MSc Management Leading through Digital Disruption Sample Assignment
The increase in digitization has also raised the possibility of digital disruptions thereby making it important for organizations to be prepared for such kinds of problems to arise.
Digital disruption can be defined as a procedure that causes changes in the expectations in the market along with changes observed in the behavior of the industry as a whole. These kinds of changes are highlighted through the online digital “assets” or channels” thus affecting the normal flow of things, as seen in IKEA.
The following section will highlight the challenges associated with this concept and the way leaders can play a role in mitigating it.
2. Task 1: The case for change
2.1 Causes of Digital Disruption
The 21st century saw the start of digitization which helped in making the operations easier, however, it also brought with it the issue of digital disruption whenever there was a technological change happening. Disruption usually starts when new technology or digital-based “business models” are implemented causing a huge change to the already existing process. In the case of IKEA, the company faced a lot of issues when it changed its systems to online and hence created lags in the system.
As opined by Templeton et al. (2019, p.35), such processes take a lot of time to master and thus cause the employees to lose their efficiency every time a change occurs. However, with increasing globalization, organizations face the threat of going out of business if it fails to implement these measures of modern technology.
Despite the threat of digital disruption, it should also be noted in this case that change is needed for the growth of the organizations. In the long run, the changes implemented through the use of modern technology helps in streamlining the processes of the organizations and ensuring the increase in productivity and growth of the organization as a whole.
2.2 Key opportunities and Challenges
Digital disruptions help both in developing opportunities for business organizations and creating obstacles. The leaders have a significant role to play when it comes to managing both of these aspects. As seen in the case of IKEA, the managers were the pillars when it came to reforming the employees to ensure that the digital disruption could be managed.
The major opportunities that arose were bringing about a “radical” change to the company, making it more enabled in the digital context (Bughin, 2017, Pp.5-8).http://MSc Management Leading through Digital Disruption Sample Assignment This was important because with more people being hooked to social media platforms this change will help in reaching a wide set of consumers.
Similarly, digitization has helped in reaching consumers easily making it easier to solve customer issues and keep them satisfied. The leaders are required to interpret the opportunities presented themselves and integrate them within the organization.
The challenge that arises when managing digital disruption is that it is merely not “enough” in sensing any kind of disruption happening. IKEA faced a lot of issues when it was operating its online website and integrating AI systems.
Thus, the challenge lies in whether organizations can interpret the change happening. It is also very difficult to understand the different types of data that are available and find ways to “monetize” it thereby leading to disruption.
There is also the challenge of maintaining an efficient team that is skillful and can easily detect any kind of disruption happening (Ho et al. 2018, pp.352-371). http://MSc Management Leading through Digital Disruption Sample AssignmentThe role of the leaders, in this case, is to ensure that all the workers are adequately trained in understanding digital data which would help in detecting it before time and mitigating the issues.
3. Task 2: Gaining Digital Business Agility
3.1 Sensing change and taking informed decisions
Organizations need to make an informed decision before investing in new technologies. Hence, managers and leaders need to sense when a change is happening. The best way to sense change is by undertaking market research which will help in providing the necessary details about what kind of technologies are present in the market.
As opined by Stonehouse et al. (2020, pp. 1-6), once the technologies have been highlighted, the next step is to undertake research within the organizational systems and find whether the chosen technology is compatible with the organization and its products. It is only after the compatibility is assessed that technology should be implemented in the organization.
IKEA undertook a similar strategy before it acquired and implemented Artificial Intelligence, and Augmented Reality Startup to help in launching the IKEA application.
The same was also done when it implemented the “Geo-Location” technology to help its shoppers take trips to its “out-of-the-way” stores. The company was further able to modify its technology systems through informed feedback from its customers and thus making it more compatible with the company’s internal systems. Hence, it can be stated that conducting market research and development strategy forms an important part of preventing digital disruption.
3.2 Strategy for Adjustments
The strategy to manage the digital disruption can be done through the use of Gartner’s Action Model that lists six ways through which Digital disruption in organizations can be managed (Mancilla, 2019, Pp 2-5).http://MSc Management Leading through Digital Disruption Sample Assignment The first step is to analyze the market and see how others are dealing with the disruption occurring.
