes and vertically integrated value chains, roles must be clear and
transactions between units and individuals must be well-described. The bet-
ter the fit between the product structure and the organisational structure,
the more efficient and more productive the firm.
Digital ecosystems are nonlinear in nature and evolve continuously. Peo-
ple and organisations come and go, and transactions between stakeholders
are seldom defined in advance. Unless the firm organises for agility, this
volatility will prove disastrous. While it is fundamentally difficult (and
harmful) to exercise formal control in digital ecosystems, informal control
modes (such as incentives and certification) offer alternative ways to govern.
This results in the disintegration of traditional value chains and, instead,
a focus on horizontal integration, where niches are expanded across tradi-
tional industry boundaries. Although they might seem chaotic and random,
self-organising digital practices outperform traditional product innovation
in many respects. Contrasting innovation regimes reveals that:

Paradox 1. The development and production of physical products are

managed most effectively within an independent and functionally de-
composed organization, whereas digital functions emerge, primarily,
from transparent and self-organizing units engaged in unexpected com-
binations of digital components.

11.2.2 Market dynamics: supply-side economies of scale versus

demand-side economies of scope
Physical products are associated to marginal costs. This means that each
new unit produced increases the total cost for the manufacturing firm. In
practice, marginal costs are a dominant factor for most product- developing
organisations, leading to competition over prices and direct sales to custom-
ers. Certainly, development is expensive, but the costs associated to produc-
tion greatly outweigh development costs. As a consequence, any initiative
to reduce costs pays off in relation to product volume. This makes a strong
argument not just for increasing market shares but also for keeping prod-
uct variety low. Therefore, innovation quickly transforms, from an experi-
mental state of made-to-order to becoming a dominant design, shaped by
a standardised mass-market manufacturing system and powered by scale
economies.
In contrast to physical products, software is not associated to marginal
costs. Once the fixed costs of development are covered, a digital function
can be reproduced at no additional expense. This induces new innovation
incentives, typically, translating into platform businesses and a two-sided
market logic. Such markets offer an abundance of functional options, lead-
ing to competition over attention rather than price. Powered by economies
112 Fredrik Svahn and Bendik Bygstad
of scope these two-sided markets reward the platform providing the demand
side with the largest variation. Therefore, when setting up a new business
model for digital product innovation, the firm must consider:

Paradox 2. The production of physical goods is made profitable by

supply-side economies of scale whereas the economic potential of a
self-organizing, digital innovation ecosystem lies in its capability to
trigger economies of scope in demand.

11.2.3 Architectural composition: modular versus layered

The literature considers modularity as the standard way to deal with the
complexity of physical artefacts and manage technological change. When
creating a modular architecture, the firm adopts a reductionist perspective
and decomposes the product into a hierarchy of, largely, independent parts,
in order to increase flexibility and scalability. While this overall decompo-
sition is frozen at an early stage, its parts can be assembled later, in differ-
ent ways, into readymade products based on aggregation. Thus, modularity
centres on the physical structure of products and focuses, particularly, on
reuse of components across different variants.
Software platform architects pay particular attention to functional struc-
ture, resulting in layered rather than hierarchical architectures. Relatively
independent layers identify core design problems, at different levels of gran-
ularity, and offer replicable rules and building blocks for their solutions.
In this sense, a layered software architecture addresses the complexity of
problems. Also, compared to a hierarchical structure, independent layers
allow largely unconstrained recombination of digital resources, from dif-
ferent layers, for genuinely new purposes. This makes layered software plat-
forms inherently emergent and allows for late and recurring changes in the
overall functionality of a digital system. Comparing product and software
platforms reveals that:

Paradox 3. The reuse of physical components across a range of defined

products is effectively enabled by the adoption of a hierarchic prod-
uct structure whereas reuse of digital components for new purposes re-
quires a layered product architecture.

We draw on the paradoxes identified in this section to provide some impli-

cations, in the form of general capabilities, for the management of digital
product innovation.

11.3 Managing the paradoxes of digital product innovation

Managing the paradoxes of digital product innovation is difficult for incum-
bent firms in that they must learn to master the logic of digital innovation
 Digital product innovation 113
and recognise the potential it brings. However, an even greater challenge is
finding a working solution allowing the combination of innovation regimes.
In what follows, we propose three capabilities to manage the paradoxes of
digital product innovation.

11.3.1 Capability for self-organising exploration

To manage the organising logic paradox, incumbent firms need to develop
what we call the capability for self-organising exploration. Selected parts of
their organisation must be allowed to emerge, without a clear view of out-
comes, while remaining situated in the context of an existing, functionally
decomposed organisation. Successful development and application of the
capability for self-organising exploration allows the firm to navigate con-
current engagement in “refinement-oriented local search” and “innovation-
oriented distant search” (Lopez-Vega et al. 2016). In jockeying for position
in the emerging market of self-driving cars, Volvo Cars exploited its existing
knowledge about chassis, powertrains and safety while, simultaneously, ex-
ploring artificial intelligence, communication technologies and novel sensor
solutions within the independent company, Zenuity. According to the cor-
porate website, independence would help to “foster speed and spearhead
innovation through cross-functional teams with end-to-end responsibility
and maximum freedom.” This manoeuvring of exploitation and exploration
requires the firm to develop complementary governance models.
Incumbents traditionally exercise process control based on such ques-
tions as “how do we get what we have specified, with the right quality?”
While they may reduce uncertainties related to product development, pro-
cess control practices effectively suppress unconventional moves. There-
fore, to develop the capability for self-organising exploration, management
needs, also, to consider the formative power of incentives. Instead, firms
can exercise input control by asking “what would trigger interest?” or “what
do they need to be creative?” to allow the sharing of resources with external
innovators. As an example, LEGO learned to appreciate its user communi-
ties as highly productive resources. Today, LEGO hosts an idea generation
community (ideas.lego.com) for the general public and endorses external
developer communities for software solutions (e.g., www.ev3dev.org) as well
as hardware designs (e.g., www.hackster.io/mindstorms). While it is not fea-
sible to exert explicit control over these innovation communities, LEGO in-
fluences indirectly, for example, through exclusive provision of beta releases
of upcoming hardware. Research shows that people self-identify for tasks
for complex motivational reasons (e.g., Wareham et al. 2014). While money
can play a role, community members often seek enjoyment, reputation and
learning or may be motivated, simply, by the possibility to resolve a unique
user need. At LEGO, concurrent manoeuvring of intrinsic and extrinsic mo-
tivations opened the way for integration of community-based digital inno-
vation and internal product development.
114 Fredrik Svahn and Bendik Bygstad
As incumbents develop new governance models, they must recognise
loosely coupled innovation environments as ecosystems, not as value chains.
Rather than fostering competition among innovators, self-organising explo-
ration capability requires management to appreciate the highly collaborative
nature of ecosystems. While LEGO donated its EV3 software for collabora-
tive community development, it encouraged competition by announcing, on
the corporate website, that “we anticipate the MINDSTORMS community
to develop additional languages such as JAVA.” Researchers increasingly
often rely on coopetition (Hannah and Eisenhardt 2018) to describe such
concurrent use of collaboration and competition.

11.3.2 Capability for horizontal diversification

To manage the market dynamics paradox, incumbents must develop capa-
bility for horizontal diversification. That involves drawing on the existing
firm know-how and resources to create new revenue streams for their exist-
ing customer bases (Ansoff 1957). Put differently, firms must figure out how
to enable ‘the long tail’ (Brynjolfsson et al. 2010) of digital niche products
for business model innovation, without destroying their existing volume
businesses.
Around 2010, the renowned U.S. bookseller, Barnes and Noble, which
was founded 1886, began to experience the disintegration of its existing
business model. The arrival of e-books had rendered the company’s existing
low-margin/high-volume strategy outdated. To combat its declining profita-
bility, it launched a new strategy, focused on concurrent cost reduction and
value creation. It closed over 800 stores and refocused the remaining ones
on high-margin niche products such as college books or gift books. At the
same time, Barnes and Noble kick-started Nook, a brand of e-reader, to
enable the distribution of e-books. Rather than seeing a range of seemingly
competing book titles as raw material for weeding out bestsellers, multi-
plicity became a direct business asset. The broader the scope, the better
the business. This example illustrates that digital contexts often make value
creation a better profit driver than cost reduction.
However, to build complements, firms may have to give away or subsidise
a previous core asset (e.g., Parker et al. 2016). Barnes and Noble reinforced
its horizontal diversification capability by subsidising Nook. It offered free
floor space in its physical stores – something not available to its biggest com-
petitor, Amazon – to allow customers to experience its e-reader before buy-
ing. While this move had a negative impact on store sales, it helped to grow
the installed base of Nook, which captured 27% of the e-book market in the
first two years it was available.
Ultimately, the balancing between core and complementary assets aims
at utilising the firm’s existing resources and enabling horizontal diversifica-
tion. Rather than yielding to the instinct to protect its resources to prevent
imitation and substitution (Barney 1991), a better firm strategy might be to
 Digital product innovation 115
disclose them as boundary resources (Ghazawneh and Henfridsson 2013), to
trigger external innovation. In 2012, AstraZeneca found itself in a difficult
situation. The company’s R&D pipeline was almost empty, which predicted
a steep decline in the coming years. In an attempt to restock its product
pipeline, AstraZeneca launched its Bio Venture Hub to promote open inno-
vation. AstraZeneca invited a range of start-ups to co-locate physically and
gave them access to AstraZeneca researchers, tools and laboratories, and,
with some exceptions, to company know-how. The Bio Venture Hub proved
successful and contributed to the product pipeline. This is an excellent ex-
ample of selective revealing (Henkel 2006), where the decisions to disclose
corporate resources brought multiple returns.
To master horizontal diversification, firms have to develop a new perspec-
tive on risk. Product development traditionally relies on stage-gate strategy
(Cooper 1990), where rational decision-makers deal with risk by outlining
alternatives and choosing the alternative with the lowest risk–benefit ratio.
Digital environments are remarkably diverse and highly volatile, making it
difficult to identify the winning horse upfront. Therefore, to manage digi-
tal product innovation, incumbents must employ an options strategy (Ku-
latilaka and Venkatraman 2001), which involves a portfolio of solutions or
designs being evaluated and refined in parallel, with the goal of delaying
decision-making and increasing responsiveness to market change. When
inviting a start-up company to the Bio Venture Hub, AstraZeneca made a
small investment in a high-risk option, to enable better and faster decisions
in the future.

11.3.3 Capability for open-ended design

To address the paradox of architectural composition requires incumbent
firms to develop what we describe as capability for open-ended design.
Product development traditionally relies on a hierarchically decomposed,
modular architecture to offer product variants based on commoditised
components (Baldwin and Clark 2000). This mix-and-match strategy de-
livers variation by substitution of components (Garud and Kumaraswamy
1995), where each component has a well-defined role within a rigid over-
all system structure. In practice, the need to freeze the overall architecture
requires upfront definition of all possible variants. Digital artefacts differ
from physical products in that they are reprogrammable. As such, they do
not embody predefined functionality. Therefore, to build open-ended design
capability, incumbents must figure out how to architect, not just for substi-
tution but also for the evolution of entire systems (Tiwana 2015). Layering is
a recognised architectural solution. For example, modern smartphones use
an operating system (e.g., iOS or Android) to create architectural separation
between the application layer and the underlying hardware. Smartphones
do not include prefabricated, permanent App portfolios when bought; these
portfolios emerge over the product’s lifetime.
116 Fredrik Svahn and Bendik Bygstad
To design a layered architecture requires investment in generalisation,
rather than a focus on a specific functionality, used as a template for de-
composition. It requires identification of “generic concepts, or patterns,
that abstract from irrelevant information related to its implementation”
(Henfridsson et al. 2014: 31). Creatively combined, and deployed at differ-
ent layers of abstraction, these generic concepts can form new, unforeseen
applications.
To establish generative, open-ended design practices incumbents must
strike a compromise between openness and control (West 2003). The archi-
tecture must be sufficiently closed to appropriate a reasonable economic
return, while being sufficiently open to attract innovators and end-users.
In February 2019, a Husqvarna Group press release announced an open
application programming interface or API, for its market-leading robotic
lawnmowers. The new architecture allowed integration of mowers and an
existing smart home innovation ecosystem, while reserving the mower con-
trol algorithms to Husqvarna’s exclusive control. Thus, it increased cus-
tomer value, while maintaining the product’s competitive edge.
Finally, capability for open-ended design requires architectures that al-
low recombination. In digital environments, recombination is a matter of
design, but it also takes place in use (Henfridsson et al. 2018). For example,
consider the case of Amazon’s Alexa, the ‘brain’ behind the Echo smart
speakers. According to Amazon’s website, developers engage in the Alexa
voice design through “a collection of self-service APIs, tools, documenta-
tion, and code samples.” While such design recombination is important, the
service offered by Alexa ultimately depends on the training gained through
large-scale use.

11.4 Takeaway
We contribute a synthesis of insights to managers who struggle with the im-
plementation of digital product innovation. First, we derive three paradoxes
of digital product innovation, that is, inherent tensions between product
innovation and digital innovation that are contradictory and persist over
time; functional decomposition versus self-organisation; supply-side econ-
omies of scale versus demand-side economies of scope; and the reuse of
physical components in modular architectures versus the recombination of
digital artefacts in layered architectures. Next, we reveal organisational ca-
pabilities to master these paradoxes. To manage the first paradox, managers
need to stimulate self-organising exploration, that is, allowing parts of their
organisation to evolve without a clear view of outcomes. To manage the
second paradox, managers should organise horizontal diversification, that
is, balance the core and complementary assets. To manage the third tension,
managers should support open-ended design, that is, establish architectural
solutions that allow unforeseen recombination.
 Digital product innovation 117
References
Abernathy, W.J. and Utterback, J.M. 1978. Patterns of industrial innovation. Tech-
nology Review 80(7): 40–47.
Acquier, A., Daudigeos, T. and Pinkse, J. 2017. Promises and paradoxes of the shar-
ing economy: An organizing framework. Technological Forecasting and Social
Change 125(Dec): 1–10.
Ansoff, H.I. 1957. Strategies for diversification. Harvard Business Review 35(5):
113–124.
Baldwin, C.Y. and Clark, K.B. 2000. Design Rules: The Power of Modularity Volume
1. Cambridge, MA: MIT Press.
Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of
Management 17(1): 99–120.
Boland, R.J., Lyytinen, K. and Yoo, Y. 2007. Wakes of innovation in project net-
works: The case of digital 3-D representations in architecture, engineering, and
construction. Organization Science 18(4): 631–647.
Brynjolfsson, E., Hu, Y.J. and Smith, M.D. 2010. Research commentary: Long tails
vs. superstars: The effect of information technology on product variety and sales
concentration patterns. Information Systems Research 21(4): 736–747.
Chandler, A.D. 1977. The Visible Hand. Cambridge, MA: Harvard University Press.
Cooper, R.G. 1990. Stage-gate systems: A new tool for managing new products.
Business Horizons 33(3): 44–54.
Eisenmann, T., Parker, G. and Van Alstyne, M.W. 2006. Strategies for two-sided
markets. Harvard Business Review 84(10): 92–101.
Garud, R. and Kumaraswamy, A. 1995. Technological and organizational designs
for realizing economies of substitution. Strategic Management Journal 16(1):
93–109.
Gawer, A. 2014. Bridging differing perspectives on technological platforms: Toward
an integrative framework. Research Policy 43(7): 1239–1249.
Ghazawneh, A. and Henfridsson, O. 2013. balancing platform control and external
contribution in third-party development: The boundary resources model. Infor-
mation Systems Journal 23(2): 173–192.
Godin, B. 2006. The linear model of innovation: The historical construction of an
analytical framework. Science, Technology & Human Values 31(6): 639–667.
Godoe, H. 2000. Innovation regimes, R&D and radical innovations in telecommu-
nications. Research Policy 29(9): 1033–1046.
Hannah, D.P. and Eisenhardt, K.M. 2018. How firms navigate cooperation and com-
petition in nascent ecosystems. Strategic Management Journal 39(12): 3163–3192.
Henderson, R.M. and Clark, K.B. 1990. Architectural innovation: The reconfigura-
tion of existing product technologies and the failure of established firms. Admin-
istrative Science Quarterly 35(1): 9–30.
Henfridsson, O., Mathiassen, L. and Svahn, F. 2014. Managing technological
change in the digital age: The role of architectural frames. Journal of Information
Technology 29(1): 27–43.
Henfridsson, O., Nandhakumar, J., Scarbrough, H. and Panourgias, N. 2018. Re-
combination in the open-ended value landscape of digital innovation. Informa-
tion and Organization 28(2): 89–100.
Henkel, J. 2006. Selective revealing in open innovation processes: The case of em-
bedded Linux. Research Policy 35(7): 953–969.
118 Fredrik Svahn and Bendik Bygstad
Katz, M.L. and Shapiro, C. 1994. Systems competition and network effects. The
Journal of Economic Perspectives 8(2): 93–115.
Kulatilaka, N. and Venkatraman, N. 2001. Strategic options in the digital era. Busi-
ness Strategy Review 12(4): 7–15.
Lopez-Vega, H., Tell, F. and Vanhaverbeke, W. 2016. Where and how to search?
Search paths in open innovation. Research Policy 45(1): 125–136.
Parker, G., Marshall, G., Van Alstyne, W. and Choudary, S.P. 2016. Platform Rev-
olution: How Networked Markets Are Transforming the Economy – And How to
Make Them Work for You. New York: WW Norton & Company.
Sambamurthy, V., Bharadwaj, A. and Grover, V. 2003. Shaping agility through dig-
ital options: Reconceptualizing the role of information technology in contempo-
rary firms. MIS Quarterly 27(2): 237–263.
Sanderson, S. and Uzumeri, M. 1995. Managing product families: The case of the
Sony Walkman. Research Policy 24(5): 761–782.
Selander, L., Henfridsson, O. and Svahn, F. 2013. Capability search and redeem
across digital ecosystems. Journal of Information Technology 28(3): 183–197.
Smith, W.K. and Lewis, M.W. 2011. Toward a theory of paradox: A dynamic equilib-
rium model of organizing. Academy of Management Review 36(2): 381–403.
Suarez, F.F. and Utterback, J.M. 1995. Dominant designs and the survival of firms.
Strategic Management Journal 16(6): 415–430.
Svahn, F., Mathiassen, L. and Lindgren, R. 2017. Embracing digital innovation in
incumbent firms: How Volvo Cars managed competing concerns. MIS Quarterly
41(1): 239–253.
Teece, D.J. 1986. Profiting from technological innovation: Implications for integra-
tion, collaboration, licensing and public policy. Research Policy 15(6): 285–305.
Tiwana, A. 2015. Evolutionary competition in platform ecosystems. Information
Systems Research 26(2): 266–281.
Ulrich, K. 1995. The role of product architecture in the manufacturing firm. Re-
search Policy 24(3): 419–440.
Wareham, J., Fox, P.B. and Giner, J.L.C. 2014. Technology ecosystem governance.
Organization Science 25(4): 1195–1215.
West, J. 2003. How open is open enough? Melding proprietary and open source
platform strategies. Research Policy 32(7): 1259–1285.
Williamson, O.E. 1979. Transaction-cost economics: The governance of contractual
relations. Journal of Law and Economics 22(2): 233–261.
Yoo, Y. 2012. Digital materiality and the emergence of an evolutionary science of
the artificial. In Materiality and Organizing: Social Interaction in a Technological
World, Leonardi, P.M., Nardi, B.A. and Kallinikos, J. (eds). Oxford: Oxford Uni-
versity Press: 134–154.
Yoo, Y., Henfridsson, O. and Lyytinen, K. 2010. Research commentary: The new or-
ganizing logic of digital innovation: An agenda for information systems research.
Information Systems Research 21(4): 724–735.
Yoo, Y., Lyytinen, K., Boland, R., Berente, N., Gaskin, J., Schutz, D. and Srini-
vasan, N. 2010. The next wave of digital innovation: Opportunities and challenges:
A report on the research workshop digital challenges in innovation research. Fox
School of Business & Management, Temple University, Philadelphia, PA.Zittrain,
J. 2006. The generative internet. Harvard Law Review 119(7): 1974–2040.
12 When external reporting
goes social
New conditions for transparency
and accountability?
Cecilia Gullberg

It is frequently claimed that the advent of social media is having significant

implications for various organisational practices such as internal collabora-
tion (Treem and Leonardi 2012), marketing (Berthon et al. 2012) and ad hoc
organising (Weinryb et al. 2019). Similar claims have been made by scholars
of accounting (Bellucci and Manetti 2017; Blankespoor 2018). As a scholar
of accounting, I elaborate in this chapter on the idea of social media as an
accounting technology and discuss how social media differs from earlier
digital technologies and what these differences may imply for what can be
seen as the core elements of accounting.
First, I provide some examples of how accounting has entered social me-
dia. For example, firms tweet their earnings announcements (Blankespoor
2018) and publish their sustainability-related performance on Facebook
(Manetti and Bellucci 2016), and philanthropic organisations use Facebook
to account for how they use their funds (Bellucci and Manetti 2017). There
are various forms of external reporting observed on social media. It might
be, also, that various types of internal accounting are dealt with on internal
social media, within organisations; however, I would surmise that this is
significantly less common. An important component of social media are the
digital interactions among individuals that, potentially, are visible to large
numbers of other people in real time (Kaplan and Haenlein 2010). This pos-
sible large-scale exposure and large-scale interaction are more salient in the
context of external reporting and, therefore, are likely to be more frequent
in that context. Above all, theoretically, they could reshape the basic tenets
and premises of accounting and, consequently, the conditions under which
managers produce and/or consume accounting.
While accounting scholars have begun to investigate the implications of
social media for accounting, this line of research is in a nascent stage. Some
of the literature focuses on the quantitative implications, such as the num-
bers of likes and shares (Bellucci and Manetti 2017) or the types of reactions
to different types of accounting produced by organisations (Blankespoor
2018). Other works approach accounting in terms of relationships, for exam-
ple, how accountability and auditing relationships are altered on rate-and-
review platforms such as TripAdvisor (Scott and Orlikowski 2012) and eBay

DOI: 10.4324/9781003111245-12
120 Cecilia Gullberg
(Kornberger et al. 2017). However, little attention is paid in these literature
streams to the nature of accounts per se and how this nature might change
with use of social media and what this implies for accountability – and for its
longstanding partner – transparency. This chapter outlines and illustrates
the phenomenon of organisational external reporting on social media, to
initiate a discussion of its implications for transparency and accountability.
Section 12.1 provides an overview of the concepts of transparency and
accountability and their assumed relations. Section 12.2 examines the char-
acteristics of social media and discusses what they may entail for the nature
of accounting and for transparency and accountability. I also discuss ear-
lier digital phenomena in the context of accounting and how social media
differs in their capacity to redraw the conditions for transparency and ac-
countability and for accounting production and consumption. Section 12.3
provides some takeaways from this chapter.

12.1 Transparency and accountability: longstanding

ideals of accounting
So, what are the basic tenets and premises of accounting? Accounting as-
sumes a relationship between two parties, between the performer of activi-
ties that are of interest to another party and the party that monitors and acts
on these activities at a distance (Robson 1992). Hence, it is a relationship of
accountability, in which the different actors can “give and demand reasons
for conduct” (Roberts and Scapens 1985: 447) or, to put it differently, where
the first actor “has an obligation to explain and justify his or her conduct”
and where the other actors “can pose questions and pass judgment” (Bov-
ens 2007: 450). In turn, explanation and justification assume provision of
some kind of information of an account (Robson 1992). A typical example
in the context of external reporting is the annual or – for some – quarterly
financial reports that organisations publish, which contain numbers, texts,
diagrams and tables. These and other accounts, such as sustainability re-
ports, are expected to provide a range of actors – stakeholders – with in-
formation to allow them to draw conclusions about how the organisation is
doing and/or, if necessary, demand additional accounts. Hence, by creating
transparency, accounts are expected to pave the way to accountability. Typ-
ically, transparency and accountability are expected to increase efficiency
and eliminate malfunctions (Bovens 2007; DeFine Licht 2019). The types of
stakeholders vary with the type of organisation; they could include taxpay-
ers, customers, owners, beneficiaries or investors, among others.
For accounts to create transparency and inform the audience, requires
the qualities of mobility, stability and combinability (Robson 1992). First and
foremost, accounts are not about what the organisation is doing; they are
representations of what the organisation is doing. Representations are nec-
essary since audiences would rarely be able to observe everything going on
in an organisation and, even if they did, would be overwhelmed by the sheer
 External reporting goes social 121
number of information cues (Latour 1987). As a result, accounts need to
be mobile so that they can be transferred across time and space, from the
organisation to the audience (Latour 1987). The organisation of accounts
needs to be stable in terms of their relationship to the underlying ‘reality’
they represent (Latour 1987). In the context of external reporting, this might
imply that accounts are presented according to established formats and
definitions, to allow their audiences to make better sense of the informa-
tion in relation to its context (Robson 1992). In addition, ideally, accounts
should be combinable, which allows the audience to compare and accumu-
late accounts from different parts of ‘reality’, that is, different places and
different points in time (Latour 1987). To achieve combinability requires the
accounts to be expressed at the same level of aggregation and in the same
units to avoid mixing apples and oranges (Robson 1992). This implies a cer-
tain amount of work in order to render accounts combinable.
In the context of external reporting, accounts from different years might
be combined to assess development, or accounts from different organisa-
tions or units might be combined to allow a performance ranking. Their
quantitative nature and the far-reaching harmonisation efforts involved
mean that, typically, financial accounts are considered to be both stable and
combinable. However, even more qualitative and less regulated accounts, re-
lated, for example, to sustainability reporting, are often expected to adhere
to certain standards and reference points. That is, they may be expected to
cover certain themes related to specific organisational goals or to provide a
balance between positive and negative aspects.
To sum up the arguments so far, accounting assumes a relationship which
involves one party, the audience of stakeholders, who wants to obtain infor-
mation, accounts, from another party, for example, an organisation. Pro-
vided that accounts are mobile, stable and combinable, they are assumed to
provide a basis for transparency. Transparency allows the audience to assess
how the organisation is doing and, if necessary, request additional accounts
or demand certain measures be taken. Thus, transparency is assumed to en-
able accountability. Overall, therefore, accounting can be considered a tool
that enables managers to communicate with audiences unable to observe
directly what happens in the organisation and a tool that allows certain au-
diences (e.g., investors, customers, other organisations) to make decisions.
At the same time, as various literature streams acknowledge, there are limits
to both transparency and accountability.
One criticism concerns the relationship between transparency and ac-
countability. For example, DeFine Licht (2019) distinguishes between raw
and refined transparency, arguing that raw transparency provides a weak
basis for accountability and requires systematic organising by some kind of
auditor – refinement – in order to enable accountability (compare Tsoukas’s
1997 reasoning about overload). Furthermore, even in the case of refined
transparency, there may not necessarily be an interested audience that
calls for explanation and justification and, vice versa, accountability that
122 Cecilia Gullberg
depends more on trust may be attained without a refined transparency ac-
count (DeFine Licht 2019). Hence, the relationship between transparency
and accountability is not clear-cut, although many would argue that that
the first creates the conditions for the second. Also, as Feldman and March
(1981) suggest in their seminal work, the mere existence of information con-
stitutes a symbol of competence that may be sufficient for the audience, in
turn, reducing the perceived need for scrutiny.
Another criticism concerns the dysfunctional consequences brought by
the effort to achieve transparency and accountability. Not only does the
production of transparent accounts require time and effort, it can also in-
fluence operations. Here, the argument is that accounts are not mere rep-
resentations of some underlying reality but are constitutive of that reality
(Robson 1992; Tsoukas 1997). Put differently, what is made transparent –
the requested accounts – can influence the focus of operations, possibly at
the expense of other parts of the operations. This type of criticism is linked
to my earlier point that accounts are representations of operations and that
the process of representing reality is not always straightforward. In the case
of financial reporting, this, perhaps, is less pertinent, but choosing what ac-
counts should represent the operations of the organisation is to some degree
a subjective process (Robson 1992) and one that cannot fully capture the
complexity of the underlying reality (Tsoukas 1997).
In sum, the criticisms raised about transparency and accountability, in
part, concern the ability and interest of the audience to make sense of and
engage with accounts and, in part, are related to the account-giver’s ability
to produce a representative account that reflects the potential complexity
of the organisation. From a critical perspective, the role of accounting in
managerial decision-making is not clear.
Having outlined and problematised some of the basic tenets and assump-
tions of accounting, in the next section I discuss social media and what it
means for transparency and accountability.

12.2 Social media and its implications for transparency

and accountability
As mentioned in the introduction to this chapter, social media involves an
important element of the interaction among several parties, potentially in
real time. In seeking to define what characterises social media, Treem and
Leonardi (2012) point to the persistence and broad visibility of social me-
dia content, which distinguishes it from other forms of interactions such as
telephone or e-mail conversations. There are also a number of characteris-
tics, which, if not defining and unique to social media, are at least common.
One is the tendency for informal, subjective or even emotionalised content
(Gerbaudo 2016), another is the importance of recognition from others (Luca
2015), and yet another is the wider mix of formats that include numbers and
text and images and videos (Blankespoor 2018).
 External reporting goes social 123
Taken together, I believe that the above characteristics boil down to
two important ways in which social media differs from earlier digital ac-
counting technologies. First, they are more distributed and decentralised;
that is, they involve a larger number of actors who contribute content on
an equal basis. Second, they are less standardising; that is, they allow for
more variation in length, form and tone of content. Earlier digital tech-
nologies, such as enterprise resource planning systems and knowledge
management systems, served to reinforce these fundaments of account-
ing by further standardising and categorising information that then could
become a tool for transparency, overview, decision-making and control
(Davenport 1998).
So, what might these differences imply for the nature of accounting and,
in turn, for transparency and accountability? And how do these implica-
tions affect a managerial perspective? Below, I elaborate on these aspects
(which were briefly presented in a popular science text – Gullberg 2019).

12.2.1 From periodic to continuous

While external reporting tends to be periodic, for example, yearly or quar-
terly, I argue that accounting on social media will necessarily be more
continuous. Although the frequency of accounts certainly differs across or-
ganisations, studies show that organisations across sectors are publishing
monthly or even weekly accounts. For example, both for-profit and non-
profit organisations are reporting on sustainability-related aspects (Manetti
and Bellucci 2016), and philanthropic organisations are accounting for how
they spend their money (Bellucci and Manetti 2017) outside of the periodic
reporting schedules. Although earlier digital technologies allowed some
level of frequent and real-time information updates, the broad visibility
and fast-paced interactions enabled by social media are coupled to signif-
icantly stronger expectations about reporting frequency. Furthermore, the
preference for brevity (Blankespoor 2018) – not least on Twitter – and the
perceived importance of generating likes and shares (Luca 2015) are likely
promoting this frequency.

12.2.2 From holistic to fragmented

Whereas external reporting typically requires aggregation of activities and
results during a given time period and their presentation as a joint whole,
I would argue that accounting on social media is more fragmented. This
is likely related to the need to be brief, but continuous, which necessarily
implies more frequent reporting. Rather than summarising a whole year’s
results and activities, tweets and Facebook posts are likely to provide short-
term pictures of operations and reporting of a particular event or domain of
operations. Below I provide an example of a sustainability-related account
on a company Facebook page.
124 Cecilia Gullberg
We are not only helping our customers to save energy; we are also mak-
ing ourselves more energy efficient [link to webpage]
Cited in Manetti and Bellucci (2016: 1000)

Although, in theory, accounts published on social media over time could

be accumulated to form a more coherent whole, these different accounts,
often, are not read in conjunction. Of course, this could apply to an annual
report, where the reader chooses what to read and what to ignore. However,
a delimited report would seem more likely to provide a more holistic view
of operations, for example, by outlining goals, strategies and results, than a
continuous stream of short accounts. Also, the typically more emotional, in-
formal and varied format of accounts on social media, potentially, could in-
fluence how accounts are interpreted and are related to each other. Studies
show that quantitative accounts on social media are often accompanied by
more subjective accounts – particularly in relation to positive performance
(e.g., Yang and Liu 2017). I use an example from a company’s financial re-
porting on Twitter to illustrate this point:

It’s been a good year for the business. Another strong set of results; total
returns of 25% & stronger operational performance.
Cited in Yang and Liu (2017: 680)

In addition, accounts are produced not only by the organisation under scru-
tiny but also by its audience who post comments related to the original mes-
sage, which can influence how the original message is interpreted. Hence, it
seems that various aspects intermingle to render accounting on social media
fragmented and that this fragmentation could have consequences for how
accounting is interpreted.

12.2.3 From historical to forward-looking

While external reporting commonly summarises what has already taken
place, I argue that accounting on social media is likely to include signifi-
cant present and future events. This certainly applies to traditional reports,
which include information on both achievements and ongoing and future
projects. However, in light of the fast-paced and interactive nature of so-
cial media discussed earlier, such accounts are likely to be more common
on social media. If organisations are continuously being urged to publish
accounts of the progress of their operations, they may be forced to include
activities and events which have yet to take place. This might be both ex-
pected and acceptable on social media, given the more informal nature and
more varied format. Below is an example from the Facebook page of a phil-
anthropic organisation, presenting something great to come.

Congratulations to Seattle Seahawks’ Russell Wilson (link) for the

launch of his new charitable foundation, the “Why Not You” foundation.
 External reporting goes social 125
Seattle Foundation staff members Fidelma McGinn and Mary Grace
Roske were able to congratulate Russell in person at the kickoff event
last night. And kudos to Russell Investments (link), who announced
that in addition to donating $3,000 each time Russell Wilson scores a
touchdown, they also are making a $10,000 contribution to his founda-
tion! The foundation will focus on Russell’s passion of impacting and
influencing kids’ lives.
Cited in Bellucci and Manetti (2017: 892)

Taken together, what do these potential shifts in the nature of accounting

hold for transparency and accountability and, ultimately, the production
and consumption of accounting?

12.2.4 Transparency
On the one hand, continuous accounting could be seen as a promoting trans-
parency by providing the audience with more timely information – perhaps
an earlier idea of how operations are progressing. Also, although perhaps not
providing real transparency, continuous accounting might signal competent
management and reduce demands for additional information (Feldman and
March 1981). On the other hand, fragmented accounts, read, perhaps, out of
sequence, and not easily accumulated, might question the notion of trans-
parency (compare Robson 1992). How is the audience to make sense of frag-
ments? To what standards and/or goals are they related? It could be argued
that increasingly forward-looking accounting provides earlier insights, simi-
lar to more frequent accounting. However, maybe forward-looking accounts
could divert attention from historical achievements and non-achievements
(see “the journey metaphor,” Milne et al. 2006)? In addition, as the content
on social media seems to be driven by maximising the numbers of likes and
shares, this could question how much such accounts are representations of
‘reality’ (compare Robson 1992). Informal and emotional accounts, which
include both numbers and text, and also images and/or videos, could be
considered closer to reality since they provide depictions rather than rep-
resentations, but this is no guarantee of their representativeness of the
organisation’s entire operations (compare Preston and Oakes 2001). Who se-
lects these accounts and on what grounds? Such questions could and should
be asked in relation, also, to traditional annual reports, but since accounting
on social media is an emergent practice, I argue that these questions are even
more worthy of investigation in the context of web reporting.
To what extent accounts on social media provide transparency is likely to
depend on ‘the eye of the beholder’. The target audience could include a di-
verse set of stakeholders, some of whom may favour more vivid descriptions
and images of specific situations and others of whom might prefer aggre-
gated statistics illustrating the implementation of key strategies (Connolly
and Hyndman 2013). Thus, accounting on social media and traditional ac-
counting could have different importance for different stakeholder groups.
126 Cecilia Gullberg
12.2.5 Accountability
Typically, transparency is considered an important precondition for ac-
countability. So, if transparency is raw rather than refined (DeFine Licht
2019), what does that imply for the possibility of the audience to assess
operations and request justification or explanation? Judging from the liter-
ature, social media audiences do not hesitate to ask for justifications and
explanations (Bellucci and Manetti 2017; Manetti and Bellucci 2016). Also,
since social media has an important interactive component, audience’s ex-
pectations related to responses to their requests tend to be high (Agostino
and Sidorova 2017). Lack of a response from the organisation can be in-
terpreted as lack of accountability – by a potentially large audience, given
the broad visibility of content on social media (Treem and Leonardi 2012).
From this perspective, it is unclear whether it is perception of transparency
per se or the interactive nature of the medium that is lowering the threshold
for holding the organisation to account, which is driving accountability.
However, if demands for accountability are not predicated on accounts that
are perceived to be transparent, accountability is enacted on rather unclear
grounds (compare Scott and Orlikowski 2012). This raises the question of
what organisations should be held accountable for. The extent of organisa-
tions’ response to demands for accountability seems to vary; some studies
suggest that their engagement with questions and comments from the audi-
ence is limited (Bellucci and Manetti 2017; Manetti and Bellucci 2016) and
other studies show that organisations make every effort to provide a swift
response (Agostino and Sidorova 2017; Scott and Orlikowski 2012). There is
variation, also, in how organisations address the issue at hand; while some
may provide superficial answers, aimed at constructing legitimacy (Man-
etti and Bellucci 2016), others may incorporate the audience viewpoint in
their operations, thereby enacting far-reaching accountability (Scott and
Orlikowski 2012).
It seems that social media could have quite diverse and, possibly, contra-
dictory implications for transparency and accountability, but what about
the production and consumption of accounting? Based on the above rea-
soning, it would seem that accounting on social media could satisfy certain
stakeholder groups and, therefore, could be an important complement to
traditional accounting. It should be noted, also, that although distinct from
earlier digital technologies in many ways, social media should not be seen
as uniform. The phenomenon includes a range of channels, each of which
emphasises a particular format (e.g., pictures on Instagram, and short mes-
sages on Twitter), some of which are favoured more by certain age groups.
This suggests that organisations should consider a mix of reporting on social
media platforms alongside more traditional channels. However, this raises
other questions related to the organisational competences that need to be
combined to produce these different types of accounting (compare Agos-
tino and Sidorova 2017) – to what extent these different processes should
 External reporting goes social 127
be formalised and how far organisations would be willing to incorporate
the views of stakeholders resulting from this more interactive approach to
accounting?

12.3 Takeaway
In this chapter, I elaborated ideas in recent literature regarding social media
as a technology of accounting. I discussed two key aspects – transparency
and accountability – and how they may be reshaped when accounting is
transformed. I identified three ways in which accounting on social media
might differ from traditional forms of accounting. It has the potential to
be more frequent, but less periodic; more fragmented, but less holistic; and
more forward-looking, but less historical. These differences may challenge
what transparency means and to whom and on what grounds accountability
is enacted. Furthermore, novel formats of accounting raise questions about
how organisations could combine different channels for accounting and
how these processes should be managed and what competences this would
require and what level of formalisation. As the effects of digitalisation are
shaped by the interaction between macro- and micro-level aspects (Treem
and Leonardi 2012), the above conclusions call for further enquiry.

