Digitalization’s Impact on Business and Management

Key Trends and Future Directions of Digitalization in Organizations

Calderon-Monge and Ribeiro-Soriano (2023) conducted a systematic literature review (SLR) to analyze the role of digitalization in business and management. The review encompassed 119 review articles published in the Web of Science from 2018 to April 2022, focusing on the mature functional areas of management, marketing, and finance and accounting. The study examines the development of digitalization literature, the key research topics, and the research agenda within these functional areas.  The review identifies several significant tendencies, including the impact of digital technologies on the analysis of consumer behaviour, the interplay between digitalization and green innovation👉 Practical application of new ideas to create value. within organizations, and the application of blockchain technology to financial services. Key contributions of this research include providing a complete and up-to-date overview of digitalization, structuring and clarifying the concept, and establishing links between digitalization and established viewpoints in management, marketing, and finance and accounting literature.

Digitalization in Business and Management: A Comprehensive Review

The rise of digitalization has been a major force for global economic growth. In 2018, firms that had undergone digital transformation accounted for $13.5 billion of the world’s GDP, and this figure is expected to rise to $53.3 billion by the end of 2023, representing over half of the total nominal GDP. This study aims to analyse the existing literature on digitalization within companies, identifying key research areas and future research directions.

Analysis of 119 Review Articles

The research involved a systematic review of 119 articles on digitalization in management, marketing, finance, and accounting, published in the Web of Science between 2018 and April 2022. The review identified several key trends, including the impact of digital technologies on consumer behaviour, the relationship between digitalization and green innovation, and the application of blockchain technology in financial services.

The study makes several contributions. First, it provides a comprehensive and up-to-date overview of digitalization from a global perspective, summarizing the current state of knowledge in an integrated framework. Second, it simplifies the complexity of digitalization by providing structure and clarity. Finally, it connects digitalization with established viewpoints in management, marketing, finance, and accounting literature.

Digitalization: Transforming Organizations and Industries

Digitalization is driving innovation and causing significant changes in organizations, institutions, and society. It is accelerating the obsolescence of traditional business models and compelling firms to adopt new strategies and technologies to maintain competitiveness. Digital technologies are also changing consumer behaviour and expectations, with consumers now playing a more active role in the dialogue between organizations and stakeholders. Moreover, digitalization is redefining competitive landscapes, as seen in the rise of platforms and the sharing economy.

Given the growing importance of digitalization, this study seeks to enhance our understanding of digitalization in key business areas, identify gaps in the literature, and suggest future research directions.

• Digitalization: A Catalyst for Change
  The text emphasizes that digitalization is not merely an incremental change but a powerful force that fundamentally reshapes organizations, institutions, and society. It acts as a primary driver of innovation, compelling entities to adapt or risk👉 The probability of adverse outcomes due to uncertainty in future events. being left behind.
• The Obsolescence of Traditional Business Models
  Digitalization significantly accelerates the rate at which existing business models become outdated. Companies can no longer rely on established ways of operating; they must be agile and willing to reinvent themselves. This often involves not just incorporating new technologies but also undertaking structural changes and overcoming obstacles to digital transformation.
• The Transformation of Consumer Behavior
  Digital technologies have profoundly altered consumer behavior and expectations. Consumers are no longer passive recipients of information but active participants in the interactions with organizations. They expect more from companies, including greater engagement, personalized services, and seamless digital experiences.
• Redefining Competitive Landscapes
  Digitalization is also reshaping how companies compete. The rise of platforms and the sharing economy has disrupted traditional markets, creating new ways of exchanging goods and services. Competition👉 Rivalry between entities striving for a shared goal or limited resource. is no longer limited by physical boundaries but extends into the virtual realm, where information flows rapidly and barriers to entry can be lower.
• The Importance of Studying Digitalization
  Given these far-reaching effects, the study of digitalization is crucial. By enhancing our understanding of digitalization in key business areas, researchers can identify gaps in knowledge and suggest future research directions, ultimately helping organizations navigate this transformative era.

Research Questions and Methodology

The study addresses the following research questions:

• RQ1: How has the literature on digitalization developed up to 2022 in management, marketing, finance, and accounting?
• RQ2: What are the main research topics related to digitalization in these areas?
• RQ3: What is the research agenda for digitalization in these areas?

To answer these questions, a systematic literature review (SLR) approach was used. This approach is suitable for consolidating existing knowledge, conducting critical analysis, and generating new ideas. The SLR involved several stages: defining the research objective, outlining the research protocol, and reporting the findings. The findings were derived through descriptive statistics, content analysis, and identifying gaps and future research directions.

Theoretical Framework: Digitalization and Digital Transformation

Digitalization is driven by digital tools like Social, Mobile, Analytics, and Cloud (SMAC) technologies, which offer opportunities to change how firms operate. These technologies enable firms to enhance market visibility, connect with various actors, access and exchange information, and understand business and client needs. While digitalization offers many benefits, it is important to address the impact of new technologies on decision-making and consumer privacy.

Digitalization involves the interaction of digital technologies with social and institutional processes, transforming these technologies into infrastructural tools that affect society and the economy. It is distinct from digitization, which is the technical process of converting analog information into a digital format. Digital transformation (DT) entails significant organizational changes driven by digital technologies, leading to profound alterations in business strategies and routines.

