Effects of Digitalization on Managerial Practices as Experienced by Managers

(1)

EFFECTS OF DIGITALIZATION ON

MANAGERIAL PRACTICES AS

EXPERIENCED BY MANAGERS

LIU, GUANTING

BIN ZAINAL FITRI, MUHAMMAD FAISAL APINE, HELENA

School of Business, Society & Engineering

Course: Bachelor thesis in Business Administration Course code: FOA230

15 cr

Supervisor: Michela Cozza Date: 5th_{of June, 2020}

(2)

ABSTRACT

Date: 5th_{of June, 2020}

Level: Bachelor thesis in Business Administration, 15 cr

Institution: School of Business, Society and Engineering, Mälardalen University

Authors: Guanting Liu Muhammad Faisal Bin Zainal Fitri Helena Apine (96/07/10) (95/09/26) (92/03/11)

Title: Effects of Digitalization on Managerial Practices as Experienced by Managers

Tutor: Michela Cozza

Keywords: Digitalization, managerial practices, managers role, digital work environment

Research question: How is digitalization transforming the practices of managers?

Purpose: The purpose of this thesis is to explore how managers' practices are transforming in the digital era. This is done by looking at how digitalization is changing managerial practices as experienced by managers.

Method: The data was collected by conducting five semi-structured online interviews and three structured email interviews with managers working at Ericsson's headquarter office in Stockholm. The collected data were analyzed using a thematic analysis approach which resulted in five themes: work and communication in the digital environment, training and learning, information and data, other effects of digitalization, and additional findings.

Conclusion: This study concludes that notable changes in managerial practices can be observed in all four categories of practices; task-oriented, relations-oriented, change-relations-oriented, and external practices. This shows that digitalization is a process that transforms managerial practices and it does it both by aiding managers in their tasks and by making some tasks more difficult. Thus, managers need to be more aware and able to adapt to these changes that digitalization brings to their practices.

(3)

Glossary

Term Definition

Business Analytics practices aimed at “exploiting large volumes of data, extract value from them, and use this value to empower the processes and business decisions at every level in the company” (Villegas-García et al., 2015, p. 96)

Cognitive Technologies “techniques and concepts (a) to identify the

decision-making/problemsolving requirements in some domain; (b) to improve decision-making/problem-solving performance; and (c) to develop joint human-machine cognitive systems” (Woods, 1985, p. 86)

Digital Transformation “sustainable, company-level transformation via revised or newly created business operations and business models achieved through value-added digitization initiatives, ultimately resulting in improved profitability” (Schallmo & Williams, 2018, p. 4) Digitalization “the application of any digital technologies to any human

activities, such as personal life, social, economic, and political activities” (Gbadegeshin, 2019, p. 55)

Managerial Practices “generic behaviours applicable to all types of managers and organizations” (Kathuria et al., 2010, p. 1083)

Robotic Process Automation

“an umbrella term for tools that operate on the user interface of other computer systems in the way a human would do” (van der Aalst, et al., 2018, p. 269)

(5)

1

Introduction

In this chapter we first describe the problem background that shows the reasoning and motivation behind our study. The purpose and research question are then shown at the end of this chapter.

Problem Background

Upon hearing the news of how automatization is destroying jobs and reading dire forecast about consequences of digitalization on occupations such as one claimed by Cetron and Davies (1997) that states that “most of us will spend our entire working lives bouncing from one career to the next, scrambling to learn the skills of a new profession before some computer snatches away our current livelihood,” (p. 22) arises the question of how the future of the managerial profession will appear to be. Be that as it may, the impact of digitalization on managerial occupations is not as destructive as painted above.

Managers are here to stay, i.e., this role will not be digitalized in near future because managers role requires capabilities that machines are not able to have such as originality, persuasion, social perceptiveness and assisting and caring for others (Frey & Osborne, 2017). However, the process of digitalization still has an impact on their occupation in a way that their capabilities are expected to be supplemented by digitalization (Fossen & Sorgner, 2019).

Fossen andSorgner(2019) identify destructive and transformative effects that digitalization has on occupations. They define destructive effects as those that replace occupations while the transformative effects of digitalization supplement human labor. A lot of research focuses on the destructive effects of digitalization (Frey & Osborne, 2017; Fuei, 2017; Sorells, 2018)

while there is not much research on transformative effects. Transformative effects are related not only to changes in occupation and requirements of human skills, but they also imply an increased machine-human interaction. According to Fossen andSorgner, managers perform non-routine tasks that are not easily replaceable by machines and their role requires capabilities that machines do not possess, at least not yet. However, people in managerial positions inevitably undergo ongoing digital transformation. This implies that new qualifications are required for managers to stay competitive.

It is suggested that the human role in human-machine interaction cannot be neglected for the efforts with the use of technological development to achieve desired results (e.g. increased effectiveness) (Johansson et al., 2017; Simic & Nedelko, 2019). Therefore, when advancements in technology change the machine part of this interaction, human competencies (skills, knowledge, approaches) and effectiveness will need to change as well. Motivated by self-serving interest as potential occupants of future managerial positions as well as recognizing the impacts of digitalization across all businesses and professions, in our thesis we aim to investigate and examine how digitalization affects managerial professions.

(6)

2

Additionally, in the literature, such a need to study the effects of digitalization on managers is recognized, and it is suggested that such perspective would be beneficial for both practice and research (Yukl, 2013; Osmundsen et al., 2018).

Purpose: The purpose of this thesis is to explore how managers' practices are transforming in

the digital era. This is done by looking at how digitalization is changing managerial practices as experienced by managers.

(7)

3

Literature Analysis

In this chapter, we first discuss the research so far relating to the effects of digitalization on managerial occupations. Further, we describe what previous studies have found regarding the effects of digitalization on the role and practices of managers.

Effects of Digitalization on Managerial Occupations

The influential work of Frey and Osborne(2017) on the effects of digitalization on professions, focuses on the risk that professions will be fully automated in the foreseeable future. These authors identify computation bottlenecks, that is, capabilities that occupations possess and that cannot be replaced by machines in the near future. They find that the professional category that managers belong to is at a low risk of computerization because these occupations require capabilities such as creativity and social intelligence. Meanwhile, Felten et al.(2018) look at which professional capabilities are mostly affected by advancements in technology, particularly in artificial intelligence (AI). However, their methodology did not allow further insight into whether technology is a substitute or complement to the occupation. Fossen and Sorgner(2019) build on both studies (Frey & Osborne, 2017; Felten et al., 2018) and assess the effects of digitalization on the occupations. Their assessment puts most managerial occupations in a category that is highly impacted by advancements in technology, that is featured as complementary to their capabilities, rather than a replacement. Overall, they find that managers' occupation is going to be transformed and most likely end up working together with new technologies.