References
Agostino, D. and Sidorova, Y. 2017. How social media reshapes action on distant
customers: Some empirical evidence. Accounting, Auditing and Accountability
Journal 30(4): 777–794.
Bellucci, M. and Manetti, G. 2017. Facebook as a tool for supporting dialogic ac-
counting? Evidence from large philanthropic foundations in the United States.
Accounting, Auditing & Accountability Journal 30(4): 874–905.
Berthon, P.R., Pitt, L.F., Plangger, K. and Shapiro, D. 2012. Marketing meets Web
2.0, social media, and creative consumers: Implications for international market-
ing strategy. Business Horizons 55(3): 261–271.
Blankespoor, E. 2018. Firm communication and investor response: A framework
and discussion integrating social media. Accounting, Organizations & Society
68–69: 80–87.
Bovens, M. 2007. Analysing and assessing accountability: A conceptual framework.
European Law Journal 13(4): 447–468.
Connolly, C. and Hyndman, N. 2013. Charity accountability in the UK: Through
the eyes of the donor. Qualitative Research in Accounting & Management 10(3–4),
259–278.
Davenport, T. H. 2000. Mission Critical: Realizing the Promise of Enterprise Sys-
tems. Boston, MA: Harvard Business School Press.
DeFine Licht, J. 2019. The role of transparency in auditing. Financial Accountability
and Auditing 35(3): 233–245.
Feldman, M.S. and March, J.G. 1981. Information in organizations as signal and
symbol. Administrative Science Quarterly 26(2): 171–186.
128 Cecilia Gullberg
Gerbaudo, P. 2016. Constructing public space rousing the Facebook crowd: Digital
enthusiasm and emotional contagion in the 2011 protests in Egypt and Spain.
International Journal of Communication 10: 254–273.
Gullberg, C. 2019. Bokslut utan slut? In Trendrapport 2020: 10 spaningar med be-
tydelse för insamling och givande, Ben Azzouz, J. (ed.). Stockholm: Giva Sverige:
20–21.
Kaplan, A. and Haenlein, M. 2010. Users of the world, unite! The challenges and
opportunities of social media. Business Horizons 53(1): 59–68.
Kornberger, M., Pflueger, D. and Mouritsen, J. 2017. Evaluative infrastructures:
Accounting for platform organization. Accounting, Organizations and Society 60:
79–95.
Latour, B. 1987. Science in Action: How to Follow Scientists and Engineers through
Society. Cambridge, MA: Harvard University Press.
Luca, M. 2015. User-generated content and social media. In Handbook of Media
Economics, Anderson, S.P., Waldfogel, J. and Strömerg, D. (eds.). Amsterdam:
North-Holland: 563–592.
Manetti, G. and Bellucci, M. 2016. The use of social media for engaging stakehold-
ers in sustainability reporting. Accounting, Auditing and Accountability Journal
29(6): 985–1011.
Milne, M.J., Kearins, K. and Walton, S. 2006. Creating adventures in Wonderland:
The journey metaphor and environmental sustainability. Organization 13(6):
801–839.
Preston, A. and Oakes, L. 2001. The Navajo documents: A study of the economic
representation and construction of the Navajo. Accounting, Organizations and So-
ciety 26(1): 39–71.
Roberts, J. and Scapens, R. 1985. Accounting systems and systems of accountability –
understanding accounting practices in their organisational contexts. Accounting,
Organizations and Society 10(4): 443–456.
Robson, K. 1992. Accounting numbers as “inscription”: Action at a distance and the
development of accounting. Accounting, Organizations and Society 17(7): 685–708.
Scott, S.V. and Orlikowski, W.J. 2012. Reconfiguring relations of accountability:
Materialization of social media in the travel sector. Accounting, Organization and
Society 37(1): 28–40.
Treem, J.W. and Leonardi, P.M. 2012. Social media use in organizations: Exploring
the affordances of visibility, editability, persistence, and association. Communi-
cation Yearbook 36(1): 143–189.
Tsoukas, H. 1997. The tyranny of light – the temptations and the paradoxes of the
information society. Futures 29(9): 827–843.
Weinryb, N., Gullberg, C. and Turunen, J. 2019. Collective action through social
media: Possibilities and challenges of partial organizing. In Organization Outside
Organizations, Ahrne, G. and Brunsson, N. (eds). Cambridge: Cambridge Uni-
versity Press, 334–356.
Yang, J.H. and Liu, S. 2017. Accounting narratives and impression management on
social media. Accounting and Business Research 47(6): 673–694.
13 Robotic process automation
and the accounting profession’s
extinction prophecy
Matthias Holmstedt, Fredrik Jeanson and
Angelina Sundström

This chapter examines robotic process automation (RPA) and the revitalised
extinction prophecy of the accounting profession. RPA is a digital solution
that enables automatic administrative procedures previously undertaken by
white-collar workers. Syed et al. (2020: 1) describe RPA as follows:

This term amalgamates robotics, referring to software agents acting

as human beings in system interactions, and process automation, i.e.
workflow management systems or, more generally, systems that are
process-aware. In essence, RPA is a relatively new technology compris-
ing software agents called ‘bots’ that mimic the manual path taken by
a human through a range of computer applications when performing
certain tasks in a business process.

In contrast to cognitive automation, for example, artificial intelligence (AI),

RPA draws on rules to structure and process data (e.g., Lacity and Will-
cocks 2016) and requires tangible human input. Notably, RPA is not a new
type of digital solution; working in Excel using macros is equivalent to an
RPA solution, with the difference only that RPA works within and across
different software.
The number of firms implementing solutions that automate specific ad-
ministrative procedures has exploded in recent years. As much as 53% of
the respondents to the Deloitte Global RPA survey (Deloitte 2018) declared
having embarked on the implementation of RPA, and this proportion is ex-
pected to increase to 72% by 2020. The Deloitte shows, also, that 78% of
respondents who had implemented RPA were likely to increase their invest-
ment up to 2021. The Protiviti RPA survey (Protiviti 2019) provides similar
data and highlights the quite widespread implementation of RPA. It sug-
gests that most contemporary firms will continue to invest in RPA in the
next two years. The RPA hype has taken over, and its implementation is
set to increase substantially in the near future. This will result in the robot-
icisation of many traditional white-collar administrative processes and a
reshaped administration organisation.

DOI: 10.4324/9781003111245-13
130 Matthias Holmstedt et al.
The impact of RPA and other automation solutions on white-collar oc-
cupations has promoted huge speculation about the future. The media has
included alarming and threatening headlines, such as “No longer a question
if the robots will take over – the question is when” (Malmström 2016), and
“The robots are coming for your job, too” (Wolf 2019). The media is also
offering advice to employees about what they should do when robots make
them redundant, evidence in headlines, such as “How to cope when robots
take your job” (Kuper 2016). These headlines are supported by statements
such as “The bottom line is that 45 per cent of work activities could be auto-
mated using already demonstrated technology” Chui et al. 2016: 5). Several
websites, such as BBC.com, are offering applications to assess the likelihood
of robots taking over particular jobs. However, other news embraces the cre-
ative power of white-collar work automation, for example, headlines such
as “Robots will boost rather than destroy jobs” (Bland 2018) and “World
Economic Forum: Robots ‘will create more jobs than they displace’” (BBC
News 2018) and “Why the Automation Age might still need us around to
work – Yes, the robots are coming – but take a breath” (Colagrossi 2019).
The accounting profession is frequently portrayed as one of the main
targets of RPA solutions. The previously mentioned BBC’s “Will a robot
take your job?” application estimates the likelihood of different types of
occupations being automated, based on Frey and Osborne’s (2017) research.
Table 13.1 summarises the occupations covered by the “Will a robot take
your job?” app that are most closely related to the accounting profession.
Table 13.1 suggests that most of these accounting-related occupations
will disappear in the future. If we look at the complete list of occupations
included in the app, we observe that there are many accounting-related
occupations in the top part of the list. Table 13.1 shows, also, that there is
a perception that the most accounting-related tasks are standardised and
rule-based and easy targets for RPA. Several organisations implementing

Table 13.1 Perceptions of occupations that will disappear in future (BBC.com)

Occupation Likelihood (%)

Financial accounts manager 98

Bookkeeper, payroll manager or wages clerk 97
Sales administrator 97
Financial administrative worker 97
Financial and accounting technicians 96
Debt, rent and other cash collector 95
Chartered and Certified Accountant 95
Records clerk 70
Credit controller 51
Finance and investment analyst and adviser 41
Sales accounts and business development manager 16
Management consultant and business analyst 7
Financial manager or director 7
 Robotic process automation and accounting 131
RPA have started by automating their accounting-related processes. Ac-
cording to one of Protiviti’s directors, Angelo Poulikakos (Cohn 2019):

Accounting contains a lot of processes that are high-transaction, re-

peatable, well structured, rules-based processes that lend themselves to
robotic process automation. A lot of times RPA initiatives also start
with accounting because accounting oftentimes rolls out to a CFO, and
it catches the CFO’s attention that you can have a ton of cost savings
through the use of RPA.

This is akin to an extinction prophecy related to the accounting profession

and the notion that RPA will eliminate many professional accounting busi-
ness process tasks. This extinction prophecy is not new; a form of it emerged
in the 1970s when it was assumed that computers would put accountants
out of work (cf., Baldvinsdottir et al. 2009). Lindell (2015) refers to a similar
discourse related to the effects of digitalisation on the future labour market.
Evaluations of whether or not the contemporary extinction prophecy can
be considered valid need to be judged on the basis of the actual tasks per-
formed within the profession. It is possible that these alarming headlines
and predictions are based on a myth about what accountants do. We suggest
that the extinction prophecy is based on the outdated image of an account-
ant as a bean counter prediction. We propose a conceptual model that dis-
tinguishes between six groups of accounting tasks and review the literature
on RPA in the accounting field to provide a more nuanced view and more
fine-tuned predictions related to how RPA is likely to affect the accounting
profession.

13.1 Conceptualising accounting and the accounting profession

RPA allows the automation of specific and standardised administrative
tasks. To estimate the potential of RPA and its effect on the accounting pro-
fession, we need to identify the tasks performed by accountants.
Accounting-related tasks include a proportion of standardised tasks
relate to recording, storing and processing data. These tasks refer to re-
cording of incoming invoices, reconciliation of accounts, preparation of
routine reports, sending out invoices to customers and enabling payments.
Accounting tasks also include some semi-standardised tasks that require
case-by-case evaluation. Examples include recordkeeping related to stock
inventories, tax deferrals, preparation of customer invoices, investment cal-
culations, and reviews of fixed assets values and costs and revenue related
to project work. Accounting involves several non-standardised tasks such
as interpretation of figures, selecting key indicators, translating strategy, ad
hoc reports, identification of cost drivers and training of others. Accounting
tasks can be categorised, also, depending on whether the task is reactive or
proactive, whether it focuses on describing the past or predicting the future.
132 Matthias Holmstedt et al.
Table 13.2 Accounting tasks in a two-by-three matrix
(authors’ own representation)

Accounting task Reactive Proactive

Standardised Q1 Q2
Semi-standardised Q3 Q4
None-standardised Q5 Q6

A 2 × 3 (see Table 13.2) matrix allows a categorisation of accounting tasks

according to degree of standardisation and time perspective.
The matrix in Table 13.2 portrays accounting as a profession distin-
guished by a variety of tasks that are both administrative and analytical
in nature. Quadrant 1 (Q1) includes routinised tasks related to the past,
such as account reconciliation. Quadrant 2 (Q2) includes routinised tasks
related to the future, for example, provision of unpaid invoices. Quadrant
3 (Q3) includes semi-routinised tasks that need case-by-case evaluation but
include stock inventories, which follows a predetermined routine, and ob-
solescence inventories, which require human evaluation. Quadrant 4 (Q4)
includes forward-looking but routine tasks such as investment calculations,
which are guided by investment manuals and human-determined param-
eters. Quadrant 5 (Q5) includes tasks that require human evaluation and
involve interpretations of the past, such as interpretation of economic statis-
tics. Quadrant 6 (Q6) includes tasks involving human judgements and inter-
pretation that are forward-looking and include, for example, the selection of
critical indicators translated from strategic prioritisation.
The portfolio of accounting tasks provides a picture of the accounting
profession that seems to deviate from common assumptions. The bean
counter stereotype became established in the 1970s (Balvindsdottir et al.
2009) and was based on the notion of accounting as limited to bookkeeping,
that is, to paperwork and number-crunching. It suggests that accountants
are mainly preoccupied with standardised and semi-standardised tasks (i.e.,
those in Q1) and some of the tasks in Q2 and, despite being a misrepresenta-
tion of the contemporary accounting profession, persists in some parts of
society (Carnegie and Napier, 2010; Christensen and Rocher, 2020). Frey
and Osborne’s (2017) and the BBC’s question of whether a robot is going to
take your job suggests that this stereotype has contaminated analysis and is
exaggerating the opportunities and consequences of automatising account-
ing work.
Since RPA applies mainly to the tasks in Q1 and Q2, Table 13.2 would
seem to allow more valid predictions about how RPA will affect the account-
ing profession. We are not suggesting that RPA will not have a substantial
impact on various organisations since it has the potential to eliminate cer-
tain standardised accounting tasks and enable the organisation to down-
size or relocate personnel involved in this type of work. However, RPA will
 Robotic process automation and accounting 133
also allow organisations to dedicate more time to semi-standardised and
non-standardised tasks that should enhance their operations, tactics and
strategy. In other words, RPA will allow an increased focus on more analyt-
ical accounting tasks.

13.2 RPA: a forthcoming frontline in accounting research?

Google Scholar shows that interest in RPA is recent; it began to increase
only in 2017 (see Figure 13.1). We searched Google Scholar, including both
academic and semi-academic texts, using the keyword term ‘robotic process
automation’ in the title of publications. Figure 13.1 shows that the first pub-
lication was in 2015. Google Trend tells a similar story; the number of web
searches on ‘RPA’ and ‘Robot Process Automation’ increased significantly
after 2016. Thus, RPA is new to both the academic community and society
more generally. Researchers have only recently begun to explore the oppor-
tunities offered by RPA and examine how the technology will impact on and
change organisations.
We used the Web of Science to identify accounting-related publications
on RPA. The Web of Science is used frequently for literature reviews (see
Gusenbauer and Haddaway 2019). A search using the keyword term ‘robotic
process automation’ identified only eight articles before 2020. Of these, six
were related to accounting. These six publications were published in Ac-
counting Horizons (1), Asian Journal of Accounting and Governance (1), Elec-
tronic Markets (1), International Journal of Accounting Information Systems
(2) and MIS Quarterly Executive (1). One of the articles was published in
2016, one in 2018 and the remaining four in 2019 demonstrating the nascent

Figure 13.1 Number of RPA-related publications in Google Scholar.

134 Matthias Holmstedt et al.
nature of RPA research. However, it is likely to attract increased research
attention because of the claims about its effect on the accounting profession
and overall public interest in solutions that automate white-collar tasks. In
Section 13.4, we review these six articles to illustrate the current state of the
knowledge on how RPA will affect the portfolio of accounting tasks and the
overall accounting profession.

13.3 RPA-related research in accounting – an early review

Lacity and Willcocks (2016) studied RPA implementation in a mobile tele-
com firm. Fernandez and Aman (2018) studied the implementation of RPA
in a global accounting services firm and how it affected the firm’s business
and finance functions. Hofmann et al. (2019) provided a review of the lit-
erature focusing on RPA implementation. Kokina and Blanchette (2019)
studied four (anonymous) firms that adopted RPA for their accounting and
finance tasks. Cooper et al. (2019) studied RPA implementation in a pub-
lic accounting setting, and Huang and Vasarhelyi (2019) focussed on RPA
implementation in the auditing industry. Five of these pieces of research
are based on empirical observation, and one is a literature review. Most
adopt a qualitative approach, employing a case study design and interviews
to gather information.
All six studies are characterised by two themes: (1) what should be auto-
mated and (2) the actual implementation of RPA in organisations. To decide
what should be automated, the studies rely on the criteria of repetitive, tedi-
ous, mundane tasks that do not require much mental effort. These tasks ex-
ist in both private and public accounting and auditing practices. Examples
include accessing databases, validating data and generating documents and
reports. All six articles focus on the opportunities for RPA to help organ-
isations reduce costs, minimise errors, make accurate performance meas-
urements and improve process documentation and report quality. RPA is
described as the solution that substitutes for the human worker, and most
of these studies discuss the ability of RPA to imitate a human worker as
positive for the organisation. RPA is presented as a tool for organisations to
reduce their workload, reduce the number of employees and reduce human
negligence due to the ability to take over repetitive and rule-based tasks
(e.g., Lacity and Willcocks 2016; Fernandez and Aman 2018; Hofmann et al.
2019; Huang and Vasarhelyi, 2019). By replacing human workers, some of
the studies suggest that this frees up accountants to focus on other tasks that
require creative thinking, analytical skills, judgment, follow-up actions and
social skills (e.g., Fernandez and Aman 2018; Hofmann et al. 2019; Huang
and Vasarhelyi 2019).
Fernandez and Aman’s (2018) is the only study that explores the poten-
tial downside to RPA implementation. They consider that, similar to other
automation technologies, RPA could have positive or negative influences
on individuals and firms. More specifically, they stress that motivation,
 Robotic process automation and accounting 135
emotions and productivity are three aspects likely to be influenced by RPA
implementation. They then adopt a profession logic lens to point out that
implementation of RPA can cause a change in the role of accountant since
the accountant will formulate and adapt to new work tasks. On the basis of
previous studies, Fernandez and Aman (2018) point out that, following the
implementation of RPA, there will be fewer work routines, improved mo-
tivation to learn, increased ability to develop professional skills, increased
ability to carry out management analysis and greater work efficiency. Along-
side these positive aspects, they discuss how RPA implementation might
negatively influence the accountant role by creating fear and worry about
new work activities and processes. The authors stress that implementation
can cause an unnecessary competition between humans and robots, under-
pinned by the accountants’ fear of being replaced by a robot.
None of these studies of RPA in accounting addresses in detail how
RPA affects the accounting profession task portfolio. Instead, they discuss
changes related to adoption of RPA and how it changes internal tasks. How-
ever, there is no support for the bean counter stereotype found in Frey and
Osborne (2017); thus, the extinction prophecy receives weak or no support.
Therefore, the literature flashlight headings addressed at the beginning of
this chapter would seem to provide an exaggerated picture of the future, at
least of the accounting profession.

13.4 Some concluding remarks

This chapter investigated the implementation of RPA and the extinction
prophecy in the context of the accounting profession. The extinction proph-
ecy is fuelled by alarmist and threatening headlines. In turn, these alarmist
views are fuelled by reports written by global consultancy firms, which pre-
dict that RPA will take over routinised and rules-based accounting tasks,
making the accountant redundant. However, they do not specify which
among the portfolio of accounting tasks is most likely to be taken over. For
example, reports by Deloitte (2018) and Protiviti (2019) highlight rates of
RPA implementation and investment in RPA but are not specific about the
tasks that RPA will perform. It would seem that the extinction prophecy
stems from external stakeholders (e.g., Malmström 2016).
After conceptualising the portfolio of accounting tasks and reviewing the
RPA-related research in accounting, we show that the prophecy appears ex-
aggerated. Our literature review shows that, undoubtedly, RPA will change
the accounting profession by taking on repetitive and standardised tasks.
This should streamline accounting functions within organisations and re-
duce the number of the white-collar workers in those functions. However,
RPA cannot and will not perform all accounting tasks; however, it will allow
for greater attention to analytical, entrepreneurial and managerial roles un-
dertaken by accountants. The analytical tasks in the accounting profession
portfolio will remain and will likely be extended by the implementation of
136 Matthias Holmstedt et al.
RPA. We suggest that scepticism is in order in the context of the extinction
prophecy but that this should be paralleled by an openness to the opportu-
nities afforded by RPA.

13.5 Takeaway
The extinction prophecy in the context of the accounting profession seems
exaggerated. We envisage a future where the task portfolio of the accounting
profession will continue to change and where the RPA is just another step,
perhaps a significant one, in an already ongoing transformation. In other
words, we forecast continuing change rather than the demise of the profes-
sion. This contrasts with descriptions of RPA as threatening the whole of
the accounting profession. The task portfolio of the accounting profession
was experiencing changes before digitalisation and is likely to continue to
change in the post-digitalisation era. It is likely that the change to account-
ing tasks will be accompanied by a change to the image of the accounting
profession.

Acknowledgement
The work in this chapter was, in part, financed by Eskilstuna Municipal-
ity through the project Sörmlandskontraktet and, in part, by post doc fi-
nancing from Mälardalen University’s School of Innovation, Design and
Engineering.

References
Baldvinsdottir, G., Burns, J., Nørreklit, H. and Scapens, R.W. 2009. The image of
accountants: From bean counters to extreme accountants. Accounting, Auditing
& Accountability 22(6): 858–882. https://doi.org/10.1108/09513570910980445
BBC News. 2018. WEF: Robots “will create more jobs than they displace.” Septem-
ber 17. Accessed March 5, 2020: https://www.bbc.com/news/business-45545228.
Bland, B. 2018. Review of robots will boost rather than destroy jobs, ADB says.
Financial Times, April 18. Accessed March 5, 2020: https://www.ft.com/
content/69602a90-3d4a-11e8-b9f9-de94fa33a81e.
Carnegie, G.D. and Napier, C.J. 2010. Traditional accountants and business profes-
sionals: Portraying the accounting profession after Enron. Accounting, Organiza-
tions and Society 35(3): 360–376.
Christensen, M. and Rocher, S. 2020. The persistence of the accountant bean-
counter image in popular culture. Accounting, Auditing & Accountability Journal
33(6): 1395–1422.
Chui, M., Manyika, J. and Miremadi. M. 2016. Four fundamentals of workplace
automation. The McKinsey Quarterly 1: 1–9.
Cohn, M. 2019. Robotic process automation comes to accounting. Accounting To-
day. May 13. Accessed March 5, 2020: https://www.accountingtoday.com/news/
robotic-process-automation-comes-to-accounting.
 Robotic process automation and accounting 137
Colagrossi, M. 2019. Review of why the automation age might still need us
around to work- yes, the robots are coming – but take a breath. Big Think, Au-
gust 16. Accessed March 5, 2020: https://bigthink.com/technology-innovation/
automation-robot-jobs.
Cooper, L., Holderness, D.K., Sorensen, T. and Wood, D.A. 2019. Robotic Pro-
cess Automation in Public Accounting. Accounting Horizons, 33(4): 15–35, Avail-
able at SSRN: https://ssrn.com/abstract=3193222 or http://dx.doi.org/10.2139/
ssrn.3193222.
Deloitte United States. 2018. Robotic Process Automation (RPA) trends and
scaling best practices Deloitte United States. February 16. Accessed March 5,
2020: https://www2.deloitte.com/us/en/pages/operations/articles/global-robotic-
process-automation-report.html.
Fernandez, D. and Aman, A. 2018. Impacts of robotic process automation on global
accounting services. Asian Journal of Accounting and Governance 9: 123–132.
Frey, C.B. and Osborne, M.A. 2017. The future of employment: How susceptible are
jobs to computerization? Technological Forecasting & Social Change 114: 254–280.
Gusenbauer, M. and Haddaway, N.R. 2019. Which academic search systems are
suitable for systematic reviews or meta‐analyses? Evaluating retrieval qualities
of google scholar, PubMed, and 26 other resources. Research Synthesis Methods
11(2): 181–217.
Hofmann, P., Samp, C. and Urbach, N. 2019. Robotic process automation. Elec-
tronic Markets 30(1): 99–106.
Huang, F. and Vasarhelyi, M.A. 2019. Applying Robotic Process Automation (RPA)
in auditing: A framework. International Journal of Accounting Information Sys-
tems 35: 100433.
Kokina, J. and Blanchette, S. 2019. Early evidence of digital labor in accounting:
Innovation with robotic process automation. International Journal of Accounting
Information Systems 35: 100431.
Kuper, S. 2016. How to cope when robots take your job “When your in-
dustry goes, you lose both your income and your identity.” Financial
Times, October 6. Accessed March 5, 2020: https://www.ft.com/content/
ed208574-8b4d-11e6-8cb7-e7ada1d123b1.
Lacity, M.C. and Willcocks, L.P. 2016. Robotic process automation at Telefonica
O2. MIS Quarterly Executive 15(1): 21–35.
Lindell, E. 2015. Framtidens Arbetsmarknad i Massmedia. Delrapport 2 Eskilstuna:
Mälardalen University, Västerås.
Malmström, M. 2016. Inte Längre Fråga Om Robotarna Tar Över – Utan När. Sven-
ska Dagbladet, March 27, sec. Näringsliv/Digitalt. Accessed March 5, 2020:
https://www.svd.se/inte-langre-fraga-om-robotarna-tar-over--utan-nar.
Protiviti. 2019. Review of 2019 Global RPA survey results: Taking RPA to the next
level. Protiviti. Accessed March 5, 2020: https://www.protiviti.com/sites/default/
files/united_kingdom/insights/2019-global-rpa-survey-protiviti_global.pdf.
Syed, R, Suriadi, S., Adams, M., Bandara, W., Leemans, S.J.J., Ouyang, C., ter
Hofstede, A.H.M., van de Weerd, I., Thandar Wynn, M. and Reijers, H.A. 2020.
Robotic process automation: Contemporary themes and challenges. Computers in
Industry 115: 103162. https://doi.org/10.1016/j.compind.2019.103162.
Wolf, Z.-B. 2019. I. I. Accessed March 5, 2020. https://edition.cnn.com/2019/08/24/
politics/economy-us-workforce-automation/index.html.
14 Managing digital employee-
driven innovation
The role of middle-level managers
and ambidextrous leadership
Izabelle Bäckström and Peter Magnusson

The contemporary innovation field includes a much wider range of in-

novators than previously acknowledged. One of these innovators, over-
looked by traditional innovation studies, is the group of non-R&D and
non-managerial employees. These employees are referred to as ‘ordinary’
employees by the novel field of employee-driven innovation (EDI). These
employees often have no formal innovation function but are hugely knowl-
edgeable about products, markets, clients, services and organisational
practices which knowledge is valuable for innovative work (Høyrup, Redien-
Collot and Teglborg-Lefevre 2018). Since innovation became the key to
achieving competitive advantage in crowded markets, an increasing number
of organisations are making efforts to invite and involve all of their employ-
ees to participate in their innovation activities such as idea generation, idea
development and idea implementation. To facilitate employee innovation,
many organisations have abandoned traditional suggestion boxes and are
turning, instead, to digital tools to promote and manage flows of employee
ideas (Beretta, Björk and Magnusson 2018). Information and communica-
tion technology (ICT)-based idea management systems (IMS)1 are being in-
troduced to support ordinary employees’ innovative endeavours and allow
managers to structure the innovation process. However, research shows that
these tools need to be properly integrated into already existing structures
and work routines in order to enrich innovation (Gressgård et al. 2014). This
chapter discusses a successful and a somewhat less successful case of IMS
adoption. Both involve the same company and the same IMS but are located
in geographically separated locations. By comparing these two cases we can
identify the factors that matter for successful engagement of the firm’s ordi-
nary employees as part-time innovators working with IMS.
The literature identifies non-managerial and non-R&D employees as
potential sources and drivers of innovation, based on their supply- and
demand-side knowledge which is needed to produce valuable ideas for in-
novations. Recognition of the potential of ordinary employees triggered
emergence of the notion of EDI (Høyrup 2012) as “the generation and the im-
plementation of new ideas, products, and processes – including the everyday
remaking of jobs and organisational practices, originating from interaction

DOI: 10.4324/9781003111245-14
 Digital employee-driven innovation 139
of employees, who are not assigned to this task” (Høyrup et al. 2018: 318).
Although they may contribute to innovation, these ordinary employees are
not formally assigned to perform innovative work. They are hired mainly
to focus on exploitation related to current business operations. However,
to realise their innovation potential, they need, also, to engage in explora-
tion, activities outside their formal job description. The literature considers
concurrent exploitation and exploration to be complex (March 1991). In the
management literature, the ability or aim to handle exploitation and ex-
ploration simultaneously is referred to as “ambidexterity” (Tushman and
O´Reilly III 1996). Management of ambidexterity requires a specific type of
leadership which has been described as “ambidextrous leadership” (Rosing,
Frese and Bausch 2011).
In addition to the influence of leadership style on employees’ ability to
conduct both exploitive and explorative work for innovation, ICT-based
tools, such as IMS, facilitate exploration and, thus, can contribute to firm
innovation. Currently, there are several IMS tools that can be used to collect,
evaluate and selecting among employee ideas. They are seen as enabling em-
ployee ambidexterity. These tools act as an interface between employee and
management, which allows the employee to contribute ideas that embody
their unique contextual knowledge. In theory, this should allow ordinary
employees to exploit their innovative potential and become part-time inno-
vators. This chapter analyses the factors contributing to success or failure
when integrating an IMS to manage (collect, evaluate and select) employees’
ideas for future products and services. It consists of a case study of two geo-
graphically separated sites – South and North – which belong to the same IT
firm’s Swedish subsidiary. The South site was successful, and the other not,
regarding the innovative output from the employees. Both sites use the same
IMS to manage their EDI activities, which allows comparison of the factors
related to success. We show that successful digital management of EDI ac-
tivities using IMS depends on the leader’s ability to actively incorporate the
tool into everyday work routines and existing structures to stimulate explor-
ative behaviour from employees. This suggests that the adoption of IMS to
manage EDI must be companioned, also, by a leadership that supports both
exploitation and exploration, that is, an ambidextrous leadership. In other
words, technology on its own is not enough for successful digitalisation – it
is its management that makes the difference.

14.1 Digital employee-driven innovation

In the past, the emphasis in innovation studies on employees has been asso-
ciated, mainly, with the firm’s innovation-specific functions (Hiltunen and
Henttonen 2016). The traditional innovation literature tends to downplay
the role of ordinary employees (i.e., employees with no formal innovation
role) and to focus on technological experts, innovation specialists and R&D
employees (Høyrup 2012). To expand this research conversation to include
140 Izabelle Bäckström and Peter Magnusson
a wider range of sources and drivers of innovation, Høyrup (2012) proposed
the notion of employee-driven innovation (EDI). EDI assumes that ordi-
nary employees have unique expertise in various processes, products and
organisational practices in their workplace. However, despite this unique
and valuable knowledge, they are an underutilised source of innovation
(Bäckström and Bengtsson 2019; Buhl 2018). Another significant aspect that
distinguishes work on EDI from the traditional innovation literature is that
the EDI concept interconnects the phases of idea generation, idea develop-
ment, idea promotion and idea implementation that traditional innovation
literature tends to study in isolation (Deslée and Dahan 2018; Haapasaari,
Engeström and Kerosuo 2018). This interconnectedness of the innovation
phases allows both successful and unsuccessful innovation outcomes to be
highlighted (Bäckström and Lindberg 2018). This is significant since the
innovation literature generally focuses only on the successful aspects and
outcomes of innovation – described as a “pro-innovation bias” (Gripenberg,
Sveiby and Segercrantz 2012).
The growing interest in web-based tools for EDI-oriented work seems
to have spurred further developments (cf. Bäckström and Lindberg 2019;
Gressgård et al. 2014). Integration of ICT tools in firm innovation processes
has been highlighted as an interesting topic for EDI studies and in the con-
text, especially, of digital employee suggestion systems (cf. Bäckström and
Bengtsson 2019; El-Ella et al. 2013). However, so far, few studies scrutinise
the phenomenon of employee innovation in relation to management tools
for promoting and developing employees’ innovation ideas. In particular,
there have been calls for more attention to the digital arrangement of EDI
activities and how these are combined with management practices such as
structures, incentives and support routines (Bäckström and Bengtsson 2019).
An exception here is the study by Gressgård et al. (2014), which leads the
authors to conclude that the organisational and social context in which the
ICT tool is applied should be taken into account. Gressgård and colleagues
suggest that these tools need to be aligned to daily work routines and, hence,
need to be integrated in already existing structures and processes through
timely and regular feedback to employees and inclusion of employees in the
later innovation phases of idea refinement and implementation. However,
little is known about managerial interventions to support and empower em-
ployees to engage in innovative activities beyond their day-to-day tasks, that
is, to engage in exploration.

14.2 Ambidextrous leadership

The ambidextrous organisation concept (Tushman and O´Reilly III 1996)
refers to the inclusion of the two necessary processes of exploitation and
exploration identified by March (1991). The first is aimed at replicating and
aligning what the organisation already does, in the most efficient manner;
the latter is about questioning the way that the firm is currently doing things
 Digital employee-driven innovation 141
to create and adapt new and better ways. Thus, exploitation behaviour has
a short-term orientation and is linked to maximising current resources uti-
lisation, while exploration has a long-term horizon and is aimed at develop-
ing organisational resources. Ambidexterity describes the ability to handle
both simultaneously. The literature describes two different types of ambi-
dexterity: structural ambidexterity and contextual ambidexterity. Structural
ambidexterity involves separating exploitation activities from exploration
activities. Contextual ambidexterity describes when both modes are com-
bined into the same unit or even individual (Mueller, Renzl and Will 2020).
This chapter examines the case of two sites that were expected to handle
both ordinary routinised work (exploitation) as well as to contribute innova-
tion ideas (exploration), that is, to be ambidextrous. Interestingly, the South
site was successful, but the North site was not. A potential reason for this
difference might be middle-level managers’ leadership styles. Middle-level
managers have the responsibility for making sense of partially incoherent
tasks for subordinates and should be able to manage ambidexterity (Gibson
and Birkinshaw 2004). The literature suggests that the ability to be ambi-
dextrous depends on leadership style. Transformational leadership has been
advocated for exploration, and for exploitation transactional leadership is
more appropriate (Crossan, Lane and White 1999).
Transactional leadership implies that the leader assigns tasks to subor-
dinates in exchange for a promised reward or benefit. Transformational
leadership involves asking the subordinates to go beyond their short-term
self-interest for the longer-term good of the group or the organisation or
even the whole of society. The transformational leader is often a role model
(Bass 1990). It should be noted that many great leaders in history have had
the ability to be both transformational and transactional, depending on the
situation.
It has been suggested that middle-level managers play an important role
in orchestrating operational ambidexterity. The study by Hodgkinson, Rav-
ishankar and Aitken-Fischer (2014) shows that middle-level managers’ ac-
tions and leadership were decisive for units’ ability to work ambidextrously.
The importance of frontline managers to achieve ambidexterity is under-
lined, also, by Zimmermann, Raisch and Birkinshaw (2015).

14.3 An illustrative case

This chapter discusses the case of two Swedish subsidiary units of a global
IT firm, located on two different sites which we call South and North. In
2014, the IT firm implemented a joint digital innovation platform to collect,
evaluate and select among employees’ creative and valuable ideas, within
certain themes that the top-level management considered significant for the
company’s current and future business activities. Some examples of previ-
ous themes included sustainability, digitalisation and healthcare. Thus, the
themes are broad and span several sectors, which allows employees to relate
142 Izabelle Bäckström and Peter Magnusson
to and draw parallels with ongoing business projects or ideas from other in-
dustries. The implementation of the IMS enabled all employees, regardless
of their function in the firm, to submit ideas and receive feedback and rat-
ings from colleagues. A group of experts were appointed by the innovation
manager to evaluate the ideas submitted by an employee and to select what
they considered to be winning ideas. The average number of ideas submit-
ted was around 30 in each round, from which the experts selected two or
three ‘winners’ and published them on the firm’s intranet. Whether or not
the ideas received funding depended on clients’ willingness to fund a part
of the project and whether the main board of directors approved the fund-
ing proposal. The initiative resulted in very few ideas from the North site,
but numerous submissions and several winning ideas were produced by the
South site. This led to the research question in this chapter related to why
some more than other employees are likely to propose ideas for innovation
using an IMS. The comparative analysis in this chapter allows us to analyse
the reasons underlying the different outcomes of using an IMS in the ar-
rangement of EDI activities.
The existing research points out, also, that the formal integration of ICT
tools is not enough on its own to nurture employee innovation; there is a
need for appropriate managerial support and empowerment interventions
(Bäckström and Bengtsson 2019; Bäckström and Lindberg 2019). However,
from a theoretical perspective, the two aspects of how this integration is
enacted in the workplace and when does the top-level management collect,
evaluate and select employee ideas are less clear. The EDI literature tends
to treat top-down managerial interventions and structures in isolation from
bottom-up employees’ responses to, and perceptions of, the activities (Lem-
piälä, Yli-Kauhaluoma and Näsänen 2018). This chapter contributes by pro-
viding a leadership perspective that focuses on the top-down and bottom-up
interactions between managers and employees. We propose ambidextrous
leadership as a way to manage the concurrent processes of exploration and
exploitation when integrating an IMS in EDI activities.

14.4 Lessons from the Swedish subsidiary units

Comparative analysis of what happened at the two sites in their EDI work of
integrating an IMS identifies several dichotomies related to exploration and
exploitation, which is presented in Table 14.1.

14.4.1 Lessons from the South site

One of the factors that contributed to effective integration of the IMS at
the South site was the frequent communication among employees and
middle-level managers when an innovation invitation was posted on the
platform. This made it clear that the innovative efforts were considered a
collective action. One middle-level manager explained:
 Digital employee-driven innovation 143
Table 14.1 Comparison of the two sites based on the number of employee ideas
that have been submitted to the joint digital innovation platform

South site North site

Attitude towards A collective action Driven by individuals as a

innovation that is a part of the separate formal activity
organisational identity
and culture
Attitude towards the idea Supportive Nuisance
management system
(IMS)
Management focus/key Employee engagement Profitable client projects
performance indicators
(KPIs)
Time horizon for business Short- and long-term Short-term

We talk about it [employees’ idea submissions] all the time … what ideas
that have been submitted and which of these ideas that originate from
our site…. We discuss them and remind each other about deadlines, and
we encourage one another to comment on each other’s ideas and vote
for the ideas that we like.

Middle-level managers at the South site promoted the use of IMS by initi-
ating discussions with employees. In addition, physical idea meetings were
part of their monthly and weekly meeting agendas which allowed employees
to discuss their ideas. Thus, explorative activities were integrated in the firm
culture. To induce explorative behaviour, managers encouraged employees
to “think outside the box, to move beyond the given frames by initially ig-
noring the limitations, because this can be dealt with later” (interview with
a middle-level manager). Explorative idea sharing was encouraged by man-
agers at the South site, who agreed that it was crucial to create a sense of
belonging, safety and tolerance “so that you [the employee] will be keen to
share crazy ideas without being or feeling judged by anyone” (middle-level
manager). This mind-set resonates with transformative leadership (Bass
1990). At the South site, importance was put also on establishing and main-
taining a climate of idea generation, nurtured by mutual respect and curi-
osity, allowing employees and managers to benefit from sharing continuous
feedback. One manager said, “If you present an idea there is always some-
one who is willing to listen to you.” In addition, when developing an idea,
both top-level and middle-level managers at the South site paid attention to
employees’ motivations and aspirations in having proposed the idea. Given
that idea refinement is a long-term activity and can result in modifications
and changes to the original idea, care was taken not to dismiss any of the
ideas submitted without careful consideration, even if the immediate busi-
ness value of the idea was not apparent. Rather, middle-level managers at
144 Izabelle Bäckström and Peter Magnusson
the South site actively encouraged employees to use the IMS to structure
their thoughts and tweak their ideas and respond to feedback from peers
working at the company’s other sites in Sweden.

14.4.2 Lessons from the North site

At the North site, there seemed to be a degree of middle-level manager dis-
trust in the employee innovation setup. One middle-level manager said:

When we have had an innovation theme running on the platform, we

tried to arrange brainstorming sessions but I feel like we aren’t listening
to each other as carefully as we should … we need more of that in order to
build trust and a willingness to openly share ideas … I think we need to
let go of our formal roles and the prestige that comes with it to be able
to start open-minded conversations about our ideas.

This suggest that at the North site innovative efforts were mainly individual
endeavours and not collective activities. At the North site, the IMS appeared
to be separate from the ongoing business projects, which was in sharp con-
trast with the situation at the South site. The above extract suggests that
both middle-level managers and employees at the North site were aware that
there was no culture of sharing. They pointed to the need for physical meet-
ings, aimed specifically at discussing and refining ideas together, in order to
increase the number of ideas submitted to the joint digital platform. How-
ever, so far, it seems that top-level management at the North site considered
innovation to be an additional formal activity that should be performed in-
dividually. Top-level managers emphasised that it was an individual respon-
sibility to participate in EDI activities. Similarly, one employee commented
that “if you want something to be done, do it yourself without asking some-
one, the general rule is do it first and then ask.” This reflects the absence of
a collective innovation culture and is illustrated by a middle-level manager’s
experience of formulating an idea and in preparing for its submission to the
joint digital platform:

I felt a sense of resistance to formulate an idea all by myself and to

sharing it on the platform. To me it is important to sit down with other
people, discuss ideas and receive feedback before I am actually willing
to put my own idea out there.… I would rather share my idea with col-
leagues first.

This extract underlines the importance of the IMS being integrated in daily
working routines, after or during idea refinement with colleagues, to ena-
ble long-run employee engagement. At the North site, middle-level manag-
ers communicated a lack of trust and safety when discussing the IMS. For
them, the organisation of employee innovation activities was perceived as
 Digital employee-driven innovation 145
yet another structure that had been imposed on them, and they had chosen
not to promote the IMS to their employees. This lack of promotion led to
employees feeling that the IMS was more of a nuisance than an aid to inno-
vation. One North site employee commented:

Innovation is not supposed to be fancy words in strategy documents …

it might look good on paper but the actual problem we face is to com-
bine our creative efforts with the daily work routines.

Thus, there seemed to be a conflict between exploiting and exploring behav-

iours at the North site. This tension was demonstrated, also, by manage-
ment’s focus and priorities. Instead of supporting explorative activities to
enable innovation, middle-level managers at the North site focused mainly
on ongoing client projects which they saw as a separate activity from the
IMS. One middle-level manager commented on employees who worked on
idea projects while also trying to keep abreast of their ongoing daily work
and client projects: “But that’s not good, really, we’re not supposed to do
that because we’re not getting paid for it.…” Instead of embracing the idea
of EDI activities, namely employee engagement, top-level and middle-level
managers at the North site tended to emphasise short-term client satisfac-
tion and client assessments. The organisation of employee innovation was
perceived as an activity to advertise the company’s innovative potential to
clients, as a branding strategy, rather than an activity to focus employees’ ef-
forts and ideas. Rather than accentuating collaboration and idea refinement
with colleagues at the site, the North site stressed “working on solutions to-
gether with clients” (employee interview). This reflects exploiting behaviour
in which clients’ needs are primary and guide the innovation activity; that
is, the client defines the framing of the innovation.

