Designing Organizational Structure In The Age Of Digitization

Abstract

The digital transformation will bring about extreme changes, as at the time when the steam engine was invented. To generate money from the emerging opportunities, companies must adapt very quickly. For this, agile forms of organization such as Holacracy are needed where the employees take over the management functions. Is the classic hierarchy still needed in companies? The following is a brief overview of traditional organizational forms. On the basis of this, the digital innovation capability of hierarchical organizations is analysed. Then it is shown how the new form of organization Holacracy works and how to move from a hierarchical organization to a holocratic one, to fulfill the need of agility. John P. Kotter replied, the hierarchy must not be replaced. He points out that dynamic network organization forms such as Holacracy are important at the beginning of the company's lifecycle. The hierarchy is better suited for stable market environments.

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