The next step is to attack after taking stock of the situation through the use of “aggressive” action. The third step is to identify an alternative in the market and see if it can help in managing the disruption.
The fourth step can be to ally with some other company that will help the organization to gain more share of the market and thus avoid disruption. The fifth step is to acquire, which will help in countering disruption. The last step is to avoid the entire situation and take no action. The following model will help organizations in managing disruption.
Figure 1: Gartner’s Action Model
(Source: Watermeyer et al. 2021, pp.623-641)
It can be concluded that digital disruption is a part of the market ecosystem and therefore cannot be avoided. The best course of action is for the leaders to be prepared and make the best use of the opportunities available and tackle the challenges through proper strategies.
Bughin, J., 2017. The best response to digital disruption. MIT Sloan management review, 58(4). Pp.5-8. Available at: http://www.g20ys.org/upload/auto/6fe8fc2229381494f7596c4a7d2fd747d07ff8f7.pdf
Bughin, J., Catlin, T., Hirt, M. and Willmott, P., 2018. Why digital strategies fail. McKinsey Quarterly, 1, pp.61-75. Available at: https://www.mckinsey.com/cn/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Why%20digital%20strategies%20fail/Why-digital-strategies-fail.pdf
Deshpande, A., (2019), How To Make Sense Of Digital Transformation If You’re A Small Business, Available at: https://www.forbes.com/sites/forbestechcouncil/2019/07/10/how-to-make-sense-of-digital-transformation-if-youre-a-small-business/?sh=65f6c4fc4997 [Accessed on 10th November 2021]
Gallotto, C., (2021), Legacy Furniture Bohemoth IKEA, All In On AI, Available at: https://digital.hbs.edu/platform-digit/submission/legacy-furniture-bohemoth-ikea-all-in-on-ai/ [Accessed on 10th November 2021]
Ho, J.C. and Chen, H., 2018. Managing the disruptive and sustaining the disrupted: the case of Kodak and Fujifilm in the face of digital disruption. Review of Policy Research, 35(3), pp.352-371. Available at: https://www.researchgate.net/profile/Jonathan-Ho-5/publication/324117046_Managing_the_Disruptive_and_Sustaining_the_Disrupted_The_Case_of_Kodak_and_Fujifilm_in_the_Face_of_Digital_Disruption_Managing_Disruptive_Sustaining_Disrupted/links/5b0a6560a6fdcc8c25326144/Managing-the-Disruptive-and-Sustaining-the-Disrupted-The-Case-of-Kodak-and-Fujifilm-in-the-Face-of-Digital-Disruption-Managing-Disruptive-Sustaining-Disrupted.pdf
Mancilla De la Cruz, J.J., 2019. Integration of Competitive and Technological Intelligence, Gartner’s Hype Cycle and Panel Data. Pp 2-5. Available at: https://repositorio.tec.mx/bitstream/handle/11285/636264/Tesis%20Jessica%20Final%20%28Biblioteca%29.pdf?sequence=1&isAllowed=y
Stonehouse, G.H. and Konina, N.Y., 2020, February. Management Challenges in the Age of Digital Disruption. In Proceedings of the 1st International Conference on Emerging Trends and Challenges in the Management Theory and Practice (ETCMTP 2019), Advances in Economics, Business and Management Research (Vol. 119, pp. 1-6). Available at: https://www.atlantis-press.com/article/125934002.pdf
Templeton, G.F., Petter, S., French, A.M., Larsen, K.R. and Pace, B., 2019. Information technology firms: Creating value through digital disruption. Communications of the Association for Information Systems, 44(1), p.35. Available at: https://core.ac.uk/download/pdf/301379316.pdf
Watermeyer, R., Crick, T., Knight, C. and Goodall, J., 2021. COVID-19 and digital disruption in UK universities: Afflictions and affordances of emergency online migration. Higher Education, 81, pp.623-641. Available at: https://link.springer.com/content/pdf/10.1007/s10734-020-00561-y.pdf
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