14.5 Discussion
Table 14.1 presented important differences between the two sites regarding
leadership that affects the successful (or unsuccessful) adoption of the IMS
to achieve EDI. We showed that there is a need for some level of organisa-
tional contextual ambidexterity to enable successful EDI, which is an ex-
plorative activity and is different for exploitative and routinised work. A
major difference between the two sites was the business time horizon; the
South seemed to be able to manage both short- and a long-term perspec-
tives, but the North site’s management was focused purely on short-term
client projects and their importance. To achieve contextual ambidexterity –
the ability to handle both exploration and exploitation within the same
structure – both of the mind-sets need to be integrated in the culture at the
site, which the South site had accomplished. However, the North site treated
exploration as a formal ‘add-on’, to be tackled on an individual basis with-
out the active support of managers.
146 Izabelle Bäckström and Peter Magnusson
The main driver of innovation activity at the North site was the direct
input and demand from the clients, whereas at the South site innovation
activity was driven by employees’ creativity and ideas and keenness to
explore. The first style could be defined strategically as market/customer-
driven, that is, to exploit current needs. The second refers to exploration of
new opportunities, that is, market/customer-focused (Jaworski, Kohli and
Sahay 2000).
In increasing the willingness to adopt an IMS, it is important for both
top-level management and middle-level management to be supportive and
to promote the structure and highlight its benefits to employees and also to
use the tool themselves to increase trust among employees and inspire them.
There were significant differences, in this regard, between the sites. At the
South site, management actively encouraged employees to submit their ideas
to the IMS and posted ideas themselves on the digital platform.
To conclude, the comparative analysis in this chapter highlights deci-
sive differences between successful and less successful uptake of IMS. The
South site had achieved ambidextrous leadership, which was shown, by the
experience at the North site, to be necessary to successfully utilise IMS for
EDI-oriented work.

14.6 Takeaway
The findings from this study have implications for knowledge-intensive
businesses aiming to expand their employee’s innovation capacity through
implementation of an idea management system (IMS). However, we found
that the adoption of IMS to manage employee-driven innovation (EDI)
needs to be accompanied by a leadership that supports both exploitation
and exploration, that is, an ambidextrous leadership. Leadership thus mat-
ters for successful digitalisation.

Note
1 Henceforward, we will use the abbreviation IMS implicitly understood that
these are ICT-based.

References
Bäckström, I. and Bengtsson, L. 2019. A mapping study of employee innovation:
Proposing a research agenda. European Journal of Innovation Management 22(3):
468–492.
Bäckström, I. and Lindberg, M. 2018. Behavioural implications of employee-driven
innovation – A critical discourse analysis. International Journal of Innovation
Management 22(7):1–18.
Bäckström, I. and Lindberg, M. 2019. Varying involvement in digitally enhanced
employee-driven innovation. European Journal of Innovation Management 22(3):
524–540.
 Digital employee-driven innovation 147
Bass, B.M. 1990. Bass & Stogdill’s handbook of Leadership: Theory, research, and
managerial applications: New York: The Free Press.
Beretta, M., Björk, J. and Magnusson, M. 2018. Moderating ideation in web‐enabled
ideation systems. Journal of Product Innovation Management 35(3): 389–409.
Buhl, A. 2018. Do it yourself-a lean startup toolbox for employee-driven green prod-
uct innovation. International Journal of Entrepreneurship and Innovation Manage-
ment 22(4–5): 526–544.
Crossan, M.M., Lane, H.W. and White, R.E. 1999. An organizational learning
framework: From intuition to institution. Academy of Management Review 24(3):
522–537.
Deslée, C. and Dahan, A. 2018. Employee-driven innovation into practice: Man-
aging the tension between organisation and innovation. International Journal of
Entrepreneurship and Innovation Management 22(4–5): 323–337.
El-Ella, N., Marrtin Stoetzel, A., Bessant, J. and Pinkwart, A. 2013. Accelerating
high involvement: The role of new technologies in enabling employee participa-
tion in innovation. International Journal of Innovation Management 17(6): 1–22.
Gibson, C.B. and Birkinshaw, J. 2004. The antecedents, consequences, and mediat-
ing role of organizational ambidexterity. Academy of Management Journal 47(2):
209–226.
Gressgård, L.J., Amundsen, O., Aasen, T.M. and Hansen, K. 2014. Use of infor-
mation and communication technology to support employee-driven innovation
in organizations: A knowledge management perspective. Journal of Knowledge
Management 18(4): 633–650.
Gripenberg, P., Sveiby, K.-E. and Segercrantz, B. 2012. Challenging the innovation
paradigm: The prevailing pro-innovation bias. In Challenging the Innovation Par-
adigm, Sveiby, K.E., Gripenberg, P. and Segercrantz, B. (eds.), New York: Rout-
ledge: 15–26.
Haapasaari, A., Engeström, Y. and Kerosuo, H. 2018. From initiatives to
employee-driven innovations. European Journal of Innovation Management 21(2):
206–226.
Hiltunen, E. and Henttonen, K. 2016. “I have ideas but I don’t want to say them
aloud.” Employee-driven innovation discourses at a retail chain store. Interna-
tional Journal of Entrepreneurship and Innovation Management 20(5–6): 349–359.
Hodgkinson, I.R., Ravishankar, M.N. and Aitken-Fischer, M. 2014. A resource-
advantage perspective on the orchestration of ambidexterity. The Service Indus-
tries Journal 34(15): 1234–1252.
Høyrup, S. 2012. Employee-driven innovation: A new phenomenon, concept and
mode of innovation. In Employee-Driven Innovation. A New Approach, Hoyrup,
S. Bonnafous-Boucher, M., Hasse, C., Lotz, M. and Moller, K. (eds.), New York:
Palgrave Macmillan: 3–33.
Høyrup, S., Redien-Collot, R. and Teglborg-Lefevre, A.-C. 2018. Introduction.
International Journal of Entrepreneurship and Innovation Management 22(4–5):
317–322.
Jaworski, B., Kohli, A.K. and Sahay, A. 2000. Market-driven versus driving mar-
kets. Journal of the Academy of Marketing Science 28(1): 45–54.
Lempiälä, T., Yli-Kauhaluoma, S. and Näsänen, J. 2018. Similar structures, differ-
ent interpretations: Perceived possibilities for employee-driven innovation in two
teams within an industrial organisation. International Journal of Entrepreneur-
ship and Innovation Management 22(4–5): 362–380.
148 Izabelle Bäckström and Peter Magnusson
March, J.G. 1991. Exploration and exploitation in organizational learning. Organi-
zation Science 2(1): 71–87.
Mueller, J., Renzl, B. and Will, M.G. 2020. Ambidextrous leadership: A meta-review
applying static and dynamic multi-level perspectives. Review of Managerial Sci-
ence 14(1): 37–59.
Rosing, K., Frese, M. and Bausch, A. 2011. Explaining the heterogeneity of the
leadership-innovation relationship: Ambidextrous leadership. The Leadership
Quarterly 22(5): 956–974.
Tushman, M.L. and O´Reilly III, C.A. 1996. Ambidextrous organizations: Manag-
ing evolutionary and revolutionary change. California Management Review 38(4):
8–30.
Zimmermann, A., Raisch, S. and Birkinshaw, J. 2015. How is ambidexterity ini-
tiated? The emergent charter definition process. Organization Science 26(4):
1119–1139.
15 Digital gamification of
organisational functions
and emergent management
practices
Edward Gillmore

Gamification is incentivisation of people’s engagement in non-game

contexts and activities, by using game-style mechanics. Gamification is
achieved by using a game design in non-game contexts. It is the newest trend
in the rich history of the intersection between games and management –
which includes business simulation games, role-play as leadership training,
serious play, innovation and design games, and serious games related to
advertising, training and recruitment (Deterding 2019; Morschheuser and
Hamari 2019).
This chapter extends our understanding of emerging management prac-
tices based on the introduction of digital gamification processes in business
firms. We present the findings from a Nordic-based logistics firm’s (Aditro
Logistics) implementation of a virtual game space for the use of employees
during working hours. The virtual game and the avatars are designed to
make use of gamification logic to complement and substitute for the firm’s
Human Resources Management (HRM) function, by motivating, moni-
toring, evaluating and rewarding Aditro employees. These emergent man-
agerial practices are a response to issues related to the introduction of a
digital gamification platform by Aditro Logistics and the associated rapidly
evolving technological environment and changing working arrangements.
To manage the changing priorities related to implementing gamification re-
quires innovative and proactive management to overcome organisational
resistance to, inadequate support for and sponsorship of the initiative.
Digitalisation has opened up all manner of opportunities for the gamifi-
cation of firm processes, which go beyond the previous learning arenas. One
such opportunity is the substitution of existing business functions or struc-
tures. This requires an assessment of the useful and useless management
practices in order that companies can experiment with ways of working and
managing and reap the potential benefits of gamification (Millar, Groth
and Mahon 2018). Small-scale experimentation and flexibility are crucial
for gamification of management process and substitution of organisational
functions.
Firms that decide to innovate by exploiting gamification and intro-
ducing it across the whole organisation often focus on technological

DOI: 10.4324/9781003111245-15
150 Edward Gillmore
innovation, that is, the design of the gamification processes (Hamari,
Koivisto and Sarsa 2014). This has resulted in a focus on the diffusion
and adoption of gamification in organisations (Rapp et al. 2019). To intro-
duce a process, such as gamification, requires adaptations to the manage-
rial structure and to management processes and practices (Vaccaro et al.
2012; Deterding 2019). The technological changes introduced may trigger
organisational changes (Mol and Birkinshaw 2008, Vesa et al. 2017) and
require new management techniques to handle the uncertainties that may
arise (Birkinshaw 2018a).
This chapter shows the importance of organisational management’s un-
derstanding of its role to enable the firm to exploit the opportunities of
gamification. It shows, also, how this management understanding influences
others’ (i.e., senior executives and the workforce) alignment to a particular
process (Floyd and Lane 2000). In the study of gamification of the HRM
process at Aditro Logistics, presented in this chapter, we identify specific
management practices and how they emerge are linked to the introduction
of gamification. The introduction of a virtual game space in Aditro Logis-
tics reveals the issues that managers must deal with when introducing gam-
ification processes into their business.
It was necessary for Aditro managers to maintain the firm’s existing
HRM department while proposing and structuring the gaming platform
to support the new HRM function. This required implementation of inter-
nal processes to both maintain the existing function and introduce a new
HRM function that is aligned to the gamification platform. The empirical
vignettes emphasise the need for a social and less aggregated perspective to
understand emergent management practices.
The chapter is organised as follows. Section 15.1 introduces key theoret-
ical tenets of gamification that explain why gamification has not been em-
ployed on a wide scale in firms. Most research on gamification focuses on
its introduction in non-business settings and emphasises learning, that is,
simulation and role-play as in the case of Lego Serious Play. This focus over-
looks the potential business opportunities and managerial implications of
introducing a game theoretic tool into firm functions through digital media.
Section 15.2 makes links to management innovation theory, which is the
theoretical foundation for the implementation of gamification in business
and the resulting management practices. Section 15.3 discusses three man-
agement practices at Aditro Logistics, which emerged to manage and over-
come the duality involved in introducing a digital game to complement and
substitute for the HRM function.

15.1 What is gamification?

Gamification in the 21st century describes the digital processes that enhance
a service and provide game-like experiences that support the user’s overall
 Digital gamification of organisation 151
value creation (Huotari and Hamari 2012). This definition highlights the
goal – the experiences that it attempts to give rise to – rather than the gamifi-
cation method. Previous definitions of gamification rely on the notion that it
is based on the use of game elements. However, there seems to be no clearly
defined set of methods related to implementing gamification elements into
organisations.
The emergence of gamification is considered to be due to a number of
converging factors, including cheaper technology, personal data tracking,
eminent successes and prevalence of the game medium (Deterding 2012). In
the past few years, elements of gamification have emerged as a trend within
business sectors focusing on services and marketing endeavours, such as
points cards, rewards and memberships, and educational structures, most
notably scholastic levels, grades and degrees (Nicholson 2015; Deterding
2019). However, gamification is not a new tool; it has been used for simula-
tion purposes by private and public organisations for many years (Hamari,
Huotari and Tolvanen 2015).
Gamification as an academic topic of study is relatively young, and
there are few well-established theoretical frameworks or unified discourses
(Hamari et al. 2015). In the past few years, gamification has sparked interest
from both industry and academia (Huotari and Hamari 2012; Hamari et al.
2014, 2015; Nicholson 2015). For example, the success of mobile services,
such as Foursquare and Nike+, is often attributed to gamification (Huotari
and Hamari 2012). However, discussion has remained mostly confined to
game studies and social science (Hamari et al. 2015). Although an increasing
number of gamification processes are offered as services to consumers, only
very few such processes are introduced in business organisations; most are
confined to the education, services and marketing domains (Hamari et al.
2015; Deterding 2019).
As digitalisation and artificial intelligence change the business landscape,
organisations increasingly are adopting more radical digital processes such
as gamification. So far, the economics of firm rewards and penalties, used to
motivate workers, has relied largely on monetary incentives and overlooked
motivational capital. At the same time, firm functions are increasingly being
digitalised, and gamification can be employed to build on this momentum.
More accessible and affordable digital technologies are prompting busi-
nesses to explore the introduction of gamification to replace or support var-
ious functions (Vesa et al. 2017).
At Aditro Logistics, digitalisation has allowed the firm to complement
its HRM function through the introduction of a game platform, designed
to make employees feel more connected, productive and effective at work.
However, it must be remembered that although the integration of digital
game processes into business structures and operations may bring many
benefits, they require management and new fit-for-purpose practices
(Birkinshaw 2018b).
152 Edward Gillmore
15.2 Emerging managerial practices triggering new
ways of working
A management innovation can be defined as a “marked departure from
traditional management principles, processes, and practices or a depar-
ture from customary organisational forms that significantly alter the way
the work of management is performed” (Hamel 2006: 3). In other words,
management innovation refers to a change in how management is enacted
and the actions managers must perform. Some refer to the “implementation
of new management practices, processes, and structures” (Birkinshaw and
Mol 2006: 81), showcasing a shift from current norms. In the management
innovation literature, the focus is on how practices, processes and structures
are introduced or changed to achieve organisational goals (Birkinshaw,
Hamel, and Mol 2008), with little reference to digitalisation. In this process
perspective, management innovation refers to routines and rules, on which
basis work is accomplished within the organisation (e.g., Vaccaro et al. 2012;
Khanagha et al. 2013; Peris-Ortiz and Hervás-Oliver 2014). Management
innovation focuses on managerial work at firm level (Vaccaro et al. 2012)
and ignores the effect of digitalisation on the managerial process.
In a business organisation, changing how managers work requires rein-
vention of the processes that govern the work, which, often, is programmed,
but may be organic and directed by a change agent (Khanagha et al. 2013).
Management processes, such as strategic planning, capital budgeting, pro-
ject management, employee assessment, executive development and knowl-
edge management, are the mechanisms that convert management principles
into everyday practices. In the context of a digital revolution, such as intro-
ducing a root and branch gamification process to substitute for a previous
function, management processes are key to the successful implementation
but must be adapted and embedded (Birkinshaw 2018a).
Management innovation applied to the introduction of gamification
into business organisations has two advantages. First, management inno-
vation champions the idea of experimentation and incremental change,
which are conducive to the processes involved in implementing gamifica-
tion and adapting the gamified platform to suit the organisational context.
Second, management innovation establishes the recipes and rituals that,
over time, govern the work of managers. These recipes and rituals emerge
from experimentation with working processes that are context-specific to
the given organisation undertaking digital transformation (Peris-Ortiz and
Hervás-Oliver 2014).

15.3 The gamification of the HRM function at

Aditro Logistics
All firms have a dedicated management whose job it is to maintain organi-
sational functions and address the concerns of internal actors. This creates
 Digital gamification of organisation 153
interdependencies between their managerial activities within the firm, man-
agerial activities involving others between managers, and the managerial
activity itself. Here, managerial activity is understood as the innovative ac-
tivity undertaken, the social action taken and the social awareness and sup-
port among managers to accomplish the implementation of gamification.
The implementation of gamification at Aditro Logistics, to substitute for
HRM practices, required constant adaption, which needed to be managed.
Below, we present three vignettes describing emergent management prac-
tices related to the practical introduction of gamification and managerial
innovations. In ongoing research on the introduction of a digital gamifica-
tion platform at Aditro Logistics, we identified three different management
practices which seem critical for the successful introduction of digitalised
gamification in Aditro Logistics. These are described in the vignettes.

15.3.1 Vignette 1: revolutionary reconfiguration of HRM practices

at Aditro Logistics
Overall, Aditro Logistics management subscribed firmly to the belief that
the HRM function was important and was linked to management and em-
ployee engagement. However, there was a small group of senior managers
who believed that the status quo had prevailed for too long and that to cap-
ture the attention of the firm’s workforce, which included a strong millen-
nial demographic, required a new approach. Influenced by this small group,
the firm decided to break up the existing HRM function and introduce a
digitalised gaming platform. These influential managers had started a revo-
lution based on the adoption of gamification principles by Aditro Logistics.
Our interviews with these managers showed that although they did not be-
gin testing the gamification platform until 2019, the idea had been mooted
in late 2018, and a business case and feasibility study has been prepared. The
forward-thinking of this small group of Aditro Logistics managers allowed
connection with the workforce which facilitated the break from the existing
HRM model.
The idea was not that the platform and access to big data would allow more
effective measurement of workforce performance, but rather that it would
enable more radical thinking about the workforce and, through contact via
the platform, would allow changes to be made to working habits. The gami-
fication platform was developed and ‘tested’ at Aditro Logistics’ Jonkoping
site; the aim was to roll it out, across the whole organisation, at all its differ-
ent locations. This required a significant ‘selling’ effort. Although proposed
as a way to digitalise the HRM function and provide game mechanisms that
would increase collaboration, a team mentality and a rewards system, the
platform was considered a non-core business. As such it required ‘selling’ by
the management team so as to gain sympathy from executives and employ-
ees for a radical departure from previous HRM thinking.
154 Edward Gillmore
Aditro Logistics has logistics hubs throughout Scandinavia, including in
Goteborg, Stockholm and Jonkoping, where the traditional factors of pro-
duction, such as land, labour and capital, are readily available. Some mem-
bers of Aditro Logistics management saw traditional solutions to workplace
disengagement as outworn and considered that motivating the workforce
required a unique approach. Aditro Logistics’ chief information officer sug-
gested that the only meaningful resource is knowledge about the workforce.
This sparked the idea of a digital solution to HRM that would capture em-
ployees’ attention.
This was a radical change and involved fundamental change to estab-
lished functions and roles but the same actors. The replacement of a role by
a digital gamification platform (Birkinshaw 2018a) has been described as
revolutionary reconfiguration. An example of revolutionary reconfiguration
is the reconfiguration that occurred at Ford Motors which affected the auto-
mobile industry in the early 1900s. The production technology was radically
reconfigured, but the key actors, that is, managers, employees, competitors
and suppliers, remained. Similarly, the introduction of digital gamification
platform did not change Aditro Logistics management’s and employees’ un-
derstanding of their roles; however, it triggered a functional reconfiguration
of the HRM unit which has had a beneficial impact on employee engage-
ment and productivity.

15.3.2 Vignette 2: internal validation practices at Aditro Logistics

The second managerial practice that emerged referred to validation of the
idea, the platform and the potential ‘return’ on investment, among stake-
holders and Aditro Logistics management. It took two forms and comprised
multiple steps. The two forms of internal validation were designed to deter-
mine whether internal stakeholders (i.e., employees at all of Aditro Logis-
tics’ sites, senior management and unions) agreed to the radical change in
the approach to HRM.
The second form was an ongoing process to check that project imple-
mentation was in line with specifications. The director of staffing played a
significant role in this activity. He was one of the small group of managers
who were behind the idea, and he was very enthusiastic about the digital
gamification process. The project specifications were initially quite loose
but became more detailed as investment in the platform increased. The
management team who initiated the process met regularly and were respon-
sible for evaluating implementation to ensure it matched requirements.
The broad experience of the project team allowed a detailed evaluation
of the different validation phases. The project team had a unique dynamic
which pivoted between fastidious verification and embracing validation.
Specifically, the chief information officer was detailed in his due diligence
of validating the project stages while the director of staffing was the ‘front
man’ of the gamification initiative and enthusiastically sought to bring
 Digital gamification of organisation 155
understanding to senior management and employees in an embracing man-
ner. This change to the HRM function at Aditro Logistics provided the op-
portunity for the company to change its employee management and, unlike
the previous system, allow for recognition and empowerment.
Early in the introductory phase of implementing the digital gamification
platform, it was realised that the management had some competence gaps.
A new actor was recruited with software experience and knowledge which
the management team lacked. To avoid technological problems, it was es-
sential to have an expert who had the relevant experience and, also, was able
to interact with other members inside the company and external actors and
increase legitimacy with stakeholders.

15.3.3 Vignette 3: management adhocracy at Aditro Logistics

The notion of adhocracy was proposed in the late 1960s, to describe flexible,
informal management and an alternative to bureaucracy. More recently,
management scholars have redefined the concept to distinguish it from
other forms of leadership and organising in firms (Birkinshaw and Ridder-
stråle 2010).
There was evidence of management adhocracy in Aditro Logistics. The
management team responsible for implementing the gamification platform
privileged decisive and intuitive actions. It recognised the power derived
from sharing information throughout the organisation while valuing de-
cisive action. The management team believed that too much information
would encourage overreliance on this information and reduce the good-
will and willingness throughout the organisation to embrace the change
process. The team responsible for implementing the platform included
well-respected managers with experience of ‘analysis paralysis’. This de-
scribes a situation of fragmented senior management attention and delayed
decisions due to overreliance on data analytics and bureaucratic processes.
In the implementation of the platform, the team wanted swift action and
no distractions during the initiation and testing phases of the gamification
process.
Adoption of an adhocratic approach to the management of the gamifi-
cation process at Aditro Logistics led to the emergence of three key man-
agement team practices which allowed them to remain attentive to the
gamification initiation process and maintain enthusiasm for it within the
firm. The first practice involved coordinating the gamification project ac-
tivities around opportunities. The director of staffing told us that the idea
for the gamification process was not presented formally to Aditro Logistics
chief executive officer; instead, it was mooted informally, over a lunch, after
the staffing director’s attendance at a gaming event in Jonkoping. This set
the tone for the project coordination; they focused on exploiting opportuni-
ties as they emerged. The choice of Jonkoping to ‘test’ the gamification plat-
form was based on the fact that Jonkoping is home to E-sports and gaming
156 Edward Gillmore
in Sweden and offered a rich environment for ad hoc ideas and access to
skilled programmers.
The second practice was the management team’s experimental approach
to decision-making. The team adopted the Swedish way of making decisions
based on open discussion and consultation with the wider organisation, to
maintain support of internal stakeholders. To speed up implementation, the
consultation and formal stage-gate processes and committees were cut out.
Instead, the management team opted for experimenting at the Jonkoping
test site to obtain fast feedback and to see what worked as opposed to testing
unproven ideas in a contained environment.
The third management practice involved motivating both the management
team and those involved in the development and testing of the gamification
platform, by ‘belonging and purpose’ in relation to the creative environment
of the project. The actors involved were made responsible for finding solu-
tions to problems that arose related to responsibilities and resources. These
efforts were rewarded at the Jonkoping site by the provision of an E-sport
room and working-time allowances for engagement in the gaming activities.
This set a strong team mentality and a willingness to try out new ideas and
emphasise ‘gaming’ among the workforce.

15.4 Mastering management practices when implementing

gamification
This chapter has discussed the findings from a study that combined two
theoretical perspectives – gamification and management innovation – to
examine the factors influencing business adoption of innovative digital sub-
stitutes for organisational functions. The main finding was that while both
managers and the organisational context are determinants of the adoption
of gamification by organisations, their relative importance is influenced by
the implementation stage. The process of developing radical new ways of
working, such as gamification, is inevitably risky, but consideration of the
following three management themes could give managers an advantage in
relation to organisational innovation.
The first theme is revolutionary reconfiguration or a culture of question-
ing and fighting functional inertia and allowing managers to question
the organisational and structural causes of the problem. In this process,
managers are encouraged to challenge and not to resort to stereotypical
responses but rather to find new ways to explore and solve the problem.
The second theme is validation of the initiative in a multidimensional
way, by making use of insiders and selected outsiders to substantiate
goals. It is important, also, that managers actively support the project
and motivate organisational members also to support it. The third theme
refers to encouragement of adhocratic management practices to build ca-
pacity for contained experimentation. This requires decisive action from
the management group and leapfrogging of the normal stage-gate and
 Digital gamification of organisation 157
reporting procedures. Project team empowerment and empathetic lead-
ers are important for resolving problems related to the introduction of
gamification.

15.5 Takeaway
The gamification platform was new not just to the case firm but also to the
entire logistics industry, meaning the integration process of the gamification
platform at Aditro is a unique context for observing digital transformation
and emergent practices. The findings of this chapter show that management
must pay attention to the following: (1) to get the gamification initiative off
the ground, managers had to take radical and bureaucracy-busting actions
to promote the initiative; (2) when introducing a radical initiative such as
digital gamification and departing from an existing firm function, managers
need to adopt an engaged and continuous validation strategy with both in-
ternal and external stakeholders; and (3) when introducing digital gamifica-
tion in a firm, the responsible managers must privilege decisive and intuitive
action by the project team, to not only create a sense of purpose but also
allow for experimentation.

References
Birkinshaw, J. 2018a. How is technological change affecting the nature of the corpo-
ration? Journal of the British Academy 6(1): 185–214.
Birkinshaw, J. 2018b. What to expect from agile. MIT Sloan Management Review
59(2): 39–42.
Birkinshaw, J., Hamel, G. and Mol, M.J. 2008. Management innovation. Academy
of Management Review 33(4): 825–845.
Birkinshaw, J. and Ridderstråle, J. 2010. Adhocracy for an agile age. Organization
Science 22(5): 1286–1296.
Birkinshaw, J.M. and Mol, M.J. 2006. How management innovation happens. MIT
Sloan Management Review 47(4): 81–88.
Deterding, S. 2012. Gamification: Designing for motivation. Interactions 19(4):
14–17.
Deterding, S. 2019. Gamification in management: Between choice architecture and
humanistic design. Journal of Management Inquiry 28: 131–136.
Floyd, S.W. and Lane, P.J. 2000. Strategizing throughout the organization: Man-
aging role conflict in strategic renewal. Academy of Management Review 25(1):
154–177.
Hamari, J., Huotari, K. and Tolvanen, J. 2015. Gamification and economics. In S.P.
Walz and S. Deterding (Eds.), The Gameful World: Approaches, Issues, Applica-
tions, (pp. 139–161). Cambridge, MA: MIT Press.
Hamari, J., Koivisto, J. and Sarsa, H. 2014. Does gamification work? – A literature
review of empirical studies on gamification. In R. Sprague et al. (Ed.), 47th Hawaii
International Conference on System Sciences, (pp. 3025–3034). Waikoloa, HI.
Hamel, G. 2006. The why, what, and how of management innovation. Harvard
Business Review 84(2): 72–84.
158 Edward Gillmore
Huotari, K. and Hamari, J. 2012. Defining gamification – A service marketing per-
spective. In Proceedings of the 16th International Academic MindTrek Conference,
Tampere, Finland, October 3–5: 17–22.
Khanagha, S., Volberda, H., Sidhu, J. and Oshri, I. 2013. Management innovation
and adoption of emerging technologies: The case of cloud computing. European
Management Review 10(1): 51–67.
Millar, C.C., Groth, O. and Mahon, J.F. 2018. Management innovation in a VUCA
world: Challenges and recommendations. California Management Review 61(1):
5–14.
Mol, M.J. and Birkinshaw, J. 2008. Giant Steps in Management: Innovations That
Change the Way You Work. London: Prentice-Hall.
Morschheuser, B. and Hamari, J. 2019. The gamification of work: Lessons from
crowdsourcing. Journal of Management Inquiry 28: 145–148.
Nicholson, S. 2015. A RECIPE for meaningful gamification. In T. Reiners and
L.C. Wood (Eds.), Gamification in Education and Business (pp. 1–20). New York:
Springer.
Peris-Ortiz, M. and Hervás-Oliver, J.-L. 2014). Management innovation and tech-
nological innovation: friends or foes? In M. Peris-Ortiz and J.-L. Hervás-Oliver
(Eds.), Management Innovation (pp. 1–17). Heidelberg: Springer International
Publishing.
Rapp, A., Hopfgartner, F., Hamari, J., Linehan, C. and Cena, F. 2019. Strengthen-
ing gamification studies: Current trends and future opportunities of gamification
research. International Journal of Human-Computer Studies 127: 1–6.
Vaccaro, I.G., Jansen, J.J., Van Den Bosch, F.A. and Volberda, H.W. 2012. Man-
agement innovation and leadership: The moderating role of organizational size.
Journal of Management Studies 49(1): 28–51.
Vesa, M., Hamari, J., Harviainen, J.T. and Warmelink, H. 2017. Computer games
and organization studies. Organization Studies 38(2): 273–284.
16 Leveraging digital technologies
in Enterprise Risk
Management
Jason Crawford and Jan Lindvall

16.1 Closing the gap: ERM and digitalisation

Organisations are facing unprecedented challenges and opportunities stem-
ming from regulatory, competitive and technological environments. Stake-
holders’ expectations are increasing, and organisations are expected to react
quickly and decisively, making better decisions amidst growing levels of un-
certainty. Organisations are also struggling to make sense of the growing
volumes of data, and expectations to leverage digital technologies to make
faster better-informed decisions are rising.
Organisations are accelerating investments in decision-support technolo-
gies and new operating models aimed at increasing speed, scale and connec-
tivity. Analytics is becoming central to decision-making, and organisations
are faced with the challenge of having to use various types of analytics ap-
plications to support managerial work in different functions (Khatri and
Samuel 2019).
One area where digital technologies can be leveraged is Enterprise Risk
Management (ERM). ERM is a holistic and integrated approach to the
management of all risks that organisations face (Arena et al. 2017). It has
received growing attention from practitioners – as organisations attempt to
implement ERM models such as the Committee of Sponsoring Organisa-
tions of the Treadway Commission (COSO) ERM-Integrated Framework –
and from researchers, as they examine ERM implementations in practice,
the results of which are published in a growing number of field studies (see
Fujita et al. 2018).
Normative texts present ERM as a one-size-fits-all process and frame-
work. It includes governance, strategy, performance, control and reporting
components which, in theory, should be aligned with the business model and
integrated with business practices to enhance strategy and performance. In
practice, ERM is shown to be an assemblage of different processes tools
and networks of actors, applied to different risks with varying degrees of
success (Arena et al. 2017). Many organisations struggle with ERM imple-
mentation, due to the inherent technical and social challenges (Jean-Jules
and Vicente 2021).

DOI: 10.4324/9781003111245-16
160 Jason Crawford and Jan Lindvall
There is considerable disparity between COSO’s ERM integration ideal
and the heterogeneous forms of ERM observable in practice. Risk man-
agement research focuses predominately on the design and implementation
of risk calculation techniques, models and representation artefacts, while
overlooking the social aspects of risk management and the relationship be-
tween risk artefacts and human actors. Updates to ERM models attempt
to rectify this problem by placing more emphasis on the qualitative aspects
of risk management, yet the obsession with developing increasingly com-
plex risk quantification techniques and more risk tools in practice continues
unabated.
In the recent debate on the future of ERM, practitioners and researchers
called for the gap between ERM and digitalisation to be closed. The up-
dated COSO ERM-Integrated Framework acknowledges this gap and high-
lights the potential for digital technologies to contribute to an increased
understanding of risk while acknowledging the gap:

As more and more data becomes available and at the speed at which
new data can be analysed increases, enterprise risk management will
need to adapt. The data will come from both inside and outside the en-
tity, and it will be structured in new ways. Advanced analytics and data
visualisation tools will evolve and be very helpful in understanding risk
and its impact – both positive and negative.
(COSO 2017: 7)

ERM models have contributed to practice by promoting formalised and

structured approaches to managing risk, providing universal guidance and
a single ERM language to facilitate risk dialogue in organisations. How-
ever, ERM implementation and use continues to be seen as a technocratic
process, which takes little account of contextual, social and behavioural is-
sues (Jeitziner et al. 2017). This is concerning, especially when one considers
that better and shared understandings of risk and how those risks should be
managed are a product of social interaction, interpretation and negotiation,
where intuition and expert judgement play important roles.
Organisations are already leveraging decision-support technologies, that
is, analytics applications, at least to some extent in managerial work (Kha-
tri and Samuel 2019). However, they are struggling to transform data into
insights useful for decision-making due to non-integrated digital technology
infrastructure, limited knowledge and resources, and an enduring commit-
ment to traditional/standardised forms of routine analysis and reporting
(Khatri and Samuel 2019).
Many organisations already have access to structured and unstruc-
tured data, which can be analysed to provide risk-informed insights that
decision-makers can evaluate to help them to assess how certain risks can
impact the business in the short, medium and long term and what the organi-
sations response should be. However, most organisations remain committed
 Enterprise Risk Management 161
to traditional approaches to data management and analysis. Static reports
and interactive dashboards account for between 56% and 64% of analytics
applications used by organisations for planning, implementing and con-
trolling aspects of finance work for example, while prescriptive analytics
account for a mere 5% or less (Khatri and Samuel 2019: 104).
Risk registers are a typical example of a poorly leveraged digital technol-
ogy. They record and store risk incident information, but the data are of-
ten limited to measurable and explicable information which disregards the
value of intuition and expert judgement (Budzier 2011). While, ideally, risk
registers should support organisational-wide risk communication by mak-
ing risks visible across the organisation, the literature shows that in many
cases risk registers fail to capture important details due to template design.
Risk managers who own these registers seldom have the time or analytics
tools necessary to drill down into data contained in registers to produce
insights for the business. Instead, their time is spent on producing standard-
ised reports for internal committees and external bodies.
In line with risk managements’ technocratic history and development, the
calculation of risk has been increasingly promoted as a science, in which
probabilistic reasoning blurs the classical demarcation between risk and
uncertainty. Experts produce evidence based on increasingly sophisticated
scientific techniques and methods, in line with computational thinking. In
doing so, these experts, to various degrees, have created information and
knowledge boundaries around themselves and the evidence they produce.
They attempt to collapse the space between the concept of risk and, un-
certainty, by attempting to push calculative practices into areas previously
reserved for human judgement (Mikes 2011). Claims about the superiority
of scientific risk knowledge are well supported in scientific and practitioner
journals, and these claims are increasingly shaping risk technologies, or-
ganisational structures and human cognition. This raises numerous ten-
sions between risk scientists and executive and operational management,
which frustrates the emergence of shared understanding. As the boundaries
in modern, complex and geographically dispersed organisations increase,
these tensions have become more apparent and are barriers to the sharing
and integration of information and knowledge.
Managing risk is not just about the scientific techniques used to produce
evidence; it is also about values, which influence both the production of
scientific evidence and its evaluation. This despite claims that the scientific
production of evidence is value-free (Aven 2016). The production of risk ev-
idence and its evaluation are always subject to value judgements as humans
rank different risks depending on the criteria chosen. Organisations need
to be aware of this and need to acknowledge that ERM involves a mix of
technical and social challenges that must be addressed if integration is to be
achieved. This will become more important as organisations are faced with
“wicked problems,” which extend far beyond what probabilistic reasoning
is capable of addressing (King and Kay 2020: 22). It will also require an
162 Jason Crawford and Jan Lindvall

Synatactic Boundary
Leveraging The Computational
Digital Technologies Promotes a common language. `Dimension
to Enhance Risk of
Computations Assumes that uncertainty be ERM
transformed into risk and be
captured in a single language.

Semantic Boundary

Leveraging Promotes shared understandings. The Interpretational

Digital Technologies Assumes that shared understandings Dimension
to Enhance Risk and in all cases possible/desirable and of
Interpretations that all actors are fluent in the shared ERM
single language.

Pragmatic Boundary
Leveraging The Political Dimension
Promotes shared interdependcies
Digital Technologies of
to Enhance Assumes that all actors are willing ERM
Risk Coordination to engage in knowledge
transformation.

Figure 16.1 The technologies, boundaries and dimensions of ERM.

understanding of the social context, human behaviour and intentions con-

cerning digital practices (Ågerfalk 2020), which are not currently apparent
in research or practice.
Closing the gap between ERM and digital technologies will require or-
ganisations to see beyond the technocratic approaches commonly used in
risk management. It will require practitioners to expand their attention
towards investigating how digital technologies can facilitate shared under-
standings and knowledge management among groups of distributed actors
as they attempt to manage risk and uncertainty.
This chapter develops and presents a model as a means for practitioners
and researchers to discuss and better understand how digital technologies
can be leveraged to reduce information and knowledge sharing boundaries
that span the science and values of risk management and impact risk-based
decision-making. Figure 16.1 below provides a visual representation of the
model, the elements of which and the relationships between them will be
discussed in the remainder of this chapter.

16.2 The tension between science and values

ERM can be thought of as a sociotechnical process, where digital technol-
ogies (e.g., risk reports, registers and maps) and actors (e.g., analysts, risk
managers, business unit managers) interact in various decision-making
situations, to frame and discuss complex ambiguous problems. Risk man-
agement is not merely the science of calculating probability distributions
 Enterprise Risk Management 163
which many perceive it to be (King and Kay 2020). Risk-based decision-
making comprises of several phases, which link the “science-based stages”
of decision-making – the production of factual evidence and a knowledge
base, by scientists and experts, to the “value-based stages” of decision-
making – the evaluation and use of scientific and other information through
the lens of policy and other considerations by decision-makers (see Aven
2016: 3, Figure 1).
Digital technologies are increasingly implicated in the science-based
stages of risk-based decision-making and, to some extent, in the value-based
stages. In the science-based stages, they include digital technologies used
for computational modelling to produce risk-informed forecasting and sce-
nario analysis. In the value-based stages, they include digital technologies
used for representation, to mediate the relationships between actors (Jordan
et al. 2013). However, little is known about how digital technologies are be-
ing used in ERM in specific organisational contexts (Scott and Perry 2012)
and, especially, nonfinancial contexts.
In going from science to values, we propose that risk-informed
decision-making crosses three dimensions of ERM. These dimensions rep-
resent interrelated contexts in which risk information and knowledge are
generated, interpreted and made actionable in networks of organisational
actors. These dimensions are informed by insights from ERM research and
Carlile’s (2002) work on knowledge and boundaries but appear here for the
first time. They are not included in normative models of ERM; rather, they
span the science and value-based stages of decision-making and exhibit
syntactic, semantic and pragmatic barriers to information and knowledge
sharing, which need to be considered when leveraging digital technologies.
Together, the ERM and knowledge boundary literatures evoke the many
problems related to ERM implementation and use experienced by organisa-
tions. This work highlights the importance of knowledge management as a
key cornerstone of ERM integration.
Organisations, especially those in the financial sector, focus a great deal
of effort on the computational dimension and the identification and calcula-
tion of risks using scientific techniques. These techniques include methods
and software to enable large-scale numerical calculations and to eliminate
human error in the production of risk information. The interpretational
dimension refers to efforts to achieve shared understandings and includes
dialogue sometimes supported by risk tools. This dimension includes prob-
lems related to different perceptions and risk language fluency. The political
dimension includes efforts to resolve disagreements arising from lack of co-
ordination among the different organisational actors.
Extant research has indicated that multiple tensions emerge within and at
the intersection of the three dimensions we put forward in our model. These
tensions can be a result of overly complex methodologies to compute risks
that produce a risk language in a format that is incomprehensible to large
parts of the organisation. They can be a result of different interpretations of
164 Jason Crawford and Jan Lindvall
the same risk information, which makes the achievement of shared under-
standings difficult. Moreover, they can be the result of political problems,
where different groups of actors cannot or are unwilling to engage with each
other to transform knowledge (Stoel et al. 2017).
The choices made in one of these risk dimensions have been shown empir-
ically to have at least some effect on one or both of the other dimensions in
terms of either reducing or reinforcing information and knowledge sharing
boundaries. The choices made are also reflective of the organisation’s risk
culture, which can facilitate or frustrate knowledge sharing and integration.
Actors in a network may act together displaying “heedful interrelating,” re-
sulting in quick responses and learning (Hardy et al. 2020: 1041) or may push
against each other displaying different forms of professional protectionism.
It is important that organisations consider the relationship between sci-
ence and values in risk management carefully and scrutinise whether they are
fostering or frustrating information and knowledge sharing. Science-based
evidence, mainly produced in the computational dimension of ERM, plays
an important role in decision-making along with intuition and expert judge-
ment used to evaluate the evidence in the interpretational and political di-
mensions. Both science and values need to be mobilised appropriately in
response to well-defined risks and ill-defined problems characterised by
high levels of uncertainty.