Similar conclusions are reached by Dengler and Matthes(2018) who argue that looking at automatization of occupations overestimates the forecast for job losses because some tasks within occupations cannot be performed by machines. Thus, they study the possibility of the tasks “as activities that individuals have to perform in a specific occupation” (p. 305) to be automatized. They find that there are some tasks in the occupation segment, “occupations in business management and organization” (p. 307), that can be fully substituted by machines while others cannot. The fact that some tasks that are performed by managers are susceptible to be digitalized while others are not, indicates the inevitable although partial transformation of managers’ occupation.

There are some more studies that reach similar conclusions about the ongoing transformation of occupations and tasks due to digitalization (Arntz et al., 2016; Brynjolfsson et al., 2018). What these studies were not able to estimate is how the tasks change, what new tasks arise and how the time freed-up due to task replacement could be used to perform other tasks

(Dengler & Matthes, 2018; Frey & Osborne, 2017). Other studies also conclude that human labor is complemented by technology or, to put it differently, technology is complemented by human labor (Spitz‐Oener, 2006; Arntz et al., 2016; Autor, 2015). In view of the fact that employees are expected to work together with technology, the human part of the equation

(8)

4

should not go unnoticed, for it to be effective and efficient (Autor, 2015; Johansson et al., 2017; Simic & Nedelko, 2019). Additionally, these transformations of occupations and tasks, due to advancements in technology, also indicate a need to focus on the transformation of business processes as noted by Brynjolfsson et al.(2018). Thus, it is important to look at digital business transformation and how it impacts the role of managers.

Effects of Digitalization on the Role and Practices of Managers

As technology develops, new digital achievements lead to the transformation of business organizations. The concept of digital transformation is tightly related to digitalization and digital innovation (Fichman et al., 2014). These concepts are all built on digital technology and the outcomes of the innovation and digitalization will lead to a change in major business conducts. Osmundsen et al. (2018) define digital transformation as “when digitalization or digital innovation over time is applied to enable major changes to how business is conducted, leading to a significant transformation of an organization or an entire industry” (p. 2). To achieve competitive advantages, companies need to establish new management practices to govern these complex transformations (Matt et al., 2015).

Managers can use the tools at hand, such as the developing technologies of AI, to organize and form these data to gain a better insight into real-time customer behavior and demand trends (Chisambara, 2018). For example, it is necessary for a demand forecasting manager to obtain high levels of accuracy of a forecast that in turn converts into higher profitability and revenue (Chisambara, 2018). With the abundance of data that are gathered during the complex process among supply chains, major companies utilize cognitive-based technologies to support and assist managers to foresee customers’ demands. Osmundsen et al. (2018), along with Haffke et al. (2017), pointed out that the digital transformation makes the role of information systems in an organization to become more relevant. The concept of bimodal information technology comes out as the digital transformation process. Bimodal information technologies (IT) divides traditional information systems into two parallel parts; the first part is the traditional IT governance approach while the second part focuses on adapting to the changes while at the same time improving the company’s agility and reaction speed (Haffke et al., 2017). Managers could improve the organization's digital capabilities by separating these two parts into new divisions. By doing this, Haffke et al. (2017) claim that IT support in business would become more effective.

Additionally, Ancarani and Di Mauro (2018) also indicate that with the fall of cost in robotics process automation (RPA) and business analytics (BA), human-robot teams will increase. This is regarding the division of company tasks and assignments whereby humans deal with the interpretation of data, as well as the creative decision-making processes. Machines, on the other hand, take the responsibilities of summarization and gathering of data. The requirement of managers dealing with machines in the research of Ancarani and Di Mauro (2018) shows the need for managers to see machines as collaborators, as well as to use machines as employee empowerment and shift of culture.

(9)

5

Furthermore, technology brings about a means to an end for managers as human expertise such as decision making is still seen as a necessity to successfully apply the capabilities of technology to draw on the combined benefits of the business (Chisambara, 2018). Hence, the need for the combined relationship between humans and machines remains the core issue. The ever-changing environment of the market, as well as the rising development of technology, urges organizations to react and adapt their business by ensuring the befitting talents to overcome the risk of losing out to the competition. Besides, with the rise of technology, managers' role does not face extinction but instead demands them to be more skilled than ever before (Gratton, 2016). To illustrate, handling employees is seen as a challenge as it demands managers to work with employees that have varieties of ways and tools that can cause them to become obsolete; automation and constant improvement on technologies causing unclear practices of management, self-assessment tools that allow employees to learn and identify difficulties of their productivity level, as well as, social networking creating a clearer picture of influence and power at the workplace enabling more practices of peer-to-peer feedback form of learning rather than a manager-employee relationship (Gratton, 2016).

Gratton’s (2016) study concluded that the use of technology has excelled more than before as it is used not only in the workplace but also in personal and home life. Nevertheless, participants in this study indicate the positive impacts of technology allowing for more routines and productivity. For managers, however, the findings signify challenges and tasks to cope with such practices of workplace digitalization. Some examples of these challenges are managing virtual teams that consist of multigenerational groups in regards to their capabilities and different preferences of the use of technology and how to manage the abundance flow of crucial information and knowledge across business units (Gratton, 2016). To be able to unravel and find the solutions to said challenges exhibit highly skilled roles of both managerial capabilities and practices. With this in mind, traditional sets of managerial skills and capabilities become ineffectual if managers do not possess sufficient technical knowledge to supplement traditional managerial skill sets as new challenges arise due to the development of technology and digitalization of a workplace (Chisambara, 2018; Gratton, 2016).

Similar to the findings of Chisambara (2018), partnering with digital colleagues, that is technologies, allows managers to make use of them as they can process complex data and solve intricate issues with the use of algorithms. As seen in Chisambara(2018) of forecasting demand managers, managers, in general, come into the process by providing recommendations and solutions, essentially the decision-making process, to their digital partners. Despite the automation of the daily routines and processes carried out by digital partners, the outcomes often fall short from satisfactory, making it imperative for managers to step in and provide human input to their digital partners (Tarafdar, 2016; Chisambara, 2018).

