Enabling Digital Transformation through Organizational Design : The Emergence of the “Business Model Innovation Function”

Abstract

The role of the business model underlying structure and the Organizational Design in managing business model innovation for digital transformation are still critical gaps in the literature. This study aims to answer how organizations can manage Business Model Innovation for Digital Transformation through Organizational Design. To answer this question, we deploy a qualitative multiple-case study approach with two Brazilian leading companies. Our findings show that companies with successful Digital Transformation, in a continuous fashion, built a specific new division for business model innovation. This new structure is at the top management team level. It has the autonomy to conduct digital transformation efforts, combining technological capability and business modeling capability. Every company adopted an open innovation approach, connecting internal resources to external resources to comprise the project teams’ capabilities. We contribute to theory by better elucidating organizational design’s role in the business model innovation management. We also contribute to practice by providing managers with a practical roadmap to guide their digital transformation efforts.