16.3 The challenges to information and knowledge sharing

Information and knowledge sharing are major preoccupations for many or-
ganisations and an important area within organisational research (Zahra
et al. 2020) and ERM (Arena et al. 2017). Knowledge management is an
important organisational capability, enabled through interactions between
technologies and networks of actors. It is also influenced by the risk culture
of the organisation.
The growing prevalence of functional teams makes information and
knowledge sharing more pertinent if risk-based decision-making is to be im-
proved, value created and competitive advantage achieved. It is also increas-
ingly challenging as the level and variety of specialisations within functions
expand and the risks that organisations are faced with require new identifi-
cation, assessment and mitigation approaches (Hardy et al. 2020).
Each organisational function represents a specific niche of domain-specific
knowledge. Those working in each function have their own way of thinking
about risk and have their own methods, tools and vocabulary (Jean-Jules
and Vicente 2021: 258). Yet these functions need to find ways to exchange
information and knowledge quickly and effectively if they are to achieve a
shared understanding of specific problems and decide upon possible reme-
dies, given that risk-based decision-making is often cross-functional.
In implementing ERM, organisations have established independent risk
functions, implemented a variety of processes and tools and appointed
 Enterprise Risk Management 165
chief risk officers – experts in risk quantification and control. These new
functions, processes, tools and experts capture the sociotechnical nature of
ERM, and they exist alongside those already in other parts of the organi-
sation. In some cases, ERM implementation has resulted in partnerships
among actors working in traditional control functions and those working
on risk management. This can facilitate information and knowledge sharing
but in some cases can result in professional rivalry and competition between
different groups to attract executive attention, which strengthens rather
than reduces information and knowledge boundaries (Hall et al. 2015).
Empirical accounts show that, in some situations, information and knowl-
edge sharing is not an issue because all the actors have similar skills and
expertise and perceive one another as equals (Meidell and Kaarbøe 2017).
In other situations, information and knowledge sharing is difficult due to
knowledge, generational and hierarchical differences. Wahlström (2009: 61)
shows how these differences play out between recently employed junior stat-
isticians working in the risk function and senior bankers as they disagree
about the future direction of the business – capturing the tensions between
science and values. The arguments of one of the parties is based on risk
calculations, while the arguments of the other are based on the evaluation
of the numbers produced by those calculations combined with their deep
knowledge of the banking industry and expertise built up over decades.
The new organisational forms that have emerged to accommodate ERM
require a shift of thinking as to how and in what ways digital technologies
are implicated in information and knowledge sharing and how they relate to
the broader set of organisational control arrangements.

16.3.1 Knowledge integration – technical and social

approaches in focus
Knowledge integration is an organizational capability for creating novel
combinations of different strands of knowledge, which have utility for
solving organizational problems, from competent knowledge sourced
from within and beyond the organization, and across time, and which
derive from individual and group contributions, facilitated by both for-
mal and social processes.
(Zahra et al. 2020: 10–11)

Knowledge integration can be achieved through technical (formal) and

social approaches. Technical approaches focus on the processes, technol-
ogies and tasks that are required to transform raw data into insights for
decision-making (Jean-Jules and Vicente 2021). Technical approaches relate
to the science-based aspects of information and knowledge integration and
facilitate the calculation of risk as well as the establishment of structural in-
terfaces between different organisational levels, to enable the dissemination
of risk evidence.
166 Jason Crawford and Jan Lindvall
While few studies on ERM integration exist, preliminary evidence sug-
gests that technical approaches are more or less successful depending on
the specific context and design attributes of ERM artefacts. In some cases,
technical approaches, aimed at promoting organisational learning, enable
distributed actors working in different functions to see and understand each
other’s activities. In other cases, technical approaches have been developed
to meet compliance requirements and have limited decision support or
knowledge transformation capabilities.
Social approaches focus on the behavioural aspects of information and
knowledge use and transformation. The pay particular attention to the de-
gree to which actors are engaged emotionally, behaviourally and cognitively
with each other in efforts to develop knowledge-based competencies and new
attitudes to risk management. They examine how the work environment and
senior management provide support by putting mechanisms in place to help
groups of actors deal with conflicting interests and power dynamics which
inhibit information and knowledge integration across boundaries (Zahra
et al. 2020). The social approach also pays attention to the value-based as-
pects of information and knowledge integration and, in particular, to how
actors in decision-making networks engage with each other to develop
shared understandings and resolve conflicts that might prevent knowledge
transformation.
It is worrying that so few studies focus on the social aspects of ERM;
however, studies as part of the artefactual turn (see Power 2016) suggest that
there is an interdependence between technical and social approaches. They
have the potential to complement each other or frustrate information and
knowledge integration depending on the dynamics between them. There-
fore, organisations need to consider these dynamics carefully.

16.3.2 Managing boundaries

Boundary-reducing activities should incorporate several important char-
acteristics at the syntactic, semantic and pragmatic boundaries. At the
syntactic boundary, individuals should have a common language to rep-
resent their knowledge. At the semantic boundary, individuals should have
the means to specify and learn about their differences and dependencies
across a given boundary. At the pragmatic boundary, a process to facilitate
the transformation of knowledge is required (Carlile 2002). The boundaries
become increasingly complex as one moves from the syntactic to the prag-
matic boundary.
These boundaries also have difference, dependence and novelty charac-
teristics, which make the movement of information and knowledge across
boundaries more or less difficult. Difference refers to the difference in
domain-specific knowledge within a functional area. Dependence focuses
on the degree of dependence between two or more parties as they attempt
to achieve a specific goal. Novelty refers to the degree of novelty on either
 Enterprise Risk Management 167
side of the boundary; a low/high degree of novelty on either side implies
a high/low capacity to share and integrate information and knowledge
(Carlile 2004).
In the context of ERM, the knowledge boundary can be expected to be
predominantly syntactic within the computational dimension of ERM, pre-
dominantly semantic within the interpretational dimension and predom-
inantly pragmatic within the political dimension. Disagreements among
risk experts working in the same function about what constitutes risk, how
it should be calculated and what evidence is produced should be minimal.
Tensions emerge when information produced in one function is mobilised
to other parts of the organisation. The more complex the information is, the
more likely it is that interpretational difficulties will arises. In some cases,
these tensions can be resolved by translating information into a language
decision-makers understand or presenting it in a format that meets their
expectations.
In the ERM literature, most of the attention has been on boundary ob-
jects and their potential to act as integrating devices. Much less attention
has been given to boundary-spanning and boundary work, where the for-
mer focuses on actors’ efforts in importing external knowledge and integrat-
ing internal knowledge (Jean-Jules and Vicente 2021), and the latter focuses
on how actors either act to open up boundaries to get things done or act to
preserve barriers to maintain their independence, tools and tacit knowledge
(Mikes 2011).
As cross-functional collaboration increases and produces dependencies
under ERM, organisations may strive to achieve a single rather than a com-
mon language. However, language fluency issues across functions and in
decision-making situations are a growing problem, particularly if the actors
involved belong to specialised areas that are highly novel. As actors move
further away from each other in terms of their specialisations and domain
knowledge and novelty increases, a single language is of less importance, as
meaning evolves through translation, interpretation and negotiation.

16.4 The computational dimension of ERM

Digital technologies transform yet unmaterialised risk objects into uni-
form materialised ‘things’, through computing, balancing and calcula-
tion (Kalthoff 2005). Calculations make things visible by creating objects
deemed to exist in the real world and presenting them as mathematical rep-
resentations (Kalthoff 2005). These calculations may not be accurate rep-
resentations of what is observed in the real world and do not have to be
exclusively numerical.
Through the computational lens, risk can be understood in two ways –
producing risk objects as ‘facts’ or producing risk objects as ‘expressions’.
Both facts and expressions can be represented using different media, in for-
mulae, ratios, writing or pictures (Kalthoff 2005). However, mathematical
168 Jason Crawford and Jan Lindvall
representations are generally considered to be more rigorous than other
forms because they are assumed to be less susceptible to misinterpretation.
Mathematical representations assume that actors outside the risk function
have a sufficient level of fluency and foundational knowledge to be able to
interpret the evidence provided. If not, digital technologies can be leveraged
to provide representations of the output of complex models in more accessi-
ble formats, such as risk maps, which reduces the cognitive demands on the
decision-makers.
Organisations should re-examine their continuing commitment to tradi-
tional procedural tools and standardised approaches to risk analysis. They
should explore the potential value of investing in analytics techniques, such
as predictive modelling and optimisation, which address questions critical
for the business in the future. For example, what may happen in the fu-
ture, what could be done and how best outcomes could be achieved are all
questions related to value creation and competitive advantage. ERM has the
potential to leverage digital technologies to provide new and novel ways of
creating and disseminating risk knowledge through the use of conceptual
and empirical tools, for example, simulation and visualisation tools; how-
ever, current use of such tools in ERM is limited.
If organisations are serious about developing more mature ERM prac-
tices, they will also need to rethink the role of the risk function. Should it
be exclusively focused on producing increasingly complex risk calculations
as the basis for creating a single language that large parts of the organisa-
tion do not understand or, alternatively, whether it is possible to engage as
a business partner in decision-making networks to assist in the creation of
shared understandings and knowledge transformation.

16.5 The interpretational dimension of ERM

There is an ongoing debate on the potential of digital technologies to aug-
ment human cognition and automate judgement-intensive activities. Some
leading financial firms are already using advanced analytics to automate
decision-making in areas such as forecasting revenue and customer growth.
This involves data scientists interacting with business managers to trans-
form small, well-defined business problems into statistical problems and
then building and training models to generate predictive analytics.
The level of support provided by digital technologies to decision support
is growing and has potential; however, there are limits to how far scientists
can push predictions into spaces characterised by uncertainty. The impli-
cations of encouraging excessive “quantitative enthusiasm” (Mikes 2009)
need to be carefully considered, especially where scientists are encouraged
to produce evidence with very weak background knowledge, thus express-
ing stronger knowledge than what is justified. Alternative techniques and
methods, involving collaboration between experts and managers, may be
more appropriate in managing uncertainty (Aven 2016).
 Enterprise Risk Management 169
While intuition and judgement are devalued in the computational dimen-
sion, they come back into view in the interpretational dimension as risk
objects are considered incomplete constructions that need to be stabilised
and made whole through communication and negotiation between different
risk experts and other organisational actors (Kalthoff 2005). It is in this
evaluation of evidence that initial conceptualisations of risk objects can be
changed and transformed, either through recalculation or other means to
extend the existing knowledge base.
On one side, scientists and experts attempt to make predictions of what
will happen by producing numbers, while decision-makers will have expec-
tations about what will happen which they express in stories. Humans don’t
express expectations in probabilistic form; they express expectations in the
form of narratives (King and Kay 2020).
From this starting point, decision-informers and decision-makers can
work together to construct a shared reference narrative, a story that com-
bines science and values into an expression of their realistic expectations of
what will happen concerning a particular problem and how it may be solved
(King and Kay 2020). Reference narratives are an expressed form of shared
understandings that can be used to mobilise risk information and knowl-
edge throughout the organisation, to raise risk awareness of particular
issues and to provide direction in the face of uncertainty by playing out dif-
ferent scenarios. Reference narratives can be a useful means of combining
numbers and stories. Digital technologies allow these reference narratives
to be shared throughout the organisation to facilitate shared understand-
ings of risk and its relationship to strategy, performance and control issues.

16.6 The political dimension of ERM

The political dimension is where technical and social approaches to infor-
mation and knowledge integration come together as risks are prioritised and
paths to action are decided. Knowledge about what happens in the political
dimension is limited; practitioners and researchers have tended to ignore
the social aspects of ERM. Extant research suggests that this dimension is
fraught with tensions as actors from different functions with different do-
main knowledge come together to negotiate plausible responses to impend-
ing problems based on the evidence provided, other information and their
own political goals. These tensions can be exacerbated by poorly designed
risk tools and/or professional rivalries that need to be addressed if knowl-
edge transformation is to be achieved.
Well-designed risk governance frameworks should include information
and knowledge integration-supporting principles and guidance related to
leveraging digital technologies. Mechanisms can be defined to facilitate re-
lational coordination, that is, the quality of relationships in groups, pay-
ing particular attention to the quality of cross-functional communication
and the establishment of mutual respect and trust between different groups
170 Jason Crawford and Jan Lindvall
(Okhuysen and Bechky 2009). This dimension constitutes a major barrier to
ERM integration. Therefore, practitioners and researchers need to examine
the implications of digital technologies and whether they can be leveraged
to resolve these tensions.

16.7 Takeaway
There is a considerable gap between Enterprise Risk Management (ERM)
and digital technologies. Digital technologies can enhance each of the di-
mensions of ERM and contribute to meeting specific information and
knowledge sharing and knowledge integration needs in individual organ-
isations. Such efforts promise to improve decision-making, create value
and lead to competitive advantage. To close this gap will require organisa-
tions to carefully consider how digital technologies are implicated in their
technical and social approaches to risk management. By leveraging digital
technologies to enhance risk computation, interpretation and coordination –
ERM can emerge having a valuable business-partnering role in organisa-
tions in the future.

References
Ågerfalk, P.J. (2020. Artificial intelligence as digital agency. European Journal of
Information Systems 29(1): 1–8.
Arena, M., Arnaboldi, M. and Palermo, T. 2017. The dynamics of (dis) integrated
risk management: A comparative field study. Accounting, Organizations and So-
ciety 62: 65–81.
Aven, T. 2016. Risk assessment and risk management: Review of recent advances on
their foundation. European Journal of Operational Research 253(1): 1–13.
Budzier, A. 2011. The risk of risk registers–managing risk is managing discourse not
tools. Journal of Information Technology 26(4): 274–276.
Carlile, P.R. 2002. A pragmatic view of knowledge and boundaries: Boundary ob-
jects in new product development. Organization Science 13(4): 442–455.
Carlile, P.R. 2004. Transferring, translating, and transforming: An integrative
framework for managing knowledge across boundaries. Organization Science
15(5): 555–568.
Committee of Sponsoring Organizations of the Treadway Commission. 2017. Ex-
ecutive Summary: Enterprise Risk Management – Integrating with Strategy and
Performance.
Fujita, S., Iwasawa, K. and Yoshida, E. 2018. Enterprise risk management in ac-
counting research: A. Journal of Modern Accounting and Auditing 14(7): 380–389.
Hall, M., Mikes, A. and Millo, Y. 2015. How do risk managers become influential?
A field study of toolmaking in two financial institutions. Management Accounting
Research 26(1): 3–22.
Hardy, C., Maguire, S., Power, M. and Tsoukas, H. 2020. Organizing risk: Organi-
zation and management theory for the risk society. Academy of Management An-
nals 14(2): 1032–1066.
 Enterprise Risk Management 171
Jean-Jules, J. and Vicente, R. 2021. Rethinking the implementation of enterprise
risk management (ERM) as a socio-technical challenge. Journal of Risk Research
24(2): 247–266.
Jeitziner, J., Mikes, A. and Oyon, D. 2017. Risk management: Towards a behav-
ioural perspective. In Routledge Companion to Behavioural Accounting Research
(edited by Libby, T. and Thorne, L.). Abingdon: Routledge: 459–469.
Jordan, S., Jørgensen, L. and Mitterhofer, H. 2013. Performing risk and the project:
Risk maps as mediating instruments. Management Accounting Research 24(2):
156–174.
Kalthoff, H. 2005. Practices of calculation: Economic representations and risk
management. Theory, Culture and Society 22(2): 69–97.
Khatri, V. and Samuel, B.M. 2019. Analytics for managerial work. Communications
of the ACM 62(4): 100–108.
King, M. and Kay, J. 2020. Radical Uncertainty. London: The Bridge Street Press.
Meidell, A. and Kaarbøe, K. 2017. How the enterprise risk management function
influences decision-making in the organization – A field study of a large, global
oil and gas company. The British Accounting Review 49(1): 39–55.
Mikes, A. 2009. Risk management and calculative cultures. Management Account-
ing Research 20(1): 18–40.
Mikes, A. 2011. From counting risk to making risk count: Boundary-work in risk
management. Accounting, Organizations and Society 36(4–5): 226–245.
Okhuysen, G.A. and Bechky, B.A. 2009. Coordination in organizations: An integra-
tive perspective. The Academy of Management Annals 3(1): 463–502.
Power, M. (ed.) 2016. Riskwork: Essays on the Organizational Life of Risk Manage-
ment. Oxford: Oxford University Press.
Scott, S. and Perry, N. 2012. The enactment of risk categories: The role of informa-
tion systems in organizing and re-organizing risk management practices in the
energy industry. Information Systems Frontiers 14(2): 125–141.
Stoel, M.D., Ballou, B. and Heitger, D.L. 2017. The impact of quantitative versus
qualitative risk reporting on risk professionals’ strategic and operational risk
judgments. Accounting Horizons 31(4): 53–69.
Wahlström, G. 2009. Risk management versus operational action: Basel II in a
Swedish context. Management Accounting Research 20(1): 53–68.
Zahra, S.A., Neubaum, D.O. and Hayton, J. 2020. What do we know about knowl-
edge integration: Fusing micro-and macro-organizational perspectives. Academy
of Management Annals 14(1): 160–194.
Part 3

Framing digitalisation
17 The end of business intelligence
and business analytics
Matthias Holmstedt and Peter Dahlin

Today we are facing something of a data revolution, where making use of

relevant data has become essential for most businesses. Successful use of an-
alytics refers to the ability to extract insights from data, which, today, is, and
will become, a criterion for survival in the contemporary and future busi-
ness landscapes, respectively. New technologies have facilitated access to
data, and new analytic solutions have changed the prerequisites for decision-
making in organisations (Hindle et al. 2020; Schrage, 2016). In this age of
analytics, organisations’ ambitions to become ‘data-driven’ and to use ever-
more sophisticated techniques and procedures to obtain insights to support
decision-making have increased (Bean and Davenport 2019; McKinsey &
Co. 2016). Data, analytics and Artificial Intelligence (AI) are expected to be
imperative for business success during the Covid 19-crisis that the world is
fighting currently and in the post-Covid-19 world (Gartner 2020).
The expectation that all companies should master advanced analytics,
regardless of their core product, service and competence, is unrealistic.
However, this provides opportunities for information technology (IT) con-
sultancy firms to take the lead in the digital transformation and to develop
solutions, products and services to allow organisations to overcome tech-
nical barriers and make use of their data. These changes have disrupted
the development of organisational capability to use analytics to increase
the core business value. We believe that businesses need analytics to enable
insights from their data, but that it should be the business perspective that
dictates the use of methods and tools, not vice versa.
The speed of the analytic transformation has caused some problems, in-
cluding, primarily, muddled discourse and somewhat pretentious terminol-
ogy. In the age of analytics, business students, researchers and professionals
need a common language and understanding. The inconsistent definitions
characterising the analytics field are a source of confusion, misinterpreta-
tion and communication problems and constitute a hindrance to achieving
the full potential of the analytic transformation.
This chapter focuses on the concepts business intelligence (BI) and busi-
ness analytics (BA), two terms frequently used in relation to data-driven
and evidence-based decision-making. A review of how these concepts are

DOI: 10.4324/9781003111245-17
176 Matthias Holmstedt and Peter Dahlin
used in practice and within academia reveals the existence of conflicting
and competing definitions within and across both communities. We pro-
vide evidence of a trend shift in terms of the popularity of these concepts
in both academia and in practice, which might indicate some weakening of
their previous strong positions. Considering the trend shift and the incon-
sistency problems surrounding these concepts, we would suggest that it is
time to abandon these terms and to see them as buzzwords linked to the
first phase in the history of the analytic revolution. We would propose that
the alternative generic term analytics should be adopted and linked to estab-
lished methods and tools for extracting insights from data on the one hand,
and creating value for decision-makers on the other hand. For example, in
a business context, we would use the term “Analytics for Business”’, or in
more specified areas of use, Analytics for marketing, Analytics for HRM
and so on. We believe that this change to the terminology would benefit firm
data-driven and evidence-based decision-making since (i) both BI and BA
are vague intermediary concepts and their exclusion would eliminate one
source of confusion, and (ii) the analytics etiquette is more straightforward,
less pretentious, more aligned to generic skillsets and tools and simpler to
integrate with organisational capabilities. Our suggestion is in line, also,
with contemporary practice implemented by leading global consulting firms
such as McKinsey & Co., the Boston Consulting Group, EY, and Bain &
Company.

17.1 Business intelligence and business analytics – two

concepts, multiple definitions
Understanding BI and BA, their interrelations and their potential uses and
benefits for business is challenging. There are no clear, agreed and discrete
definitions of BI and BA, which means that the use of these terms can be
confusing. Academic research has adopted different definitions and ways
of addressing BI and BA, and so has business practice. Perhaps especially
problematic is that academic definitions often differ from how the concepts
are understood outside of academia. Academic research and business prac-
tice are equally responsible for creating a situation of confusion surround-
ing the analytic revolution. It is not surprising that neither the Cambridge
nor the Oxford dictionaries define BA or BI; how could they without a com-
mon understanding of the concepts?
Although the use of the term ‘business intelligence’ goes back to the late
1950s, it became widespread only during the 1990s (Pope 2014). It might
be assumed that the term BI had had time to mature and that academia
and business would have converged towards a shared understanding of
what it means. However, this development has not materialised. Instead, a
number of different understandings of the concept have emerged over time,
which has added to the confusion. As stated by Trieu (2017, 111): “Rather
than having a well-accepted and specific definition, BI is typically used as
 End of business intelligence 177
an ‘umbrella’ term to describe a process, or concepts and methods, that
improve decision making by using fact-based support systems.” Olszak
(2016) summarises definitions of BI as (1) tools, technologies and software;
(2) knowledge management; (3) decision-support systems (DSS); (4) dash-
boards; (5) culture of working with information; (6) a process; (7) analytics;
(8) competitive intelligence; and (9) Big data. Al-Eisawi and Lycett’s (2012)
list of definitions demonstrates the divide between the managerial and tech-
nical perspectives and ways of understanding the term. Several of the defi-
nitions included in their review imply that BI is good or is something that
contributes to decision-making; otherwise it is not BI. Similarly, Mashin-
gaidze and Backhouse’s (2017) review shows how divided the field is in terms
of understanding what BI is and what it is not. The authors demonstrate,
also, that business and academia use different definitions. Therefore, rather
than achieving a consensus about the meaning of the BI concept, the litera-
ture makes it fuzzier. This lack of coherence creates barriers by complicat-
ing progress towards improved, data-driven decision-making.
It might be assumed that the relative recency of the BA concept, and its
more limited spread in the academic community, might mean that its defi-
nition would be less affected by confusion and inconsistency. However, Hol-
sapple et al.’s (2014) review includes a myriad of definitions, some of which
are contradictory while others are so bland that one may even question the
need of the term. Power et al.’s (2018: 51) review of the notion of BA con-
cludes that:

The concept of business analytics is still evolving. There is no single,

widely known, authoritative definition of business analytics. That goal
seems unreasonable to expect given the varied usages of the term in
practice, academic programs, and research. Also, what we teach as
‘Business Analytics’ varies among universities.

For instance, there is no consensus on whether BA is restricted to quantita-

tive data or also includes qualitative approaches to achieving insights from
data. Similarly, there is no agreement about whether BA has descriptive,
predictive or prescriptive ambitions. BA sometimes is defined as a movement
and at other times as a collection of practices and technologies. Yet others
have argued that the concept refers to a certain type of thought process.
Mashingaidze and Backhouse’s (2017) review highlights differences in the
definition of BA in business practice compared to academic research. Con-
sidering the confusion surrounding this concept, and Power et al.’s (2018)
view that there is no point in expecting a shared understanding of what BA
means, one might wonder why so many insist on using such a fuzzy concept.
Comparisons of BA and BI are equally confusing. Bayrak (2015) and
Chen et al. (2012) treat both concepts as synonymous. Mashingaidze and
Backhouse’s (2017) work shows that BI can be understood as part of BA or
vice versa, and their academic references show both that BI and BA are used
178 Matthias Holmstedt and Peter Dahlin
interchangeably and that, in some cases, BA is considered a subset of BI.
Harvard Business Analytics tries to create some order out of this messy sit-
uation (HBR 2018). They acknowledge that BA and BI are used interchange-
ably in business practice and that there is an ongoing debate over whether BI
is a subset of BA or vice versa. They suggest that BI should be understood as
a subset of BA. They suggest, also, that BI refers to descriptive features and
day-to-day operations, whereas BA is related to prescriptive ambitions and
strategic concerns. However, the conceptual confusion over BA or BI is not
dissipated by how they relate to each other. Practitioners and researchers
seem to be engaged in some kind of mutual self-mutilation by insisting on
using both concepts. It is surprising, also, that there is a lack of debate on
the conceptual disarray characterising the analytics revolution and a lack of
questioning about what is going on.

17.2 BA and BI – two fading concepts?

Although BA and BI continue to be used frequently in, for example, job
descriptions, marketing material and strategy documents, there has been a
trend shift. The world’s top consultancy firms today avoid these terms when
describing their services. For instance, the Boston Consulting Group refers
to advanced analytics, Artificial Intelligence and Big Data when market-
ing their services, and Bain & Company also refers to advanced analytics.
McKinsey & Co talks about data and analytics and religiously avoids the
terms BI and BA when presenting their services and views. EY also refers to
analytics when describing its services. All of these actors invisibilise BA and
BI by using different terms to describe their data-driven offerings. However,
the practice of consistently avoiding BA and BI is not unanimous within
the management consultancy industry. Accenture and KPMG include BI
and BA as core concepts while Deloitte and Capgemini refer to BA in their
marketing materials. However, BA and BI are no longer the primary labels
used to identify services aimed at improving data-driven decision-making
within organisations.
In academic research, BI has for long been a core concept in the trans-
formation towards data-driven decision-making and is more popular in
this arena than BA. Bayrak (2015) argues that this is because the IT com-
munity prefers the term and because it existed long before the term BA
emerged. However, the use of BI in academia seems to have peaked in
2012, based on publications in Google Scholar (see Figure 17.1). The graph
in Figure 17.1 shows a steady downward trend in the use of the term, im-
plying that the hype surrounding this concept is fading and the concept
is losing ground.
The origins of BA as a concept go back only to the late 1990s (Power et al.
2018), making it much newer than BI. Consequently, to date, its frequency
in academic research is lower compared to BI. However, based on the num-
ber of research papers with the words ‘business analytics’ in their title, the
 End of business intelligence 179

100
90

80
Google Trend index

70
60
50
40
30

20
10
0
2004-01

2005-01

2006-01

2007-01

2008-01

2009-01

2010-01

2011-01

2012-01

2013-01

2014-01

2015-01

2016-01

2017-01

2018-01

2019-01

2020-01
Year-month

BA BI

1200
Publications having the concept in title

1000

800

600

400

200

0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year

Figure 17.1 Trends in the use of the concepts BI and BA.

popularity of this concept is increasing, although it is far from matching

the frequency of BI. This might, of course, be due to inertia and the delays
associated with academic publishing. It is too soon to claim a shift from BI
to BA, although trends are suggestive. However, so far, BI has made a much
larger impact on academic research compared to BA.
If we examine the use of these concepts outside of academia, Google
Trends proxies for their broader popularity, including in business practice,
by showing the frequency of their use as search terms. The trends are similar
180 Matthias Holmstedt and Peter Dahlin
to the case of academic research but are more pronounced. Interest in BI
shows a steady downwards trend since 2004 (first available data), whereas
interest towards BA has increased since that date. Google Trends detects
contemporary and even momentary interest, whereas academic publica-
tions are subject to various delays. Nevertheless, these trends suggest that
we will see increased interest in BA in future years.
Based on their comprehensive review of the BA concept, Power et al.
(2018) describe it as “more than a buzz and faddish marketing term.” The
introduction to Scheps’s (2008: 1) Business Intelligence for Dummies includes
the following extract:

If you picked this book up off the shelf, you’ve probably heard of BI but
aren’t sure what it means. Sure, it’s got the feel of another one of these
techno-buzzwords that will fade out of fashion in a few years, But BI is
here to stay.

However, it seems that some of these views are becoming outdated. The
downturn of the BI concept and the slow take-off of the BA concept might
indicate that neither is more than a buzzword applied to the early analyt-
ics revolution. As such, they might be consigned to the same bins as the
terms cyberspace, scientific management and Lean Six Sigma. Such a sce-
nario does not seem unlikely, considering the trend shift in business practice
and the diminishing use of BI in academia. However, this terminology will
not disappear suddenly. Numerous people and organisations have invested
heavily in these concepts, and many will try to defend them.

17.3 Breaking the conceptual divide

The trend shift in the consulting sector, the diminishing use of BI and
the limited spread of the BA concept are likely related to the confusion
surrounding these concepts. Lack of consensus on the meaning and defi-
nition of a concept and its relation to other concepts can lead to confusion
and loss of clarity. Therefore, the reluctance of some leading consultancy
firms to use the terms BI and BA is not surprising; they certainly do not
want to confuse potential customers regarding their products and services
supporting data-driven decision-making. In line with these leading con-
sultancy firms, we suggest that the academic community should begin to
search for a more reliable way to describe the next phase in the analytics
revolution.
Killing off the BA and BI concepts would clear the way for a fresh start and
would get rid of historical baggage, thereby lowering the threshold to under-
standing and speaking the analytics language and promoting data-driven
decision-making. The current situation would suggest there is more to be
gained from killing than from retaining these concepts. Considering their
vagueness, the cost of phasing them out should not be high relative to the
 End of business intelligence 181
extent of the overall movement. The exceptions will be those individuals
who have invested time and resources in these concepts and whose reputa-
tion rests on their being considered experts with influence and interpretative
prerogative. We believe continuing efforts to advance data-driven decision-
making would benefit from losing the confusion introduced by these con-
cepts, whose indistinctness can only impede the development.
One solution might be to get rid of any reference to business in order to
indicate that the analytics revolution will affect more than just the business
landscape. The public sector and non-profit organisations have a significant
stake in, and potentially could benefit from, data-driven decision-making.
Removing the emphasis on business would include these other actors who
could benefit from the technology, procedures, mind-sets, craftsmanship
and culture related to the data-driven decision-making movement.
However, the terms intelligence and analytics might also be problematic.
We suggest that the notion of intelligence should be dropped and primacy
given to less pretentious ideas about analytics. This would align the move-
ment to the generic field of analytics and its developments and be more
consistent with the etiquette of leading consulting firms. While intelligence
implies the existence of covert actors and behaviours (Andrew et al. 2009),
analytics refers more directly to the analysis of data without specifying their
type, methods or objectives. This makes it a more useful concept in the
transformation to data-driven business.

17.4 Analytics at the expense of the BI and the BA concepts

We propose a broad and inclusive approach to the conceptualisation of an-
alytics, to reflect the umbrella approach applied in historical definitions of
BA and BI. We start our conceptualisation by showing that analytics refers
to a structured procedure of generating insights out of data. In other words,
it is a thought process, starting from an explicit purpose, which targets dif-
ferent insights related to a decision problem. This thought process includes
developing relevant perspectives and frameworks, data collection and ana-
lytical techniques to produce the targeted insights. This is in line with the
Institute for Operations Research and the Management Sciences definition:
“Analytics is the scientific process of transforming data into insight for the
purpose of making better decision” (INFORMS n.d.).
We support this view, which emphasises insights to benefit business, and
we see no reason to exclude qualitative data and qualitative analytic ap-
proaches since data-driven decision-making should be based on the most
appropriate approach for the problem at hand. Similarly, both structured
and non-structured data have a place in analytics. For some problems,
structured data will provide the necessary insights, whereas others might
require unstructured data and associated analytic techniques to extract in-
sights from the available and relevant data. We see no point in excluding
descriptive and prescriptive ambitions from analytics; the objective is to
182 Matthias Holmstedt and Peter Dahlin
achieve relevant data-driven and evidence-based insights, as different types
of insights are suited to different types of problems and situations.
Analytics relies on a solid process (or ‘method’) to interpret the data to
address the specified questions while considering and respecting the limita-
tions of the results. This includes both standardised and non-standardised
analytic procedures to deliver insights. To avoid conceptual confusion, we
avoid introducing terms such as culture, mind-set, application, craftsman-
ship and technology, primarily because these concepts would be treated
more appropriately separately from analytics terms.

17.5 The future for analytics in business

Looking ahead, we envisage development in which companies realise that
being data-driven refers more to the whole firm’s business-relevant analytic
skills and less to investment in IT systems. Data, no matter how big, are of
limited value outside of their context. Analytic skills combined with rel-
evant domain knowledge are critical for making data useful in regard to
specific business needs (Leonelli 2019).
Breaking free from the ‘productified’ notions of BI and BA will empower
organisations to take control of their processes and the insights from their
data to support decision-making and increase business value. Ownership
of the organisation’s data and responsibility for their use should be given
to a Chief Analytics Officer (CAO) rather than a Chief Information Officer
(CIO). This emphasises that analytics should be a company-wide responsi-
bility, not an IT issue. Identifying and handling the opportunities and chal-
lenges raised by analytics is a human and organisational skill that cannot
(yet) be left to BI and BA products.

17.6 Takeaway
Availability of more data will accelerate the digital transformation and pro-
vide opportunities for businesses and organisations to create value from
data. For those keen to develop data-driven decision-making, care should
be taken to avoid being misled by vague intermediary concepts such as busi-
ness intelligence (BI) and business analytics (BA). These can be a barrier to
the building of internal capabilities, and the organisation might be tempted
to rely on ‘productified’ solutions promoted by IT consultants, software
companies and academic researchers. The term ‘business intelligence’ is
used more frequently than ‘business analytics’, but its popularity is declin-
ing. We suggest that both concepts be replaced by the more generic ‘Ana-
lytics,’ which emphasises the fundamental goal: to create insights through
analysis of data. It suggests that being data-driven is an organisational ef-
fort, not primarily addressed through investment in IT. It is also aligned
with the developments in the generic field of analytics, with powerful meth-
ods and techniques.
 End of business intelligence 183
Acknowledgement
The work in this chapter was partly financed by Eskilstuna Municipality
through the project Sörmlandskontraktet.

References
Al Eisawi, D. & Lycett, M. 2012. Business intelligence: Definitions, managerial ef-
fects and aspects: A systematic literature review. In Proceedings of the 14th In-
ternational Conference on Enterprise Information Systems, 209–214, Wroclaw,
Poland: SCITEPRESS. doi: 10.5220/0004005902090214.
Andrew, C. M., Aldrich, R. J. & Wark, W. K. (eds.) 2009. Secret Intelligence:
A Reader. Abingdon: Routledge.
Bayrak, T. 2015. A review of business analytics: A business enabler or another pass-
ing fad. Procedia – Social and Behavioral Science 195: 230–239.
Bean, R. & Davenport, T. H. 2019. Companies Are Failing in Their Efforts to be-
come Data-Driven. Harvard Business Review, 5 February 2019. Retrieved from
https://hbr.org/2019/02/companies-are-failing-in-their-efforts-to-become-data-
driven, last accessed June 3, 2021.
Chen, H., Chiang, R. H. L. & Storey, V. C. 2012. Business intelligence and analytics:
From big data to big impact. MIS Quarterly 36(4), 1165–1188.
Gartner Inc. 2020. Top Trends in Data and Analytics For 2020, October 19, Retrieved
from https://www.gartner.com/smarterwithgartner/gartner-top-10-trends-in-
data-and-analytics-for-2020/, last accessed January 8, 2021.
Harvard Business Analytics. 2018. Business Intelligence vs. Business Analyt-
ics, November 30, Retrieved from https://analytics.hbs.edu/blog/business-
intelligence-vs-business-analytics/, last accessed June 3, 2021.
Hindle, G., Kunc, M. Mortensen, M., Oztekin, A. and Vidgen, A. 2020. Business
analytics: Defining the field and identifying a research agenda. European Journal
of Operational Research 281(3): 483–490.
Holsapple, C., Lee-Post, A. and Pakath, R. 2014. A unified foundation for business
analytics. Decision Support Systems 64: 130–141.
INFORMS. n.d. Best definition of analytics. The Institute for Operations Re-
search and the Management Sciences, Retrieved from https://www.informs.
org/About-INFORMS/News-Room/O.R.-and-Analytics-in-the-News/Best-
definition-of-analytics, last accessed June 3, 2021.
Leonelli, S. 2019. Data governance is key to interpretation: Reconceptual-
ising data in data science. Harvard Data Science Review 1(1). https://doi.
org/10.1162/99608f92.17405bb6.
Mashingaidze, K. & Backhouse, J. 2017. The relationship between definitions of big
data, business intelligence and business analytics: A literature review. Interna-
tional Journal of Business Information Systems 26(4): 488–505.
McKinsey & Co. 2016. The Age of Analytics: Competing in a Data-Driven World,
December 2016, McKinsey Global Institute. https://www.mckinsey.com/~/media/
mckinsey/industries/public%20and%20social%20sector/our%20insights/the%20
age%20of%20analytics%20competing%20in%20a%20data%20driven%20world/
mgi-the-age-of-analytics-full-report.pdf.
Olszak, C. M. 2016. Towards better understanding and use of business intelligence
in organisations. Information System Management 33(2): 105–123.
184 Matthias Holmstedt and Peter Dahlin
Pope, A. D. 2014. Business intelligence: Applying the unified theory of acceptance
and use of technology. Unpublished doctoral thesis, Capella University.
Power, D. J., Heavin, C., McDermott, J. & Daly, M. 2018. Defining business analyt-
ics: An empirical approach. Journal of Business Analytics 1(1): 40–53.
Scheps, S. 2008. Business Intelligence for Dummies- Harness BI Tools for Forecasting
and Decision Making. Hoboken, NJ: Wiley Publishing.
Schrage, M. 2016. How the BIG data explosion has changed decision making. Har-
vard Business Review, August 26.
Trieu, V-H. 2017. Getting value from business intelligence systems: A review and
research agenda. Decision Support System 93: 111–124.
18 ‘Deleted User’
Signalling digital disenchantment
in the post-digital society
Cristina Ghita, Claes Thorén and Martin Stojanov

I had three pieces of limestone on my desk, but I was terrified to find that
they required to be dusted daily, when the furniture of my mind was all un-
daunted still, and I threw them out the window in disgust.
– Henry David Thoreau

In the opening quote, American writer Henry David Thoreau warns that
while an abundance of material possessions may increase one’s life quality,
it can also become the source of future worry. We can see this sentiment
mirrored in today’s increasingly popular approach to consumerism that val-
ues minimalism. Thoreau ([1854] 2016: 96) famously wrote that “we do not
ride the railway, it rides upon us,” critiquing the increased industrialisation
of his time. Transposing Thoreau’s words to our digital society of today,
one could similarly argue that “we do not use social media, social media
uses us.” Thoreau’s solution to the distraction of modern society was self-
imposed exile from the material comforts of the city; he constructed a re-
mote cabin where he worked, undisturbed, for two years between 1845 and
1847. Echoes of Thoreau’s philosophy have recently come to inspire a con-
temporary technology rejection movement. In digitalised societies, where
the use of Internet-connected devices is ubiquitous, there are increasing
signs of organised technology rejection practices. Examples range from
Mark Boyle’s The Way Home: Tales from a Life without Technology – a nar-
rative of complete technology rejection wherein the author, in true Tho-
reauian style, built a cabin in a secluded location in Ireland (Boyle 2019),
to more organised events like The National Unplug Day, whose adherents
pledge to disconnect from their devices and spend more time offline. These
types of initiatives that seek to limit technology use are multiplying. In a
world where Internet access is defined as a human right (United Nations
General Assembly 2011) and large-scale digitisation processes have become
synonymous with progress, one wonders what might be the motivations of
the increasingly large numbers of individuals who look past the promises of
digitalisation and actively try to reduce their digital use? Such questions are
increasingly discussed as part of a broader field of inquiry that describes a

DOI: 10.4324/9781003111245-18
186 Cristina Ghita et al.
post-digital condition, a societal turn distinguished by a critical perspective
on digitalisation.
In this chapter, we articulate the concept of post-digital as capturing a
change in how users are purchasing, using and relating to digital technol-
ogies. We exemplify and expand upon the concept of the post-digital by
exploring the Reddit virtual community of ‘/r/nosurf’, where the theme of
reducing online screen-time is discussed. The aim is to provide an overview
of the post-digital concept in ways that illustrate its place as a theoretical
concept for future scholarly work, as well as its applicability to the ongoing
exploration of the evolving relationship between humans and our digital
devices.

