Business models based on flexible organizational structures - implementation of new technologies, digitization strategy


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Learning Outcomes

Objectives and goalsClick to read  

At the end of this module you will be able to:

What a business model is
Key elements of business model
Flexible organizational structures
How to implement new technologies and digitization strategies
 

Business models – basic issues

What’s a business model?Click to read  

The business model is the foundation of most companies. Every company bases its operations to a greater or lesser extent on a business model. Every business activity should have a specific purpose.

A company's business model is a concept that has many definitions. The common denominator is that a business model is a long-term plan to increase a company's operating profit. A business model is a particular company's unique recipe for selling a product or service.

The pandemic, along with political, climatic and other factors around the world, demonstrated the need to take external issues - even the most unlikely ones - into account in the strategic planning process. Some of the changes originated earlier, others were introduced in response to the COVID-19 pandemic, and others intensified or accelerated as a result. But the biggest change has been in the field of the total interconnectedness of everything to everything - the environment, national governments, markets, societies, companies and, as COVID-19 showed us, people.

Types and forms of business modelsClick to read  

Above all, the business model organizes product information and makes it possible to show in a simple and often visual way to whom and how the company will sell products and services.

Three key elements for improving the business model (these are constantly changing)

→ value proposition
→ operational models
→ use of values

Investing in people has got a key significance for improving the business model!

When creating a business model, we first answer four simple questions:

 

Principles of a flexible organizational structureClick to read  

An organizational structure is the way in which a company is formally organized, including elements such as organizational cells, departments, positions, parts of the company itself and employees, as well as the links between them, such as the flow of information, the formal division of responsibilities, affiliation, authority, responsibility.

The organizational structure is divided into centralized and decentralized, saying who makes most of the decisions in the company, and formalized and non-formalized structures.

The business structure in its current form no longer meets the requirements of the digital age. 

The organizational structure of a company is a very broad concept. Its many types can be distinguished by means of various criteria, such as:

a) basic types of organizational structure: divisional structure, task (project) structure, matrix structure, hybrid (mixed) structure;
b) by span of management and number of management levels: flat structure, slender structure;
c) classic: linear structure; functional structure; line-system structure;
d) modern: process structure; network structure; virtual structure; fractal structure; other;
e) by task division: U-type structures (unitary); M-type structures (multidivisional); H-type structures (holding);
f) by structural configuration: simple structure; machine bureaucracy; professional bureaucracy; divisional structure; adhocracy; mission structure; political structure.

The structure of the organization provides answers to the questions:

Who can and should interact and cooperate with whom, and which relationships are prohibited?
​​​​​​​• Who decides on what and to whom and how?
​​​​​​​• Who is responsible for what and for whom and how?
​​​​​​​• Who knows what and from whom, and how is that knowledge to be used?
​​​​​​​• What is the distribution of benefits and privileges (material, prestige and otherwise) among the members of the organization?

The main obstacle to changing these organizational standards is fear of the unknown. 

„Until you help someone understand that he can earn and generate value in other ways, he won't change because it is too scary.”

Many times, procedures for action by entrepreneurs during a pandemic were created on the fly. It is therefore necessary to try to anticipate such events in the future and to review one's business model accordingly. On the other hand, the operating procedures developed during this period will, it seems, make it possible to avoid in the future the dilemma that employees had during the initial period of the Covid-19 Pandemic: "career or personal life". Also, the activities of companies during this period were affected by the lack of implementation of relevant digital tools and the inflexibility of their business models.

The pandemic showed not only the advantages, but also highlighted in a special way the disadvantages of working online. It revealed the fact that some employees now feel they have to be non-stop available at work. Of course, there are advantages to working from home, such as the cost savings resulting from not having to commute, but above all, it has shown the occurrence of the worrying phenomenon of the blurring of boundaries between what is private and what is business.

Entrepreneurs have had to change their business models on an ongoing basis and adapt them to the reality around them, and the experience they have gained during the pandemic will enable them to respond efficiently to similar events in the future. For example, online working may have caused employees to fear that they might be excluded from important meetings and projects and thus their careers may have slowed down or simply stopped. Over time, appropriate tools were 'discovered' that created a substitute for relationships within companies and improved the level of trust within companies.

When planning and implementing measures that will support today's employees, and in particular women, in their professional development, employers should demonstrate a personalized and empathetic approach. The needs of specific employees need to be known. Slightly different expectations will be had, for example, by those involved in caring for relatives and by those who do not have such responsibilities.

