The Emerging Digital Firm

All of the changes we have just described, coupled with equally significant orga­nizational redesign, have created the conditions for a fully digital firm. A digital firm can be defined along several dimensions. A digital firm is one in which nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. Core business pro­cesses are accomplished through digital networks spanning the entire organiza­tion or linking multiple organizations.

Business processes refer to the set of logically related tasks and behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated. Devel­oping a new product, generating and fulfilling an order, creating a marketing plan, and hiring an employee are examples of business processes, and the ways organizations accomplish their business processes can be a source of competitive strength.

Key corporate assets—intellectual property, core competencies, and financial and human assets—are managed through digital means. In a digital firm, any piece of information required to support key business decisions is available at any time and anywhere in the firm.

Digital firms sense and respond to their environments far more rapidly than traditional firms, giving them more flexibility to survive in turbulent times. Digi­tal firms offer extraordinary opportunities for more-flexible global organization and management. In digital firms, both time shifting and space shifting are the norm. Time shifting refers to business being conducted continuously, 24/7, rather than in narrow “work day” time bands of 9 a.m. to 5 p.m. Space shifting means that work takes place in a global workshop as well as within national boundaries. Work is accomplished physically wherever in the world it is best accomplished.

Many firms, such as Cisco Systems, 3M, and GE, are close to becoming digital firms, using the Internet to drive every aspect of their business. Most other companies are not fully digital, but they are moving toward close digital integration with suppliers, customers, and employees.

Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.

5 thoughts on “The Emerging Digital Firm

  1. Candelaria says:

    I was excited to discover this great site.

    I wanted to thank you for ones time for this particularly fantastic read!!
    I definitely liked every part of it and I have you saved to
    fav to see new things on your blog.

  2. Kit says:

    Good post. I learn something new and challenging on websites I stumbleupon everyday.
    It’s always exciting to read content from other authors and use a
    little something from other web sites.

  3. Ossie Benvenuti says:

    It’s actually a great and useful piece of information. I am happy that you shared this helpful info with us. Please keep us up to date like this. Thank you for sharing.

Leave a Reply

Your email address will not be published. Required fields are marked *