18.1 From pro-digital to post-digital

The rate at which technology has developed in recent decades is stagger-
ing. An illustrative example is the computational power of the technology
supporting Apollo 11, state-of-the-art when it landed on the moon in 1969,
which pales in comparison to present-day smartphones which are estimated
to be 100,000 times more powerful (Kendall 2019). The omnipresence of the
smartphone has fuelled recent discussions on how its connectivity is fun-
damentally changing how we work, communicate and even think (Turkle
2016). In addition, the large amounts of data a smartphone produces
through location-based services and biometrics promote imaginaries of a
future where prediction will be simple and accurate. In 2008, Wired mag-
azine writer Chris Anderson proclaimed “the end of theory,” arguing pro-
vocatively that with enough data there is no need for analysis, because the
answers can be found in the numbers (Anderson 2008).
Digitalisation, understood as a reorientation towards digital-based com-
munication and media infrastructure (Brennen and Kreiss 2016), would
appear to be a success story, enthusiastically presented in progressive
government policies, conferences, research agendas, media articles and
inspirational talks. However, we are beginning to see signs of a changing
perspective, where the optimism and fascination for the digital are giving
way to a moderate, even critical perspective of digitalisation. Much like
Henry Thoreau, Mark Boyle and other proponents of technology rejection,
increasingly large numbers of individuals are looking at the relationship be-
tween humans and technology with a critical eye, postulating that today’s
taken-for-granted digital technology does not necessarily offer only benefits.
Already in 1998 Nicholas Negroponte, the founder of the MIT Media
Lab, a multidisciplinary space for research groups focused on the devel-
opment of innovative technologies and solutions, declared that “the digital
revolution is over” (Negroponte 1998). In light of an emerging discourse
on the topic of limiting the use of digital technologies, Negroponte’s words
proved not only prophetic but also became the starting point for Kim
Cascone’s (2000) proposal of the concept of the post-digital, referring to a
 ‘Deleted User’ 187
societal turn which took a step back from the promises of speed and pro-
ductivity. Cascone (2000: 112) argued that the “revolutionary period of the
digital information age has surely passed” and that the “tendrils of digital
technology have in some way touched everyone.” Cascone’s (2000) article
referred to the musical genre of glitch, which deliberately uses digital im-
perfections to challenge the idea of a perfect Digital. Later, Florian Cramer
(2015), building on Cascone’s text, discussed the notion of the post-digital
in a wider context to establish a definition. Cramer’s (2015) definition of
post-digital describes a state occurring after digitalisation characterised by
technological saturation, where disenchantment with the now-ubiquitous
digital devices is an ongoing process in which hybrids of old and new media
are born and older technologies are functionally repurposed. Indeed, the
concept reaches into so many disciplines (arts and humanities, education,
social sciences, architecture, business, communication studies and others)
and is used in different ways, albeit with some common specifics. However,
inspired by Cramer’s (2015) work, we identify that at the core of this concept
is the end of the fascination with the digital, which has led to a disenchant-
ment with the best and latest devices and, in some cases, to a renewed inter-
est in pre-digital technologies.
Cramer’s definition is exemplified in David Sax’s (2016) book The Revenge
of Analog, an investigation into the recent resurgence of analogue technol-
ogies such as vinyl records, notebooks, film photography and board games.
Not only are these analogue devices experiencing a rebirth, they are reborn
as hybrids, which means they are being used in conjunction with or as re-
placements of digital media (Thorén et al. 2019). To clarify, the post-digital
as a perspective does not claim that digital is without its usefulness or that
digital technologies should be shunned entirely. Rather, the post- digital
celebrates and recognises the beauty of digital and analogue imperfection.
A good example is analogue (or film) photography, which can be used
to replace the digital capturing process, but whose final product (photo-
graphs) are, nonetheless, edited and shared on digital platforms, often in-
dexed under hashtags such as #analogphotography (which at the time of
writing amount to almost 10 million posts on Instagram). At first glance,
these examples might seem counterintuitive, but they are indicative of in-
stances where the digital and the analogue intersect, coexist, and evolve into
post-digital hybrids.
The disenchantment with the latest digital devices has several origins.
While some individuals might feel that devices such as smartphones are
distractions that potentially steal precious time that could be spent work-
ing, creating or socialising, others refer to debilitating difficulties in trying
to restrain themselves from using these types of devices excessively. Such
issues are the focus of a growing body of research on the topic of digital
addiction, which focuses on the problematic use of digital devices among
specific vulnerable target groups such as children (Hawi et al. 2019), or in
the case of specific social media platforms (Cao et al. 2020). Furthermore,
188 Cristina Ghita et al.
the more automated and algorithm-dependent the devices and services be-
come, the less their users are likely to understand the data these devices and
services collect, produce and distribute. This might eventually result in real
concerns over privacy and surveillance that constitute reasons for partial
disengagement or outright rejection (Humayun and Belk 2020). Epistemo-
logically, the opaqueness of the computational leads to a state in which we
are alienated from understanding our technologies because our ‘knowing’
has become mediated through what has been called grey media (Fuller and
Goffey 2012). In contrast to progressive digitalisation narratives, the delib-
erate simplicity of digital automation risks black-boxing the computational
logic of the digital infrastructure, which in turn leads to a trajectory of igno-
rance. Thus, we are in danger of entering a time of a new illegibility (Berry
and Fagerjord 2017) and automation bias where, in a manner of speaking,
we can no longer read what we are writing.
Indeed, in increasingly digital societies, individuals are surrounded by
algorithms and computations. In order to fully understand the implications
of digitalisation processes, there is a need to stop viewing the digital as static
and instead consider its trajectories (Berry 2014). Moreover, the post-digital
foregrounds a convergence of technostress, technology disillusionment and
adoption of alternative or outdated technologies, not for their own sake,
but for the benefits provided by their lack of connectivity. The post-digital
builds upon the already existing disruptions to the digital, in which out-
dated technologies are revived and repurposed as a reaction to modern ones
(Cramer 2015).
The disillusionment with the digital is, paradoxically, visible at first
glance in the virtual environment as online communities discuss and sup-
port attempts to restrict online (over)use. To reduce the amount of time
spent Internet-surfing, a small selection of activities such as communicating
online or online entertainment services are proposed by members of user
communities, such as the Reddit-based /r/nosurf, as an alternative that will
help users regain control over their technology use.

18.2 /r/nosurf: a post-digital online community

Reddit is a discussion website where users engage in conversations organ-
ised in well-defined topics or communities, called subreddits, written in the
format r/[topic] (e.g. r/science, or r/news). Discussions within a subreddit can
be ranked by Reddit members through a voting system (upvote/downvote),
which determines the post’s visibility on the website. Reddit has become a
popular platform; the site’s official statistics showing 153 billion posts and
1.2 billion comments in 2018, from 330 million monthly active users.
One specific online community of interest for the exploration of the
post-digital is the subreddit /r/nosurf, a space where individuals interested
in reducing screen time discuss different strategies to achieve this. The com-
munity’s motto, “stop spending life on the net,” reflects the general approach
 ‘Deleted User’ 189
that tends to regard overuse of digital devices as addictive behaviour with
detrimental effects on an individual’s well-being. The range of discussions
taking place within /r/nosurf is broad but generally converges around the
specific digital devices or services that should be limited, strategies to do
this and practical guides in this regard.
Social media platforms and entertainment services are some of the most
discussed examples of digital services that ‘nosurfers’ believe should be used
minimally or eliminated completely. Social media platforms are perceived
negatively since they are seen as responsible for removing the intimate con-
nection in traditional face-to-face interactions. Also, the many hours spent
on online streaming services are conceived as wasted time, which should
be replaced by more meaningful and offline interactions. Social media
tends to be characterised as addictive, the purpose of nosurfers being to
regain agency lost to the respective platforms and harness some time which
then can be spent productively. Nosurfers are actively engaged in regain-
ing agency, but problematic digital use has been shown to be something
for which the users are solely responsible. In the context of social media,
addiction has been proven to be a result of both the user’s enjoyment of the
platform and technical factors such as the design of the platform, which in
combination can lead to emotional and functional attachment (Cao et al.
2020). In this case, the /r/nosurf community represents an instance of or-
ganised resistance to a self-diagnosed unhealthy attachment to social media
platforms and entertainment services. By tackling the problematic side of
the digital, the community comes together to discuss ways in which its mem-
bers can disengage from the online.
Strategies such as dopamine fasting are described as beneficial and
achieved by not using a smartphone, not watching TV and, generally, being
selective about engagement in online activities. These strategies are meant to
work in a similar way to other techniques to curtain addictive behaviours –
by cutting out the object of addiction completely. Nosurfers use dramatic
expositions, advising their readers to disable all their social media accounts
and to never look back. If successful, one day those who recover will realise
how their time was spent ‘mindlessly’ (a word often used by the community
in conjunction with surfing the Internet extensively and without purpose).
Community members advocate reading physical books, writing or keeping
a journal and developing new offline habits (especially physical activities).
The use of physical objects and analogue technologies as replacements
for digital devices and services has been seen as emerging from a desire
to disconnect from the digital (Humayun and Belk 2020). Humayun and
Belk (2020: 649) note that objects such as physical notebooks and film cam-
eras are “objects to escape the digital” which provide ways to avoid digi-
tal use. As nosurfers reflect on the myriad of digital devices and services
they should restrain from using, it is also impossible to ignore that they are
doing this online, in a virtual community enabled by digitalisation. This
resonates with Cramer’s (2015) articulation of post-digital hybridisation
190 Cristina Ghita et al.
which combines old and new technologies, repurposing older media for
current needs. Thus, the adoption of film cameras, notebooks and basic
function phones is not due to their original functions but related to their
newly assigned role of supporting and mediating disengagement from the
digital. As the adoption of analogue offline products to avoid the perils of
the online emerges as a popular practice, Humayun and Belk (2020) note
their place within the post-digital context, referring to them as postdigital
consumption practices. For the /r/nosurf community, post-digital consump-
tion is a solution to the intense digital consumption and use of pervasive
technologies.
Using analogue/offline devices to replace digital ones, such as smart-
phones, constitutes a creative workaround. Nosurfers often call for
smartphones to be replaced by basic phones (known affectionately as
dumbphones), for online chatting to be replaced by face-to-face conversa-
tions and for digital planners to be replaced by bullet journals or personal
organisers. However, there is no consensus about the degree of digital re-
jection; for example, while some members agree that smartphones should
be avoided entirely, others note that it is social media, specifically, that
leads to their overuse and their other features are still needed (e.g., GPS,
e-mailing, banking applications, productivity tools). This is in line with
Cramer’s (2015) notion that the post-digital is not a rejection of the digital
but rather a state where the boundaries between the analogue and digital are
amorphous and older technologies are repurposed. The value to be found in
analogue replacements, such as notebooks instead of note-taking apps, or
film cameras instead of smartphone cameras, lies in the trade-off between
digital convenience and the preciousness of the analogue. In this view, the
analogue does not completely replace the digital but interjects in everyday
activities as something whose aesthetic, functional and mindfull values can
increase the life quality. A similar situation is explored by Wickberg (2020)
in a subreddit focused on handwriting, the author conceptualising the ob-
served practices as post-digital handwriting; Wickberg (2020) suggests that
the activity is not enjoyed for its functionality but, instead, enjoyed for the
added intimacy and closeness brought by the act of writing and its aesthetic
qualities. Intimacy or pleasing aesthetics can be found in analogue objects
(notebooks, pen and paper note-taking, dumbphones, mechanical clocks
etc.) and practices (face-to-face communication, walks, journal-writing)
which members of communities such as /r/nosurf see as highly desirable and
lacking in their digital counterparts.
Nosurfers also discuss the benefits of a slower tempo, since by slowing
down the pace of their activities they achieve more meaningful interactions
with others and perceive time as being spent more wisely. Such approaches
to technology are discussed increasingly in the context of the slow technol-
ogy movement, which advocates for slower and, therefore, more mindful
use of technology, challenging the culture of acceleration and automation
for increased productivity. The slow movement has its roots in the slow food
 ‘Deleted User’ 191
movement, which opposes the idea of food cooked and consumed quickly
and promotes traditional ways of preparation and cooking, insisting that
time should be a carefully calculated ingredient of meals which should be
enjoyed and not rushed. The slow technology movement has emerged as
a statement against productivity based on speed and proposing increased
reflection in relation to the use and design of technology (Hallnäs and
Redström 2001). Slow technology encompasses post-digital ideals of using
older technologies, resulting in a slower but more meaningful interaction;
by trading speed and efficiency for a slower and more meaningful engage-
ment with technology, nosurfers avoid technostress and being overwhelmed
by the myriad functionalities concentrated in devices such as smartphones,
allowing them to control how their time is spent. In a post-digital context,
these aims are central and are indicative of the end of the fascination with
the digital (Cascone 2000) and the turn towards the hybridisation of old and
new media to achieve more meaningful engagement.
Members regard the ultimate mark of success for the nosurfer to be de-
letion of their Reddit account. The Reddit social media platform has been
criticised as encouraging intensive, addictive use. Accordingly, ‘[deleted]’
user, the name automatically assigned to members who have deleted their
profile (but whose posts and comments remain published on the platform),
is proof of success and is often remarked on by members who peruse that
individual’s posts. The existence of the [deleted] user and its function as a
signifier of success in a community such as /r/nosurf signals the post-digital
condition in a visible way. The [deleted] user could not exist without the
digital, yet it signals a departure from the digital. This label shows that,
through post-digital practices of technology disengagement, we do not sim-
ply abandon the technology; rather, we are developing a new, more reflexive
and cautious relationship, taking into account how we affect technology
development and how, in return, technology development affects us. Both
within and outside the digital world, the [deleted] user shows that the ini-
tial author has proactively chosen to limit their screen time (at least on the
Reddit platform), and [deleted] is decoded as providing aspiration for
the continuing members who see it as a proof of success of the main aim of
the /r/nosurf community. This acts as a visible trace of the post-digital con-
vergence between offline and online (Cramer 2015) where digital absence is,
nonetheless, virtually present.
The very existence of communities such as /r/nosurf renders the relevance
of the post-digital visible. Never before have societies been as reflexive to
and as critical of personal use of digital technology. The dissatisfaction ex-
pressed by the members of /r/nosurf comes from the increased black-boxing
of digital technologies, which further reduces their understanding of their
functionality and their algorithms. This mistrust is targeted at the manufac-
turers of such devices, which are often accused of intentionally developing
addictive designs. Not knowing what data are collected and for what purpose
is a frequent concern within and outside the space of /r/nosurf. Although
192 Cristina Ghita et al.
the benefits of digitalisation are undeniable, so is the increased scepticism
towards tech giants such as Google, Microsoft and Facebook (Mosco 2017).
The reasons for this fall under the overarching theme of ethics as concern
over the ownership of data, over unwanted surveillance or over black-boxed
technology are morality issues. The view that societies increasingly are gov-
erned by tech giants (Mosco 2017) can be seen in numerous accounts about
distrust in digital services in relation to privacy, and inability to understand
devices’ functionality, which negates (or complicates) the possibility that us-
ers understand what they are signing up for.
Decelerating practices and instances of digital disengagement attempt
to inject a level of meaningful interaction or human agency into everyday
practices, on which communities, such as /r/nosurf, are focusing their ef-
forts. Thus, the rejection of automation is not a complete rejection of mod-
ern technology; rather, it is a demonstration of the distrust and increased
worry caused by the inability to understand its functionality. Not knowing
how devices used in everyday functions is, indeed, leading to a revival of old
– often analogue and mechanical – technology, where tinkering with them
provides an understanding of their functionality. If the initial argument is
true, that the digital has redefined many of the ways we work and social-
ise, the increasingly post-digital practices referred to by the online /r/nosurf
community have the potential, by the same logic, to redefine our future.
Many of the changes we are seeing in disparate settings are already theo-
retically articulated within a post-digital understanding; for example, in the
political reconfiguration of academic publishing, discussed by Jandrić and
Hayes (2019) as postdigital challenges, and the addition of mindfulness in
technology consumption, described by Humayun and Belk (2020) as post-
digital consumption.
The aim of the nosurf community to avoid digital devices and instead
adopt the slower and more mindful interaction with older technologies is
precisely how Cramer (2015) conceptualises the post-digital condition: see-
ing through the excitement of digitalisation towards more reflective and
meaningful technology use. The logic of the post-digital, as observed in the
example of /r/nosurf, is the rejection of the digital as unquestionably ben-
eficial, opening up for an increasing integration of analogue objects and
activities in everyday life and adoption of emergent hybridisation between
repurposed analogue objects and ubiquitous digital devices.

18.3 Takeaway
The initial assumption about the /r/nosurf community might be that it is
promoting neo-luddism. However, this is not the case. Rather, communities
such as /r/nosurf should be considered as evidence of the post-digital con-
dition, based not only on their content but also on their very existence. It is
important to understand how control and human agency have become hard
currency with increased automation and the subsequent need for increased
 ‘Deleted User’ 193
technological transparency. Balancing automation and convenience with
manual control is vital for how we approach and understand the implica-
tions of digital technologies in the future. Finally, recalling the quote at the
beginning of the chapter, we draw attention to how Thoreau’s limestone
stands in for the technology of today: initially desired for its seductive func-
tionalities, but increasingly criticised for its effects. While this thinking
might have seemed odd 150 years ago, it is becoming increasingly common
in today’s post-digital society.

References
Anderson, C. 2008. The end of theory: The data deluge makes the scientific method
obsolete. Wired Magazine, June 23, 2008. https://www.wired.com/2008/06/
pb-theory/
Berry, D.M. 2014. Critical Theory and the Digital. New York: Bloomsbury.
Berry, D.M. and Fagerjord, A. 2017. Digital Humanities: Knowledge and Critique in
a Digital Age. Cambridge: Polity Press.
Boyle, M. 2019. The Way Home: Tales from a Life without Technology. London: One-
world Publications.
Brennen, J.S. and Kreiss, D. (2016). Digitalization. In Jensen, K.B., Rothenbuhler,
E.W., Pooley, J.D. and Craig R.T. (Eds.), The International Encyclopedia of Com-
munication Theory and Philosophy, Chichester: Wiley-Blackwell: 556–566.
Cao, X., Gong, M., Yu, L., and Dai, B. 2020. Exploring the mechanism of social
media addiction: An empirical study from WeChat users. Internet Research 30(4):
1066–2243.
Cascone, K. 2000. The aesthetics of failure: “Post-digital” tendencies in contempo-
rary computer music. Computer Music Journal 24(4): 12–18.
Cramer, F. 2015. What is ‘post-digital’? In Berry, D.M. and Dieter, M. (Eds.), Post-
digital Aesthetics: Art, Computation and Design, Basingstoke: Palgrave Macmil-
lan: 12–26.
Fuller, M. and Goffey, A. 2012. Evil Media. Cambridge, MA: MIT Press.
Hallnäs, L. and Redström, J. 2001. Slow technology – Designing for reflection. Per-
sonal and Ubiquitous Computing 5(3): 201–212.
Hawi, N.S., Samaha, M. and Griffiths, M.D. 2019. The digital addiction scale for
children: Development and validation. Cyberpsychology, Behavior, and Social
Networking 22(12): 771–778.
Humayun, M. and Belk, R. 2020. The analogue diaries of postdigital consumption.
Journal of Marketing Management 36(7–8): 633–659.
Jandrić, P. and Hayes, S. 2019. The postdigital challenges of redefining academic
publishing from the margins. Learning, Media and Technology 44(3): 381–393.
Kendall, G. 2019. Would your mobile phone be powerful enough to get you
to the moon? The Conversation, July 1, 2019. https://theconversation.com/
would-your-mobile-phone-be-powerful-enough-to-get-you-to-the-moon-115933
Mosco, V. 2017. Becoming Digital. Bingley: Emerald Publishing.
Negroponte, N. 1998. Beyond digital. Wired Magazine, December 1, 1998. https://
www.wired.com/1998/12/negroponte-55/
Sax, D. 2016. The Revenge of Analog: Real Things and Why They Matter. New York:
Public Affairs.
194 Cristina Ghita et al.
Thoreau, H.D. [(1854) 2016]. The Illustrated Walden: Thoreau Bicentennial Edition.
New York: Penguin Books.
Thorén, C., Edenius, M., Lundstrom, J. and Kitzmann, A. 2019. The hipster’s di-
lemma: What is analogue or digital in the post-digital society? Convergence – The
International Journal of Research into New Media Technologies 25(2): 324–339.
Turkle, S. 2016. Reclaiming Conversation: The Power of Talk in a Digital Age. New
York: Penguin.
United Nations General Assembly. 2011. Report of the Special Rapporteur on the
Promotion and Protection of the Right to Freedom. Report No. A/HRC/17/27, Ge-
neva: United Nations.
Wickberg, A. 2020. New materialism and the intimacy of post-digital handwriting.
Trace: A Journal of Writing, Media, and Ecology 4(1): 11–20.
19 The role of boundary-
spanners in the post-digitalised
multinational corporation
Henrik Dellestrand, Olof Lindahl and
Jakob Westergren

Multinational corporations (MNCs) face a conundrum; their activities and

processes are spatially distributed across the globe, which makes it prob-
lematic to coordinate the activities of their locally embedded subsidiaries in
countries with various cultural, institutional and historical differences. For
better or for worse, digitalisation – the use of digital technologies to facili-
tate business operations and exploit opportunities – is both an opportunity
and a challenge for the coordination of modern MNCs. A consequence of
subsidiary embeddedness within the corporation and in the local host coun-
try environment is that integration with other subsidiaries and the head-
quarters is important, especially if the aim is to leverage and incorporate
the subsidiary’s local knowledge. This local knowledge is unique due to the
particularities of the host country market. Tapping into knowledge1 outside
the organisational boundaries is increasingly critical for firms to remain
competitive in a rapidly changing business environment (Klueter and Mon-
teiro 2017). This activity can be especially advantageous for MNCs, which
are able to add value by integrating globally dispersed pockets of knowledge
in their innovation processes, making them more effective than those of do-
mestic rivals (Tushman and Katz 1980; Zander 2011).
Due to the spatial distribution of subsidiaries, the MNC must overcome
external boundaries, such as national borders and legal jurisdictions and,
also, internal boundaries, such as different national and corporate cultures,
all of which can pose problems for MNC management. In addition, these
internal and external boundaries can be formal and informal in nature, ex-
emplified by the existence of a formal national border and the informal ex-
pression of a specific national culture. To cope with the complexity arising
from spatially distributed activities, MNCs rely on boundary-spanners, that
is, individuals or corporate units, which are tasked with or which assume
responsibility for facilitating the integration of esoteric knowledge across
existing internal or external firm boundaries (Tushman and Scanlan 1981;
Kärreman 2010; Schotter et al. 2017).
The scope of the boundary-spanning activity increases in a multinational
context and can be more difficult if it involves different cultures and lan-
guages and long distances, which, potentially, can impede communication

DOI: 10.4324/9781003111245-19
196 Henrik Dellestrand et al.
(Janowicz-Panjaitan and Noorderhaven 2008). However, boundary-spanners
are vital for MNCs to mitigate knowledge and culture differences between
subsidiaries and the MNC headquarters (Schotter et al. 2017). The complex-
ity related to boundary-spanning is undeniable, especially when it occurs in
multifaceted organisations, such as large MNCs, where headquarters and
subsidiaries have to overcome multiple boundaries. It has been suggested
that, ultimately, peripheral boundary-spanners are responsible for MNC
success and, especially, since MNCs are renowned for their ability to learn
from their periphery (Zander 2011).
To the joy or dismay of boundary-spanners, digitalisation is allowing eas-
ier access to information, which, traditionally was provided by these actors.
Digitalisation is making it easier for distributed actors across the MNC to
stay in touch without the help of a boundary-spanner and is likely enabling
MNCs to reap the benefits of internationalisation (Khanagha et al. 2014).
However, the advent of the digital era has meant, also, that the amount of
information firms are exposed to has increased. Potentially, digitalisation
allows the collection and communication of information across globally
dispersed MNC subsidiaries, which suggests that the significance of some
of the boundaries faced by MNCs has changed. For example, digital com-
munication tools, such as Zoom, have made it easier to cross geographical
boundaries and allow more rapid communication compared to a physical
visit to the corporate headquarters by subsidiary actors.
However, due to the flux and relatively recent incorporation in many
firms of digital technologies with embedded information and support pro-
cesses, how boundaries and boundary-spanning activity in MNCs should
be understood is not entirely clear. The questions addressed in this chap-
ter are: who are boundary-spanners? What constitutes a boundary? Which
boundary-spanning activities should persist in the digitalised corporation,
to understand what is unfolding within MNCs? To do this, we consider some
of the main manifestations of boundary-spanning, describe some impor-
tant effects of digitalisation and explore these themes by analysing how the
boundary-spanning activity in MNCs can be expected to change. We pro-
pose some directions for further research on the influence of digitalisation
on boundary-spanning in MNCs and outline some of the managerial chal-
lenges that can be expected to emerge.

19.1 Boundaries and how to overcome them

MNCs have to cope with multiple external and internal boundaries. These
include the boundaries separating the MNC from external, locally embed-
ded business actors such as customers, suppliers and competitors. Here,
boundary-spanners mediate between these actors and the firm to help
integrate locally embedded knowledge, skills and opportunities in the
organisation. By bridging between the organisation and the external envi-
ronment, individuals and, sometimes, entire organisational units, can act
 Boundary-spanners in post-digitalised MNCs 197
as boundary-spanners (Thompson 1967; Tushman and Katz 1980). How-
ever, MNC units, typically, are assigned specific roles and responsibilities;
boundary-spanners tend to be specialised units, working at the frontier be-
tween the organisation and the external environment (Ciabuschi et al. 2011).
Boundary-spanning units scout for new technological solutions, knowledge
and partnerships likely to be in the interests of internal and external stake-
holders (Monteiro and Birkinshaw 2017).
Within the organisation, there are internal boundaries, such as between
headquarters and subsidiaries, and between subsidiaries. Internal boundary-
spanning focuses on bridging between hierarchies and spanning divisions,
for example, to help other organisational actors understand the value of
local foreign knowledge (Roberts and Beamish 2017). Both subsidiaries and
headquarters can act as boundary-spanners within the MNC to manage
vertical and lateral flows of knowledge to generate innovative output within
the network (Dhanaraj and Parkhe 2006).
However boundary-spanning is defined, it involves two critical activities.
To use Aldrich and Herker’s (1977) terminology, they engage in informa-
tion processing, which refers to information filtering. Based on their expert
knowledge, the boundary-spanner selects which information from the ex-
ternal environment reaches the organisation. They engage, also, in rep-
resentation, which refers to a focus on resources acquisition, maintenance of
the outward corporate image to other stakeholders, and legitimisation in-
ternally of the boundary-spanner role. We would add a refinement to these
two main activities, that is, information processing and representation, and
suggest that they are concerned with the integration of different perspec-
tives and practices. At the core of the boundary-spanning role is the ability
to master esoteric – abstruse – knowledge (Kärreman 2010), related, per-
haps, to technological competence or cultural aptitude. Figure 19.1 depicts
the relationships between boundary-spanners and the internal and external
environments.

19.2 Boundary-spanners meet digitalisation

There are some interesting parallels to digitalisation that emerge from the
boundary-spanner’s primary tasks of representation and information pro-
cessing. The term digitalisation is often used to refer to the third industrial
revolution whose referents are standalone information and communication
technologies and automation (Sturgeon 2019), and more empirical research
is needed to understand the part played by digital technologies in inter-
nal and external MNC boundary-spanning. In the succeeding sections, we
elaborate some theoretical issues that could guide this empirical work. We
discuss the current state of the boundary-spanning literature in light of the
emerging effects of digitalisation on boundary-spanners and explore how
the boundary-spanning activities of representation and information pro-
cessing are being affected.
198 Henrik Dellestrand et al.

Internal to the focal boundary Boundary External to the focal boundary

Step 2: Facilitating internal collaboration Step 1: Understanding the environment

Intraorganizational actor Boundary-spanner

Information or communication flows Interorganizational actor

Figure 19.1 A common view of boundary-spanners.

Source: Authors’ own visualisation.

19.2.1 The consequences of digitalisation for boundary-spanners

Organisations that rely heavily on digital technologies are argued to be
actor-oriented. The term ‘actor-oriented firm’ connotes self-organising and
shared resources (Snow et al. 2017), which have implications for boundary-
spanners who, typically, have considerable discretion and autonomy. Con-
sequently, there would seem to be a tension between highly autonomous
boundary-spanners and commonly available digital resources. While the
promises of digital organisation and the digital economy more generally,
are plentiful, we reveal a darker side to boundary-spanning in the post-
digitalisation context. Although digitalisation promises greatly increased
productivity, it also risks information overload (Wang et al. 2020), decontex-
tualisation of knowledge across geographically dispersed networks (van den
Hooff and Kotlarsky 2016) and loss of autonomy for employees using digital
tools, which, in turn, might affect information quality (McNally 2010).
First, information overload might imply that the boundary-spanner gains
access to larger amounts of information from a wider range of sources.
However, it might be problematic and might result in short-term and arms-
length relationships with different units, rather than the long-term, deep
relationships that, traditionally, are typical of boundary-spanning work
in MNCs. This might increase the efficiency of representation, but it will
also reduce its effectiveness since different kinds of relationships can be
expected to yield very different kinds of insights into other units. Second,
 Boundary-spanners in post-digitalised MNCs 199
the decontextualisation of information might be particularly problematic
since the information made available using digital means may be difficult
to interpret accurately outside of the local subsidiary context. Third, the
loss of autonomy that employees can experience when using digital tools to
communicate with distant colleagues has been shown to affect information
quality. This is likely to affect the amount of information provided and its
accuracy if the reporting party believes it is unimportant or is likely not to
be challenged.

19.2.2 Representation and digitalisation

Representation is an important boundary-spanning activity and refers to the
bridging achieved between separated units. Representation eases the rela-
tions between headquarters and subsidiary, for example, to enable internal
control and coordination of activities between headquarters and subsidiary
or between two subsidiaries. Coordination between MNC headquarters and
subsidiaries is an ongoing issue for large organisations and allows the mon-
itoring of operational activities and synergies among subsidiaries. It tends
to be initiated and managed by the MNC headquarters, which can lead to
involvement in delicate operational activities at different MNC units. This
requires substantial knowledge of the units involved to avoid monitoring the
wrong activity or issue damaging instructions for collaborations between
units. Involvement of the headquarters in operational activities of subsidiar-
ies for the wrong reasons can be detrimental to the firm (Ciabuschi et al. 2011).
Responsibility for spanning the boundaries between units that are part
of large corporations is generally the province of managers with experience
of working in both the headquarters and subunits, or on the activities be-
ing controlled or coordinated. This tends to involve tacit knowledge, which
is gained through personal experience and long or intense immersion in a
particular environment. This experience can facilitate boundary-spanning
by providing knowledge about both the organisation’s activities and its em-
ployees and ‘how it works.’ Therefore, it requires an understanding of the
corporate cultures in both the headquarters and the focal subunit, which
may vary as the result of their unique history.
Digitalisation is likely to make this type of hands-on experience required
for boundary-spanning less dominant since communication will be increas-
ingly digitally enabled as opposed to physical co-location and frequent vis-
its. The shift to digital means of communication and coordination provides
boundary-spanners with new ways to become familiar with the organisation
but, at the same time, deprives them of their reliance on hands-on experi-
ence. Whether this shift from physical presence to digital overview will be a
net gain for the boundary-spanning activity of representation is an empir-
ical question and requires more investigation. However, based on what we
know about the more general impact of digitalisation, we can discuss some
potential consequences.
200 Henrik Dellestrand et al.
19.2.3 Information processing and digitalisation
Boundary-spanning roles related to information processing involve infor-
mation filtering and facilitating. They involve technical personnel search-
ing for innovative ideas or insights from individuals internal or external
to the MNC (Dahlander et al. 2016). The boundary-spanner must help
colleagues to understand the value of the knowledge held by some other
intra-organisational unit, such as a sister subsidiary (Roberts and Beam-
ish 2017). By devoting time and resources to interacting with individuals
outside the focal team or unit, boundary-spanners select information per-
ceived as important, for example, to advance a current project. Informa-
tion processing allows information that might become a novel idea, to flow
through the MNC’s distributed knowledge system (cf. Aldrich and Herker
1977).
Digital solutions could help boundary-spanners in MNCs to engage in
more information processing as the availability of information increases
(van den Hooff and Kotlarsky 2016). However, there is a trade-off re-
lated to easier access to more information, which can be compared to
the trade-off between short-term and long-term business relationships re-
lated to the boundary-spanning activity of representation. Since the aim
of boundary-spanners engaged in information processing is to link who
knows what with what needs to be known and when, digitalisation can dis-
rupt the identification of information relevant to the boundary-spanner’s
own context. Therefore, this trade-off can be understood as a compro-
mise between the breadth and the depth of information processing. In a
digitally optimised workplace, it can be assumed that boundary- spanners
will have more information at their disposal but will be less aware of its
original context.
This puzzle is not exclusive to boundary-spanners and could present
unique opportunities or challenges. Several scholars (e.g., Levina and
Vaast 2006) have referred to the informalisation of the boundary-spanning
role. With the availability of enterprise-wide systems and other digital in-
terfaces, it seems possible that the activity of information processing will
make formal boundary-spanners redundant since more employees will be
able to search for information independently without the help of a formally
appointed knowledge authority. However, a formal position has been iden-
tified as one of the most defining enablers of boundary-spanning (e.g., Tush-
man and Scanlan 1981).
So what does this leave for information processing? Issues, such as infor-
mation overload, might be dependent, in part, on personal characteristics
and savoir faire (Snow et al. 2017; Wang et al. 2020). Some individuals may be
more inclined to handle higher cognitive loads or may be better at selecting
which information to focus on. Boundary-spanners are not superhuman,
but a crucial part of the role is information filtering to prevent information
overload for teams, units or the organisation.
 Boundary-spanners in post-digitalised MNCs 201
19.3 Discussion
The objective of this chapter was to try to integrate the phenomenon of
digitalisation with our current understanding of boundary-spanning and to
theorise about the potential implications of digitalisation on the boundary-
spanning roles of representation and information processing. Our aim, also,
was to suggest directions for future research on the contribution made by
boundary-spanners to knowledge integration in MNCs. Digitalisation is in-
creasing the information processing opportunities for boundary-spanners,
but this increased breadth of information, potentially, comes at the cost of
information depth. Similarly, related to the representation activity, oppor-
tunities to develop many short-term business relationships are increasing,
but probably at the expense of long-term relationships. We have shown that
digitalisation fundamentally alters the foundations of both representation
and information processing as the focus of boundary-spanning moves away
from a greater concern with socialisation as a means of representation and
information processing to a purer form of information transacting. Extrap-
olating from this discussion, we assume that boundary-spanning through
digital means could make cultural boundaries, which, traditionally, can be
problematic to traverse, loom larger, but might make other types of bound-
aries, such as hierarchical boundaries, easier to negotiate.

19.3.1 Theoretical implications

Digitalisation is making more information available to boundary-spanners,
yet it is also increasing access to the wrong kind of information, to decon-
textualised and possibly biased information, which might reduce boundary-
spanning effectiveness in MNCs. Moreover, information overload is
likely to have different effects on representation compared to information
processing.
Information overload: Specifically, information overload suggests that the
sheer volume of the information available about different MNC subunits
might reduce attention to often critical tacit knowledge. Focusing on eas-
ily available information incentivises short-term instrumental interactions
with other units and risks making the long-term relationships, previously
central to boundary-spanning, less appealing. For boundary-spanners en-
acting information processing roles, the depth of knowledge and informa-
tion has tended to be central; however, in the post-digitalised organisation,
the breadth of information occupies centre stage. Information overload
could be considered as taking the form of a smorgasbord of information
compared to the value of a single main dish of more granular knowledge.
The sheer increase in information availability does not mean better utilisa-
tion of knowledge; rather, it might be a distraction (O’Reilly III 1980).
Decontextualisation: In light of the representation activity of boundary-
spanners, more, but less contextualised, information could be a potentially
202 Henrik Dellestrand et al.
dangerous mix since it would invite greater headquarter involvement in
subsidiaries, while, simultaneously, giving rise to fewer capable boundary-
spanners. As the information that flows to the headquarters from its subsid-
iaries becomes detached from its local context (operational or cultural), the
ability of the headquarters to interpret and act on this information correctly
can be expected to decrease. This could have several consequences for the
ability of the headquarters to coordinate its subsidiaries; decontextualis-
ation of knowledge allows for greater comparison and contrasting of subsid-
iary activities and, crucially, outcomes. This might increase productivity as
context is de-emphasised and the subsidiaries are forced to take account of
the higher quality or lower costs of other subsidiary units. However, it risks
the problem of comparing apples to pears or even to oranges. In practice,
learning about subsidiary activities out of context may lead to damaging
headquarter coordination and an assumption that the production processes
that work in Japan, for example, will work equally well in Sweden. Informa-
tion and knowledge taken out of its original context is problematic, also, for
the boundary-spanner’s information processing activity, since knowledge
stemming from a context different from that of the boundary-spanner risks
unsuccessful implementation. Familiarity with contextual contingencies is
crucial for identifying, for example, the value that a sister subsidiary unit
could offer for the boundary-spanner’s own innovation projects.
Demotivation to contribute: In the boundary-spanning activity of rep-
resentation, demotivation risks populating information systems with inac-
curate information as the subsidiaries share only the information they are
forced to share. This results in the headquarters obtaining the information it
requested (assuming nobody cheated), but that information only, which can
provide false security related to knowing what is going on. Demotivation in
relation to boundary-spanners’ information processing activities material-
ises as an underutilisation of information systems. That is, resources have
been spent on implementing expensive digital solutions for coordinating
information and codifying best practice, but these systems remain mostly
unused. The existence of a digital information system can create the illusion
of information availability, but might lack any useful information content.

19.3.2 Future research

Here, we suggest some suggestions for future research on the impact of dig-
italisation on boundary-spanners in MNCs. These three broad research
themes refer back to our discussion of information overload, decontextual-
isation and demotivation.
Too much information: To further investigate the influence of informa-
tion overload on representation in boundary-spanning, and where new
ways of representation are enabled while old ways are made more diffi-
cult, we propose the following research questions: does digitalisation cause
a shift from long-term to short-term relationships between boundary-
spanners and the MNC units they span? If so, how does this affect (1) the
 Boundary-spanners in post-digitalised MNCs 203
kind of boundary-spanning activity performed and (2) the effectiveness of
boundary-spanning to bridge inherent divides among MNC units? Research
on information processing could investigate how boundary-spanners cope
with increased information availability and what kinds of information trig-
ger the attention of boundary-spanners.
Losing context: The problem related to the decontextualisation of knowl-
edge for the boundary-spanning role of representation suggests the need for
more research into how the ability of the MNC headquarters to coordinate
subsidiaries is affected by the decontextualisation of the knowledge pro-
vided by boundary-spanners. For boundary-spanners searching for infor-
mation, the issue of decontextualised knowledge and information suggests
critical questions, such as how do boundary-spanners orient themselves
in the search for information in an increasingly decontextualised work
environment?
Running out of motivation: Demotivation in relation to representation
boundary-spanning suggests the need for deeper investigation of how digi-
talisation can detect weaknesses in the knowledge gained from information
systems and how this might impact the ability of the headquarters to coor-
dinate and control its subsidiaries. The effect of demotivation on boundary-
spanners’ information processing activity leads to questions about how they
share knowledge and ideas using digital solutions and how they actively ex-
ploit the knowledge contributed by others.

19.3.3 Managerial implications

Our investigation has some implications for managers. For example, by
increasing the breadth of the available knowledge, digital solutions might
be more useful as complements rather than replacements for traditional
boundary-spanning. In our view, digitalisation is unlikely to completely
replace face-to-face interaction to reconcile language and cultural bounda-
ries in headquarters–subsidiary relationships. That is, information quality
(whether related to its focus or an accurate contextual understanding) may
prove more important than the quantity of information. Also, since head-
quarters rely on this information to coordinate their subsidiaries, less, but
more accurate and contextualised, information might be preferable to more,
but lower-quality, information. The Covid-19 pandemic has shown that dig-
italised communication has allowed the relocation of work from the office
to the home; however, there is evidence suggesting that, although many indi-
viduals have become marginally more productive when working from home,
they have also experienced stress due to the lack of face-to-face interaction.

19.4 Takeaway
In many ways, digital technologies have increased representation and the
sharing of information among MNC units. However, they are hamper-
ing boundary-spanners’ activities that rely on face-to-face interaction.
204 Henrik Dellestrand et al.
It can be difficult to make sense of vast amounts of – particularly
decontextualised – information communicated digitally. Ultimately, digi-
tal information repositories and reporting systems could reduce employees’
motivation to share. In our view, digital technologies need to be combined
with, rather than replacing, traditional management tools. Our analysis of
how digitalisation might affect boundary-spanning in MNCs has opened
up numerous avenues for future research into how information overload,
decontextualisation of knowledge and demotivation of employees to share
information using digital technologies might affect both representation and
information boundary-spanning activities in MNCs.