The experience of the Covid-19 pandemic period has also shown the urgency of looking after the welfare of employees, meeting their most important needs, respecting their values, relationships based on trust in the company, superiors and colleagues. The stories of the companies that survived the pandemic, and even more so of those that succeeded, show how much depended on the commitment and behaviour of the people they employed. The right actions by employers are and will be of great importance in the future for the professional development of employees and therefore also for the development of companies.

The flexible working model is becoming the standard!
The pandemic has shown that there is a need to redefine what 'flexible working hours' and what 'availability' means. Flexible working hours do not just mean 'working from home', which has become the norm in the pandemic. They can also take the form of arrangements that allow employees to contribute to the business, while helping them to maintain a work-life balance.

There are possible solutions, for example, reduced working hours, an extended working day with a shortened working week or sharing a particular position between two people. Importantly, this must not be an 'attractive option' only for parents. It should be a standard available to all. 

Just as important as putting the right rules and flexible working conditions in place is building a culture that enables employees to benefit from the new rules without worrying about their future careers. Without this, flexible working conditions will never be fully exploited.

How to implement digitalization technologies and strategies?Click to read  

Technology implementation - the stage of scientific and technological activity in which the results of scientific work in basic and applied sciences, including research and development work strictly aimed at achieving practical objectives, are put into practice, e.g. by launching new technologies or modifying existing technologies.

During the Covid-19 pandemic, practically overnight businesses, from small companies to global corporations, moved their key processes to the cloud. The pandemic demonstrated the benefits of having a variety of digital tools, without which a business should in principle not operate in such an extremely challenging environment (e.g. instant messaging). It has shown not only the potential of digital tools, in performing everyday tasks, but even the necessity of using them whether there is a pandemic or not. It also revealed the weaknesses of entrepreneurs due to their lack of digital tools, which seems to have had a direct impact on limiting or even stopping their business. It also brought to light the fact that, in the post-pandemic period and in anticipation of similar events, digital tools suitable for businesses should be implemented immediately. 

For large investments, implementation is a complex business process. 

It requires the involvement of large interdisciplinary teams of specialists, including but not limited to:
- scientists developing the theoretical basis for the production process;
- building and equipment designers ;
- technical installation contractors ;
- IT specialists preparing the control systems for their operation;
- specialists in research and market analysis. 

The coordination of the work of such teams is carried out by specialized managers.

The Covid-19 pandemic demonstrated that the foundation of a business in such a difficult period is trust! 
Importantly, it is important to use the pandemic period and the experience gained during this time to improve this trust, which will in turn be important in the future. It is important to emphasize that trust appears to be the essence of how a company conducts its business, both in a pandemic and the basis of its operations in the period afterwards and, before all, in anticipation of similar events in the future.

Two fundamental types of trust should be highlighted:

→ Trust between colleagues, employees, managers, departments and teams - e.g. trust that when working remotely, employees use their working time effectively and appropriately.
→ Trust in data and digital solutions, e.g. that data will not be leaked.

Examples of stages in the implementation of a new technology:

1. Start with the basics. Focus on tools to improve communication, document management, workflow and practice management

2. Make sure everyone has access to the tools.

3. Create an environment where open dialogue is welcome to ensure the team of being comfortable with the technology.

4. Focus by making sure each tool helps achieve the company's overall objectives.

5. Include key stakeholders in conversations about what technology works and areas where it can be improved.

6. Don't be afraid to outsource the implementation process.

7. Develop an evaluation and implementation process when reviewing new technologies to ensure they are in line with company objectives.

Strategic planning is not just about finances. The pandemic has shown us that a company also needs plans in case a threat similar in impact to the Covid-19 pandemic occurs in the future or simply new opportunities arise. It is important to re-create and scale the capabilities of the organization post-pandemic in terms of scenario planning - taking into account both the threats and opportunities from such events - to capture and tame the various issues from different perspectives. This will help identify issues more quickly and reduce the risk of future unexpected impacts.

The biggest challenge of digitalization and also the first hurdle to overcome is early implementation. Overcoming resistance to implementation is best started by showing reluctant users the undeniable benefits of the new solution. The pandemic has demonstrated such benefits, as well as, on the other hand, revealing in an extremely brutal way the weaknesses of businesses in this regard. It needs to be reiterated and consolidated to employees what they will gain with implementation. Businesses should be aware of the added value and opportunities that digitisation brings, especially in the wake of a pandemic such as Cvid-19 or afterwards.  Digitisation is a gradual process. This kind of change will take years, not a few days. It is therefore difficult to catch up afterwards. 

