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

Volberda, H. W., Khanagha, S., Baden-Fuller, C. ORCID: 0000-0002-0230-1144 , Mihalache, O. R. & Birkinshaw, J. (2021). Strategizing in a digital world: Overcoming cognitive barriers, reconfiguring routines and introducing new organizational forms. Long Range Planning, 54(5), 102110. doi: 10.1016/j.lrp.2021.102110


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

Publication Type: Article
Additional Information: © 2021. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Publisher Keywords: Digital transformation, Digital technologies, Platforms, Business models, Cognitive frames, Routines, New organizational forms
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce
Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Departments: Bayes Business School > Management
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This document is not freely accessible until 15 May 2023 due to copyright restrictions.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

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