(10)

6

Tarafdar (2016) also denotes consistent findings as Gratton (2016) in regards to technology allowing for remote work where the traditional setting work hours become less and less meaningful. Tarafdar specifically pinpoints the issues that arise from remote work as it can lead to “techno-stress” where it becomes difficult for managers to make clear of the boundaries between work and non-work related issues of their daily lives. Remote work allows for a steady flow of information and knowledge that is continuous that carries through even after work hours. Therefore, due to technology, the need for managers to become more and more digitally mindful is important (Tarafdar, 2016). Moreover, it is not only managers that deal with the flexibility of work. Individuals have different approaches and preferences for their technological habits. On top of being more digitally mindful, managers have to develop empathy for others’ technological preferences as neglecting it can cause inefficiency in communication leading to misunderstandings, conflict, and stress (Tarafdar, 2016). What this ultimately amounts to is managers’ ability and response to the effect of digital technologies at the workplace.

Meanwhile, Kohnke (2017) states that change in management techniques will be the direct result of digitalization, whereby managers in charge of the organizational change will require a profound knowledge of digital technologies. In turn, for managers to successfully administer change, in the long run, the practices and tasks will most likely be more focused and specialized. Some examples of these more focused and specialized tasks are coaching, supervision, and dealing with resilience (Kohnke, 2017). Wokurka, et al., (2017) examines practice examples and what to avoid when dealing with digital transformation and how business can gain digital success, looking more specifically at how strategy and culture are the keys to handling digital transformation. Wokurka, et al. denote the four key learnings. Firstly, day-to-day, as well as long term digital strategy must be clearly defined for managers and their teams. Secondly, culture is an important factor to accomplish a successful digital transformation where managers must balance both the upsides and the downsides of the integration of culture. Thirdly, an individual’s emotion and feelings must be taken into consideration when undergoing a digital transformation as old habits and belief is a challenge for managers to change. Lastly, managers must be ready to put in the work when enforcing the concrete behaviors; managers must learn how to teach employees to think and act differently.

(11)

7

Theoretical Framework

In this chapter, we present and define concepts that are used for gathering the data, guiding its analysis as well as discussing our findings regarding the effects of digitalization on the practices of managers.

Digitalization

It has been identified in the literature that digitization is sometimes used as a synonym for digitalization (Urbach & Ahlemann, 2019; Gbadegeshin, 2019; Ilcus, 2018; Kuusisto, 2017), however, these two concepts do not refer to the same thing. Thus, the distinction between the two must be made before defining digitalization as it is used in our study. As found in the literature, digitization means transforming something from analog or physical format into digital format (Schallmo & Williams, 2018; Gbadegeshin, 2019; Heilig et al., 2017). For example, scanning a document so that it is available on the computer. While in general context digitalization is defined as “application of any digital technologies to any human activities, such as personal life, social, economic, and political activities” (Gbadegeshin, 2019, p. 55). This indicates that digitization is only one component of digitalization.

There are many definitions of digitalization that reflect the different contexts that it is used. For our study we need to look at digitalization in an organizational context that also allows us to see its potential effects on people within the organization. For this reason, in our study the understanding of digitalization in an organizational context is shaped by the following definition:

Digitalization is the use of technological innovations in the business context with a significant influence on products, services, business processes, sales channels, and supply channels. The associated potential benefits include, among others, increased sales or productivity, innovations in value creation, and new forms of customer interaction.

(Urbach & Ahlemann, 2019, p.7)

Additionally, it is needed to understand the aspect of digitalization in the context of the workplace i.e. the digital environment that the work takes place. It is suggested that the digitalized work environment is affecting the way people in organizations are collaborating and engaging with each other and with other stakeholders (De Bruyne & Gerritse, 2018). The digitalization in this context is best described by a digital business consultancy i-scoop (n.d.). They say that digitalization in the workplace means that the workforce

works differently, using digital tools such as the mobile devices and technologies that make them mobile and/or using social collaboration and unified communication platforms, which are digital systems, enabling them to work in a more “digital way”. This, in turn, creates new opportunities to engage differently. (What is digitalization section, para. 7)

(12)

8

In our study we need to take into consideration both aspects, digitalization in the organizational context and digitalization in the context of the workplace. Thus, in our study, we defined digitalization as:

The use of digital technologies that have implications for everything from business operations (research and development, production, sales, and distribution), to how the organization is communicating with their stakeholders including customers and how people within the organization are engaging in the activities that keep the business going.

Managerial Practices

In our study, practices are defined as “generic behaviours applicable to all types of managers and organizations, and include: networking, team building, supporting, mentoring, inspiring, recognizing, rewarding, consulting, delegating, planning, clarifying, problem solving, monitoring, and informing” (Kathuria et al.,

2010, p. 1083). Several other studies view practices as behaviors (Kathuria et al., 2010; Quijano-Nguyen, 2004; Tracey & Hinkin, 1998; Hassan et al., 2016).

This definition by Kathuria (2010) is built on Yukl’s leadership behavior taxonomy that was first introduced in the late 1980s. This taxonomy has been used and validated by many other researchers (Tracey & Hinkin, 1998; Kent, 2005; Kathuria, 2010; Borgmann et al., 2016; Park et al., 2018; Özşahin, 2019) and adjusted several times

(Yukl et al., 2002; Yukl, 2012) ever since it was first made. The version used in our study (see Table 1) categorizes the practices into four meta-categories that each has a different primary objective and includes several midrange categories (Yukl, 2012). These meta-categories of practices are task-oriented (planning, clarifying, monitoring, problem-solving),

relations-oriented (supporting, developing,

recognizing, empowering), change-oriented (advocating change, envisioning change, encouraging innovation, facilitating collective learning) and external (networking, external monitoring, representing) (Yukl, 2012).

Table 1: Categories of Managerial Practices

(13)

9

The leadership behavior taxonomy consists of unique and separate categories named meta-categories (Yukl, 2012).As noted before this classification has been validated and adjusted over the years. Although it has been widely used for quantitative studies including Managerial Practices Survey, its use is also applicable for qualitative studies (Yukl, 2013). It is used in our study to design an interview guide and aid the analysis of data aimed at answering our main research question. Specificities of such use will be discussed in the “Research Design and Method” chapter.

