How does digital transformation affect organization's behavior: the leadership style
Last Updated: September 09, 2020

Digital technologies are transforming the dynamics of the workforce within organizations; it’s dramatically reshaping the industry after industry. In a new McKinsey Global Survey on Digital Transformation, more than 8 in 10 respondents stated that their organization has taken such efforts in the past five years to reap the benefits of digital transformation. This makes researchers wonder whether such changes have any implications for an organization’s behavior and culture.

The new technologies such as big data, algorithms, AI, interconnectedness, and machine learning have made the world a more digitalized and transparent place for all stakeholders. In order to influence customers, organizations can’t only focus on marketing strategy, but also company branding to retain customers, identify ways to automate the process, etc. Against the scenery of digitalization, globalization, and shortage of resources, organizations should understand the impact associated with these trends in order to prepare themselves for the future.

The influence of technology on the work environment and workflows is an important determinant of Organizational Behavior science, as the changes in technology may not only affect the individual characteristics in the workplace but as well as organizational structure. These aspects are interrelated and interdependent affecting the organization.

The main factors of organization's aspects that interrelated of each other

Understanding the meaning of Organizational Behavior

In order to understand fully the impact of digitalization on an organization’s behavior and culture, first thing first, it’s important to understand the concept of an organization’s behavior. Organizational behavior is the insight on how people behave in an organization settings. The extensive description of Organizational behavior is the approach to understand the behavior of individuals within organizations. Starting from the individual as the smallest entity to a bigger one, and eventually, the way an organization interacts with its environment. There are 3 major factors that can affect a company’s organizational behavior: People, Structure, and Technology. The influence of technology on the workforce in an organization is an important determinant of organizational behavior science, as the technology could change the way individuals behave and also affect the enterprise structure.

The implementation of technology will definitely bring a gradual change in the composition of the workforce. A.J Dubrin, in his book called Fundamentals of Organizational Behavior, he stated an example, a younger, better educated, more mobile, as well as technologically versed generations, will enter companies in a greater number as in the past, resulting in a changeover within organizations that may as well bring along a new set of values, attitude, concerns, that will affect the organizational behavior within the organization.

Over the last decades, digitalization has shifted not only the businesses from physical to software-based services, but Information Technology has become one of the most crucial parts of our society and industry. It’s nearly impossible that digitalization does not have any effect whatsoever on companies’ organizational behavior. Elaborate below is the impact of digitalization on organizational behavior, especially on organizations’ leadership style:

Leadership style

To support this digital transformation, companies are required to shift from their traditional-hierarchical structure to a decentralized-flexible structure. The generation change is also will affect the leadership structure of a company, from a baby boomer to technological savvy employee, which has unique characteristics and capabilities compare to the previous generations. The new leadership style is also known as digital leadership or leadership 4.0, this does not only refer to an application of digital technology in collaboration and communication, the leaders should be able to utilize new technologies maximally and provide solutions through digital tools.

The companies leaders are expected to be contextual, emotionally intelligent, trustworthy, and should be able to lead democratically. VOPA leadership designed by Buhse in 2014, is the right leadership style to support successful corporate and management in the digital era by reflecting the demands of the new generation. The core of VOPA being the ideal example of digital leadership is trust, the concept of trust is not new since trust has been one of the most significant emotions in human relationships. Here’s the elaboration of VOPA the new model for digital leadership.

1.Vernetzung (Connection)

-Utilization of Social Media

-Promotion of Virtual Communities

-Networks Collaboration

-Engagement between employees and customers

Offenheit (Openness)

-Provision and share of information company-wide

-Open and clear communication

-Promotion of innovation

Partizipation (Participation)

-Employees involvement in strategic decision

-Share responsibilities

-Free space for self-controlled

-Promotion of self-responsibility

Agilitat (Agility)

-Flexibility and speed to react on changes

-Trial and error or learning by mistake approach

-Project based structure for innovation and development

The new digital technologies and solutions are not just triggering the need for change, they also enable and support the change itself. For instance, Big Data and learning algorithms enable organizations to better predict and control their business process, allowing organizations to maximize their works such as allocating resources, better-targeted marketing, product personalization, and evaluate employees’ performance.

The integration of social media supports the engagement between employees in an organization through regular updates, sharing important information, foster understanding, and create conviction. The usage of data-enabled talent management based on algorithmic data analysis enable to increase in the number of meaningfully evaluated employees, the precision of these evaluations can increase personal relationships between leaders and employees. But the leaders have to take in mind the way technology interferes with managerial activities could affect creative adaption to a problem. Hence, it is crucial for leaders of organizations to analyze the market situations and the business first, then decide the right strategy and structure for the employees to contribute to the digital transformation.

The Conclusions

Technological changes are inevitable for organizations in various industries, it’s either adapt or die. Along with the utilization of advanced technologies, organizations’ leaders have to prepare their employees to support the digital transformation itself, creating a workforce that is suitable for innovation. Kai Riemer, the professor of Information and Technology (University of Sydney) stated that “Disruptors don’t set out to beat you at your own game — they change the rules.”

Volantis has helped many organizations from various industries to accelerate digital transformation. If you’d like to learn more about digital transformation please contact us at