Note
1 Here, we understand knowledge as including “the exercise of judgment and the
capacity to make interpretations. This means that we can hardly talk about
knowledge as codified and stored in databases. This is then better seen as infor-
mation, not knowledge” (Alvesson 2004: 43).

References
Aldrich, H.E. and Herker, D. 1977. Boundary spanning roles and organization
structure. The Academy of Management Review 2(2): 217–230.
Alvesson, M. 2004. Knowledge Work and Knowledge-Intensive Firms. Oxford: Ox-
ford University Press.
Ciabuschi, F., Forsgren, M. and Martín, O. 2011. Rationality versus ignorance: The
role of MNE headquarters in subsidiaries’ innovation processes. Journal of Inter-
national Business Studies 42(7): 958–970.
Dahlander, L., O’Mahony, S. and Gann, D.M. 2016. One foot in, one foot out: How
does individuals’ external search breadth affect innovation outcomes? Strategic
Management Journal 37(2): 280–302.
Dhanaraj, C. and Parkhe, A. 2006. Orchestrating innovation networks. Academy of
Management Review 31(3): 659–669.
Janowicz-Panjaitan, M. and Noorderhaven, N.G. 2008. Formal and informal in-
terorganizational learning within strategic alliances. Research Policy 37(8):
1337–1355.
Khanagha, S., Volberda, H. and Oshri, I. 2014. Business model renewal and ambi-
dexterity: Structural alteration and strategy formation process during transition
to a cloud business model. R&D Management 44(3): 322–340.
Klueter, T. and Monteiro, F. 2017. How does performance feedback affect boundary
spanning in multinational corporations? Insights from technology scouts. Jour-
nal of Management Studies 54(4): 483–510.
Kärreman, D. 2010. The power of knowledge: Learning from ‘learning by
knowledge-intensive firms’. Journal of Management Studies 47(7): 1405–1416.
Levina, N. and Vaast, E. 2006. Turning a community into a market: A practice per-
spective on information technology use in boundary spanning. Journal of Man-
agement Information Systems 22(4): 13–37.
McNally, M. 2010. Enterprise content management systems and the application of
Taylorism and Fordism to intellectual labour. Ephemera 10(3/4): 357–373.
 Boundary-spanners in post-digitalised MNCs 205
Monteiro, F. and Birkinshaw, J. 2017. The external knowledge sourcing process in
multinational corporations. Strategic Management Journal 38(2): 342–362.
O’Reilly III, C.A. 1980. Individuals and information overload in organizations: Is
more necessarily better? Academy of Management Journal 23(4): 684–696.
Roberts, M.J.D. and Beamish, P.W. 2017. The scaffolding activities of international
returnee executives: A learning based perspective of global boundary spanning.
Journal of Management Studies 54(4): 511–539.
Schotter, A.P.J., Mudambi, R., Doz, Y.L. and Gaur, A. 2017. Boundary spanning in
global organizations. Journal of Management Studies 54(4): 403–421.
Snow, C.C., Fjeldstad, Ø.D. and Langer, A.M. 2017. Designing the digital organiza-
tion. Journal of Organization Design 6(7): 1–13.
Sturgeon, T.J. 2021. Upgrading strategies for the digital economy. Global Strategy
Journal 11(1): 34–57.
Thompson, J.D. 1967. Organizations in Action: Social Science Bases of Administra-
tive Theory. New York: Transaction Publishers.
Tushman, M.L. and Katz, R. 1980. External communication and project perfor-
mance: An investigation into the role of gatekeepers. Management Science 26(11):
1071–1085.
Tushman, M.L. and Scanlan, T.J. 1981. Characteristics and external orientations of
boundary spanning individuals. Academy of Management Journal 24(1): 83–98.
van den Hooff, B. and Kotlarsky, J. 2016. Managing dispersed and dynamic ex-
pertise in fluid organizational forms. In Treem, J.W. and Leonardi, P.M. (Eds.),
Expertise, Communication, and Organizing. Oxford: Oxford University Press:
232–250.
Wang, B., Liu, Y. and Parker, S.K. 2020. How does the use of information commu-
nication technology affect individuals? A work design perspective. Academy of
Management Annals 14(2): 695–725.
Zander, U. 2011. Game-park capitalism, globalization, and multinational compa-
nies: An overview and research agenda. Thunderbird International Business Re-
view 53(3): 279–298.
20 The effect of digital
transformation on subsidiary
influence in the multinational
enterprise
Noushan Memar, Ulf Andersson, Peter Dahlin
and Peter Ekman

Digital transformation requires strategic changes to the organisation (Roger

2016) and demands innovative business models to increase organisational
performance and extend the firm’s networks (Warner and Wäger 2019). In
the context of international business (IB), in general, multinational enter-
prises (MNEs) increase organisational performance by globalisation. In
this setting, the international involvement of MNEs enhances the opportu-
nities provided by digitalisation; however, different digitalisation strategies
affect MNEs in different ways and impact the influence of its subsidiaries.
The globalisation business model of the MNEs has resulted in fine-sliced
MNE value chain activities (Contractor et al. 2010) where the core activi-
ties are disaggregated and optimised, resulting in dispersed technological
capabilities, processes and competencies across all functions and locations.
Disaggregation of core activities increases innovation and competitiveness
by exploitation of the entire global value-creating networks and resources
(Contractor et al. 2010) where the MNE Headquarters (HQ) orchestrates
resources and implements financial and investment controls, while the sub-
sidiaries perform the innovation activity (e.g., Ambos and Schlegelmilch
2007). In practice, globalisation has led to changes in subsidiaries’ activities,
relationships and subsidiaries’ influence in the MNE (Gillmore, Andersson
and Ekman 2020). Furthermore, the disaggregation of global value chains
affects subsidiary flexibility (Ambos, Andersson and Birkinshaw 2010).
Digital transformation research shows that organisational strategy in-
creases the need for entrepreneurialism, in order to cope with the threats
associated to disaggregation and disintermediation of existing value chains
(Warner and Wäger 2019). Similarly, in IB research, innovation activity and
implementation of successful initiatives require a business model where sub-
sidiary managers are encouraged to engage in entrepreneurial behaviour
(O’Brien et al. 2019), exploit core value-adding activities and facilitate col-
laboration with firms both internal and external to the MNE (Ekman et al.
2020). Entrepreneurial behaviour by a subsidiary manager increases the de-
pendence of other MNE units on that particular subsidiary, and subsequent
competence building enhances the subsidiary’s role and influence over the
MNE’s strategising (Andersson, Forsgren and Holm 2001, 2015; Gillmore,
DOI: 10.4324/9781003111245-20
 Digital transformation in MNEs 207
Andersson and Memar 2018). In addition, external and internal collabora-
tion enhances subsidiary embeddedness and allows subsidiary managers to
influence the MNE strategy and performance. Several studies show that the
subsidiary’s innovation capability (and, thus, its influence within the MNE)
is strongly associated with its embeddedness, especially its embeddedness
in external business networks. However, the subsidiary’s internal embed-
dedness and how this affects subsidiary’s influence in the MNE’s strategic
decision-making have received less research attention (Garcia-Pont, Cana-
les and Noboa 2009).
This chapter tries to fill this gap in the context of MNE digitalisation. We
discuss two digital technology dimensions and two dimensions of subsidi-
ary internal embeddedness. First, we consider MNE digitalisation in rela-
tion to high-tech or high-touch interaction capabilities (Ekman et al. 2021).
Second, we discuss subsidiary internal embeddedness in terms of (1) the
subsidiary’s internal production network and (2) subsidiary managers’ in-
terpersonal relationships. High-tech and high-touch interaction capabilities
refer to the relationship between digital technologies and the firm’s internal
production network and the link between the interpersonal relationships of
subsidiary managers and the relational dimension of internal embedded-
ness (see Tate et al. 2013). We suggest that all these aspects constitute impor-
tant components of the strategic change related to digital transformation in
firms (Warner and Wäger 2019).
The following text theorises about the positive effect of embeddedness on
subsidiary influence in an MNE that is undergoing digital transformation.
It emphasises on interpersonal relationships that allow subsidiary manag-
ers to leverage their entrepreneurial behaviour. The aim is to show how the
subsidiary’s role in the MNE’s internal production network and subsidiary
managers’ interpersonal relationships affect the influence that subsidiaries
have on the MNE’s (strategic) decisions in the context of digital transforma-
tion. Section 20.1 discusses how organisations develop their IT portfolios
and drive firm digitalisation. Section 20.2 addresses the concept of embed-
dedness from a subsidiary perspective and the possibilities for its internal
production network to influence the MNE’s decisions. Section 20.3 inves-
tigates the interpersonal relationships of subsidiary managers that might
counterbalance the MNE’s structural constraints and increase the subsidi-
ary’s influence in the MNE’s strategic decision-making. Since this dynamic
is affected by digitalisation, we propose a framework for understanding the
level of subsidiary influence in the MNE. Section 20.4 discusses some of
the implications of the proposed framework, and then Section 20.5 presents
the chapter’s takeaway.

20.1 The high-tech and high-touch dimensions of digitalisation

Ekman et al. (2020) investigate MNE’s external embeddedness (i.e., its busi-
ness relationships with customers and suppliers). However, their findings are
208 Noushan Memar et al.
relevant, also, for MNE’s internal embeddedness. They argue that firms de-
velop their information technology (IT) portfolios to improve their interac-
tion capabilities, that is, the ability to manage different forms of exchanges.
These can include traditional business exchanges of products, services and
money and softer forms of exchanges such as social interactions and infor-
mation diffusion. Depending on the types of relationships, the firm will be
required to possess a certain level of high-tech and high-touch interaction
capabilities.
The firm that develops high-tech interaction capabilities:

prioritizes activities and decisions at the organizational level rather

than in response to the preferences of the individuals involved. This
interaction capability is optimized for structured, routine interactions
and representative of settings where uncertainty is low and each possi-
ble outcome has a codified response action, making them amenable to
digitalization and automation.
(Ekman et al. 2021: 18)

Thus, high-tech interaction capabilities can be expected to drive all the

MNE subsidiaries in a similar direction, making their business activities
similar worldwide.
In contrast, an MNE digitalisation strategy emphasising high-touch in-
teraction capabilities will focus on supporting interpersonal interactions
both within and outside the organisation. The notion of high touch is re-
lated to trust, which is vital for the formation of relationships, not only with
customers and suppliers but also with the MNE HQ and other of its sub-
sidiaries (Gillmore et al. 2020). High-touch capabilities support subsidiary
managers’ interpersonal links with executives at the HQ and with managers
in other subsidiaries.
The effects of high-tech and high-touch interaction capabilities will differ
depending on the dimension of internal embeddedness. This chapter dis-
cusses two forms of internal embeddedness and its relation to the MNE’s
digitalisation strategy.

20.2 Subsidiary internal embeddedness

Internal and external embeddedness build on different foundations. Ex-
ternal embeddedness is promoted by and builds on economic transactions,
which, over time, create complex dynamics in terms of ownership of in-
dependent companies (supplier or buyer) where knowledge for the mutual
benefit of leveraging the relationship is shared. External embeddedness is
a part of a market or relationship governance form, whereas internal em-
beddedness is related to hierarchical governance and includes the intra-
organisational relationships between sister units. These relations tend to be
predesigned; for example, one of the partners is responsible for a specific
 Digital transformation in MNEs 209
task whose outcome is used by the other partner in its activities. In the MNE
business model, the HQ assigns the portfolio of each subsidiary and these
activity portfolios play a crucial role in the embeddedness of its subsidiaries.
The higher the number of activities performed by the subsidiary that are
utilised by the other subsidiaries, the stronger the focal subsidiary’s internal
embeddedness. However, it is clear that the HQ predesigned activity port-
folio limits the flexibility of its subsidiaries. This rigidity can be increased
further by digital transformation (Ekman et al. 2020). In this study, we study
the subsidiary internal embeddedness while acknowledging the interplay
between external and internal embeddedness.
We argue that internal embeddedness has both structural and relational
components. Its structural component depends on the subsidiary’s position
in the MNE, and the activities assigned by the HQ or assumed by the sub-
sidiary. The relational component refers to the subsidiary managers’ inter-
personal network. In line with the MNE business model, we assume that
subsidiaries try to influence the MNE’s strategy.

20.2.1 Structural dimension of internal embeddedness

The structural dimension of internal embeddedness is the subsidiary’s inter-
nal production network, which is a measure of its position within the MNE,
its internal bargaining power (Andersson et al. 2001) and its relations with
the other MNE subsidiaries and the HQ. MNE subsidiaries tend to be of
three types:

The position of the subsidiary within the MNE influences the HQ delega-
tion of value-adding activities, during implementation of a digital transfor-
mation strategy. The assigned activities affect the flow of technologies and
products among MNE units. In other words, the assigned activity portfolio
can increase or reduce the subsidiary’s degree of embeddedness in the MNE.
The subsidiary’s activity portfolio can include innovation activity, man-
ufacturing, sales and administrative support and other activities, which
may increase the subsidiary’s importance and influence within the MNE.
Some activities are considered more important. For instance, marketing,
210 Noushan Memar et al.
sales, and R&D are important for innovation and subsidiary influence in
the MNE (Dellestrand 2011). We can expect, also, that subsidiaries involved
in the full range of business activity, that is, R&D, procurement, manufac-
turing, marketing, sales and aftersales service, will have more influence over
the MNE strategy compared to subsidiaries responsible for fewer activities.
Based on the above reasoning, we suggest that the importance, scope
and nature of the subsidiary’s activity portfolio in relation to the other sub-
sidiaries and the HQ affect the subsidiary’s internal embeddedness and its
influence within the MNE. A production network which includes only a
few activities will reduce the possibility of subsidiary influencing the MNE
strategy. Thus, the influence within the MNE increases with the degree of
integration of the subsidiary with other subsidiaries and the number of ac-
tivities assigned to it. Figure 20.1 depicts the relationship between the range
of subsidiary activities and the degree of its influence within the MNE.
The subsidiary’s activity portfolio and its influence within the MNE fol-
low an inverted U-shape and increase with the range of activities in parallel
with subsidiary integration and independence in the MNE. Thus, a depend-
ent specialised subsidiary (i.e., a subsidiary that is mainly a supplier of com-
modities) will have limited influence in the MNE and will be less likely to
engage in entrepreneurial behaviour.
The degree of influence in the MNE increases with the range of activi-
ties and degree of integration. For example, a subsidiary with a centre-of-
excellence status is likely to have the greatest influence on MNE strategy
within a given area. These specialised subsidiaries are more likely to be

Subsidiary’s
influence
within the
MNE
Dependent
specialized
subsidiary

Full-fledged
subsidiary
Isolated
subsidiary

The extent of the subsidiary’s

activity portfolio

Figure 20.1 The relationship between the subsidiary’s activity portfolio and its
influence within the MNE.
 Digital transformation in MNEs 211
entrepreneurial due to their central position in the MNE – and their wider
network – and their dependence on the resources and activities of other
subsidiaries.
The downward slope of the curve includes isolated subsidiaries, which are
independent of, autonomous and alienated from the MNE network. While
their decentralised governance could be considered a benefit, they run the
risk of sell off or closing down by the MNE. Isolated subsidiaries are spe-
cialised but have little overlapping knowledge with other MNE units (Mon-
teiro et al. 2008), which reduces both their possibility to be entrepreneurial
and their influence in the MNE.

20.2.2 Relational dimensions of internal embeddedness

The relational dimension of internal embeddedness is based on the subsidi-
ary managers’ interpersonal network. This dimension of embeddedness has
been examined in terms of subsidiary managers’ activities (O’Brien et al.
2019) and middle managers’ socialisation (Rouleau and Balogun 2011) and
in relation to social exchanges, knowledge transfer and interpersonal trust
(Lai et al. 2014). Informal relational attributes are advantageous in terms
of the activities assigned to the subsidiary (Gillmore et al. 2020). However,
the informal mechanism of the MNE strategy has received less attention
compared to the formal control and coordination of the MNE in influenc-
ing the HQ strategy related to the delegation of value-adding activities to a
subsidiary.
Informal relations, such as social interactions among the managers of
different subsidiaries, promote knowledge sharing and learning within the
MNE (Noorderhaven and Harzing 2009). Interactions among subsidiary
managers diffuse knowledge about employees and innovation opportu-
nities and promote collaboration and integration in the MNE. The in-
terpersonal networks of subsidiary managers affect the MNE’s ‘strategic
navigation’ (Tasheva and Nielsen 2020). Subsidiary managers’ informal
personal interactions with MNE (Garcia-Pont et al. 2009) involve ex-
changes of information and knowledge beyond subsidiary boundaries and
contribute to their informal networks that enable internal embeddedness
in the MNE.
Subsidiary managers’ informal interpersonal networks affect the level
of entrepreneurialism in the subsidiary (O’Brien et al. 2019); they identify
opportunities and challenge the MNE’s assignment of responsibilities and
activities. The interpersonal networks of subsidiary managers can influence
how information flows through the MNE and the position of the subsidiary
vis-à-vis other subsidiaries. Most individuals prefer to interact with individ-
uals they know and trust (Powell 1990). From a social network perspective,
the number of links among subsidiary managers in the MNE network is
related to influence. Thus, a favourable position of the subsidiary manag-
ers can be defined by the number of links they have with other managers.
212 Noushan Memar et al.

However, some finer structural measures put greater emphasis on links to

the ‘right’ people and the ‘right’ resources or a bridging or brokerage net-
work position.

20.3 Internal embeddedness in the context of digital

transformation
The two dimensions of internal embeddedness provide different oppor-
tunities for entrepreneurial behaviour and benefit from different forms of
digitalisation. The internal production network defines how much influence
the subsidiary has in the MNE. The internal production network is related
directly to the subsidiary’s activity portfolio, which, in turn, is related to
different forms of dependencies. In some cases, MNE digital transforma-
tion allows the implementation of digital systems such as Enterprise Re-
source Planning (ERP) and standardised global IT platforms (Ekman et al.
2020). By enabling efficient information exchange and reducing uncertainty,
their implementation, primarily, increases the MNE’s ‘high-tech’ capability.
Their adoption in the internal production network increases information
transparency and connectivity, which increases HQ control and subsidiary
interdependence and, intuitively, reduces the subsidiary’s ability to influ-
ence the MNE.
The relational dimension of internal embeddedness, based on the inter-
personal networks of subsidiary managers, can increase the influence of the
individual subsidiary due to status and access. Digital transformation in
MNEs to enhance ‘high-touch’ capabilities, for example, implementation of
collaboration platforms, video communication and internal social media,
can enable and boost relational embeddedness. This type of digitalisation
can facilitate interpersonal networking across the MNE which can increase
subsidiary influence in the HQ.
The structural and relational dimensions of internal embeddedness may
be counterbalancing. The subsidiary manager could be considered a middle
manager (Rouleau and Balogun 2011), who negotiates (upwards) with the
HQ, collaborates with other subsidiaries and external partners (sideways)
and manages the subsidiary operations (downwards). In this case, while
digitalisation is focused on high-tech interaction capabilities, this can limit
managers’ entrepreneurial activities, whereas solutions focused on high-
touch interaction (e.g., communication systems to support interpersonal
interactions) would support managers’ personal networks. The subsidiary
manager’s interpersonal network plays an enabling role, and high-touch in-
teractions increase the possibility to influence the MNE.
Figure 20.2 depicts this updated influence based on digital transforma-
tion and its effect on internal embeddedness. Subsidiary influence, based on
the assigned portfolio of activities, is the baseline. The two grey curves show
 Digital transformation in MNEs 213
Subsidiary’s High touch digital transformation
influence Full-fledged
within the subsidiary
MNE

Dependent
specialized
subsidiary

Isolated
subsidiary

High tech
digital
transformation

The extent of the portfolio

activities of a subsidiary

Figure 20.2 The impact of digital transformation on subsidiary influence through

internal embeddedness.

how the influence shifts with digitally transformed internal embeddedness.

The subsidiary manager’s interpersonal network is the relational dimension
of internal embeddedness, shown by the upper grey curve, which increases
the subsidiary’s influence within the MNE. The grey area above the black
curve is the manoeuvring space created by relational embeddedness and
boosted by high-touch digital transformation. The lower grey curve repre-
sents reduced subsidiary influence stemming from high-tech digital trans-
formation, where digital control of some activities reduces the subsidiary’s
influence in the MNE. Figure 20.2 shows that the structural and relational
dimensions of internal embeddedness can be counterforces in relation to
subsidiary influence.
Figure 20.2 has implications for our three subsidiary types. Digital trans-
formation may reduce the influence of a dependent specialised subsidiary
based on relational embeddedness, when compared to a full-fledged sub-
sidiary. The uncertainty related to the lack of integration and low base-
line influence of the isolated subsidiary may be mitigated by its specialist
knowledge. Although all three types of subsidiaries, to different degrees,
have the potential to increase their influence through relational embedded-
ness, this can be enhanced by technologies that support personal relations.
Subsidiaries whose influence depends on their structural embeddedness as
gatekeepers, for example, might experience reduced influence if technology
takes over some of their responsibilities and control.
214 Noushan Memar et al.
20.4 Added complexity for the subsidiary manager
We have discussed how subsidiaries are affected by digital transformation of
MNEs. Digital transformation enables innovative business models, whose
implementation might be difficult for subsidiary managers (Hess et al. 2016).
Internal embeddedness is important, with or without digitalisation, but dig-
ital transformation adds complexity to subsidiary managers’ activities and
roles. Digital transformation strategy forces managers to exploit existing
capabilities and develop new capabilities in order to remain relevant in the
organisation and the market (Warner and Wäger 2019). The MNE business
model means that subsidiary managers must compete to get more resources
for their subsidiaries, which, in turn, requires them to have some influence
on the MNE’s strategic decisions. We discussed internal embeddedness in
relation to subsidiary’s influence in the MNE, and we argue that subsidiary
managers should leverage their interpersonal relationships to increase their
influence over digital transformation in the MNE.
The digital transformation strategy chosen matters for the MNE. Subsid-
iary managers need to assess the organisational position and current activ-
ity portfolio of their subsidiary and ensure that their activity portfolio and
capabilities are in alignment with the MNE’s high-tech interaction capa-
bilities. Finally, subsidiaries that fail to keep up with high-tech interaction
capabilities of the MNE during the digital transformation strategy will need
to rely on their managers’ interpersonal networks, which is a risky strategy.
Subsidiary managers’ interpersonal networks require repeated interactions
with both HQ and sister subsidiaries. If the number of social exchanges is
reduced, it then reduces the strength and value of the network. High-touch
interaction capabilities will be lost if the subsidiary manager moves to an-
other position or retires. Managers of isolated subsidiaries lack knowledge
about the MNE’s operations, which makes it more difficult for them to have
any influence over the HQ strategy. Digital transformation in MNES em-
phasises the importance of the dimensions and dynamics of internal embed-
dedness and their dual effects on subsidiaries.

20.5 Takeaway
Digitalisation can transform MNEs. Subsidiary influence in the MNE de-
pends on two dimensions of internal embeddedness, which are affected in
different ways by digital transformation. Structural embeddedness, based
on the portfolio of activities assigned to the subsidiary, can be weakened
by high-tech digital transformation, which can shift control and infor-
mation from the subsidiary to an information system. Relational embed-
dedness, based on subsidiary managers’ interpersonal networks, can be
strengthened by high-touch digitalisation, which enhances the opportu-
nities to connect with others in the MNE. Consequently, while digital
transformation offers opportunities for MNEs and reduces the impact
 Digital transformation in MNEs 215
of geographical distance, it can also change the fundamental balance of
power and autonomy, including functional and decision-making inde-
pendence, within the MNE, between the subsidiary and the MNE, and
between different subsidiaries; the possibility of such a pitfall or imbal-
ance to exist must be considered by both the HQ and subsidiary managers
as it can warrant both negative and positive effects on the performance of
both the MNE and the subsidiaries.

Acknowledgement
The authors gratefully acknowledge the financing of this project by, in
parts, Eskilstuna Municipality through the project Sörmlandskontraktet,
the Swedish Research School of Management and IT, and Handelsbankens
forskningsstiftelser, project P20-0154.

References
Ambos, B. and Schlegelmilch, B. 2007. Innovation and control in the multinational
firm: A comparison of political and contingency approaches. Strategic Manage-
ment Journal 28(5): 473–486.
Ambos, T. C., Andersson, U. and Birkinshaw, J. 2010. What are the consequences of
initiative-taking in multinational subsidiaries? Journal of International Business
Studies 41(7): 1099–1118.
Andersson, U., Forsgren, M. and Holm, U. 2001. Subsidiary embeddedness and
competence development in MNCs: A multi-level analysis. Organization Studies
22(6): 1013–1034.
Andersson, U., Forsgren, M. and Holm, U. 2015. Balancing subsidiary influence in
the federative MNC: A business network view. In Forsgren, M., Holm, U. and
Johanson, U. (Eds.), Knowledge, Networks and Power: The Uppsala School of In-
ternational Business. London: Palgrave Macmillan: 393–420.
Contractor, F.J., Kumar, V., Kundu, S.K. and Pedersen, T. 2010. Reconceptualizing
the firm in a world of outsourcing and offshoring: The organizational and geo-
graphical relocation of high‐value company functions. Journal of Management
Studies 47(8): 1417–1433.
Dellestrand, H. 2011. Subsidiary embeddedness as a determinant of divisional head-
quarters involvement in innovation transfer processes. Journal of International
Management 17(3): 229–242.
Ekman, P., Thilenius, P., Thompson, S. and Whitaker, J. 2020. Digital transfor-
mation of global business processes: The role of dual embeddedness. Business
Process Management Journal 26(2): 570–592.
Ekman, P., Dahlin, P., Erixon, C. and Thompson, S. 2021. Exploring “high tech” and
“high touch” interaction capabilities: Aligning the IT portfolio with customer
and supplier relationships. Information Technology & People 34(2): 862–886.
Garcia‐Pont, C.J., Canales, I. and Noboa, F. 2009. Subsidiary strategy: The embed-
dedness component. Journal of Management Studies 46(2): 182–214.
Gillmore, E., Andersson, U. and Memar, N. 2018. How subsidiaries influence inno-
vation in the MNE value chain. Transnational Corporations 25(1): 73–100.
216 Noushan Memar et al.
Gillmore, E., Andersson, U. and Ekman, P. 2020. The enduring effects of relational
attributes on subsidiary evolution after mandate loss. Global Strategy Journal, in
press, https://doi.org/10.1002/gsj.1391.
Hess, T., Matt, C., Benlian, C. and Wiesböck, F. 2016. Options for formulating a
digital transformation strategy. MIS Quarterly Executive 15(2): 123–139.
Lai, C., Singh, B., Alshwer, A.A. and Shaffer, M.A. 2014. Building and leveraging
interpersonal trust within and across MNE subsidiaries: A social exchange per-
spective. Journal of International Management 20(3): 312–326.
Monteiro, L.F., Arvidsson, N. and Birkinshaw, J. 2008. Knowledge flows within
multinational corporations: Explaining subsidiary isolation and its performance
implications. Organization Science 19(1): 90–107.
Nell, P.C., Ambos, B. and Schlegelmilch, B.B. 2011. The MNC as an externally em-
bedded organization: An investigation of embeddedness overlap in local subsidi-
ary networks. Journal of World Business 46(4): 497–505.
Noorderhaven, N. and Harzing, A.-W. 2009. Knowledge-sharing and social interac-
tion within MNEs. Journal of International Business Studies 40(5): 719–741.
O’Brien, D., Scott, P.S., Andersson, U., Ambos, T. and Fu, N. 2019. The micro-
foundations of subsidiary initiatives: How subsidiary manager activities unlock
entrepreneurship. Global Strategy Journal 9(1): 66–91.
Powell, W. W. 1990. Neither market nor hierarchy: Network forms of organization.
Research in organization behavior 12: 295–336.
Rogers, D.L. 2016. The Digital Transformation Playbook: Rethink Your Business for
the Digital Age. New York: Columbia University Press.
Rouleau, L. and Balogun, J. 2011. Middle managers, strategic sensemaking, and
discursive competence. Journal of Management Studies 48(5): 953–983.
Tasheva, S. and Nielsen, B.B. 2020. The role of global dynamic managerial capabil-
ity in the pursuit of international strategy and superior performance. Journal of
International Business Studies. https://doi.org/10.1057/s41267-020-00336-8.
Tate, W.L., Lisa, M., Ellram, L.M. and Gölgeci, I. 2013. Diffusion of environmental
business practices: A network approach. Journal of Purchasing and Supply Man-
agement 19(4): 264–275.
Warner, K.S.R. and Wäger, M. 2019. Building dynamic capabilities for digital trans-
formation: An ongoing process of strategic renewal. Long Range Planning 52(3):
326–349.
Yamin, M. and Andersson, U. 2011. Subsidiary importance in the MNC: What role
does internal embeddedness play? International Business Review 20(2): 151–162.
21 Understanding information
system outsourcing in the
digital transformation era
The business-relationship
triad view
Cecilia Erixon and Peter Thilenius

Digital transformation has brought about a number of challenges for in-

formation system (IS) outsourcing. IS outsourcing occurs when a firm al-
locates the management of their IS, consisting of information technology
(IT)-based processes, services and so on, to an external actor – an IS pro-
vider. Firms have come to realise, due to their digital transformation or
their starting to digitally transform, that ISs are enablers of change and that
IS outsourcing is more integrated with the business strategy than ever before
(Dibbern and Hirschheim 2020). Thus, IS outsourcing cannot be managed
or studied separate from the firm’s business context. The business context
of firms today means using various IT and IS for the exchange taking place
in the business relationships with customers and suppliers. Furthermore,
as firms outsource the management of these information technologies and
systems to IS providers, they are passing over some of the actual control of
the exchange that takes place in their business relationships. In essence, the
business relationship between the firm and one of its customers includes a
third party. When addressing IS outsourcing in the context of a business re-
lationship with a certain customer, the setting should consist not only of the
firm and its customer but also involve a third actor, that is, the IS provider.
Against this backdrop, this chapter offers a complementary view on
how to approach and analyse IS outsourcing and focuses on one of a firm’s
counterparts – the customer. The view offered emphasises the context of
business by introducing the business-relationship triad view on IS outsourc-
ing. As indicated above, a firm’s outsourcing of IS can, in this day and age,
almost be seen as the ‘new normal’ (Karimi-Alaghehband and Rivard 2020).
But even though we now find IS outsourcing to be the ‘new normal’, both
firms and researchers still struggle with understanding how to manage this
outsourcing situation successfully. Throughout the years, researchers have
strived to address the challenges that come with managing IS outsourcing, of-
ten starting from the strategic perspective of a single firm. In other words, the
crucial managerial question has been outlined as the conglomerate strategic
decisions based on (1) whether to outsource or not; (2) what to outsource;

DOI: 10.4324/9781003111245-21
218 Cecilia Erixon and Peter Thilenius
and (3) to whom to outsource, that is, selecting the ‘right’ outsourcing part-
ner. The scenery for these strategic decisions is the strengthening of the sin-
gle firm’s strategic position vis-à-vis its competitors; that is, the objective is
to find the path to competitive advantage.
In line with strategic management thinking, the relationship with the out-
sourcing partner is understood from the contractual agreement perspective,
where the protection of the outsourcing firm’s competitive advantage is the
key issue. To overcome potential failures of the outsourcing arrangements,
companies have focused on tightening their contracts and their service-level
agreements (SLA), where certain aspects of the service are specified, such as
quality, responsibility and so on. However, this strategy has not been effec-
tive; instead, the main success factor for IS outsourcing is strongly correlated
to the relationship between the IS provider and its customer and not tight
contracts and SLAs (Wolverton et al. 2020). In the digitalised business set-
ting, IT capability cannot simply be outsourced to a partner and protected
through contractual arrangements. Rather, IT capability and associated
activities outsourced to and performed by the IS provider are incorporated
in the firm’s business relationships with customers and, hence, inseparable.
This calls for a view on IS outsourcing that recognises the digitalised busi-
ness relationship between the firm and its customer as including the IS pro-
vider as a third actor. It is in business relationships with other actors, such
as customers, that IS is, to varying extent, incorporated and used. Studies
have shown that the management of the IS that is part of digitalised business
relationships becomes highly important to consider together with the man-
agement of the digitalised business relationship (Ekman et al. 2020). There-
fore, in contrast to the view of the firm’s outsourcing partnership with an IS
provider as a problem of contractual arrangements, this chapter presents an
alternative analytical view. The business-relationship triad, founded in the
business relationship perspective (Vedel, Holma and Havila 2016), allows
for a deeper understanding of the business situation that outsourcing entails
for the digitised relationship of the outsourcing firm, the firm’s customers
and the IS provider. Vedel, Holma and Havila (2016) hold that from a man-
agerial perspective there are far too few examples of guidance that deal with
analysing business relationships in their context, and they stress that it is of
great importance for managerial practice to get help in doing these analyses.
In this chapter, we address this research gap by discussing how IS out-
sourcing forms different business-relationship triads and how the three
involved actors – customer, supplier and IS provider – are associated and
connected. This setting allows for a deeper understanding of strategic
decision-making and thereby allows for generating managerial implications.
Thus, the objective of this chapter is to provide the analytical framework of the
business-relationship triad and place the challenges of the strategic decisions
relating to IS outsourcing in a new light. In the next sections, we overview the
accepted view of IS outsourcing, followed by a discussion on IS outsourc-
ing in different business-relationship triads. We conclude the chapter by
 Information system outsourcing 219
summarising the research and the managerial implications of the proposed
framework.

21.1 IS outsourcing and digitalisation in business relationships

Modern IS outsourcing is often traced back to when Kodak agreed in
1989 to outsource its data centre business to IBM (Könning, Westner and
Strahringer 2019). Compared with other forms of outsourcing, such as ac-
counting or cleaning services, IS outsourcing is more complex since IS is
integrated in and impacts and shapes most organisational processes in one
way or another (Kern and Willcocks 2002). To make matters more complex,
IS is not homogenous in its character but comprises a variety of IT (infor-
mation technology) activities where the IT capabilities also progress at a
dizzying pace. This complexity makes IS outsourcing full of uncertainty
when making any IS sourcing decision (Willcocks and Lacity 2009). IS out-
sourcing can be defined as the process in which one focal firm entrusts the
facility of IT-enabled business processes, practices and other services to an
external actor (Han and Mithas 2013; Kern and Willcocks 2002). These IS-
based business activities can be both intra- and inter-organisational in their
character depending on what services the IS is utilised for. When focusing on
interorganisational ISs, there are several different ISs that bind a firm with
other actors such as its customer or suppliers, and thus the ISs are part of
the business relationships (Ekman et al. 2020). Some business relationships,
for example, have connected the two actors’ enterprise systems and even au-
tomated some of the exchanges that take place in the business relationship;
this type of business relationship can be seen as a highly digitalised business
relationship while others use emails for communication, which is another
way of digitalising the exchange taking place in the business relationships.
From the early beginnings, IS outsourcing was seen as a cost-cutting tool
but has changed to become an integral part of the firm’s overall IT/IS strat-
egy. For many years, businesses as well as research have sought to address the
challenges of IS outsourcing management at different firm levels and tried
to identify ways for achieving success in IS outsourcing (Lacity et al. 2010;
Liang et al. 2016). When IS outsourcing is incorporated into a coherent sys-
tem of different processes around the IS and business processes outsourced
to the IS provider, it is necessary to build reliable interactions and successful
relationships between the outsourcing firm and the IS provider (Bharadwaj,
Saxena, and Halemane 2010; Kern and Willcocks 2002). Thus, research in
IS outsourcing has shown that good relationships significantly contribute
to the success of IS outsourcing (Qi and Chau 2012). In addition, according
to Claybaugh and Srite (2009), unsuccessful relationships raise the cost of
outsourcing by 70% compared with successful relationships. With that in
mind, the importance of understanding the relationship becomes obvious.
The research in IS outsourcing have up until today has mostly focused on
the IS provider and the outsourcing firm’s relationship involving just the
220 Cecilia Erixon and Peter Thilenius
two parties. By adding an actor and viewing business relationships with a
network approach, like research on for example supply chain management,
the triad can be used as the unit of analysis. As a result, a more holistic view
on IS outsourcing would also be to consider the outsourcing firm’s relation-
ships that use some of the ISs when trying to understand the phenomenon
of IS outsourcing. By also considering the business relationship, where the
IS is employed for exchanges, and thus taking a business-relationship triad
standpoint, we will achieve increased understanding of the IS outsourcing
in its context.

21.2 IS outsourcing as business-relationship triads

Business relationships have been extensively studied in a vast variety of set-
tings. Nevertheless, most studies view the relationship as a dyad (Holma
2010). The business relationship is thereby commonly approached as a dyad,
that is, the relationship involves two parties – a seller and a buyer. This,
however, means constraining the analytical frame to comprise just two ac-
tors in the ongoing reciprocal exchange, forfeiting the opportunity to gain
a full understanding of situations with additional actors involved in the ex-
change, as in the case of IS outsourcing to an IS provider.
Furthermore, the dyad view of business relationships often bases its rea-
soning in what Bagozzi (1975) denotes restricted exchange, leading to a ba-
sic assumption of maintaining equality and mutuality between the actors.
This assumption can be questioned in the setting of IS outsourcing, where
the exchange between the three actors bears a different character and could
include less benevolent and even harmful effects. The outlined setting of
digitalised business relationships involving the outsourcing of IS to a third
actor thus calls for additional views. There are examples of circumstances
where a business relationship, due to the character of the business, involves
additional parties. One example is international business-relationship triads
where an intermediary, in the form of a local representative in a foreign mar-
ket, is part of the social interaction necessary for various business undertak-
ings (Havila, Johanson and Thilenius 2004), and one more recent example is
viewing transport service as triads to understand the conditions for change
at the micro level (Andersson et al. 2019).
The outsourcing of IS to an IS provider can, from a simplistic technical
viewpoint, be seen as only a transfer of locus for the activities the IS in-
volves, but de facto means that parts of the exchange of the business rela-
tionship is carried out through the third party, outside the dyad. Thus, parts
of the exchange of the business relationship are not restricted to the firm–
customer dyad due to outsourcing to the IS provider. The exchange of the
business relationship that is carried out through the means of information
technologies is executed through and contingent on the different systems in
possession of the IS provider. This inevitably includes the IS provider as a
third actor in the business relationship through complex exchange (Bagozzi
 Information system outsourcing 221
1975). IS outsourcing to a third party hence makes the understanding of
the patterns of complex exchange among the three actors crucial for the
management of the business. The three actors’ relationships or triads can
on a general level be defined as follows: “When relationships between three
directly or indirectly associated actors are connected, the structure consti-
tutes an inter-organizational triad” (Vedel, Holma and Havila 2016, p. 142).
The framework, by Vedel, Holma and Havila (2016), provides a guide for
studying triads, and they suggest areas such as business relationships, sup-
ply chain, marketing channels, logistics and service management.
Similarly, business-relationship triads (Havila, Johanson and Thilenius
2004) are formed by the inclusion of providers of IS for information pro-
cessing in the business relationship. Information processing in business re-
lationships involves all aspects of ongoing exchange related to economic,
social, technological and informational requirements. The common view
of business relationships is constituted by two actors interacting through
various activities to exchange resources. The ongoing exchange forms the
business relationship atmosphere commonly explained through concepts
such as trust, commitment, adaptations, cooperation and mutuality. As in-
dicated above, inclusion of a third actor in a business-relationship triad in-
creases the complexity in the exchange among the actors, and the effects on
the atmosphere are uncertain. In essence, in the accepted view the developed
long-term oriented relationship’s atmosphere forms the setting for future in-
teractions and exchange of the two actors; including a third forms a different
context for its development. In the case of IS outsourcing, the firm and its
customer are complemented by a third actor in the form of the IS provider of
the outsourced IS, thereby forming a business-relationship triad.