There have been several scholars that have tried to address the issue of conceptualization of leadership and management (Kent, 2005; Nienaber, 2010). They have pointed out that there is no clear consensus in the scientific community of what leadership and management mean, how they differ, and thus how to define these concepts. Findings of the literature study by

Nienaber (2010) show that all the tasks associated with leaders are part of the tasks associated with managers and there are only several tasks that are associated with managers but not with leaders. However, our study is taking the perspective of Kent (2005) who in his study tries to conceptualize the process of managing and leading and behaviors associated with each of them. According to him, Yukl’s leadership behavior taxonomy does not represent leadership, it represents management. This perspective is taken because the main focus of our study is management not leadership. Thus, for the purpose of our study and to avoid further confusion for the readers, we will refer to leadership behaviors, as named by Yukl, as managerial practices. Our study is not the first to refer and use Yukl's leadership behaviors as managerial practices (Tracey & Hinkin, 1998).

As previously indicated by Kathuria et al. (2010), this analytical framework can be used for studying managers working in different organizational units (Yukl et al. 2002) or, as they are called in the study by Yukl (2012), work units. ‘Organizational units’ can refer to the organization as a whole; business units like research and development (R&D) department or division responsible for a specific product; and teams, for example, consisting of people working on a specific project. Practices used by managers have slight variations due to the differences that characterize the previously described contexts - organizational unit i.e. work unit. For example, this means that a manager such as an executive who is in charge of the organization as a whole uses practices in the midrange category “representing” for representing the organization as whole to the outsiders. While the same category of practices for a manager in charge of a team within the organization means that the manager is representing the team to the other organizational units as well as the outsiders.

Further a short description is given for each meta-category and each midrange category.

Task-Oriented Practices

Task-oriented practices are those practices primarily related to efficient use of organizational resources, both labor and capital, to accomplish a task and maintain stable operations of the business (Yukl, 2012). This meta-category includes four midrange categories: planning and

(14)

10

organizing work, clarifying roles and objectives, monitoring operations and performance, and work-related problem-solving.

Planning is concerned with making decisions about what needs to be done, who will do

it, how it will be done, and when it needs to be done (Yukl et al., 2002). It includes “making decisions about objectives and priorities, organizing work, assigning responsibilities, scheduling activities, and allocating resources among different activities” (Yukl, 2012, p. 70). Planning usually requires information from other organizational units and outsiders such as suppliers.

Clarifying is “the communication of plans, policies, and role expectations” (Yukl et al., 2002, p. 19). It also involves the guidance and the coordination of activities to make sure that people know what they need to do, how to do it, and what are the expected results.

Monitoring involves acquiring and assessing the information about a manager’s work unit

and using it to recognize problems and opportunities and the need for changes in plans and procedures (Yukl et al., 2002; Yukl, 2012). “There are many different ways to monitor operations, including directly observing activities, examining recorded activities or communications, using information systems, examining required reports, and holding performance review sessions” (Yukl, 2012, p. 70).

Problem-solving deals “with disruptions of normal operations and member behavior that

is illegal, destructive, or unsafe” (Yukl, 2012, p. 70). These disruptions may require leadership interventions and could call for disciplinary actions. Also, assessment of the complexity of the problems needs to be made to evaluate if the problem can be resolved quickly or it requires a more complex solution like the involvement of other managers and/or use of change-oriented practices.

Relations-Oriented Practices

According to Yukl (2012), the primary objective of relations-oriented practices “is to increase the quality of human resources and relations” (p. 68). By definition, relationship behavior includes supporting, developing, recognizing, and empowering people within the managers’ organizational unit.

Supporting is the relation practice which involves offering support, help, consideration,

and acceptance to other people (Yukl et al., 2002). The purpose of this practice is to help managers build and keep good internal relationships inside their work unit and to aid people in dealing with stressful or difficult tasks.

Developing consists of practices such as training and teaching people how to do a job

better; guiding people through and away from mistakes and offering opportunities to improve their skills (Yukl et al., 2002).

(15)

11

Recognizing could simply refer to awarding, praising, appreciating, for others’

achievements, significant contributions, or good behavior. It normally comes up with intangible rewards (Yukl et al., 2002).

Empowering involves sharing information, resources, and opportunities with other

people in the manager’s organizational unit (Yukl et al., 2002). In some cases, it involves delegating decision-making authority to others within the unit. The purpose of these activities is to enhance the productivity and satisfaction of the people.

Change-Oriented Practices

Change-oriented practices are aimed at increasing “innovation, collective learning, and adaptation to the external environment.” (Yukl, 2012, p. 68). They include managers' practices related to the “initiation and encouragement of change” (p. 72) and facilitation of the change process at hand. This combination of practices includes advocating change, envisioning change, encouraging change, and facilitating collective learning.

Advocating change is related to “influencing people to accept the need for change” (Yukl, 2012, p. 72). This is needed not only when a change is urgently needed but also when an organization experiences a slow-changing internal or external period, and there are no crises happening during that period.

Envisioning change means articulating a clear and appealing vision of the gains that can

be reached by implementing change (Yukl, 2012). This is done to build confidence and commitment in the work unit to the implemented changes.

Encouraging innovation means to “encourage, nurture, and facilitate creative ideas and

innovation in a team or organization” (Yukl, 2012, p. 73). Additionally, it involves the facilitation of creative problem-solving and entrepreneurial activities within the work unit.

Facilitating collective learning “of new knowledge relevant for improving the

performance of a group or organization” (Yukl, 2012, p. 73). These practices might involve supporting the exploitation of existing and exploration of new work methods and strategies, and facilitation of learning from failures. It also involves guiding the learning, spreading, and use of new knowledge and technology.

External Practices

The previous categories were related to what is going on within the managers’ work unit while the purpose of external practices is to “provide relevant information about outside events, get necessary resources and assistance, and promote the reputation and interests of the work unit” (Yukl, 2012, p. 74). Three midrange categories included in this meta-category are networking, external monitoring, and representing.

(16)

12

Networking involves building and maintaining relationships, communicating, and

interacting with people outside of the managers’ organizational unit to acquire “information, resources, and political support” (Yukl, 2012, p. 74).

