Is the role of strategic management changing in the context of current economic processes and the development of new information technologies typical of the current fourth technological revolution, known as Industry 4.0?
Strategic management is an important area of management in the context of management of both individual enterprises (microeconomically) as well as domestic economic policy (macroeconomics).
In connection with the development of internationally operating corporations, strategic management acquires a new character, it becomes a part of the study of information and economic globalization processes.
In addition, strategic management can also change its charler in relation to processes such as prolonged business cycles, shortened life cycles of products, increased importance of information, technology, innovation, etc. as particularly important production factors in knowledge-based enterprises and economies in which an ever-increasing role of fully computerized advanced information processing technology, ie technologies typical of the current fourth technological revolution, known as Industry 4.0.
The current technological revolution, known as Industry 4.0, is determined by the development of the following technologies of advanced information processing: Big Data database technologies, cloud computing, machine learning, Internet of Things, artificial intelligence, Business Intelligence and other advanced data mining technologies.
Do you agree with my opinion on this matter?
In view of the above, I am asking you the following question:
Is the role of strategic management changing in the context of current economic processes?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
The change is having to act under more pressure as the environment changes more and more rapidly.
I have added an academic article that I have read a while ago. The emphasis is on Strategic Leadership as a key ingredient for Strategic Management. I would argue that we need Strategic Leadership to face the challenges of Industry 4.0.
Organizations are evolving in the way can rely on Resource Based View (RBV) on its rare inimitable to more Dynamic capabilities and as possible opening up to innovation.
The new way of Accessing Market to achieve organizational objectives moves on; A good example in emerging Economies Retails bank are making decision accessing rural market through Mobile Financial services (MFS) in order to increase customer base rural.
This means to access rural market Retail Bank don’t have to have physical branch, they can partner with Mobile operators this reduce cost of hiring new staff, or rent offices what exactly is changing is not the organization to operates strategically but effectiveness &efficient with which organization chooses to achieves its strategic goal, it may for example chose to use robot for efficiency or apply Human Resource Information System in its HRM functions the decision may for example ranges between increasing shareholder value and community well being .in developing Countries for example digitalization wories lay-off ,orientation cost and the question of security and reliability of access and source of energy (electricity ) More particularly Public sector management stay alert since Lay off risk unemployment and shrink community well being in which it focuses
but the option moves along decision on security,adoptation,cost,realiability,value creation,market orientation and Access these areas surround most basic Decision but different between public sector management and Private sector management will probably make the timing of digitalization and achievement pioneers seek to achieve
Whether there is any changes can be explained by variation between early digitalization adaptors and laggard or skeptical on how they manage to achieve their organization objectives.
Yes, it is, we need a Value based architecture - VBPMN - Value-based Business Process Management Network_ in place of Activity based architecture as a new base platform
The impact of industry 4.0 will only come about through increased technical/organizational networking in the supply chains. This is also the qualitative difference to earlier efforts such as Computer Integrated Manufacturing (CIM). The decisive new feature of current digitization is the possibility of technical networking and continuous availability of product and process data. However, this also poses a challenge to the compatibility of interfaces and data content and quality. This requires a rethinking of (partnership-based) cooperation in supply chains, because only if all partners are at the same technical/organizational level will the effect of Industry 4.0 begin. At the same time, a move away from proprietary solutions is necessary (e.g. in the sense of an open operating system such as Android for industrial applications), which enable fast docking to industry 4.0 supply chains.
For strategic management, this means setting priorities in corresponding forms of cooperation.
This also applies where industry 4.0 is linked to the development of qualitatively new products, which goes hand in hand. Examples are the realization of electric or fuel cell vehicles, where technical expertise is redistributed in supply chains. This changes the relationship with suppliers from a primary cost perspective to innovation partnerships. These need to be strategically redeveloped. The know-how monopolies (e.g. the knowledge about the combustion engine and its supply chain), which have grown historically as in the automotive industry, will lose importance in the future, this will only succeed through the development of new strategic cooperation.
