Digital transformation as expanding strategy and structure

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School of Science | Doctoral thesis (monograph) | Defence date: 2019-08-16
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Aalto University publication series DOCTORAL DISSERTATIONS, 138/2019
The thesis compares digitalization to industrialization as a technology-driven transformation with new strategies and structures. The theoretical foundation is expressed as first principles: (1) The industrialization as the interplay of strategy and structure with the transformative role of technology, as chronicled by Chandler, (2) the expansion of strategies and structures with new options, and (3) the fractal system theory as the operationalization of Schumpeter's views on dynamics, leadership and nested levels, such as ecosystem, industry, market and corporation. This theoretical foundation links the digitalization to the rich industrial era epistemology and leads to the initial research question: How does digitalization change strategy and structure – not only in theoretical and general terms, but the practical core concepts and methods? To scope the research question, the thesis has three objectives: (1) To construct a set of frameworks for leading the digital transformation; (2) to apply and test these frameworks for the transformation of the mobile communications industry into the mobile Internet ecosystem, through a retrospective case study; and using the case study as an experiment, (3) to evaluate the case, the frameworks and their theoretical foundation as well as to synthesize the scientific contribution with managerial implications. The initial research question entails a boundary spanning agenda to fill gaps in the research on digitalization, in theoretical knowledge, especially between classic and new strategies and structures, but also between theory and practice, and digitalization and ICT management.The theoretical foundation is operationalized by triangulated frameworks. The transformation cycle (circle) describes or prescribes decisionmaking paths. The alignment matrix (square) is a portfolio of strategies and structures. The system-theoretical kite strategy map allows to describe issues and movements fractally and holistically. These frameworks link the literature on digitalization to classic corporate, network and industry strategies, structures, systems and planning. As to the testing of the frameworks, the firsthand information sources are mobile world congresses from 2001 to 2015. The global industry analysis is complemented by zooming in to the Finnish manifold lead market, out to the global ICT industry, and to the then-leading company Nokia. The key observation is the missing Internet insight with classic-biased strategies and structures, leaving emergent business options for adjacents and startups. Scientific contributions are presented as answers to the initial research question and as building blocks for a mid-range theory on digitalization. The theoretical foundation is reframed with a discussion on the "hard" and "soft" elements of digitalization. Managerial implications are discussed including the digital transformation as Internet of Everything during The Roaring 2020s.
Supervising professor
Smeds, Riitta, Prof., Aalto University, Department of Industrial Engineering and Management, Finland
Thesis advisor
Vepsäläinen, Ari, Prof., Aalto University, Department of Information and Service Management, Finland
digital transformation, strategy, structure, mobile Internet ecosystem
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