External monitoring includes scanning and analyzing the external environment to identify

relevant changes (Yukl, 2012). That information is then used to identify potential threats and opportunities for the whole organization or the unit that the manager is responsible for. The relevance of these activities depends on the degree of the impact that events in the external environment or other organizational units have on the managers’ unit.

Representing. According to Yukl (2012) managers need to represent their organizational unit or the organization in general when dealing with outsiders such as colleagues from other units, superiors, and organizational stakeholders (e.g. customers, suppliers, partners, investors, etc.).

(17)

13

Research Design and Method

We start this chapter by describing and motivating the choices we made about research design and method. Then we provide a detailed account of how we conducted the study and end this chapter by showing how we addressed ethical consideration, limitations, trustworthiness, validity, and reliability.

Choice of Research Design and Method

Several reasons motivated us to choose qualitative methods as research methods. Compared to quantitative methods, the qualitative methods are adept at exploring the human experience (Nowell et al., 2017). The changes in managers’ practices led by digitalization belong to the area of human experience. Hence, to that extent, we believe a qualitative method is suitable for our study. According to Nowell et al. (2017), qualitative methods also provide meaningful and useful academic views and knowledge. Additionally, when we searched for literature on databases, the majority of available literature about digitalization and management or managers was published in the last 5 years. This indicates that digitalization is a comparably new concept in academic management study. Thus, we need to explore an area with relatively limited pre-existing knowledge. To do that qualitative methods are more suitable because we can base our study on managers' experiences as that is a way of gaining valuable new information without being dependent on juggling different concepts and measurements. To conquer this task, the choice was made to use primary data that we gather for the specific purpose of our study. It was collected by using qualitative data collection techniques - semi-structured interview and a structured interview.

An interview is considered one of the popular ways of doing qualitative research (Holt, 2010)

since the interview specialized in exploring people’s experiences. Furthermore, a semi-structured form was chosen by us to collect the data in a semi-structured manner while having the flexibility to respond to and explore in more depth what was said by the interviewees. Also, a semi-structured interview would help us to interact with participants to build relations and trust between us and the interviewees (Silverman, 2000). The semi-structured form can also lead to inconsistencies between interviewers. To minimize it a decision was made to develop an interview protocol that each interviewer could use when conducting interviews.

The interactive interviews were conducted through the online environment by using different communication software, more precisely, by using Zoom, Skype, and WhatsApp. The reason behind the use of these platforms is that they provide the same functions like phone calls or video calls and that they are widely available. However, there are downsides to using such platforms when they are compared to face to face interviews. We might miss some information such as facial expression, eye contact, or body language (Holt, 2010). Thus, it might be hard for interviewers and participants to build a first impression and to understand and react to each other’s nonverbal cues. On the other hand, unlike face-to-face interviews,

(18)

14

the use of such platforms provides flexibility regarding adaptation to the interviewee’s schedule and location. It is also suggested that the participants feel more relaxed and easier to talk to when interviews similar to phone interviews are used (Holt, 2010). Another major factor that we had to consider was the COVID-19 pandemic in the world during the time that our study was conducted. Thus, it was important that we fulfilled our social responsibilities and followed the guidelines by the World Health Organization and the Swedish government to keep distance with people and avoid face-to-face meetings.

Also, a decision was made to use structured email interviews in addition to semi-structured online interviews. This was done because of the time constraints of the interviewees. Email interviews allowed us to have more participants because they could answer questions on their own time without the need of having a scheduled meeting. However, structured email interviews lack flexibility and provide no chance for responding and clarifying. To minimize this, the definitions of key terms, that explained what we are interested in from each question, was sent with the interview questions, and participants were encouraged to ask questions at any time during the process. Additionally, interviewees were informed that we might contact them again in case there is a need for clarifying their answers.

To analyze data, we applied thematic analysis as it is very flexible and can be applied to a variety of research purposes. Our study tries to explore managers’ experiences concerning their practices thus it tries to reflect their reality. This means that we assume the managers can convey their experiences by using language (Braun & Clarke, 2006). Thus, thematic analysis is an appropriate method to use because it can work on multiple levels, more specifically, the surface (what this study is interested in) and what is going on beneath it. Additionally, thematic analysis fits with our experience levels as novice researchers.

Case Study

As introduced in the previous chapters this study focuses on the topic of digitalization and how it affects managerial practices. We chose to study the experiences of managers working at Ericsson’s office in Stockholm. Not only because Ericsson is one of the largest local companies that employ almost 13 000 people in Sweden, but also because Ericsson is one of the leading companies in the telecommunication industry. According to the study by Butner and Ho (2019), the telecommunication industry on average is using emerging technologies more than any other industry. Hence, studying an organization from this industry is considered suitable for our study. Additionally, our choice of case company was influenced by accessibility which in our case meant that we had a contact person in the organization who could provide access to the managers working in it.

Approach to Literature

Searching and reading the literature helped us to narrow down the topic and focus on the research problem. We first looked at the broad topic of digitalization then, as search for relevant literature continued, we put our focus on the effects of digitalization on managers’

(19)

15

profession and roles. Another reason for approaching the literature is that it helped us to understand the concepts more precisely and in an academic way and provided us with validated and tested theoretical frameworks for managerial practices. The literature search was performed by using databases such as ABI/INFORM Global, Primo, Emerald Insight, and Google Scholar. Access to these databases was provided by the Mälardalen University. Mostly peer-reviewed scientific journal articles were used. However, to gain a broader view of the topic and a deeper understanding of the theoretical framework, we included some relevant books, conference papers, and dissertations.

Development of Research Instrument

For answering our research question and to formulate the interview questions, we are using meta-categories of managerial practices, as described in the previous chapter. Using these categories allows one to focus the questions and let the interviewees describe the changes that they have experienced in their practices due to digitalization. In this way, all the broad categories of practices (task-oriented, relations-oriented, change-oriented, and external) are represented. The operationalization of the interview questions can be seen in Appendix A. These interview questions are adjusted after a pilot interview that we did with a former team manager from our network of acquaintances. The pilot interview was done to test the understandability of the interview questions and whether any questions need to be improved to make them more clear and easier to answer. The pilot interview was not included in the analysis and further parts of this study. Additionally, after the pilot interview an interview protocol was developed (see Appendix B), to have consistency between interviewers when conducting the interviews. The interview protocol also includes clarifying guidelines for asking follow-up questions or being used during the interviews to clarify what we mean by each question.