21.3 IS outsourcing business-relationship triad framework

Vedel, Holma and Havila (2016) found that there is a lack of clarity in the
use of the concept of triads. To address this, they developed a framework
that categorises triads into four different types on the basis of internal co-
hesiveness and ability to act as an entity. To be able to use this framework,
the actors need to be directly or indirectly associated and the relationships
need to be connected; these two are mandatory while the added features of
degree of cohesiveness and their ability to act as an entity are not.
The degree of internal cohesiveness in triads can be defined as either high
or low. Triads have a high degree of internal cohesiveness where the actors
are directly linked and the ties between the actors are strong. Low cohesive-
ness is caused by one or a combination of the following: (1) an open triad,
(2) weak ties within the triad or (3) an open triad with weak ties. The degree
of cohesiveness is used in the framework to distinguish between triads de-
pending on the extent to which they act as a unit towards their environment.
Triads where the cohesiveness is low can also function as units. This means
that closure is neither a necessary nor a sufficient condition for a triad to
222 Cecilia Erixon and Peter Thilenius
function as a unit. When a triad acts as an entity, it means that it functions
as a single unit in its interaction with its surrounding and the actors con-
stituting the triad do not act independently of one another. The framework
still does not support a refined analysis of variation within each category,
but four different types in the framework can be outlined. The group-like
triad is closed, and ties must be strong, and hence there is high cohesiveness.
There are strong ties and direct connections between all three actors; they
usually have direct connections with one another and also have meetings
together. In the set of connected actors the cohesion ability is low, the ties
between the three actors are weak and all three actors are not necessarily
directly linked to one another. Thus, the actors do not or only rarely meet
one another. The group-like triad and the set of connected actors do not
act as a unit of business outside the triad. In the third and fourth types
of triad, the actors act as a unified entity but act in different ways within
that entity. The coalition has a high degree of cohesion and relations are
direct. In a coalition, a power-balancing strategy involves formal and direct
associations among all actors that have been directly linked. Actors in a
coalition are directly linked or associated, and the structure is character-
ised by closure and cohesion. A high degree of cohesion is due to closed and
strong bounds. The hub-driven strategic network has low cohesion, and all
partners in a hub-driven strategic network do not need to be directly linked
to one another, and the exchanges can be managed separately by the hub
firm. The ties in hub-driven strategic networks can be strong, but there is no
closing of the triad. In other words, both coalition and hub-driven strategic
networks act as an entity but in different ways. If it is an open triad then
the ties do not need to be weak. An open triad can be of a highly special-
ised structure, which basically consists of close and committed ties, which
is sometimes the case in long-term supplier–distributor–customer relation-
ships. When applying the triad framework (see Figure 21.1) to IS outsourc-
ing, different managerial implications can be made following the four types
of business-relationship triads.

21.3.1 Group-like IS outsourcing business-relationship triad

A group-like business-relationship triad is characterised by being closed;
that is, all the three actors have ties and the ties among them are strong. The
cohesiveness is thereby high in the triad. The strong ties and direct connec-
tions between all three actors imply that the firm, its customer and the IS
provider have direct connections with one another and also have meetings
together. In the IS outsourcing situation, this means that the outsourcing
concerns ISs that are engaged in day-to-day interaction and close reciprocal
exchange among all the three actors. The complexity of the exchange pattern
in the group-like business-relationship triad is high and most likely intense,
and the ISs used are central to the operations. Nevertheless, the three actors
are acting independently in the business-relationship triad, which provides
 Information system outsourcing 223

Degree of internal cohesiveness

Low degree
High degree
Indicated by non-closure and/or weak
Indicated by closure and strong ties ties

Group-like triad Set-of-connected-actors

 IS employed in day-to-day  The three actors are not
interaction necessarily directly linked
 Reciprocal exchanges between all  Limited exchange between the
three actors customer and the IS-provider
No  Intense interaction  All three actors rearly or never
 The IS used is central for meet
business  Exchanges between actors are
 All three actors act independently managed separately
Act as
an entity
Coalition Hub-driven-strategic-network
 All three actors have direct and  No necessary direct interaction
extensive exchange  Exchanges between actors can
 The triad acts as an entity to its be managed separately
surrounding  All actors might meet
Yes  High degree of trust and  Interaction with the IS-provider
interdependence indirectly impacts the
 Difficult to replace one of the interaction with the customer
actors and vice versa
 High investments forming strong
commitment

Figure 21.1 Four types of IS outsourcing business-relationship triad (inspired by

Vedel, Holma and Havila 2016: 144).

an opening for adverse effects to emerge due to the connection effects of the
exchanges not being firmly based in equality and mutuality. This implies a
difficult and hard-to-predict situation for managing IS outsourcing.

21.3.2 Set-of-connected-actors IS outsourcing

business-relationship triad
In a set-of-connected-actors business-relationship triad, the cohesion among
the actors is low as the ties are weak and all the three actors are not neces-
sarily directly linked to one another. The exchange is carried out between
the firm and the customer and between the firm and the IS provider but not
necessarily between the IS provider and the customer. Thus, the actors ei-
ther do not meet at all or only rarely meet; hence, the possibility for sharing
opinions on the functionality of the ISs used is less. In some IS outsourcing
situations that might not be a problem, and, thus, the business exchanges
can be managed separately. But in other cases, the non-existing exchanges
with all actors in the set-of-connected-actors business-relationship triad
may hinder the possibility to enhance the digitalisation in exchange with
the customer.
224 Cecilia Erixon and Peter Thilenius
21.3.3 Coalition IS outsourcing business-relationship triad
In a coalition business-relationship triad, the exchanges are direct, the ties
are strong, and the cohesiveness is high. The direct exchanges means that
the firm, the customer and the IS provider have strong links with one an-
other, through meetings and other cooperation opportunities. The stronger
ties indicate that there are more intense exchanges going on in the triad.
This business-relationship triad is closed in its character, and the IS used is
of significance to the business of the firm and its customer. To its surround-
ings, the triad acts as an entity, which indicates a high degree of trust and
dependence in the triad to be able to be so united. The dependence on one
another, with strong ties in this triad, also indicates that it might be difficult
from a managerial point of view, for example to change one of the actors, ei-
ther it be the customer or the IS provider, since there have usually been a lot
of investments, in both time and money, in coalition business-relationship
triads.

21.3.4 Hub-driven strategic network IS outsourcing business-

relationship triad
In a hub-driven-strategic-network business-relationship triad, the partners
do not need to be directly linked to one another, making it possible to man-
age the exchanges in the triad more separately. The triad has low cohesion,
and the ties might be strong in the triad but the triad is not closed. The
indirect connection but no closure indicates that the three actors – firm,
customer and IS provider – might meet at times but there is no necessity to
do so, and in some cases they may never meet, since the firm can manage
the business totally separately. However, the exchanges with the IS provider
indirectly impact the exchanges with the customer and vice versa, so even
though these can be managed separately it is of importance for the manag-
ers to understand their impact on one another.

21.4 Concluding remarks and managerial implications

As addressed in this chapter, almost every firm today has in some way digi-
talised one or several of their business relationships using different informa-
tion systems (ISs) to support different business exchanges. Some of the firms
are right now in the process of digital transformation. In the process of dig-
italisation or digital transformation, most companies let a third party, the
IS provider, manage the ISs, thus handing over the controlling of some of
the exchanges to someone else. Since the IS provider is directly or indirectly
part of the firm’s business relationships where the ISs they manage are used,
the business-relationship triad view presented in this chapter puts forward
and helps illustrate their inseparability even when a firm manages the busi-
ness relationships separately. Thus, when applying the business-relationship
 Information system outsourcing 225
triad view to IS outsourcing, it becomes evident how closely knit the IS pro-
vider is with the firm’s business and how dependent the firm and its cus-
tomer are on the outsourcing partner. In the era of digital transformation,
IS takes a more active role than a being a passive object that can be managed
apart from a firm’s business. This suggests that the view presented might be
one crucial component in understanding IS outsourcing.
To further the research, an empirical study of several business-relationship
triads consisting of an outsourcing firm, its customer (or supplier) and its IS
provider could provide more evidence. The evidence could enable the contri-
bution of knowledge to research on both the growing business-relationship
triad and IS outsourcing. This could expand the knowledge concerning how
intertwined the IS provider really is in a firm’s business relationships. IS out-
sourcing research could also benefit from the triad view on IS outsourcing
in the multisourcing area and, also, as stressed by Könning, Westner and
Strahringer (2019), from a relationship characteristic standpoint, to under-
stand the drivers for innovation in IS outsourcing. A business-relationship
triad view on multisourcing might let the IS providers see the impacts they
have on one another in new ways, allowing for new strategies.
Managers who employ the business-relationship triad view on their busi-
ness can perhaps better identify how the IS provider influences their other
business relationships. But they can also gain insights into how to manage
this in a more conjoined manner and not as separated business relation-
ships. The presented view, founded in Vedel, Holma and Havila (2016),
could be a tool for the manager to identify the IS provider’s direct or indirect
involvement in other business relationships. In the digital transformation
era, it is of importance for managers to view IS outsourcing to a third party
as not separated but as an integral part of their business relationships with
customers and suppliers who in some sense can be the key for the success of
their transformation.

21.5 Takeaways
Digital transformation poses new managerial challenges for IS outsourcing.
To understand the impact of IS providers in business relationships, a tool
to further understand different forms of triads that can be manifested in a
firm and its business relationships is needed. By managing IS outsourcing
through a business-relationship triad lens, the firm’s IS strategy and IS out-
sourcing decisions will be more contextually adapted, providing the ground
for stronger competitive positions, not only for the outsourcing firm but
also for the whole IS outsourcing business-relationship triad. This chapter
stresses that in the setting of IS outsourcing, it is important to understand
that (1) the IS provider is recognised as a third actor in the firm’s business re-
lationships with its customer and (2) the degree of internal cohesiveness and
acting as an entity of the digitalised business-relationship triad forms the base
for an analytical frame, where (3) different types of business-relationship
226 Cecilia Erixon and Peter Thilenius
triads – (a) Group-like, (b) Set of connected actors, (c) Coalition and (d) Hub-
driven strategic network (see Figure 21.1) – impose different managerial chal-
lenges for the firm.

Acknowledgement
The work in this chapter was partly financed by Eskilstuna Municipality
though the project Sörmlandskontraktet.

References
Andersson, D., Dubois, A., Eriksson, V., Hulthén, K. and Holma, A. 2019. The
transport service triad: A key unit of analysis. Journal of Business and Industrial
Marketing 34(1): 253–266.
Bagozzi, R. 1975. Marketing as exchange. Journal of Marketing 39(4): 32–39.
Bharadwaj, S., Saxena, K. and Halemane, M. 2010. Building a successful relation-
ship in business process outsourcing: An exploratory study. European Journal of
Information Systems 19(2): 168–180.
Claybaugh, C.C. and Srite, M. 2009. Factors contributing to the information tech-
nology vendor-client relationship. Journal of Information Technology Theory and
Application 10(2): 19–38.
Dibbern, J. and Hirschheim, R. 2020. Introduction: Riding the waves of outsourc-
ing change in the era of digital transformation. In Hirschheim, R., Armin, H. and
Dibbern, J. (Eds.), Information System Outsourcing: The Era of Digital Transfor-
mation, Cham: Springer, 1–20.
Ekman, P., Dahlin, P., Erixon, C. and Thompson, S. 2020. Exploring ‘high tech’
and ‘high touch’ interaction capabilities: Aligning the IT portfolio with customer
and supplier relationships. Information Technology and People 33. ahead-of-print,
https://doi.org/10.1108/ITP-09-2017-0317.
Han, K. and Mithas, S. 2013. Information technology outsourcing and non-IT oper-
ating costs: An empirical investigation. MIS Quarterly 37(1): 315–331.
Havila, V., Johanson, J. and Thilenius, P. 2004. International business‐relationship
triads. International Marketing Review 21(2): 172–186.
Holma, A. 2010. Relationship development in business triads – Case studies in cor-
porate travel management. Journal of Business Market Management 4(2): 73–90.
Karimi-Alaghehband, F. and Rivard, S. 2020. IT outsourcing success: A dynamic
capability based model. Journal of Strategic Information Systems 29(1). https://
doi.org/10.1016/j.jsis.2020.101599.
Kern, T. and Willcocks, L. 2002. Exploring relationships in information technology
outsourcing: The interaction approach. European Journal of Information Systems
11(1): 3–19.
Könning, M., Westner, M. and Strahringer, S. 2019. A systematic review of recent
developments in IT outsourcing Research. Information Systems Management
36(1): 78–96.
Lacity, M., Khan, S., Yan, A. and Willcocks, L. 2010. A review of the IT outsourcing
empirical literature and future research directions. Journal of Information Tech-
nology 25(4): 395–433.
 Information system outsourcing 227
Liang, H., Wang, J., Xue, Y. and Cui, X. 2016. IT outsourcing research from 1992 to
2013: A literature review based on main path analysis. Information & Management
53(2): 227–251.
Qi, C. and Chau, P. 2012. Relationship, contract and IT outsourcing success: Evi-
dence from two descriptive case studies. Decision Support Systems 53(4): 859–869.
Vedel, M., Holma, A. and Havila, V. 2016. Conceptualizing inter-organizational
triads. Industrial Marketing Management 57: 139–147.
Willcocks, L. and Lacity, M. 2009. Outsourcing practice: The search for flexibility
and control. In Willcocks, L. and Lacity, M. (Eds.), The Practice of Outsourcing.
Houndmills: Palgrave Macmillan, 3–34.
Wolverton, C. C., Hirschheim, R., Black, W.C. and Burleson, J. 2020. Outsourcing
success in the eye of the beholder: Examining the impact of expectation confir-
mation theory on IT outsourcing. Information & Management 57(6). https://doi.
org/10.1016/j.im.2019.103236.
22 Transforming the management/
profession divide
The use of the red–green matrix
in Swedish schools
Anton Borell, Johan Klaassen, Roland Almqvist
and Jan Löwstedt

In many ways, the emergence of data processing and complex simulation

tools has made organisational life easier. Information technology (IT) in-
frastructures have helped organisations bridge both physical and intra-
organisational boundaries between functions with different interests,
enabling new forms of coordination (cf. Kellogg et al. 2017). Digital technol-
ogy offers organisations opportunities for both automation and ‘informat-
ing’ capabilities (Zuboff 1988). Thus, digital technology is supporting the
standardisation of work while also enabling efficient information streams to
measure performance. The importance of IT for establishing management
and control structures in organisations should not be underestimated.
The development of digital technologies has been intertwined with in-
creased external influence over organisations, coordinated previously by
professional principles. The drive for greater systematisation and rationali-
sation means that today’s professionals are expected to comply with formal
rules and established written procedures rather than relying on their discre-
tional judgements (Meyer and Rowan 1977; Evetts 2011). The increased de-
mands imposed by external rules apply to public services such as education
(Noordegraaf 2016). Digital technology has promoted the establishment of
administrative infrastructures in schools to both standardise certain activ-
ities and allow the generation of performance information. However, it has
been shown that although management initiatives in profession-driven or-
ganisations may be effective for changing administrative practices, different
professional practices (Börjeson and Löwstedt 2017) may be more or less
susceptible to external influence.
Research on professional organisations (such as schools) suggests differ-
ent possibilities to align different interests. On the one hand, it has been
shown that these organisations are characterised by a strong divide between
managerial and professional interests, which suggests that the alignment of
these different worldviews will be difficult (e.g., Brignall and Modell 2000;
Börjeson and Löwstedt 2017; Klaassen and Löwstedt 2020). On the other
hand, some studies show how professionals are bridging between these
worlds by applying ‘hybrid’ managerial and professional thinking, which

DOI: 10.4324/9781003111245-22
 The management/profession divide 229
allows them to move skilfully between these two spheres (Llewellyn 2001;
Noordegraaf 2007). In relation to the exploitation of digital technology in
schools, it is of interest, therefore, to identify the technology that, poten-
tially, could influence both the administrative and professional spheres.
This chapter discusses such a technology which spans across professional
and managerial interests. It studies the application of an administrative
tool in three Swedish elementary schools to explore the influence of a man-
agement technology on professional work. The red–green (RG) matrix was
introduced to influence professional work by standardising organisational
procedures. However, we show that in an elementary school context, achiev-
ing alignment between professional and managerial interests failed. Not
only did the technology work to maintain the boundaries between these two
views, it also worked to reinforce them through various modes of use that
served the profession. This chapter shows that, unless underlying conflicts
of interests are addressed, institutional interests may persist, or even be re-
inforced, with the introduction of a mediating technology based in mana-
gerial intentions.
The chapter is organised as follows. It starts by conceptualising pro-
fessional and managerial thinking as two forms of institutional logics
(Section 22.1). Section 22.2 describes the case background and discusses the
observations in the studied schools. Sections 22.3 and 22.4 provide conclud-
ing remarks and overall reflections on the digital transformation to manage-
ment and information technology, and Section 22.5 provides key takeaways.

22.1 Using information technology to bridge two perspectives

Since our aim is to examine a case of managerial intervention in profes-
sional work, we draw on two institutional logics (Friedland and Alford 1991;
Thornton et al. 2012) in order to address the different interests affecting the
reasoning within these groups. This perspective allows us to conceptualise
people’s reasonings and actions as embedded in stabilised norms. First, we
consider the professional logic, which is based on the idea that actors should
be allowed to make discretionary judgements based on their access to expert
knowledge (Abbott 1988). According to this logic, people decide about their
courses of action based on the needs of individual clients, whose interests are
believed to be protected and served by professional experts (Freidson 2001).
Second, we consider the managerial logic, which describes actions that are
focused on aspects such as efficiency and reporting requirements, which, it
is believed, serve the organisation as a whole (Freidson 2001). In this case,
expertise is based on organisational knowledge (typically reflected in hier-
archical chains of command) rather than the knowledge acquired outside
of the organisation through formalised education, for example (Freidson
2001). When these logics compete to guide organisational activity, this can
promote conflict, involving each of the actors trying to impose their own
logic on the other rather than making efforts to achieve an understanding
230 Anton Borell et al.
and a compromise (Friedland and Alford 1991; Thornton et al. 2012). Thus,
a logics perspective helps to explain both social actions and the ways that
managerial interventions in professional work can trigger conflicts.
We focus on a managerial intervention mediated by digital technology,
which requires some discussion of the possibilities and limits of technology
related to their inherent power to change. People deal with technology in
different ways, depending not only on their perception of its physical fea-
tures but also according to group norms (Leonardi and Barley 2010). In
other words, organisational activity includes individuals’ actions, based on
intentions embedded in social norms, and also the performances of the tech-
nology acting on their behalf, in ways that are enabled and limited by phys-
ical shapes and features (Leonardi 2012). In goal-oriented organisational
activity, the social and material are often intertwined to a degree that it
makes no sense to even keep them analytically separate (cf. Leonardi 2013),
although we will do so for one important reason: technologies are easy to
fool! Although technologies can handle increasingly advanced tasks, they
are still tools that perform according to what they are told. What is im-
portant here is that they perform according to the intentionality of people
(Leonardi 2012).
For actors working across institutional boundaries deemed impermea-
ble, technology, potentially, can provide the means to achieve more or less
stable common ground (cf. Star and Griesemer 1989; Leonardi et al. 2019).
This view suggests that the actors might not only be adhering to a singular
logic; they might be able to become ‘hybridised experts’ and communicate
skilfully between two different spheres (Llewellyn 2001; Noordegraaf 2007).
The introduction of a common technology should have the potential to
bridge the gap between two different institutionalised interests.

22.2 Digitalisation in the Swedish school context

In line with developments in other countries and other organisational con-
texts, the Swedish education system has been subject to increased pressure
to adopt a managerial logic (Borell 2019). For instance, education has been
subjected to an increased focus on performance measurement, quality as-
sessments and documentation, each of which could be characterised as an
attempt to govern schools according to a general management model (Sher-
idan et al. 2013). Some argue that this trend is challenging traditional profes-
sional ideals and is associated with greater administrative burdens and more
standardisation of work (Larsson and Löwstedt 2020).
Digitalisation is both a consequence and an enabler of these devel-
opments. For instance, IT has been touted as a means to improve school
achievements. Previous attempts to introduce digital technology in educa-
tional practices have seen varied success (cf. Larsson 2004), but have been
shown to be related to the imposition of standardised administrative func-
tions such as formative assessments and quality reports (Skolinspektionen
2012). Most Swedish schools use some type of administrative IT system to
 The management/profession divide 231
enable communication with various stakeholders (such as parents and gov-
erning bodies) and standardise routine activities to make them a part of the
organisational IT infrastructure. Over the decades, digitalisation has pro-
gressed; its most salient effects have been manifested in administrative work
based on the establishment of an organisational IT infrastructure.

22.2.1 The three schools: TechSchool, SubUrb and CityCentre

Our analysis focuses on three Swedish elementary schools – TechSchool,
CityCentre and SubUrb – all located in Stockholm. Despite this similar geo-
graphical location, the schools differ in their ownership and socioeconomic
structures. TechSchool is part of a large corporate group; CityCentre and
SubUrb are both public schools, located in areas with different socioeco-
nomic conditions. Thus, the analysis is based on data from similar locations,
but they span various forms of ownership. Later, we show that, despite these
differences, the teachers in these schools use the technologies in fairly simi-
lar ways. This adds to the robustness of our findings.
The case studies in this chapter are based on interviews and participant
observation by two of the authors. They collected the information in paral-
lel, between 2016 and 2019, from TechSchool (one author) and SubUrb and
CityCentre (another author). This allowed the collection of data on all the
schools while also allowing the authors to make in-depth observations and
conduct interviews at each of the schools.

22.2.2 The red–green matrix

To exemplify the digital transformations at the three schools, we use the RG
matrix. In brief, this allows compiling and reporting of pupil achievements
and serves as a way to allow the school to follow the current teaching and re-
sources provided for certain pupils. Assigning a specific colour to individual
pupils across subjects highlights their individual achievements in relation
to nationally formulated goals. The visualisation uses the colours red and
green, hence the name red–green matrix. Green indicates that the pupil is
expected to achieve the certain goals related to a specific subject; red indi-
cates that the pupil will fail unless something in the current teaching form
changes. The schools also added blue, to signal an understimulated pupil
and yellow to indicate a level between red and green. Figure 22.1 provides a
fictive example.
The rationales for implementing the RG matrix in their school practices
varied across schools, but were related, overall, to systematic good quality
work and individual adjustments – two of the requirements in the Swedish
National School Act (SFS 2010). In relation to systematic good quality
work, the RG matrix was intended to foster dialogue about quality among
teachers, using the colours to discuss and identify the most effective meth-
ods for both individuals and subjects, as well as overall school performance.
In relation to individual adjustments, the RG matrix linked school practices
232 Anton Borell et al.

Subject “A” Subject “B” Subject “C”

Pupil “X” Red Green Green

Pupil “Y” Green Green Red

Pupil “Z” Yellow Red Green

Figure 22.1 Example of an RG matrix.

Source: Authors’ reconstruction.

to the failure categories of ‘extra adjustment’, which was a teacher responsi-

bility, and ‘special adjustment’, which required administrative intervention.
Thus, the RG matrix could be conceived as a technology aimed at identify-
ing the need for and implementation of extra adjustment and special adjust-
ment measures, in practice, based on the colours assigned and the related
responsibilities.
Overall, it was clear that the RG matrix had many intended forms of ben-
efits for the schools. It could be used by the teachers for managerial-focused
activities (e.g., more frequent reporting, standardised work, improved per-
formance, holding professionals accountable for classroom activities) and
also professional objectives (e.g., help for individual clients, knowledge
sharing within the professional community, administrative accountability
for resources). In this view, the RG matrix served as a potential technology
to bridge across perspectives and enable a hybrid teaching practice respond-
ing to both professional and managerial logics. In the context of these ex-
pectations, we next examine use of the tool in teachers’ everyday work.

22.3 Professional use of the red–green matrix

Our observations and our interviews with teachers and other school per-
sonnel showed that usage of the RG matrix differed from expectations. It
was used only infrequently for managerial goals or to achieve hybridised
managerial and professional logics understandings. It was used mostly to
enforce professional ideals, which reinforced the professional–managerial
boundary. We found that this reinforcement occurred because the matrix
worked (i) to seal off communication flows from the managerial level to
the teacher level and (ii) to influence managers by requesting for additional
resources. These outcomes are discussed below.

22.3.1 Sealing off communication flows from managers to teachers

The teachers used the matrix to exclude communication across professional–
managerial boundaries in order to signal that the teachers had things under
control and did not want any interference from the school administration.
 The management/profession divide 233
This represented a failure of the technology to facilitate communication
across boundaries and find compromises; it served only to reinforce profes-
sional autonomy.
Nevertheless, there were variations across schools in relation to similar
forms of communication. Teachers at the TechSchool focused on technolog-
ical design and marked all pupils green while the CityCentre school teachers
were more interested in protecting their autonomy and refused to use the
matrix. Since both actions were designed to seal off communication flows
from the administrative level down to the teacher level, we include both
types of actions in this category.

22.3.2 Marking all pupils green

Initially, the TechSchool did use the RG matrix. During meetings, teacher
teams suggested it could be used to synchronise their knowledge about spe-
cific students. This suggests the potential for sharing best practice, in line
with the managerial ideal of more efficient daily activities.
However, it soon emerged that there was a great deal of scepticism about
the tool. This suspicion was manifested by the perception that RG meetings
were time-consuming and use of the matrix would involve even more teacher
time and more administrative work. A red colour triggered an immediate
response, requiring the a teacher analysis process, which resulted in more
administrative work and the involvement of additional personnel who might
question the teacher’s judgement. The distrust in the matrix was demon-
strated, also, by the teachers questioning the effect of the RG matrix on in-
dividual pupils. Some teachers believed that students with needs were aware
of their shortcomings and needs and marking them red served only to dis-
courage them further. Overall, the RG matrix was associated with distrust.
As a result, the teachers began to mark more pupils green to try to avoid
most of these problems. A green colour meant less administrative work for
the teacher because it did not require additional documentation and plan-
ning. It also reduced the need for communication with other organisational
members, such as the student health service, and left the teacher free to
make their own assessment of individual pupils. Finally, being marked
green reduced the problems for the individual student and avoided the po-
tentially negative effect of being reminded about shortcomings. Overall, a
green marking served the professional goal of maintaining autonomy and
control over the classroom, motivated from the purpose of acting on behalf
of their pupils. There was no interest in the managerial logic such as sharing
best practice or providing the information required for accountability.

22.3.3 Ignoring the matrix

In the CityCentre school, the RG matrix was perceived, also, as imposing
greater workload and unnecessary administrative burden. However, in con-
trast to the TechSchool, the CityCentre teachers referred to already existing
234 Anton Borell et al.
practices. They claimed to be documenting their students’ progress (e.g., by
predicting their grades), which meant that they saw the matrix as providing
few benefits over already established routines. This led to serious conflicts be-
tween the school’s managers and its teachers. According to one teacher, the RG
matrix was even said to “run over the teacher collective” and was an example
of “quadrangular thinking” or a box-ticking mentality. Although expressed
differently, teachers at both CityCentre and TechSchool considered the tool
to be overly bureaucratic, too time-consuming and as providing few benefits.
Rather than marking all their pupils green, CityCentre teachers simply
ignored the matrix, which allowed them to maintain their existing routines
and did not introduce an additional workload. Thus, all forms of communi-
cation were cut, which can be interpreted as a rather obvious way to protect
their professional logic.

22.3.4 Using the red–green matrix to strengthen the influence over

managers – asking for more resources
While in both CityCentre school and TechSchool (non)usage of the matrix
was aimed at sealing off communication, the tool was used, also, to ob-
tain more resources. This is in line with a professional logic, since it implies
greater power and influence over the managerial level, as opposed to the
managers influencing the teachers.
This use applies to SubUrb. As a school located in a socioeconomically
disadvantaged area, the SubUrb viewed the RG matrix as essential to track
pupils’ progress and make corresponding adjustments. This was reinforced
by the national school inspectorate, which criticised the school for not cater-
ing more to pupils’ individual needs. The school’s principal and managers
were keen to implement the RG matrix to provide a systematic way of keep-
ing track of pupils and conducting inspections successfully. In other words,
the environmental conditions of the school and the prospect of inspections
made the RG matrix a relevant management tool.
However, the teachers did not appreciate the requirements imposed by
the RG matrix. They saw a red marking of a pupil as increasing the amount
documentation and requiring adjustments to their classes, which were seen
as problematic for the teachers. Since the school included numerous pupils
with particular needs, the teachers felt that the matrix imposed imperatives
which were difficult to accommodate in their current teaching formats.
They saw a red colour as indicating that the teacher must make adjustments,
and this was perceived as impossible within their current class times. An
adjustment implied a trade-off with those pupils who could be considered
‘green’, which made the teachers uneasy.
The common response among teachers with several pupils who required
extra help was to request additional resources. Receiving help from special
pedagogues or teacher assistants relieved the teachers of responsibility for
prioritising between ‘individuals in need’ and the other pupils in the class.
 The management/profession divide 235
The teachers saw the solution to be marking the pupils red, which, ac-
cording to one teacher, made the problem into a responsibility of the school
board rather than that of the individual teacher. The idea was to use the
matrix to signal to the managerial level that more resources were needed
and that this was the responsibility of the school’s managers and not the
individual teachers. In this case, the RG matrix served to enable ‘upward’
communication in the organisational chain, by mobilising more resources
‘downward’ to the classroom level.
This effort to obtain more resources produced other tensions. Since the
demand for more resources also had budgetary implications, principals and
school boards could not simply recruit more staff because this risked failing
to achieve financial targets. In turn, since the professionals mostly did not
consider this a legitimate reason for not providing more resources, this led
to a situation where the differences between managers and professionals
intensified. Rather than being bridged, boundaries were reinforced. Thus,
SubUrb provides another example of how the RG matrix failed to encour-
age cross-boundary communication and understandings and, in fact, rein-
forced established reasoning and thinking.

22.4 Conclusion: technology-enforced differences

The solutions offered by the RG matrix were several. It could be used to
resolve managerial problems (e.g., increased reporting, standardised work,
improved performance, more frequent inspections) and was interrelated
with professional ideals (e.g., a focus on helping individual pupils, sharing
knowledge within teacher teams, making administrative levels accountable
for resources). These uses and the initial aim of the tool was to blur the
distinctions between the professional and the managerial logics and, poten-
tially, to reduce the professional–managerial divide.
However, we found that its use in practice caused other types of transfor-
mations. Our observations on the use of the RG matrix at three different
schools showed that it was used based, mainly, on professional interests and
included sealing off communication between the managerial and teacher
levels and increasing influence over managers. Our findings suggest that, de-
spite the aim of reducing the managerial–professional divide, the RG matrix
rather reinforced it. There were transformations, but these were not in line
with the original aims envisaged for the matrix.
Overall, this case provides important insights into the management–
professional divide. The RG matrix was introduced to standardise and for-
malise dialogue between performance requirements and the pedagogical
efforts needed to achieve them. In other words, it was envisaged as pro-
viding a potential bridge between the competing interests of the teaching
profession and school management. However, the teachers’ use of the RG
matrix to pursue their professional interests highlights the fact that the suc-
cess of a technology depends on the intentions of the user. Technologies
236 Anton Borell et al.
lack human intentionality; although they might enable the professionals to
perform complex tasks, they still cannot, on their own, solve organisational
problems.

22.5 Takeaway
While a technology can provide common ground for individuals with differ-
ent interests, it requires that these different interests converge about objec-
tives. Use of the RG matrix resulted in increasing the distance between the
different interests; each group interacted with the technology rather than
with each other, and it worked mostly to serve the interests of the teaching
profession. The digital transformation may be providing new possibilities
for communication and transparency in organisations, but institutionalised
interests are likely to persist, and even to be reinforced, unless the underly-
ing conflicts of interests are addressed.

References
Abbott, A. 1988. The System of Professions: An Essay on the Division of Expert La-
bor. Chicago, IL: University of Chicago Press.
Borell, A. 2019. Budgets vs individual needs. Journal of Public Budgeting, Account-
ing and Financial Management 31(3): 410–430.
Börjeson, L. & Löwstedt, J. 2017. Accomplish change or causing hesitance –
Developing practices in professional service firms. Scandinavian Journal of Man-
agement 33(3): 185–194.
Brignall, S. & Modell, S. 2000. An institutional perspective on performance meas-
urement and management in the “new public sector.” Management Accounting
Research 11(3): 281–306.
Broadbent, J. & Laughlin, R. 1998. Resisting the “new public management”: Ab-
sorption and absorbing groups in schools and GP practices in the UK. Account-
ing, Auditing and Accountability Journal 11(4): 403–435.
Clarke, J. & Newman, J. 1997. The Managerial State: Power, Politics and Ideology in
the Remaking of Social Welfare. London: Sage.
Erixon Arreman, I. & Holm, A. S. 2011. School as “Edu-business”: Four “serious
players” in the Swedish upper secondary school market. Education Inquiry 2(4):
637–657.
Evetts, J. 2011. A new professionalism? Challenges and opportunities. Current So-
ciology 59(4): 406–422.
Freidson, E. 2001. Professionalism, The Third Logic: On the Practice of Knowledge.
Chicago, IL: University of Chicago Press.
Friedland, R. & Alford, R. 1991. “Bringing society back in: Symbols, practices and
institutional contradictions.” In The New Institutionalism in Organizational Anal-
ysis, edited by Powell, W.W. & DiMaggio, P.J., 232–263. Chicago, IL: University
of Chicago Press.
Kellogg, K.C., Orlikowski, W.J., & Yates, J. 2006. Life in the trading zone: Structur-
ing coordination across boundaries in postbureaucratic organizations. Organiza-
tion Science 17(1): 22–44.
 The management/profession divide 237
Klaassen, J. & Löwstedt, J. 2020. “Digitalization in schools: Four examples of em-
beddedness.” In Research in Organizational Change and Development (Vol. 28),
edited by Noumair, D.A. & Shani, A.B., 103–126. Bingley: Emerald Publishing
Limited.
Larsson, P. 2004. Förändringens villkor en studie av organisatoriskt lärande och
förändring inom skolan. Ekonomiska forskningsinstitutet vid Handelshögskolan
i Stockholm: EFI.
Larsson, P. & Löwstedt, J. 2020. Distributed school leadership: Making sense of the
educational infrastructure. Educational Management Administration & Leader-
ship, https://doi.org/10.1177/1741143220973668.
Leonardi, P.M. 2012. “Materiality, sociomateriality, and socio-technical systems:
What do these terms mean? How are they different? Do we need them.” In Ma-
teriality and organizing: Social Interaction in a Technological World (pp. 25–48),
edited by Leonardi, P.M., Nardi, B.A. & Kallinikos, J., 25–48. Oxford: Oxford
University Press.
Leonardi, P.M. 2013. Theoretical foundations for the study of sociomateriality. In-
formation and Organization 23(2): 59–76.
Leonardi, P.M., Bailey, D.E., & Pierce, C.S. 2019. The coevolution of objects and
boundaries over time: Materiality, affordances, and boundary salience. Informa-
tion Systems Research 30(2): 665–686.
Leonardi, P.M. & Barley, S.R. 2010. What’s under construction here? Social action,
materiality, and power in constructivist studies of technology and organizing.
Academy of Management Annal’s 4(1): 1–51.
Llewellyn, S. 2001. “Two-way windows”: Clinicians as medical managers. Organiza-
tion Science 22(4): 593–623.
Meyer, J.W. & Rowan, B. 1977. Institutionalized organizations : Formal structure as
myth and ceremony. American Journal of Sociology 83(2): 340–363.
Noordegraaf, M. 2007. “From ‘Pure’ to ‘Hybrid’ Professionalism: Present-Day Pro-
fessionalism in Ambiguous Public Domains.” Administration and Society 39(6):
761–785.
Noordegraaf, M. 2016. Reconfiguring professional work: Changing forms of profes-
sionalism in public services. Administration and Society 48(7): 783–810.
SFS 2010. Skollag. (National School Act), Serial No. 800. Stockholm: Department
of Education.
Sheridan, S., Williams, P., & Sandberg, A. 2013. Systematic quality work in pre-
school. International Journal of Early Childhood 45(1): 123–150.
Skolinspektionen. 2012. Satsningarna på IT används inte i skolornas undervisning
[The investments in IT are not used in the schools’ education] (Dnr. 40–2011:2928).
Skolinspektionen.
Star, S.L. & Griesemer, J.R. 1989. Institutional ecology, translations and boundary
objects: Amateurs and professionals in Berkeley’s Museum of Vertebrate Zool-
ogy, 1907–39. Social Studies of Science 19(3): 387–420.
Thornton, P.H., Ocasio, W., & Lounsbury, M. 2012. The Institutional Logics Per-
spective: A New Approach to Culture, Structure, and Process. New York: Oxford
University Press.
Zuboff, S. 1988. In the Age of the Smart Machine. New York: Basic Books.
23 Integrating research in master’s
programmes
Developing students’ skills to
embrace digitally transformed
markets
Todd Drennan, Cecilia Thilenius Lindh and
Emilia Rovira Nordman

The digital transformation of businesses has revolutionised marketing and

increased the need for a workforce with digital, analytical and technical
skills. In turn, this requires changes to higher education curricula and teach-
ing practices. This chapter discusses how educators have embraced the new
digital landscape to create an environment that engages students actively,
increases their methodological and analytical capabilities, and challenges
them to explore new knowledge. More effective delivery of education can be
accomplished by adopting and integrating technology in a blended learning
process.
This chapter presents an illustrative case of a methodology course at
Mälardalen University (in Sweden) with an enrolment of approximately 40
master’s level students per year. The course rests on two ideas. The first is
that individuals who have grown up surrounded by and immersed in tech-
nologies in their daily activities can be described as ‘digital natives’ (Pren-
sky 2001), implying that they are experienced users of digital technologies
and need little extra training in using digital tools in their coursework (Ugur
2020). The second is that the Internet and its accompanying applications
(e.g., web-based databases, social media platforms) can be easily utilised
to teach students how to collect data for research but that some teaching
activities are more effective when conducted face-to-face or ‘In Real Life’
(IRL). Therefore, the course uses a blended learning approach, that is, a mix
of face-to-face learning and online learning (Hrastinski 2019; Kireev, Zhun-
dibayeva and Aktanova 2019). By combining digital and IRL meetings, our
illustrative case shows how educators can use society’s digital transforma-
tion to change their teaching practices and equip students with new skill sets
that will prepare them for real-life tasks in modern labour markets.

DOI: 10.4324/9781003111245-23
 Integrating research in master’s programmes 239
23.1 The background to digitalisation of higher education
Since the 1990s and the beginning of online learning, when the term
‘blended learning’ was first coined (see Hrastinski 2019), the digitalisation
of teaching has fundamentally changed higher education. Although not
all digital teaching experiences are positive (e.g., they may be hampered
by technology malfunctions and potential device distractions), digitali-
sation has the positive effects of helping students to create and interact
with course content, to collaborate and to learn using social media tools
(Gikas and Grant 2013). Nevertheless, real-life face-to-face learning ac-
tivities remain important. Also, providing instructional support via an
online medium may take the educator more time than delivering the same
information in a face-to-face setting (Senn 2008). In addition to saving the
teacher’s time and effort, the personal dimension to the teaching process,
afforded by IRL meetings, can promote use of digital tools. Previous re-
search shows that students can benefit from a blended course format that
combines online activities with traditional face-to-face teaching (Kemp
and Grieve 2014).
As long ago as 1997, the idea of integrating new digital technologies into
education was making waves, and webpages began to figure in education
(Noble 1998). The discussion soon shifted towards the potential of digital
technologies to enable deeper learning in an education context (Weigel
2002). In the current times, digital transformation has become so integral
to society that its dependency and effects can be seen in the economy (e.g.,
social media, e-commerce). In the context of education, digital transforma-
tion has led to numerous successful projects that have incorporated or uti-
lised digital technologies (Benavides et al. 2020). However, there continue
to be calls for more research to provide educators with a better understand-
ing of the cognitive learning outcomes derived from the use of digital tools
in education (see Meirovitz and Aran 2020) and the methodological chal-
lenges related to digital pedagogy. By investigating how digital technologies
can promote academic engagement in exploring new knowledge through
­research-based experiences, this chapter increases our understanding of
the consequences of using course formats which mix face-to-face learning
with digital means. It describes a blended marketing methodology course
that has proven useful for engaging a group of diverse master’s students
in research into international purchasing behaviours of ‘online consumers’.
We provide an example of how digital technologies improve the quality of
master’s courses and research projects by illustrating how students learn by
doing research. This chapter also highlights how digital transformation of
higher education has facilitated student learning and how courses can be
designed to take advantage of digital possibilities to integrate education and
research, in a higher education setting.
240 Todd Drennan et al.
23.2 Digitalisation of higher education
The integration of digital technologies into everyday life is captured by the
term digitalisation (Croon Fors 2012). The adoption of digitalisation has
radically transformed how individuals communicate and collaborate. In
this process, information technologies (IT) are understood as enabling the
digitisation of information to be shared easily among many people (Meyer,
Müller and Niemann 2018).
Recent research on digital instruction in higher education posits that in-
corporating technological applications promotes active learning, increases
learner engagement and fosters knowledge construction (Meirovitz and
Aran 2020; Seifert 2016). The illustrative case in this chapter was designed
based on these ideas, particularly the notion of constructive alignment, that
is, that higher education should build on activities allowing students to prac-
tice what they learn and, thereby, to construct their knowledge (Biggs 1996).
Awareness of the purpose of their learning activities allows the students
to play an active role in their education and take responsibility for their
learning. The teacher’s role is to be an expert in the field and design suitable
activities in an environment appropriate to the task, that is, to guide rather
than instruct the students (Biggs 2014). In marketing studies, many teach-
ing activities entail collaboration among students to facilitate constructive
alignment.
Digitalisation provides new and richer means of collaboration in aca-
demic institutions. Collaborative courses may combine digital technologies
(i.e., learning management systems, online educational materials) and com-
munication channels (i.e., email, social media) with face-to-face approaches
that require the consistent physical presence of both educators and students.
The master’s degree course ‘Business Research Methods’, a ten-week course,
was redesigned in 2015 as part of Mälardalen University’s International
Marketing Programme. The course director responsible for the course is an
active researcher with vast experience of pedagogical development. Every
year, around 40 students from 15 different countries, on average, participate
in the course. Many of the Swedish students who enrol on this course have
roots in other parts of the world and networks in these other countries.
During the course, group discussion forums on social media platforms
facilitate discussions among students and between students and educators,
to foster knowledge construction and facilitate discovery-based learning.
One of the course’s main aims is to facilitate student learning regarding
the possibilities offered by digitalisation for marketers. The course direc-
tor aims to develop students’ practical skills and encourages them to use
a combination of IT tools such as databases, learning platforms, instant
messaging services, video conferencing and social media channels. The stu-
dents collaborate in work groups of four people. Each of the groups system-
atically conducts a set of research-related tasks. They use digital databases
to identify research articles to formulate hypotheses linked to their research
questions. They share and process the information they find, using digital
 Integrating research in master’s programmes 241
discussion forums to create conceptual models. They search digitally to find
validated questions to construct the questionnaire. The digitally enabled
data collection process is a joint class effort, and the resulting data are used
to conduct the final analyses (using appropriate software).
The students carry out the practical work; the teacher ensures implemen-
tation of good research techniques and achievement of learning objectives.
The course relies on the use of digital technologies and builds on the digital
transformation of society in the spirit of constructive alignment. Thus, dig-
italisation increases learning (Meirovitz and Aran 2020; Seifert 2016) and is
integral to the course. In the succeeding sections, we discuss how digitalisa-
tion enhances learning, in more detail.

