Key Characteristics of Organizational Structure that Supports Digital Transformation

Abstract

Changes in business environment toward digitalization significantly impact on all market participants,
especially organizations. In order to operate efficiently, organizations are enforced to adopt new patterns of business
and to adequately apply innovative organizational solutions inherent for modern digital age. Digital transformation is
an imperative for organizations due to their necessity to stay competitive on the market, so organizations should
experience significant structural changes. Some of the most common organizational barriers to digital transformation
are: unclear vision and objective of digital transformation, lack of management understanding, knowledge and
experience, lack of leadership skills, lack of organizational agility, rewards and incentives that are not aligned to
digital transformation, unclear measurement and rewarding system, lack of employee’ involvement and engagement
and employee’ resistance to change. Digital transformation should be considered as a journey and long run process
which make organization more adaptable on requirements of modern business. It brings a lot of advantages to the
company, but we also should take into account some challenges that leaders and managers are faced with. One of
those challenges is how to adequately prepare organizational structure that supports digital transformation. Speed and
collaboration are the key factors that organizations need to achieve and master. That consequently means reducing the
number of hierarchical levels, decentralization of decision making and greater collaboration among employees. As the
traditional bureaucratic organizational models are rigid, without potential for further improvement in terms of new
market conditions, it is obvious that new forms of organizational structure should be introduced. The purpose of this
paper is to analyze the key aspects of organizational structure that supports digital transformation and to point out on
possible solutions for organizational models in digital era.