Companies that do not have a digital strategy, particularly for a situation such as the Covid-19 pandemic, should immediately take up this challenge and develop one so as not to be left behind. To be able to react in time to sudden changes affecting their business. Digitisation makes qualities such as readiness for change, social competence and IT literacy increasingly important, which poses new challenges for companies in terms of training and educating employees. Implementing new software is fraught with the risk of failure - as it largely depends on the attitude of the users. When developing a company's digital strategy, it is necessary to take this problem into account in order to be able to prevent it effectively.

 

 

Conclusions

Key takeaways Click to read  

Tip 1: The business model is the basis for most businesses. 
Tip 2: In itself, a business model is not yet a guarantee of success, but it can be important to achieving it.
Tip 3: Organizational structure is the way in which a company is formally organized and the links between them.
Tip 4: Companies should be aware of the added value and opportunities that digitalization brings, and when conducting trainings on the new solution, it is worth persistently repeating and reinforcing to employees what they will gain with the implementation.



Description:

The Business model is the basis for the operation of most companies. Every company bases its operations to a greater or lesser extent on a business model. Every business activity should have a specific purpose. Analysing the period of the Covid-19 pandemic and planning for the future, one will come to the conclusion that many assumptions about the nature of business have lost their rightness. The pandemic revealed vulnerabilities in many dimensions. It has affected healthcare, education, transport, business, commerce, technology, the financial sector and social systems, forcing a review of basic assumptions and the principles, processes and technologies that support them.
Reducing risk, however, is only half the battle. We still need to develop business models that are not only resilient to disruption, but also enable to get innovation started and to take advantage of value. To achieve this, we also need to use the experience gained to shape new markets, new product and service offerings, new revenue streams and, most importantly, new value for a connected world after the COVID-19 pandemic.
The structure of an organization is a way of formally defining the relationships and dependencies between its participants, it is a very broad concept. There are many types of it distinguished by different criteria.
It is important to understand that there will be no 'new normality'. Instead of this, we get the opportunity to analyse these sensitive areas in current business models with this experience in mind and use the new knowledge to build more modern and resilient organizations
The biggest challenge of digitization is the first obstacle to overcome: early implementation. Companies should realize the added value and opportunities that digitization brings.


Keywords

Business models, flexible organizational structure, new technologies, digitization strategy


Bibliography

Cybersecurity Strategy of the Republic of Poland for 2019-2024) https://www.gov.pl/web/cyfryzacja/strategia-cyberbezpieczenstwa-rzeczypospolitej-polskiej-na-lata-2019-2024

Organizational structure - Encyclopedia of Management – https://mfiles.pl/pl/index.php/Struktura_organizacyjna 

What is a business model and what are the elements of a business model? - https://harbingers.io/blog/model-biznesowy-co-to-jest

Digital Strategy: What are the challenges of digitalisation? - https://blog.item24.com/pl/cyfryzacja-w-budowie-maszyn/strategia-cyfrowa-na-czym-polegaja-wyzwania-cyfryzacji/

Digital Strategy: What are the challenges of digitalisation? - https://www.gov.pl/web/cyfryzacja/ai

Susan Etlinger, Creating a Culture of Business Model Innovation: Five Lessons from a Year of Change, Altimeter 1 marca Susan Etlinger - https://damassets.autodesk.net/content/dam/autodesk/www/pdfs/altimeter-2021-building-a-culture-of-business-model-innovation-pl.pdf

Gray, Mary L. „COVID-19 Unraveled the Workforce: Here’s How to Fix It”. TED2020. 6 lipca 2020 r. (https://www.ted.com/talks/mary_l_gray_covid_19_unraveled_the_workforce_here_s_how_to_fix_it).

Etlinger, Susan. The future is a distributed environment. Customer and employee relationships in the digital age, Altimeter 15 stycznia 2021 - 
https://damassets.autodesk.net/content/dam/autodesk/draftr/13470/altimeter_2020_strategies_for_resilience_in_disruptive_times_v5.0_pl.pdf

REPORT: The impact of the pandemic on the prospects for women's professional development in business - https://www2.deloitte.com/pl/pl/pages/kobiety-w-biznesie/articles/raport-wplyw-pandemii-na-perspektywy-rozwoju-zawodowego-kobiet-w-biznesie.html