Redefining Motivation in Digital Transformation: Employee Motivation in a Flat Organization

Redefining Motivation in Digital Transformation: Employee Motivation in a Flat Organization

Václav Cejthamr (University of Economics, Prague, Czech Republic)
Copyright: © 2020 |Pages: 33
DOI: 10.4018/978-1-7998-0214-3.ch007

Abstract

The rapid pace of change and the rapid growth of technology, especially artificial intelligence, are accelerating the pace of organizational transformation in enterprises. Organizations must be able to respond appropriately. Hierarchical structures still dominate current organizational systems. One way to respond adequately to today's challenges is to introduce flat organizational structures that represent a specific decentralized management system. Flat organizational structures, represented mainly by holacracy, require other ways of motivating workers, mostly predominantly millennials. In addition, organizations can no longer count on employee loyalty. However, boss-less organizations that rely on self-management and self-control are not suitable for every employee, and the concept of self-management and the boss-less organization has to be further developed and adjusted. The solution can be to redesign a traditional hierarchical model of needs that should be adapted and targeted to the current needs of flat organization employees that no longer count on managers.
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Introduction

The ever-accelerating pace of change is affecting the transformation of corporate organizational structures and is rapidly threatening their existence. According to Credit Suisse, the life expectancy of companies reported in the S&P 500 index in 1958 was more than 60 years, while in 2016 it dropped to just 24 years (Anthony, Viguerie, & Waldeck, 2016). This trend will continue, and it is estimated that in 2027 the life expectancy of a company will be only 12 years. About 50% of the S&P 500 will go bankrupt or be acquired over the next decade.

The driving force behind this trend is the rapid growth of intelligent technologies that allow further extension in automation, especially the implementation of artificial intelligence and the Internet of Things (Oracle, 2016). Analysts expect insurance companies' revenues to fall to half over the next ten years, as intelligent systems will dramatically reduce accidents (Innosight, 2018).

These changes do not leave managers at ease, and they must prepare for adequate responses. As Innosight says in its survey of executives (Anthony, Viguerie, & Waldeck, 2016) from 91 companies with revenue greater than $ 1 billion, their growth strategy is being constantly undermined by the everyday influx of operative decisions inside companies. This is precisely in line with Mintzberg's almost 50-year-old (Mintzberg, 1973) analysis of the top managers' working day. Typical day-to-day managerial work continues to focus on handling operational tasks, filling in forms, reports, and attending meetings. It is extremely difficult to reduce the number of operative activities and additional tasks that keep managers from innovative, creative work that will allow their organizations to react flexibly to expected and unexpected future trends. Similarly, it is difficult to move from common management practices that have begun to develop gradually since the beginning of the 20th century and have become a major management paradigm at the end of the 20th century.

Hierarchical structures dominated and still dominate organizational systems. At that time, organizations were far from understanding the importance of automation, complex processes, knowledge management, data mining, and artificial intelligence. Their main task was to achieve efficiency. However, this situation has started to change very quickly and companies, if they wanted to succeed or survive on the market, had to pay attention to new technologies and their influence on organizational structures, organizations and customers. As a result of the development of information technology, the customer has also quickly transformed into a highly intelligent and perfectly informed consumer who uses new technologies to his advantage. Previously conventional traditional planning methods and tools have moved to new, useful tools that enable organizations to respond quickly to continual change and adapt planning procedures to the real situation. Organizations are no longer able to accurately estimate future trends with a horizon of more than one year using traditional planning tools, and so more and more different innovative and agile planning approaches and methods are being used. What is the management hierarchy? It can probably be defined as a multi-level organizational system in which managers monitor and coordinate the work of the organizational units they control (Chandler, 1977). The management hierarchy is based on two basic underlying principles: the hierarchy of authority, where individuals report to managers, and the hierarchy of responsibility, where responsibility for work extends from direct executors to managers (Lee & Edmonson, 2017). The basic premise of the managerial hierarchy, which distinguishes it from non-hierarchy, is individual obedience to superiors (Burns & Stalker, 1966).

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