Procedure for Data Collection

The invitation email to the managers was sent on the 24th_{of April (2020) to the contact person} in Ericsson’s office in Stockholm. The contact person made several adjustments to it so that it is more understandable and appealing to the managers. Then this adjusted version of the invitation email (see Appendix C) was forwarded to the managers through Ericsson’s internal emailing system. Managers then could volunteer to participate by choosing their preferred method of participation (interactive interview or email interview), preferred time and date for the interview, and by leaving their contact details in a Google form. Once the managers volunteered to be interviewed the follow-up email was sent to them. At this point no managers chose to do an email interview. Those three managers that volunteered to do interactive interviews received a follow-up email similar to the draft in Appendix D containing the interview questions and the definitions of key terms. This was included in the email so that participants are prepared for the interview and to get them thinking in the terms that we are using. Additionally, a reminder email was forwarded on the 4th_{of May (2020) by the} contact person. Two more managers volunteered to have interactive interviews via Skype and

(20)

16

three managers volunteered to participate by email interviews. Short information about interviews with managers can be found in Table 2, while more elaborate information about the interviews, the interviewees, and how they were reached is available in Appendix E.

For four of the interviews two of us were present and one interview was conducted only by one of us present. Only one person interviewed each manager while the other person was providing support to the interviewer. The interviews largely followed the protocol as seen in Appendix B. Some follow-up questions were asked depending on interviewees' answers to clarify or dig deeper into what was said. The interviews were between 30 to 50 minutes long. All of the interviews were held using the English language. They were recorded with the permission of the interviewees and within 48 hours transcribed into a textual format (see Appendix F). This was done for the ease of the analysis and so that the persons involved in the assessment of trustworthiness, reliability, and validity of our study could have the necessary information to do that.

Managers that chose to participate by doing email interviews received a follow-up email similar to the draft presented in Appendix G. They were encouraged to contact us if anything is unclear at any time, however, none of the interviewees did. On the 8th_{of May an additional} email was sent to remind that this was the last day for sending in the answers to the interview question. Once all the email interviews were received, they underwent the same analysis as the transcripts of interactive interviews. The answers from email interviews (see Appendix H) were significantly shorter than transcripts of interactive interviews. However, they were more focused and concise and thus provided a satisfactory account of managers' experiences.

Procedure for Data Analysis

For thematic analysis of the data collected we followed the guide by Braun and Clarke (2006). The analysis process began with getting familiar with the data by reading and re-reading it while starting to sketch the initial idea of what we find interesting in the data. In the next step, we began the coding process that was guided by our research question. Each interview was coded by one of us and after coding was finished, the codes were reviewed by the others,

(21)

17

and adjustments were made where differences arose. The third step, searching for themes, began when all the interviews were coded. All the codes were put in one document and each of us searched for themes separately and then we discussed each other’s themes and came up with six initial themes. Then,

during the fourth step of the analysis, these six initial themes were reviewed by looking if they work with the coded extracts. This step reduced our six initial themes to five (see Table 3) that include the theme ’Miscellaneous’ and contains codes that do not seem to fit anywhere else. During the fifth step, we defined themes further and came up with appropriate names for them. The themes, sub-themes, and codes that they are comprised of and the original items that they are coming from can be seen in Appendix I. In the final step, we presented our themes and discussed them in relation to the literature and theory. This is going to be our ‘Results’ and ‘Discussion’ chapter.

A note regarding the consideration of gender in this research; We do not include the gender

of the managers in our study because, as noted by Silverman (2017) in the qualitative analysis, only identities that matter are those invoked by the participants themselves. Thus, we do not want to present any identities based on our assumptions, and managers themselves did not bring up their gender during the interviews. Additionally, we do not want to lead readers to believe that we considered the effect of gender in a particular way during our analysis because based on writing by Silverman (2017) we do not have data that enables us to make claims of correlation and causation between our findings and such identities.

Ethical Considerations

Several steps were taken to ensure that ethical considerations were addressed in our study. When managers were asked to fill in a Google form to volunteer to participate in our study, they were informed that their names and contact information will not be available to anyone besides us. The follow-up email before each interview included a section that described how their interviews are going to be used and interview questions were included

(22)

18

in the attachment so that they could give informed consent to the participation. The email also ensured that their names and emails will not be included in our study and that they have a right to withdraw their participation at any time during the process. Before each interactive interview began, the interviewee’s consent for recording it was acquired.

Limitations

The COVID-19 pandemic in the world had an impact on the availability of managers and their answers to our interview questions that have been shaped by this major disruptive event. During this time, managers were working only remotely, hence they talked much about how remote work disturbs their normal working process. This might lead us to overestimate the influence of remote work. However, working in a digital environment was also part of the change that digitalization brings before the COVID-19 pandemic. Additionally, our interview questions were designed in a way that led the interviewees to talk about a variety of aspects of their practices concerning digitalization.

The article contains 8 interviews which mostly account for the perspective of managers, that is, a specific point of view. Furthermore, most of the managers that we interviewed are from research and development related departments. We lack other perspectives on the topic, for example the marketing department or customer support department. On top of that, this research was mainly focused on managers that are situated in Stockholm, Sweden where the main office is located. With this in mind, the practices performed by managers in Stockholm may not be similar to other offices situated in other geographical locations.

An additional limitation of this research is the use of the English language. This is in regard to all of the approaches taken to conduct this research. This is because English is not our first language. The same point might apply to the interviewees. As a result, the interviewees’ interpretation of the questions, as well as our interpretation of the answer, can be misconceived.

Trustworthiness

For our research to be considered trustworthy, it needs to include enough information so that the readers can judge our results based on the way we arrived at them (Nowell et al., 2017). We tried to achieve that by describing in detail exactly what we did, especially how we conducted data analysis.

Reliability

To ensure internal reliability, i.e., inter-observer consistency during data collection, all of us did at least one interview so that in the data set all of our accounts are represented. We also used the same protocol with clarifying guidelines for conducting interviews to have consistency among ourselves and to avoid pursuing our preconceptions and interests. To ensure internal-observer consistency when performing data analysis, each of us checked each

(23)

19

other’s codes during the coding process and each of us created themes before, and then they were discussed and adjusted collectively.

It is suggested that external reliability is hard to achieve in qualitative research (Bell et al., 2019), and in our case the study was done during the COVID-19 pandemic, which is a social setting that is unique for our study. However, we tried to ensure external validity by describing in detail our procedures for data collection and analysis so that our study can be replicated.