23.3 Digitalisation to promote learning

In many academic institutions, the impact of digitalisation is exemplified
by better access to and greater use of the Internet via laptops and smart-
phones, to provide quick and easy access to scholarly archives. It also allows
faster interpersonal communication (e.g., via email and social media; Seifert
2016). Digital communication enables access to the ‘real world’ (e.g., inter-
national target markets) and allows students’ to collect data more rapidly
and at a lower cost (Ilieva, Baron and Healey 2002).
The cultural diversity of the enrolment in this master’s course has pro-
vided the opportunity to investigate international online purchasing behav-
iour. The study of online consumer behaviour is complex because it covers
many different behaviours demonstrated by many different consumers
and requires an understanding of how digital environments are organised.
A small strand of work examines online consumer behaviour using technol-
ogy acceptance models or considering potential differences among consum-
ers from different cultures (e.g., Hwang and Jeong 2016; Wang et al. 2019).
However, academic studies of international online consumers are scarce
(e.g., see Lindh et al. 2020) even though marketing researchers often use on-
line surveys, which are able to reach a wide audience. Their administration
is also not constrained by their geographical location (Ilieva et al. 2002).
The topics studied on the master’s course have ranged, over the years, from
payment methods and related security issues to the importance of corporate
social responsibility.
The requirements for successful completion of the course include a certain
level of maturity, motivation and commitment to advancing their knowl-
edge by investigating their chosen marketing topic. The master’s track in the
Mälardalen University’s international marketing programme provides an
environment that facilitates the students’ learning. Most of the students are
knowledgeable about marketing and methodological issues, are dedicated
and reliable and can conduct an individual research project. An important
learning outcome is an increased understanding of the processes involved in
conducting quantitative research.
242 Todd Drennan et al.
23.4 Practical course organisation
Throughout the course, the students are provided with the required digital
solutions. Initial digital interaction begins before the course starts after stu-
dents have been enrolled; for example, required readings are available on
the university’s learning platform. The students then need to search for in-
formation on the main theme of online consumers’ international purchasing
behaviour. Digitalisation greatly reduces the time required for such search
compared to having to locate physical resources and reading full texts.
Online scholarly archives can be used to identify appropriate journals and
articles, which then can be searched using keywords and other techniques
(see Figure 23.1). The relevant peer-reviewed articles are used to develop
the students’ research questions, hypotheses and research models. In ad-
dition to delivering lectures and organising workshops, educators support
the hypotheses development stage by providing the student groups with
instruction and practical and theoretical guidance. Digitally enabled com-
munication tools, such as the university’s digital learning platform, benefits
both students and educators.
There is an allocation of one week for the students to scrutinise the
identified peer-reviewed articles once more and compile relevant, vali-
dated questionnaire items. In this stage, Internet is paramount since
it provides a multitude of relevant information sources. A workshop
is organised where the students present and discuss their projects and

Online Online
community scholarly
discussions resources

1) Theme 2) Validated
Development Questions

4) Test,
3) Combine
Revise, and
and Refine
Finalize

Online Online
questionnaire collaboration
tool tools

Figure 23.1 R
 epresentation of the effect of digitalisation on the questionnaire
construction process.
 Integrating research in master’s programmes 243
questionnaire items. There they can receive direct feedback and advice
from the educators.
In the next step, the questionnaire is tested, refined, revised and final-
ised, enabled by use of an online questionnaire tool (see Figure 23.1). Both
educators and students benefit from online testing of the questionnaire,
enabling efficient distribution, adjustment and updating or revision in
real-time prior to finalising the survey. Digitalisation allows this testing
process to extend beyond the classroom’s confines and allow collabora-
tion and rapid feedback. Previous research highlights digital communica-
tion and digital learning platforms’ facility to dissolve the boundaries to
time and place and extend the teaching–learning process beyond the class-
room through the sharing of content, rapid communication, active learn-
ing and collaborative work (Seifert 2016). The students’ participation in
this process gives them a better understanding and appreciation of the
amount and quality of the work involved in constructing an effective ded-
icated research questionnaire. Following final changes, the questionnaire
is finalised, and students are given a web link to allow its administration.
Figure 23.1 depicts the questionnaire construction process and how it is
facilitated by digitalisation.
Figure 23.1 shows that all the questionnaire construction stages are
greatly enhanced by digitalisation.

1. in stage 1, Theme Development, the students expand their own

knowledge and awareness by exploring relevant topics using multiple
online resources, including online community discussions, online news
sources and technological trends, and the discussion around them;
2. in stage 2, Validated Questions, the students develop their research
questions and hypotheses, using online scholarly resources to refine
them and to identify validated questions and measures;
3. in stage 3, Combine and Refine, construction of the questionnaire
is enabled by use of an online questionnaire tool, which expedites con-
struction, and enhanced administrative controls which include settings
for quotas or limits, and screening capabilities;
4. in stage 4, Test, Revise and Finalise, online collaboration tools,
which increase both efficiency of communication and accuracy
throughout the entire process, contribute to streamlining the question-
naire finalisation.

A combined lecture and group workshop is held before the students embark
on the data collection phase. This activity is designed to reiterate and dis-
cuss ethical concerns and procedures, in particular, in the context of using
the web link. It is imperative that the educators clearly define and students
adhere to ethical guidelines, during and after data collection and distribu-
tion of the questionnaire. This will strengthen validity, reliability and good
research practice.
244 Todd Drennan et al.
23.5 D
 igitalisation to facilitate administration of the
questionnaire
The means used to distribute the questionnaire have been enhanced by use
of the Internet and a survey link. The students contact the members of their
personal networks, via email and personal messages on social media, to dis-
tribute the link to the questionnaire. The students’ involvement in the entire
research process, from idea generation to data collection, means they are
involved in their own knowledge construction (see Seifert 2016), which in-
creases their enthusiasm for and engagement in the project. It has a positive
effect on their use of their personal networks to administer the survey more
widely. When administering it, they stress the need for honest and accurate
responses since this will affect the outcome of the project.
Initially, the students use convenience sampling to recruit participants,
based on their personal networks. To mitigate the limitations of conveni-
ence sampling, the students are instructed then to use the snowball sampling
method. They are also advised to request confirmation of completion so
that they can report response rates and to allow for targeted follow-ups.
The combination of convenience and snowball sampling has proven ef-
fective. Given the nature of convenience sampling, responses are sometimes
skewed to the age demographic profile matching the student distributing
the questionnaire. Educators demonstrate and discuss this limitation and
its implications with the students and set quotas to increase data from un-
derrepresented demographics. Setting quotas, routinely monitoring and
communicating results, and encouraging students to continue to contact
additional respondents represent strategic sampling, the third leg in the
sampling tripod. During data collection, educators actively monitor the
progress and spread and use the university’s learning platform to commu-
nicate with the students. This transparency and communication enable a
greater and more heterogeneous data set and a more effective combined
data-gathering effort.
The sampling method described above allows the students to access large
amounts of data that contribute to the knowledge and skills development in
the later stages of the course. The data collection method exemplifies how
societal digital transformation has positively affected higher education; the
students are able to use existing networks of contacts to collect responses
via social media platforms and via email.

23.6 Digitalisation related to analysis

The online survey tool includes restrictions to ensure the data cannot be
filtered to show individual answers to protect respondents’ privacy. Data
collection via the questionnaire is limited to two weeks due to the time con-
straints of the course. The sampling tripod has proven not to be a hindrance,
and the survey’s administration has resulted consistently in more than 700
 Integrating research in master’s programmes 245
completed questionnaires. After two weeks, the survey is no longer available
and the groups meet to analyse the data. While each group formulates its
own hypotheses and tests its own constructs, the collaborative environment
has been conducive to learning; everyone helps each other understand or
clarify interpretation of the data. This collaboration is particularly useful
since the international diversity of students in the course means that they
have significantly different backgrounds, experience and knowledge. By
working collaboratively, these differences become complementary and use-
ful. Since time is a limitation for the students, educators use digital tools
(email, social media) to provide support and instruction and answer ques-
tions. All these responses are available from any location. The educators’
use of the university’s learning platform increases the students’ independent
learning; educators are able to provide links to instructional videos on data
analysis.
Each group works on the data analysis and tests their hypotheses. It is
inevitable that some hypotheses are not supported, which leads to a group
discussion. Subsequently, the implications of the results are discussed in the
class and the groups are asked to propose potential reasons why some hy-
potheses are not supported. They discuss the potential for direct and indirect
effects of the variables, which suggest further and more complex analysis.
Finally, the groups have to produce a written report that discusses the
implications of the theory, the research process and their results. The course
evaluations show that students appreciate the learning-by-doing elements of
the course and find it increases their confidence both generally and in the
data derived from their questionnaire, on which their final report is based.
In some cases, students and educators have continued their collaboration
and co-authored research papers, based on the collected data (e.g., Anasta-
siadou, Lindh and Vasse 2019; Johnstone and Lindh 2017; Lindh and Lisich-
kova 2017). A few graduates continue their higher education and enrol for a
doctoral degree.

23.7 Concluding remarks

The digital transformation has brought about the need for educators to
make good use of digital tools for education (see Meirovitz and Aran 2020).
Our description of the process and underlying reasoning related to develop-
ing an accessible and affordable master’s level methodology course that inte-
grates education and research contributes to the ongoing discussion on how
the societal digital transformation is enabling new education activities and
teaching models and preparing students for a digitally transformed world.
The case in this chapter highlights the importance of a blended learning
approach to support complex learning processes. Although contemporary
university students can generally be described as digital natives (Prensky
2001), our illustrative case shows that some physical contact and presence
on campus is required to support complex tasks such as data collection and
246 Todd Drennan et al.
data analysis. Because this support is best provided face-to-face (e.g., edu-
cators can show students how to use statistical software programs to analyse
their data), course delivery by solely digital means will require more time
and more investment. This was demonstrated starkly in the autumn of 2020
when the Covid-19 pandemic meant that all teaching was conducted online
via digital meeting software for a period of two weeks. This coincided with
the construction of the survey; the time spent on constructing, discussing
and checking the survey was almost double that of the time previously allo-
cated. Also, the questionnaire was of lower quality, and the students found
it more difficult to recruit respondents. At the same time, the teaching team
found it harder to motivate students to focus on data collection. Thus, fol-
lowing this experience in 2020, it is clear that the course model is better
suited to a blended teaching approach than to a purely digital approach. We
can conclude that the digital transformation has opened up new possibili-
ties for learning but that it is not a replacement for already well-functioning
collaborative interaction processes.
Societal digital transformation has made digital processes a critical com-
ponent of most marketing activities and highlights marketers’ need to be
digitally competent. Digital marketing manager, social media manager,
e-commerce manager and big data analyst will be key job positions in the
future (Di Gregorio et al. 2019). As demand for people with digital skills in-
creases, especially in retail, the course used as the case study in this chapter
will become even more crucial to prepare students for real-life tasks in a
modern job market.

23.8 Takeaway
Digital transformation of higher education has facilitated student learning.
This chapter describes how a blended learning course can exploit the ad-
vantages offered by digitalisation. Higher education teachers often come
under pressure to (1) increase the digital aspects of master’s programmes
and (2) involve master’s students in research activity. The case in this chap-
ter shows that research ‘practice’, that is, learning based on constructive
alignment, can be implemented successfully using digital tools. Digital tools
allow students to accomplish more in a shorter time period and enable con-
ducting methodological and analytical practices more robustly. The course
examined in this chapter is an example of constructive alignment which,
increasingly, higher education institutions are implementing. More work is
needed to develop teaching models that prepare marketing students for jobs
requiring digital, analytical and technical skills.

Acknowledgement
One of the authors acknowledges financial support from the Torsten Söder-
berg Foundation [Project: ET2/18].
 Integrating research in master’s programmes 247
References
Anastasiadou, E., Lindh, C. and Vasse, T. 2019. Are consumers international? A
study of CSR, cross-border shopping, commitment and purchase intent among
online consumers. Journal of Global Marketing 32(4): 239–254.
Benavides, L.M.C., Tamayo Arias, J.A., Arango Serna, M.D., Branch Bedoya, J.W.
and Burgos, D. 2020. Digital transformation in higher education institutions: A
systematic literature review. Sensors 20(11): 3291.
Biggs, J. 1996. Enhancing teaching through constructive alignment. Higher Educa-
tion 32(3): 347–364.
Biggs, J. 2014. Constructive alignment in university teaching. HERDSA Review of
Higher Education 1(1): 5–22.
Croon Fors, A. 2012. The ontology of the subject in digitalization. In R. Luppicini
(ed.) Handbook of Research on Technoself: Identity in a Technological Society. Her-
shey, PA: IGI Global: 45–63.
Di Gregorio, A., Maggioni, I., Mauri, C. and Mazzucchelli, A. 2019. Employability
skills for future marketing professionals. European Management Journal 37(3):
251–258.
Gikas, J. and Grant, M.M. 2013. Mobile computing devices in higher education:
Student perspectives on learning with cellphones, smartphones and social media.
The Internet and Higher Education 19(1): 18–26.
Hrastinski, S. 2019. What do we mean by blended learning? TechTrends 63(5):
564–569.
Hwang, Y. and Jeong, J. 2016. Electronic commerce and online consumer behavior
research: A literature review. Information Development 32(3): 377–388.
Ilieva, J., Baron, S. and Healey, N.M. 2002. Online surveys in marketing research.
International Journal of Market Research 44(3): 1–14.
Johnstone, L. and Lindh, C. 2017. The sustainability-age dilemma: A theory of (un)
planned behaviour via influencers. Journal of Consumer Behaviour 17(1): 127–139.
Kemp, N. and Grieve, R. 2014. Face-to-face or face-to-screen? Undergraduates’
opinions and test performance in classroom vs. online learning. Frontiers in Psy-
chology 5(1): 1278–1289.
Kireev, B., Zhundibayeva, A. and Aktanova, A. 2019. Distance learning in higher
education institutions: Results of an experiment. Journal of Social Studies Educa-
tion Research 10(3): 387–403.
Lindh, C. and Lisichkova, N. 2017. Rationality versus emotionality among online
shoppers: The mediating role of experts as enhancing influencer effect on pur-
chasing intent. Journal of Customer Behaviour 16(4): 333–351.
Lindh, C., Rovira Nordman, E., Melén, S., Safari, A. and Hadjikhani, A. 2020. Dig-
italization and international online sales: Antecedents of purchase intent. Journal
of International Consumer Marketing 32(3): 1–12.
Meirovitz, T. and Aran, S.S. 2020. An investigation of digital thinking skills in EFL
digital instruction. Interdisciplinary Journal of e-Skills and Lifelong Learning
16(1): 19–41.
Meyer, M., Müller, T. and Niemann, A. 2018. Digitalization in higher education:
From the anonymous mass to personalized and individual learning relationships.
http://getthefun.de/dokumente/Paper_THM.pdf.
Noble, D.F. 1998. Digital diploma mills: The automation of higher education. Sci-
ence as Culture 7(3): 355–368.
248 Todd Drennan et al.
Prensky, M. 2001. Digital natives, digital immigrants Part 1. On the Horizon 9(5):
1–6.
Seifert, T. 2016. Involvement, collaboration and engagement: Social networks
through a pedagogical lens. Journal of Learning Design 9(2): 31–45.
Senn, G.J. 2008. Comparison of face-to-face and hybrid delivery of a course that
requires technology skills development. Journal of Information Technology Edu-
cation 7(1): 267–283.
Ugur, N.G. 2020. Digitalization in higher education: A qualitative approach. Inter-
national Journal of Technology in Education and Science 4(1): 18–25.
Wang, Y., Wang, Z., Zhang, D. and Zhang, R. 2019. Discovering cultural differences
in online consumer product reviews. Journal of Electronic Commerce Research
20(3): 169–183.
Weigel, V.B. 2002. Deep Learning for a Digital Age: Technology’s Untapped Potential
to Enrich Higher Education. San Francisco, CA: Jossey-Bass.
Index

Note: Bold page numbers refer to tables and italic page numbers refer to figures.

Accenture 178 AstraZeneca 36; Bio Venture Hub 115

accountability 4; audience of Atari Inc. 55; arcade machines 56; Atari
stakeholders 121; context of external 7800 56
reporting 120–121; criticisms 121–122;
lack of 126; traditional accounting Baccarini, D. 99
126–127; and transparency, Baccman, C. 4, 81, 83
relationship between 121–122 Backhouse, J. 177
accounting: conceptualising 131–133; Bagozzi, R. 220
profession 131–133; research in Bain & Company 176, 178
133–135 Bayrak, T. 177, 178
Acquier, A. 109 Begel, A. 100
Aditro Logistics: internal validation Belk, R. 189, 190, 192
practices 154–155; management Beric, I. 100
adhocracy 155–156; revolutionary big data 1, 14, 38, 44, 153, 177,
reconfiguration of HRM practices 178, 246
153–154 Birkinshaw, J. 141
agile project management 93, 96–97; Blanchette, S. 134
Making detailed plans only for the next Blizzard Entertainment 58
events 96; priorities 96; stages in 97 Boehm, B. 97
Aitken-Fischer, M. 141 Boston Consulting Group 176, 178
Aldrich, H. E. 197 boundary-spanning in MNCs: ‘actor-
Al Eisawi, D. 177 oriented firm’ 198; common view
Aman, A. 134, 135 of 198; decontextualisation of
Amazon 23, 59, 114 information 199, 201–202, 203;
ambidexterity 139; contextual demotivation to contribute 202,
ambidexterity 139, 145; employee 139; 203; digitalisation 199; digital
structural ambidexterity 139 solutions 200; information overload
ambidextrous leadership 139; employee- 198, 201, 202–203; information
driven innovation (EDI) 140–141; processing 200; loss of autonomy 199;
exploitation and exploration 140; managerial implications 203; in post-
transformational and transactional digitalised 5, 197–200; representation
leadership 141 199; responsibility 199; scope of
Amit, R. 54 195–196
Appelbaum, S. H. 100, 101 Boyle, M. 186; The Way Home: Tales
Apple 30 from a Life without Technology 185
arcade machines 55–56 Brundtland Report 45
Artificial Intelligence (AI) 23, 129, 175, business analytics (BA): analytics at
178; emergence of 34; use of 43 expense of 181–182; definitions
250 Index
176–178; future for 182; origins of contextual settings 84; implementation
178–179; trends in use of 179 process 84; individual characteristics
business intelligence (BI): analytics 84; inner settings 83; innovation
at expense of 181–182; data-driven characteristics 83
decision-making 178; definitions Cooper, L. 134
176–178; trends in use of 179 Cooper, R. G. 97
Business Intelligence for Dummies Covid-19 pandemic: data, analytics and
(Scheps) 180 AI 175; digitalised communication
business logic fit: broken value-chain 203; digital transformation 9; online
36–38; non-generic company structure teaching 246; organisation’s role
36; structural efficiency 38 18; remote working and distributed
business model innovations 54; operations 9; risk 16–17; trust 17;
complementarity 54; defined 54; value 17
digital transformation period 53, Cramer, F. 187, 189, 190, 192
57–58, 60–61; efficiency 54; fight customer relationship management 34
against piracy 57; lock-in 54; customer self-service 34
novelty 54; post-digital period 53, cyberspace 180
58–59, 60–61; pre-digital period 53,
55–56, 60–61; and technological dashboards 161, 177
advancements 60–61; in video games decision-support systems (DSS) 177
industry 54–59 DeFine Licht, J. 121
business network theory 41 Deloitte Global RPA survey 129
business process reengineering 1, 33 digital assistive technology (DAT)
business-relationship triad framework, 4; adoption and implementation
IS outsourcing: coalition IS 83–84; challenges to 84–88; complex
outsourcing 222, 223, 224, 226; innovation characteristics 84–85;
group-like triad 222–223, 223, 226; digital solutions 81; e-health
hub-driven strategic network 222, 223, applications 84; in elderly care
224, 226; set-of-connected-actors 222, 83; external policy and incentives
223, 223, 226 85–86; fear 83; implementation of
83–84; influence on existing work
Carlile, P. R. 163 practices 83; in municipal healthcare
Carr, N. 1, 34 81–82; Nordic context (cases) 82;
Cascone, K. 186, 187 organisational characteristics 86–87;
Chen, H. 177 research on 81; role of actor groups
Chief Analytics Officer (CAO) 182 84; Scandinavian or Nordic Model 82;
Chief Information Officer (CIO) 182 surveillance cameras and e-commerce
classic Taylorism 64; performance of solutions 82; Technology Acceptance
work tasks 65; robotic execution of Model 83
tasks 65; third-order technologies 66; digital dilemmas: digital maturity of
time-and-motion studies 65; organisations 14–15; emphasis on
work-design approach 65 sustainability 15; organisational and
Claybaugh, C. C. 219 cultural inhibitors, importance of 15
cloud-based technologies 13, 23, 34, digital disruption 8, 11, 15
60–61 digital gamification: emerging
coalition business-relationship triad 222, managerial practices 152; gamification
223, 224 150–151; of HRM function; mastering
Committee of Sponsoring Organisations management practices 156–157; of
of the Treadway Commission organisational functions 5
(COSO) 159 digitalisation 44–45; adoption of 34–35,
computer gaming industry 60 46; change, evidence of 2; Covid-
Consolidated Framework for 19 pandemic 2; defined 1, 93; and
Implementation Research (CFIR) 83; digitisation, distinguish between
 Index 251
1–2; evidence of 2; to facilitate relationships 24, 29–30, 31; transition
administration of questionnaire 244; towards 25–, 29–30, 31
future research opportunities 48; digital Taylorism 69
of higher education 239; industry digital technologies: connecting multiple
(see industry digitalisation); micro- stakeholders 16; development of
transactions 53; to promote learning 228; driving operational efficiencies
241; reasons for lagging behind 34–35; 16; emergence of 15; increasing
related to analysis 244–245; sales of transparency 16; introduction of
digital goods 53; step-by-step guide 17–18; position of worker 66–67;
for managers 49–50; subscription Robot Process Automation 66;
services 53; for sustainability 46–48; role of manager 67–68; third-order
technological developments 39–41; automation technology 66; use of
transparency and accountability 45; 14, 16
waves of 33–35 digital transformation 2–3; alignment
digitalisation inertia, phenomenon of 33 between technology-led pressures
digital natives 238 18; beyond digital products and
digital platforms 10, 23, 29–31, 44, 46, services 15–16; Building Back
57, 105, 109, 144, 146, 187 Better 9; challenges 12–16; Covid-19
digital product innovation 4; pandemic 16–17; definitions 10–11;
architectural composition 112; digital dilemmas 14–15; digital
boundary-spanning practices 107; technologies, use of 14; focus 11;
cooperation and competition forces innovators dilemma 8; internal
108; core and complementary assets embeddedness 212–213; LEOs,
114; demand-side economies of scope challenges 10, 12–14; management
108–109; design and development 107; and information technology 1–3;
digital innovation 107–109; distributed McKinsey’s global survey 10; mind-set
value creation 108; dominant design, 11; opportunities 10; organisational
concept of 106–107; dual face of change activities 9, 18; post-pandemic
106–109; functional decomposition vs. world, organisation’s role in 18;
self-organisation 110–111; horizontal practices and business-led pressures
diversification, capability for 114–115; 18; product and service delivery,
incremental innovation 106; market alignment between 14; strategy 11;
dynamics 111–112; modular vs. technology and business model
layered 112; open-ended design, innovation, relationship between
capability for 115–116; organising 13–14; understanding 10–12
logic 110–111; paradoxical tensions digitisation 8; customer-centric 24;
in 109–112, 110; platform-centric described 44; and digital delivery 16;
ecosystems 109; product-developing and digitalisation, distinguish between
organisations 107; product innovation 1–2, 44
106–107; self-organising exploration, DirectX technology 57
capability for 113–114; supply-side Disney 59
economies of scale vs. demand-side dominant design, concept of 106
economies of scope 111–112; variation
and uncertainty 108 eBay 119
digital revolution 44, 152, 186 e-book 46
digital servitization 3; customer insights electromechanical game machines 55
25; going digital 23; internal and electronic waste (e-waste) 46
external resistance 25–26; new forms employee-driven innovation (EDI)
of collaboration 29; the new oil 24; 4–5; ambidextrous leadership 5, 139,
remote monitoring 29; resource 140–141; exploitation and exploration
integration 30; service ecosystem 139; idea management systems 138;
perspective 3, 26–29; services free of illustrative case 141–142; Information
charge 24; strong and weak business and communication technology
252 Index
138; non-managerial and non-R&D Galloway, S. 16
employees 138–139; phenomenon gambling industry 55
of employee innovation 140; gaming industry 4, 59–60; digital
pro-innovation bias 140; traditional (see digital gamification); video
innovation literature 139–140 (see video games industry)
Enterprise Resource Planning (ERP) Gjellebak, C. 83
systems 33, 34 Glomsas, H. S. 81
enterprise risk management (ERM) going green phenomenon 45
5; Committee of Sponsoring Google 33, 59, 192; Scholar 133, 133,
Organisations of the Treadway 178; Stadia 58; Trends 133, 179–180
Commission 159–160; computational green lease 47
dimension 167–168; decision- Gressgard, L. J. 140
support technologies 160–161; and grey media 188
digitalisation 159–162; domain- group-like business-relationship triad
specific knowledge 164; information 222–223
and knowledge sharing, challenges to A Guide to the Project Management Body
164–167; interpretational dimension of Knowledge (PMBOK Guide) 93;
168–169; knowledge integration traditional project management 93,
165–166; managing boundaries 94–95, 96
166–167; political dimension 169–170;
quantitative enthusiasm 168; Hammer, M. 1
risk-informed decision-making 163, Harris, B. 54
164; risk management 161–162; risk Harvard Business Review 1, 34
quantification and control 165; science Havila, V. 218, 221, 225
and values, tension between 162–164; Hayes, S. 192
technical and social approaches HBO 59
165–166; technologies, boundaries Herker, D. 197
and dimensions 162, 162; value-based higher education: active learning 240;
stages of decision-making 163 blended learning 239; collaborative
Epic’s Fortnite Battle Royale see Fortnite courses 240; digital databases
Excel 129 240–241; digitalisation of 240–241;
external reporting: accountability 4, group discussion forums 240; new
120–122, 126–127; ad hoc organising digital technologies 239; real-life
119; from historical to forward- face-to-face learning 239
looking 124–125; from holistic Hobbs, B. 100
to fragmented 123–124; internal Hodgkinson, I. R 141
collaboration 119; marketing 119; Hofmann, P. 134
from periodic to continuous 123; Holma, A. 218, 221, 225
quantitative implications 119; social Holsapple, C. 177
media 122–127; transparency 4, Hoyrup, S. 140
120–122, 125 Huang, F. 134
eXtreme Programming 93 hub-driven-strategic-network business-
EY 176, 178 relationship triad 222, 223, 224
Humayun, M. 189, 190, 192
Facebook 33, 119, 123, 192 hybrid methods 97
Feldman, M. S. 122 hybrid project management: complexity
Fernandez, D. 134, 135 and uncertainty 98, 99; hybrid
first-order technologies 64 methods 97; product development
Fitzgerald, B. 98 performance 98; scaling up 98; use of
5G technology 11, 14, 58 agile and traditional approaches
Floridi, L. 64, 69 97–98
Fortnite 58 hyper-Taylorism 4; digital Taylorism 69;
freemium 58 and its consequences 68–70; sharing
free-to-play model 58 economy 63; technology-enhanced
Frey, C.B. 130, 132, 135 Taylorism 69
 Index 253
idea management system (IMS) 138; large established organisations (LEOs) 8,
adoption of 145–146; importance 10, 12–14
of 144–145; integration of 142; use Lean Six Sigma 180
of 143 Lensges, M. L. 98
IEEE Computer 100 Leonardi, P. M. 122
immature suppliers 39 Lindenfalk, B. 75
Imre, O. 75 Lycett, M. 177
Industry 4.0 23
industry digitalisation 3; barriers 35, 35; Malardalen University 238
complex market 38–39; poor business management and information
logic fit 35, 36–38; real estate industry 36 technology: framing digitalisation
industry-wide delayed digitalisation, 5–6; managerial and organisational
phenomenon of 33 challenges 4–5; perspectives on 1–3;
information and communication transformation of society and
technology (ICT) 138 markets 3–4
information system (IS) outsourcing management/profession divide 5;
5; business-relationship triad (see digitalisation in Swedish school
business-relationship triad framework, context 230–232; professional use
IS outsourcing); complex exchange of red–green matrix (see red–green
220–221; customer, supplier (RG) matrix); technology-enforced
and IS provider 218; degree of differences 235–236; using information
internal cohesiveness 221–222; and technology 229–230
digitalisation in business relationships managers: digital gamification 152;
219–220, 226; managerial implications digital marketing manager 246;
224–225; restricted exchange 220; e-commerce manager 246; information
service-level agreements 218; strategic system outsourcing 224–225;
decisions 217–218; third actor multinational corporation 203;
217–218, 220–221, 225; three actors’ multinational enterprise 214; red-
relationships or triads 221 green matrix 234–235; role in digital
information technology (IT) 1; cloud- technologies 67–68; social media
hosted services 8; expenditure 34; manager 246; step-by-step guide for
interaction capabilities 208; managerial 49–50; subsidiary 211–212; value
logic 229; professional logic 229; creation strategy 50
transformative effects on industries 33 March, J. G. 122, 140
infrastructure as a service 34 market complexity: end-user
In Real Life (IRL) 238 characteristics 39; legacy
Instagram 33, 61 infrastructure 38; standardised
institutional theory 41 software 38–39
international business (IB) 206 Mashingaidze, K. 177
Internet of Things (IoT) 34, 44, 105 massive open online courses (MOOCs) 2
master’s programmes 5–6; higher
Jandri, P. 192 education, digitalisation of (see higher
Jovanovic, P. 100 education); learning, digitalisation
to promote 241; practical course
knowledge management 88, 123, 152, organisation 242, 242–243;
162–164, 177 questionnaire construction process
Kodak 30, 219 242, 242–243, 244
Kokina, J. 134 McKinsey & Co 176, 178
Konning, M. 225 McNeil, S. 54
KPMG 178 Microsoft 59, 192; Game Pass in 2017
Kytomaki, O. 36 58, 59; Windows 95 operating system
57; xCloud 58, 59; ZeniMax Media 59
Lacity, M. C. 134 modern project management 4; agile
LAN (Local Area Network): emergence leadership behaviours 101; agile
of 57; shared gaming 57 project management 96–97; factors
254 Index
favouring different approaches 102, de Oliveira, M. A. 101
103; hybrid project management Olszak, C. M. 177
97–99; level of complexity 99; one-game-systems 56
obstacles to agility 100; plan-and- operators 66
control-driven methods 93, 103; ordinary employees 138
project characteristics 99–100; project Orlikowski, W. J. 64
scope 100; skills and leadership 100– Osborne, M. A. 130, 132, 135
101; stakeholders and customers 102,
103; traditional project management Petit, Y. 100
93, 96; transformational leadership pinball machines 55
style 101 platform as a service 34
multilevel perspective 41 PMBOK Guide see A Guide to the
multinational corporation (MNC): Project Management Body of
decontextualisation 201–202; Knowledge (PMBOK Guide)
demotivation to contribute 202; post-digital condition 186; adoption of
external and internal boundaries alternative or outdated technologies
195, 196–197; future research 202; 188; Apollo 11 186; defined 187;
information filtering 197; information digital and analogue imperfection 187;
overload 201–203; losing context grey media 188; latest digital devices
203; managerial implications 203; 187–188; /r/nosurf, post-digital online
role of boundary-spanners in community 188–192; societal turn
post-digitalised (see boundary- 186–187
spanning in MNCs); running out of Poulikakos, A. 131
motivation 203 Power, D. J. 177, 180
multinational enterprise (MNEs): The Principles of Hyper-Taylorism
complexity for subsidiary manager in the post-digital era 65 Scientific
214; context of international business Management (Taylor) 64–65
206; embeddedness on subsidiary Protiviti RPA survey 129
influence 207; entrepreneurialism
206; Headquarters 206, 208, 209; Raisch, S. 141
high-tech and high-touch dimensions Ravishankar, M. N. 141
of digitalisation 207–208; high- R&D 36, 115
touch digitalisation 214; internal real estate industry: commercial real
embeddedness, context of digital estate 33–41; complex market (see
transformation 212–213, 213; market complexity); digitalisation
strategy and performance 207; and sustainability 40; green leases
subsidiary internal embeddedness 40; lower-cost changes 40; poor
208–212 business logic fit (see business
logic fit); technological developments
Nagappan, N. 100 39–40
Negroponte, N. 186 Reddit 188
Netflix 53, 59, 61 red–green (RG) matrix 229; example of
Netflix-for-gaming 58 232, 233; ignoring matrix 233–234;
Newman, M. 54 marking all pupils green 233; sealing
new seniors 73; function of spaces off communication flows 232–233;
77–78; housing (see senior housing); using to strengthen influence over
quality of life and well-being 73, 74; managers 234–235
Swedish population 73; technical Reengineering Work see Hammer, M.
functions 74 Resource Man 39
Nintendo 55, 56; The Legend of Zelda The Revenge of Analog (Sax) 187
56; Nintendo Entertainment System Riesener, M. 98
56; Super Mario 56; video games /r/nosurf, post-digital online community:
consoles 56 analogue/offline devices 190; benefits
 Index 255
of digitalisation 192; black-boxing of formal and informal constraints 27;
digital technologies 191; deletion incumbent inertia 28; institution,
of Reddit account 191; digital role of 27; long-standing business
disengagement 192; dopamine fasting relationships 28; newer business
189; face-to-face interactions 189; relationships 28; resource integrations
motto stop spending life on the net 27–29; service offering 26
188–189; post-digital handwriting Service Games Enterprises see SEGA
190; promoting neo-luddism 192–193; set-of-connected-actors business-
regaining agency 189; rejection relationship triad 222, 223, 223
of digital 192; slow technology Sklyar, A. 30
movement 190–191; use of physical smartphones 115
objects 189–190 social media 44, 122–127; from historical
robotic process automation (RPA) 4; to forward-looking 124–125; from
academic community and society 133; holistic to fragmented 123–124;
accounting profession’s extinction from periodic to continuous 123;
prophecy 4, 129–131, 135; accounting platforms 33; for transparency and
tasks 131–132, 132; conceptualising accountability 122–123
accounting and accounting profession software as a service 34
131–133; impact of 130; non- Sommer, A. F. 97, 98
standardised tasks 131; opportunities Sony 56, 59; PlayStation 56
for 134; perceptions of occupations space: age optimisation 77–78;
130, 130; positive or negative co-creation process 75, 76–77, 78,
influences 134; related research in 79; digital services 78, 79; facilities
accounting 134–135; repetitive tasks management 78; housing environment
135; semi-standardised tasks 131, 132; 73–74 (see also senior housing);
standardised tasks 131, 132, 135 resource integration 79; social
robotics 43, 44 interaction 78
Ross, J. 85 Spotify 53, 61
Srite, M. 219
Samsung 58 Steam 57
Sax, D.: The Revenge of Analog 187 Strahringer, S. 225
Scheps, S.: Business Intelligence for streaming games: cloud technology 58
Dummies 180 Strengers, Y. 39
scientific management 180 subreddits 188
Scott, S. V. 64 subsidiary internal embeddedness:
Scrum 93 activity portfolio and its influence
Sears 55 209–211, 210; dependent production
Sears Tele-Games 55 subsidiaries 209; informal relations
second-order technologies 64 211; interdependent and integrated
SEGA 55; Mega Drive console and subsidiaries 209; internal and external
games 56; Saturn 56; Sega Master embeddedness 208–209; isolated
System 56 subsidiaries 209; position of 209;
senior housing: co-creation of services relational dimensions 211–212;
75, 76–77; digital services 74–75, structural dimension 209; subsidiary
76; housing environment 73–74; managers 211–212
new seniors 73; service delivery 4, sustainability 3–4; beneficiaries 48; of
72, 76–77; service innovation 4, 72, business approaches 15; challenges 47;
76–77; spaces and places 73–74; value climate change and service exclusion
creation 76; and well-being 73–74 43; digitalisation for 46–48; electronic
service ecosystem perspective 41; waste (e-waste) 46; of environment
benefits of 26; boundary-spanning 15; firm’s core activities 50; levels of
activities 27; core rigidities 28; defined 45; of people 15; resource-demanding
27; digital servitization 3, 26–29; and time-consuming 47; technological
256 Index
development 48; triple-bottom line 43; triads, concept of 221
value co-creation perspective 48; value Trieu, V. H. 176
propositions 47 TripAdvisor 119
Swedish National School Act 231 Turner, R. 97
Swedish school context: digitalisation
in 230–232; red–green matrix UK BREEAM (Building Research
231–232; TechSchool, SubUrb and Establishment Environmental
CityCentre 231 Assessment Method) 37
Syed, R. 129 UK Digital Economy Bill 13
UK General Data Protection Regulation
Taylor, F. W. 64, 65, 66, 69; The 17
Principles of Hyper-Taylorism in United Nations (UN) 45
the post-digital era 65 Scientific US LEED (Leadership in Energy and
Management 64–65 Environmental Design) 37
Taylorism 63; see also classic Taylorism;
hyper-Taylorism Valve 57
technological and business model Vasarhelyi, M. A. 134
innovations, relationship between 4 Vedel, M. 218, 221, 225
Technology Acceptance Model video games industry 4; digital
(TAM) 83 transformation period 57–58, 60–61;
Tencent 59 post-digital transformation period
third-order technologies 4; Classic 58–59, 60–61; pre-digital period
Taylorism 64–66; described 63; 55–56, 60–61
post-digital era and algorithms
64; Taylorist logic 64; third-order Wahlstrom, G. 165
automation technology 66–67; see also The Way Home: Tales from a Life
hyper-Taylorism without Technology (Boyle) 185
Thoreau, H. D. 185, 186, 193 Web of Science 133
3D printing 105 Westner, M. 225
traditional project management: Wickberg, A. 190
PMBOK Guide 93, 94–95, 96 Willcocks, L. P. 134
transparency 4, 120–122, 125; and Wired magazine 186
accountability, relationship between World Commission on Environment and
121–122; continuous accounting Development 45
125; creation of 120; criticisms 122; World of Warcraft 58
fragmented accounts 125; informal
and emotional accounts 125; xCloud 58, 59
qualities of mobility, stability and
combinability 120; raw and refined Zimmermann, A. 141
transparency 121; social media 125 Zott, C. 54