The implementation of digital technologies interacts with various organizational and managerial characteristics, including strategy, resources, processes, values, and culture, as well as external factors like legal conditions, infrastructure, and industry dynamics. Business model👉 A business model outlines how a company creates, delivers, and captures value. innovation and dynamic capabilities👉 A firm's ability to adapt and reconfigure resources for change. are crucial for firms to remain competitive in the digital age. Digital entrepreneurship is also influenced by factors like perceived utility, ease of use, and willingness to change. Furthermore, the characteristics of the digital consumer, such as their increasing trust in digital technologies and expectations of ubiquitous access to virtual resources, shape digital transformation. The availability of data has also increased the importance of automated learning and data analysis for organizations.

Finally, Industry 4.0👉 Usage of digital technologies to create smart, connected manufacturing systems. represents a paradigm shift towards a hyperconnected and decentralized manufacturing ecosystem, with intelligent physical objects, decentralized subsystems, and seamless integration of various components.

Research Methodology: A Systematic Literature Review

This study employs a systematic literature review (SLR) to analyse digitalization and its effects on firms within management, marketing, finance, and accounting.

The SLR methodology was chosen because previous reviews have used various methodologies on different aspects of digitalization, and there is a lack of a comprehensive review that integrates the mature areas of the firm. The review followed the PRISMA protocol, a systematic approach for conducting literature reviews. The Web of Science database was used for the literature search. Content analysis and co-occurrence analysis were employed to analyse the data and identify research trends and themes.

Key Findings: Development, Topics, and Trends in Digitalization

The analysis of the literature reveals a substantial increase in review articles on digitalization from 2020 onwards, indicating a growing interest in this area. The literature is fragmented across various journals, with a significant portion of papers published in journals related to management, business, marketing, finance, and accounting. Europe leads in the number of published review articles, followed by Australia and North America.

The analysis of research trends reveals several key topics in each area. In marketing, the focus is on digital marketing performance, social media strategies, consumer behavior, the impact of digital technologies, and the customer journey. In management, the main topics include management performance, innovation, technologies, and Industry 4.0. In finance and accounting, the research emphasizes financial technologies (Fintech) and blockchain, as well as the impact of digitalization on accounting and cryptocurrency.

Development of Digitalization Literature

• Increased Research Interest: The analysis indicates a significant surge in the number of review articles focused on digitalization, particularly from 2020 onward. This upswing suggests a growing recognition of the importance and complexity of digitalization across various fields of study.
• Fragmentation of Literature: While there’s increased interest, the literature is spread across numerous academic journals. This fragmentation implies that research on digitalization is being conducted in diverse disciplines and contexts, highlighting its interdisciplinary nature but also potentially indicating a lack of a consolidated body of knowledge.
• Geographical Distribution: The research output is concentrated in specific regions. Europe is the leading contributor of review articles on digitalization, with substantial contributions from England, Italy, Germany, and France. Australia and New Zealand, followed by North America (the USA and Canada) also contribute significantly. This geographical distribution may reflect variations in technological adoption, economic development, or research focus across different continents.

Key Research Topics

The review identifies distinct key topics within the three functional areas:

Marketing: The research trends in marketing emphasize the following:

• Digital Marketing Performance: Studies explore the effectiveness of digital marketing strategies and how they drive performance.
• Social Media Strategies: A significant focus is placed on the use of social media as a marketing tool, including its management and impact.
• Consumer Behavior: Researchers investigate how digitalization influences consumer behavior, preferences, and decision-making.
• Impact of Digital Technologies: The broader impact of digital technologies on marketing practices and outcomes is a key area of inquiry.
• Customer Journey: Understanding the customer journey in the digital age, including online experiences and touchpoints, is crucial.

Management: The key topics in management include:

• Management Performance: Research examines how digitalization affects management practices and organizational performance.
• Innovation: Digitalization’s role as a driver of innovation within organizations is a central theme.
• Technologies: The adoption and impact of various digital technologies on management and organizations are explored.
• Industry 4.0: The implications of Industry 4.0 for management and organizational structures are investigated.

Finance and Accounting: The research in this area highlights:

• Fintech: Financial technology (Fintech) and its transformative effects on the financial industry are a major focus.
• Blockchain: The application of blockchain technology in finance and accounting is a key area of research.
• Impact on Accounting: Studies analyze how digitalization is changing accounting practices and processes.
• Cryptocurrency: The emergence and implications of cryptocurrencies for finance and accounting are examined.

Progress and Evolution of Digitalization Research

The review also traces the progress and evolution of digitalization research in each area. In marketing, the research has evolved from search engine marketing and electronic word-of-mouth to online experiences, consumer privacy, value delivery, digital advertising, and mobile marketing. More recently, there has been a focus on consumer participation in social networks, co-creation👉 Collaborative process involving stakeholders to develop innovative solutions. of value, and digital products.

In management, the research has centred on firms’ capabilities to adapt to disruptions, dynamic capabilities, malleable organizational designs, data-based operations, and digital business models and ecosystems. The increasing turbulence and interconnectedness of the business environment due to digitalization are also key themes.

In finance and accounting, the research has explored the development of Fintech, the impact of digital currencies, and the challenges and opportunities in the digital era. The blurring of professional boundaries and the influence of social networks are also significant topics.

Future Research Directions and Managerial Implications

The study identifies several avenues for future research. In marketing, there is a need for more research on immersive technologies, consumer behaviour in the context of AI, and the multicultural aspects of digital consumption.

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