Validity

To try to ensure that our results are in agreement with the data that we produced, i.e., the internal validity (Bell et al., 2019), we described our procedure for data analysis in the ‘Research Design and Method’ chapter. Additionally, our study was subjected to several peer reviews by opposing students and by our supervisor and co-assessor who had access to all the data that we collected and a detailed description of the method of its analysis.

Due to the use of a case study and our small sample, external validity is problematic in our study (Bell et al., 2019). However, we tried to increase it by approaching and interviewing managers occupying different positions and having different levels (e.g. general managers and front-line managers) within the organization.

(24)

20

Findings

In this chapter we describe the results of the data analysis i.e. the five themes and subthemes within them (Table 3). The descriptions of each theme are organized on the theme by theme basis.

Work and Communication in Digital Environment

Shrinking the Impact of Physical Distance

The use of digital tools to work and communicate is a growing need nowadays. It is due to the organization having internal and external stakeholders all over the world and due to the COVID-19 situation. Additionally, some specific work, like software development, would not be possible without digitalization. The use of different devices and sometimes using them at the same time for work is the new norm. Thus, as long as employees or managers have access to a device, the location from which they work does not matter. So, in general digitalization reduces the physical distance by allowing communication, collaboration, and work regardless of people’s physical location. It allows managers to communicate and work with teams and manage people located in different parts of the world.

It is also suggested that digitalization helps to focus on interactions with people and allows them to stay in touch with them, by making these aspects easier. Another benefit of working and communicating in a digital environment, as pointed out by Manager 5, is that reduced need for travel helps to reduce stress levels in people associated with the traveling:

Nowadays, all the companies that we are working with are also very, quite advanced when it comes to digitalization. So that has been helping a lot. For example, you want to meet a customer, ten years ago, in most cases, you will have to travel. But now, it is becoming a norm, let’s say, you meet them by digital means and to handle tasks. That helps a lot, that really helps people in terms of stress-level, that really helps people instead of taking an extra step of traveling.

This also indicates that for the communication and work between organizations to be effective, it is needed that both parties involved are adapted to and using digital tools. Furthermore, digitalization allows scale operations without having additional facilities in different geographical locations which makes it more cost-effective because there is no need for investment in capital and human resources to run them.

When it comes to working together, as suggested by the majority of managers, digitalization enables and makes it easier to run projects, accomplish tasks, and collaborate with people from different geographical locations. The work is not tied to the physical location and it allows them to work from anywhere at any time. However, it was indicated by some managers that this leads to a need to find and manage a balance between work and private life. This is

(25)

21

best illustrated by Manager 8 who wrote that “when you can work from practically anywhere/anytime it’s harder to separate work and private life. New skills are needed to manage work-life balance”.

Digitalization is changing the way people are communicating and interacting by offering more ways and more tools to do that. The number of communication tools used has increased and the tools themselves are changing as well. They are becoming more user friendly and more efficient and new tools are adapted when they seem more efficient than previous ones. This also enables much more communication to be done digitally which is needed for a large organization like Ericsson as described by Manager 4:

In Ericsson, it’s a huge company. I think we are about 100,000 people in the world. A little over 10,000 in Sweden. It is difficult to have a communication with everybody locally to go and sit with conference, so… Quite a lot of it is done digitally.

It was also pointed out by several managers that the digital tools make it easier and more efficient for booking meetings and communication between people in the same building as well as those in different geographical locations. Digitalization has improved communication not only with internal stakeholders, but also with external stakeholders making it easier, much faster, and more efficient.

As noted before, the use of digital tools enables communications with people from different parts of the world. However, organizing communication between time zones can be challenging. It can also be challenging to manage meetings, communicate, and discuss with people from different cultures. This requires managers to have knowledge about different cultures and differences between them.

Challenges

Digitalization has enabled communication immensely and work to be done in a digital environment for some time and face-to-face communication was decreasing. However, Covid-19 forced people to work and communicate only in a digital environment. Thus, this current extreme situation contributed to uncovering challenges associated with working and communicating in a digital environment. Managers need to address these challenges for their practices to be as effective as or even more effective than when working in only a physical environment or the combination of both. So, currently, they are in the adoption phase to this environment and are exploring new ways to leverage the challenges that it brings as described by Manager 3

So, I think we’re not… we’re kind of exploring on how we can work best in this kind of reality. So, I think it is still a process at the moment, and at the same time, we are… we have been using these kinds of tools for a long time but we are not ready yet, I think, to fully use 100%.

(26)

22

The majority of managers expressed some challenges with reading and managing people when communicating in a digital environment. This challenge is associated with the lack of face-to-face or physical interactions that takes away the non-verbal cues, which leads to a decreased understanding of people and their mood and emotions. This suggests that face-to-face communication is needed, and even some people want to have it. Thus, there is a need to adapt to how meetings are set up and how to talk to people that need face-to-face interactions and people that are not used to digital tools. On the other side, those people that normally are not comfortable with having physical face-to-face communication, are able to express themselves better by communicating in the digital environment.

Digitalization also provides an alternative to physical face-to-face communication in the form of using video during online calls and meetings. This use of video during meetings has increased, especially during the COVID-19 outbreak, to help to balance some of the negative effects of only digital meetings discussed above. However, they are still considered to be not as effective as physical face-to-face meetings.

Another challenge is the perceived impersonal nature of interactions in a digital environment. This stems from lack of human contact while working that some people need and lack of possibility to have spontaneous, unofficial meetings, small chats, or quick discussion of ideas. It is also hard to build trust, get to know people on a personal level, build relationships, and create team spirit in a digital environment, and by only using digital tools. This makes it harder to support, engage, recognize, inspire, and motivate employees. Thus, it is needed to find new ways to build trust and relationships with teams and people when working in a digital environment.

A major challenge brought by digitalization is regarding change management and

implementation. It is suggested that digital tools are not that useful for managing people

through change implementation. This is because, to implement a major change, it is considered necessary to have face-to-face discussions or informal meetings where people are bonding and spreading the idea of and need for change. It is also harder to establish relationships with key people for change implementation and having trust that is needed between managers and the employees to persuade the change implementation.