Well, I don't think its "only" industry 4.0, which on the other hand is also a consequence of earlier changes - generally speaking: "globalisation". While older works argue on the logic of “strategy follows structure”, there is increasing evidence, that after liberalisation measures and its consequences (e.g. international capital flow growth since the 1970s) structure can also follow strategy. As we can see, "lobbying" is often water under the bridge. Actors found other instruments. To cite Kobrin (1976): "the state is not the sovereign actor anymore, it is a sovereign actor."
This had and still has substantial influence also on (strategic) management (research). No matter where you look, current theoretical approaches certainly have explanatory power, but usually fail in delivering complete explanations of the increasingly globalised reality we all live in today. Or sometimes the heterogeneity within a nation-state or even just within an industry.
The world has become increasingly interconnected and thus might ask us to shift our focus away from the system-view a level deeper onto the actor-view, whose answer quite often is: "It depends."
You have posed one of the more interesting questions emerging from Research Gate. It is also an matter that interests me and that also finds its way into my teaching.
Please see the attachment for work in process that was prompted by your question.
Jim
There is another point that might be relevant to your question. In the premises it says, “the development of new information technologies typical of the current fourth technological revolution, known as Industry 4.0”.
Summarizing the real developments, there is currently no 4th industrial revolution taking place, but the first post-industrial one. The greatest impact of digitization on the economy is the development of the platform economy, which, like various experts, is increasingly dominating entire economies. According to the self-conception of the platform economy, it is the only value-adding economic factor (which also directs more and more capital flows into this sector). In this sense, industry is no longer seen as value-creating. This also has a variety of effects on an existing industrial infrastructure. Product-as-a-service strategies are therefore also a direct consequence, i.e. products are no longer sold in the classical sense but offered as a service, this applies in particular to technically more complex products, machines and equipment (aircraft engines, elevators, vehicles, etc.). Due to the strength of the platform economy, a lot of investors money is also channeled into digital innovations in this sector.
This can be seen, for example, from the fact that digital innovation cycles are no longer compatible (because they are faster) with industrial innovation cycles. This means that digital innovations overtake each other, but in industrial practice only arrive at the prototype/field trial stage, not in a productive roll out. The entrepreneurial decision for a new technology is called into question at the moment when a newer technical alternative is already offered in publications, marketing communications, etc. The decision to use a new technology is also questioned at the moment when a newer technical alternative is already being offered in publications, marketing communications, etc. The decision to use a new technology is not taken at this stage. Companies are then increasingly faced with the question as to which state-of-the-art technology they should be entering if the life cycle of the technology to be implemented requires "security for years" before it can be amortized. In Germany, "stockpiles" of technical solutions for industry 4.0 can definitely already be found today, which no longer exceeds the prototype status and are at best still being demonstrated in showrooms. Since many of these prototype innovations are financed by various subsidies, the developers and their environment do not care whether they are marketed or not. It is much more attractive to acquire funds for next innovations.
As a result, although technology is available for industry 4.0 (often to the state of prototypes, which are also tested in field trials in industry), the implementation of innovations in production operations is much slower than expected by experts for the reasons mentioned. This is the result of many technical discussions with developers, research and innovation insiders and clear feedback from industry. I have also described this connection in a technical paper in German entitled "Der Osborne-Effekt der Digitalisierung" ("The Osborne Effect of Digitization" - which is available as a full-text download on my Researchgate profile; an article analyzing the thesis of the first post-industrial revolution and the system-determining change to the platform economy will be published shortly).
Andreas Seidel picks up a major issue with, "Companies are then increasingly faced with the question as to which state-of-the-art technology they should be entering if the life cycle of the technology to be implemented requires 'security for years' before it can be amortized.
There is, as it were, a clash between the cycle time of I4 components and of the business. It's not just a question of amortization, but, I suspect, also question of the churn in the capabilities (knowledge, skills, experience, attitude, behavior) of labor and management.
Is it possible that a firm can never realize the full benefits of I4 because of the churn, because of always chasing the next glittering star in the I4 constellation?
Jim
James Drogan First of all, we know from many conversations here in Germany that logistics service providers always invest in low-tech variants with a long service life due to short contract durations wherever possible.
At the moment, industry and trade usually only take big steps when they set up completely new plants on a greenfield site. One problem is still the existence of older generations of production plants that cannot communicate with new I4-capable plants, or only with disproportionate effort.
