The Role of Organizational Structure in Digital Transformation Outcomes

Abstract

Rapid technological advances in an otherwise fast-changing environment accelerate market disruptions, pressuring firms to adapt and embed digital technologies within their core. Orchestrating a digital transformation process can be daunting, given that replacing or complementing existing processes is an act of self-altercation that, if prolonged or miscalculated, results in technological failures and economic loss. Previous studies have identified certain organizational aspects, such as technology assets and culture, as success factors in the digital transformation process, yet the influence of organizational structure remains unexplored, so far studied only as an outcome. Through a retrospective cross-sectional design of online panel data collected from top management professionals, this paper shows digital transformation success being amplified when starting from a higher point of organizational centralization, suggesting centralization helps with initial process coordination. However, a less centralized structure is associated with better outcomes as the process progresses.