When we asked Manager 2 if he found a good way to manage people through change when human contact is lacking, he replied:

Not a silver bullet. But awareness is the key. We need to be aware of the limitations and the constraints that the digitalization implies and we need to be very conscious about and aware of these effects in order to mitigate them by being more personal… Seeking the dialogue with people more actively. So, it’s in a way harder work… or we need to be more thorough.

Accordingly, being aware of the issue and searching for ways to get more personal with people might help to minimize the negative effects on how they are managed through

(27)

23

change. On the other hand, it is also suggested the change can be managed faster and more efficiently due to digitalization. Thus, this gain can be reinvested in managing people through change and helping them to perform better that got more difficult due to digitalization. The decision-making process has also changed due to digitalization and changing ways of communication. There used to be regular physical meetings with people involved in the decision-making. Now the decision-making process has been disrupted because the informal stage before making a decision and the planning and setting goals is more difficult to do in a digital environment. Additionally, it is harder to have a structure around difficult decisions or solving a difficult problem and making this structure visible to other people involved when people are not in the same physical environment.

Managers are trying to find different ways to leverage the disadvantage of working only in a digital environment by having more formal and informal interactions and having frequent online meetings to monitor progress and assist people in their work tasks. Some creative digital alternatives to informal physical meetings such as online “Fika” (a coffee and cake break in Swedish culture) are used and found to be helpful for having better relationships in the teams when working only in a digital environment.

In general, to navigate and overcome these challenges brought by working in a digital environment, managers need to actively search for more creative ways to interact and work with people in a digital environment. Also, it is noted the digital tools are not what makes these challenges but the way they are used so far. These points are described by Manager 3

I think it is not the digital tool itself that is the blocker, but it is more our ways of thinking, right? It is how we approach things. I think, being more creative in the way that we need to communicate, I think that is the key. That is the answer to this. I, myself, I’ve already explained, I am exploring and finding creative ways of approaching people that I need to establish trustful relationship with and to be able to make, later, difficult decisions and enable change management.

Consequently, once the managers have adapted to working and communicating in the digital environment and have found better ways to use the functions that digital tools provide, it should improve the ways they establish relationships, make difficult decisions together and enable change management.

Training and Learning

Normally, the need for training for employees is decided in their annual performance meetings with their managers. For some positions continuous training is crucial to continue the work. In general, the organization and the managers support, encourage, and sometimes push employees to take courses and learn new knowledge because it is beneficial for the organization and the employees themselves. Sometimes training and workshops are needed to implement some changes in the work units.

(28)

24

Additionally, digitalization has created a need to learn new terminology and digital tools and technology as they come available. Another need for learning and training arises from the speed of changes in the organization and the environment as best described by Manager 6:

Nowadays the world is changing very quickly, this has never been so rapid, and the biggest reason of it I think is digitalization. Adaptability is the key. Because of the quick changes, it can easily happen that our knowledge suddenly becomes worthless, then we need to adopt and learn new things and solve new problems. It can be very hard especially for older colleagues, but not only for them. I usually give them positive feedback and tell them they can do it.

It also shows that it may be hard for some employees to learn and adapt to the new changes brought by digitalization and that it is important to support them and encourage them in this process.

The need for managers to learn due to digitalization has been expressed by Manager 2: New things are popping up every day. So, the ability to learn is something that... I think… Is different from before digitalization was such a boost. And we need to think more holistic. We are expected to know things outside the borders of our direct work. So, we need to learn broader to also understand the neighboring part, at least, the neighboring part, if not the complete flow an end to end. So, that’s learning, learning, learning.

The need to have the “big picture” of what is happening around, instead of just the direct area of work requires more knowledge about other parts of the organization. Managers also need to deal with and work with people from different departments that are outside of their field of expertise. Thus, to interact effectively with them, it is important to learn about them, how they work and think.

However, under some circumstances less training might be needed. One manager has noticed that educational institutes are now adopting more towards digitalization processes. Hence, managers’ practices are made easier when dealing with new employees that have gotten used to using digital practices before starting to work.

Online Training

The amount of training is increasing, and it is recognized by several managers that digitalization enables many ways of learning and training. Thus, more remote education is being used than before. At the same time, online training has also advanced through the years and allows for interactive teaching, as noted by Manager 4:

I mean, whoever thought about remote education, remote courses before like 10 years ago. There was one, but they were not on this level. But now, some of the courses are completely remote, some of the courses, you watch like a similar YouTube page, but it is on a completely different level. Some of the courses, you have like a video where you can talk to the teacher, like a conference.

(29)

25

The advantages of online training are that they are easier and faster to organize than physical training and it is also easier to participate in them. Having training programs in a digital environment also reduces the cost of travel. These advantages in comparison to physical training are illustrated by Manager 6:

Usually, it takes very long time to organize all of them and to organize the lot of travels for them. (some people don’t want to travel, some of them can’t for some reasons, ….) Nowadays we do almost everything via Skype or Teams software, so no travel is needed, it makes our lives easier. (and cheaper because we don’t have travel cost)

It is also noted by the same manager that training in a digital environment sometimes is not as effective because people tend to do other things at the same time.

All in all, there is a growing need for training and learning due to digitalization, and managers need to ensure that employees get the needed knowledge and training. Also, for similar reasons, not only employees need to learn and go through training but managers themselves as well. Managers also need to be aware that for some learning and adapting to new tools and technology might be harder. Thus, additional attention should be paid to these people, and managers might need to provide extra support to them. To meet the need for training and learning, managers can use online training that has advanced over the years. This enables them to organize the training more efficiently while saving costs. However, managers also need to be aware that online training might not be as effective, and they might need to search for ways to increase their effectiveness.

Information and Data

In general, information and data in this day and age have gone through a drastic change. More specifically, the availability and amount of data and information have increased, more and more from the external environment of the organization. Furthermore, concerning the external environment, there is an expectation for managers and employees of being overall informed.

Information and data are available in different sizes despite the high degree of availability. Smaller chunks of information and data are seen to be easier to consume. Also, information and data available to managers can be overwhelming. It is, however, possible to acquire only relevant information with the tools that are available as the method used to retrieve and handle them has changed and developed.

Just as importantly, the use of information and data is beneficial for managers when it comes to their decision-making. The analysis of information and data is further enhanced for managers in terms of overall quality. This is made possible with the help of new digital tools that are available in their grasp.

Effects of Digitalization on Managerial Practices as Experienced by Managers