In Europe, standards for data interfaces and protocols have now been agreed upon, which represents a major step forward for production plants of different manufacturers to be able to work in a networked I4 network.
In fact, there is also a risk that new technologies will ultimately only be understood by those who have developed them, and there is hardly anyone left who has an overview of a complex I4 production system if everything is to be implemented quickly. Building and transferring complex knowledge to large teams always involves a time factor of its own. But this is also an investment in people. But to do this, the providers of new technologies must also prepare and document it in a suitable form so that it can be communicated. Complex I4 applications are something other than intuitive small apps on the smartphone, which only display tiny functions. There is often a lack of trained personnel on the developer side.
During the development push for consumer products in recent years, manufacturers have been able to sell imperfect products to customers, knowing full well that the mass of customer complaints will ultimately contribute to troubleshooting.
To leave the risk for unfinished products (at full price) to the early adopters cannot be a strategy in the industrial sector. From this consumer market segment the false expectation arose that a product already approved by the developer is the finished innovation. Industrial innovation actually works differently.
Following the idea outlined in the last paragraph "The current technological revolution, known as Industry 4.0, is determined by the development of the following technologies of advanced information processing: Big Data database technologies, cloud computing, machine learning, ... and other advanced data mining technologies", that we concord, but above of all, it is necessary to having people / managers able to known interpret them and have vision to give new forms the business life, adjusting the strategic management in naturally form to new trends and knowledge, demanding and imposing new knowledge and technologies for do not stagnate.
Dear Dariusz Prokopowicz
Hello
In my opinion and based on valid sources..........
Strategic management is an analysis of the important and prominent issues of the organization that is taken by the senior executives of the organization on behalf of the owners, in order to control resources in non-organization environments. This process includes identifying missions, perspectives, organization assets, developing programs and policies of the organization's organizations, and all the activities that are needed to achieve them. but The Fourth Industrial Revolution builds on the Digital Revolution, representing new ways in which technology becomes embedded within societies and even the human body. The Fourth Industrial Revolution is marked by emerging technology breakthroughs in a number of fields, including robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, The Internet of Things (IoT).
sure the role of strategic management changing in the context of current economic processes in the era of Industry 4.0.
Technology affects everything in the organization.
The question still remains: how to map iot to show to add to the final value of your business?
Our discussion shows the conclusion that the role of strategic management is changing in the context of current economic processes in the era of Industry 4.0, because the management of the organization is increasingly determined by, among others, the developing new information technologies, ICT, Internet and Industry 4.0. In 2020, the SARS-CoV-2 (Covid-19) coronavirus pandemic accelerated the digitization and internetization of economic processes. Remote work, virtual enterprises etc. are developing. Therefore, the applied concepts of strategic management are also subject to these processes.
What do you think about it?
Best regards,
Dariusz Prokopowicz
I have a bit of a different view of "...because the management of the organization is increasingly determined by, among others, the developing new information technologies, ICT, Internet and Industry 4.0."
New information technologies, ICT, Internet and Industry 4.0 will provide a new set of alternatives for management, but they will be the ones making the determination.
Dear James Drogan, Thank you for your participation in the discussion. Yes, you have provided a very important postulate in this matter. What will be the scale of the impact of new information technologies, ICT, Internet and Industry 4.0 on the improvement of management processes in enterprises in the next years, is currently difficult to determine. However, we know the impact will be. Best wishes, All the best, Stay healthy!
Dariusz Prokopowicz
In defining strategic management, the "skillful and rational use of resources, according to a given project/objective", this leads it to take into consideration (depends) not only on existing technologies, and those being acquired for the success of the project(s) to be implemented, but mainly on the knowledge and capacity of existing human resources, and the environment in which they fit, regardless of whether one speaks of Industry 3.0, 4.0, or any other. It essentially depends on the management vision, the strategies to be followed, the resources and means existing or being acquired, and the environment in which all this occurs, and also the lucky factor.
Industry 4.0 provides innovation and development, where the mix of new technologies, the "stars" of this industry interact and intersect, but if strategic management does not follow the principles previously described, they will be resources that will be lost in the beginning, until their learning and assimilation.
