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Accelerating Digitalization Powers Organizational Evolution

Jun 10-2022   



Management has arrived at its fifth stage as a result of digitalization, and organizations must embed itself in a value network through extensive connections, said Prof. Chen Chunhua, Dean of BiMBA, in the recent MBA Forum of the NSD.

 

As digitalization speeds up, enterprises are seeing dramatic changes to management, strategy, and business. Shifting industry boundaries means that companies need to transcend industries for survival and growth, said Prof. Chen. Applying digital technology to reach and serve customers, a company can create values for them through all activities, as compared to Michael Porter’s categorization of value creating and non-value creating activities. Even more meaningful is that linkages across industry boundaries also drive value creation.

 

What should enterprises care most about in the digital age? Prof. Chen cited Satya Nadella, Microsoft President, who boiled it down to two major points: first, every organization and industry are potential partners, which is different from the Industrial Age’s focus on competitors and rivals; two, enormous attention must be paid to privacy, safety, and free speech, for extensive connections are exerting profound impacts on these areas. Consequently, companies are adopting new development modes that can be summed up as ‘inclusive growth’, or ‘symbiosis’ by Prof. Chen.

 

The accelerating digitalization requires organizations to undertake ten adjustments, said Prof. Chen. In terms of organizational strategy, more space for value creation can be unlocked through building digital business structure, digital organizational structure, and digital ecosystem structure. As of the pattern of organization, digital penetration enables all parts of the organization to be customer-facing and thus organizational structures are evolving to be ever more flexible and responsive. In addition, when it comes to organizational management, the rise of individuals and the increasing use of robots call for what Prof. Chen terms ‘activating-empowering’ management. She also dissects the shifting roles and responsibilities of managers and employees as well digital ways of working.

 

From scientific management to symbiotic organizations, organizational management has traversed five phases. Prof. Chen believed it will continue to forge ahead. The best way to predict the future, she cited Peter Drucker, is to create it.

 

Accelerating Digitalization Powers Organizational Evolution

Jun 10-2022   



Management has arrived at its fifth stage as a result of digitalization, and organizations must embed itself in a value network through extensive connections, said Prof. Chen Chunhua, Dean of BiMBA, in the recent MBA Forum of the NSD.

 

As digitalization speeds up, enterprises are seeing dramatic changes to management, strategy, and business. Shifting industry boundaries means that companies need to transcend industries for survival and growth, said Prof. Chen. Applying digital technology to reach and serve customers, a company can create values for them through all activities, as compared to Michael Porter’s categorization of value creating and non-value creating activities. Even more meaningful is that linkages across industry boundaries also drive value creation.

 

What should enterprises care most about in the digital age? Prof. Chen cited Satya Nadella, Microsoft President, who boiled it down to two major points: first, every organization and industry are potential partners, which is different from the Industrial Age’s focus on competitors and rivals; two, enormous attention must be paid to privacy, safety, and free speech, for extensive connections are exerting profound impacts on these areas. Consequently, companies are adopting new development modes that can be summed up as ‘inclusive growth’, or ‘symbiosis’ by Prof. Chen.

 

The accelerating digitalization requires organizations to undertake ten adjustments, said Prof. Chen. In terms of organizational strategy, more space for value creation can be unlocked through building digital business structure, digital organizational structure, and digital ecosystem structure. As of the pattern of organization, digital penetration enables all parts of the organization to be customer-facing and thus organizational structures are evolving to be ever more flexible and responsive. In addition, when it comes to organizational management, the rise of individuals and the increasing use of robots call for what Prof. Chen terms ‘activating-empowering’ management. She also dissects the shifting roles and responsibilities of managers and employees as well digital ways of working.

 

From scientific management to symbiotic organizations, organizational management has traversed five phases. Prof. Chen believed it will continue to forge ahead. The best way to predict the future, she cited Peter Drucker, is to create it.