It may be necessary to change the attitude and methodology of explaining and discovering the appropriate strategy management, according to iera of Industry 4.0 based on determining factors such as information technology, ICT and most importantly, human aspects.
Dear António Dos Santos Baptista,
Yes, Industry 4.0 creates a new technological environment in which innovations are created and the development of economic entities is generated. Therefore, one should strive for efficient implementation of Industry 4.0 technology into economic processes and in order to improve the strategic management processes of the organization.
Best wishes,
Dariusz Prokopowicz
Dear Behrooz Fathi,
You're right. The implementation of Industry 4.0 technology into economic processes causes a change in the structure of production factors used in production processes. Therefore, the applied formulas of strategic management may also be modified.
Best regards,
Dariusz Prokopowicz
When an organization's top management decides on Industry 4.0, it knows the need to identify the new factors relevant, internal and external, that influencing the business, which leads it to reformulate the way to make managing. If the product's objective is to enter in a certain type of market, to increase it and control, then management becomes strategic.
Dear António Dos Santos Baptista,
The implementation of Industry 4.0 technology to computerized systems for analyzing the economic, competitive, market environment, etc. should contribute to the improvement of early warning systems and strategic management processes of the company.
Best wishes,
Dariusz Prokopowicz
Dear António Dos Santos Baptista,
The implementation of Industry 4.0 technology to computerized systems for analyzing the economic, competitive, market environment, etc. should contribute to the improvement of early warning systems and strategic management processes of the company.
Best wishes,
Dariusz Prokopowicz
Dear Dariusz Prokopowicz,
Given the growing increase in the interplay of ITs at all levels of management, vertical and horizontal in the organization, contributing even more to this situation the current pandemic crisis, it must necessarily contain risk analyzes to all levels of the market where it is intended compete to, as you say and well, precociously predict undesirable situations that may be harmful to the organization, "this is strategy".
So, in I 4.0 it becomes this is more evident, given the speed/acceleration with which the whole process is done, from the development and design, acquisition of raw materials and materials, production, until to the final delivery to the consumer, ie the entire chain is processed almost in real-time, because all business partners, online know in advance what to expect, this will be the trend. This is my opinion regarding the central role of the introduction of IT's TC's in todays and future processes.
Attention, it's a point of view.
Dear António Dos Santos Baptista,
Yes, that's right. You're right. Due to the growing implementation of ICT and Industry 4.0 information technologies to economic processes and supporting management processes, it is necessary to improve the operational risk management processes of IT systems developed thanks to the use of ICT and Industry 4.0 information technologies.
Best regards,
Dariusz Prokopowicz
Yes...SM of intellectual property... Reitzig, M. (2004). Strategic management of intellectual property. MIT Sloan Management Review, 45(3), 35-40.
Strategic management of technology and innovation...White, M. A., & Bruton, G. D. (2010). The management of technology and innovation: A strategic approach. Cengage Learning.
Psychological foundations of dynamic capabilities... In recent years, there has been a move to identify the behavioral foundations underpinning the evolutionary and economic fitness of the enterprise. Indeed, the dynamic capabilities project now occupies center stage in the field of strategic management... Hodgkinson, G. P., & Healey, M. P. (2011). Psychological foundations of dynamic capabilities: Reflexion and reflection in strategic management. Strategic management journal, 32(13), 1500-1516.
Dear D A Gayan Nayanajith,
Thank you for answering the question: Is the role of strategic management changing in the context of current economic processes in the era of Industry 4.0?
Thank you for your participation in the discussion and for explaining your position on the issue of the impact of Industry 4.0 technology development on the improvement and support of enterprise management processes. Thanks for the interesting information on the support of company management processes based on the improvement of computerized management systems of an economic entity.
Best regards,
Dariusz Prokopowicz
Dear Fuad Gattaz Sobrinho,
Thanks for answering the question:
Is the role of strategic management changing in the context of current economic processes in the era of Industry 4.0?
Yes, an important issue is currently the use of Industry 4.0 technology to support the strategic management process of a company, including, inter alia, take into account the Internet of Things mapping to improve the functioning of the business.
Thank you, Regards,
Dariusz Prokopowicz