Key Characteristics of Organizational Structure that Supports Digital Transformation

Changes in business environment toward digitalization significantly impact on all market participants,especially organizations. In order to operate efficiently, organizations are enforced to adopt new patterns of businessand to adequately apply innovative organizational solutions inherent for modern digital age. Digital transformation isan imperative for organizations due to their necessity to stay competitive on the market, so organizations shouldexperience significant structural changes. Some of the most common organizational barriers to digital transformationare: unclear vision and objective of digital transformation, lack of management understanding, knowledge andexperience, lack of leadership skills, lack of organizational agility, rewards and incentives that are not aligned todigital transformation, unclear measurement and rewarding system, lack of employee’ involvement and engagementand employee’ resistance to change. Digital transformation should be considered as a journey and long run processwhich make organization more adaptable on requirements of modern business. It brings a lot of advantages to thecompany, but we also should take into account some challenges that leaders and managers are faced with. One ofthose challenges is how to adequately prepare organizational structure that supports digital transformation. Speed andcollaboration are the key factors that organizations need to achieve and master. That consequently means reducing thenumber of hierarchical levels, decentralization of decision making and greater collaboration among employees. As thetraditional bureaucratic organizational models are rigid, without potential for further improvement in terms of newmarket conditions, it is obvious that new forms of organizational structure should be introduced. The purpose of thispaper is to analyze the key aspects of organizational structure that supports digital transformation and to point out onpossible solutions for organizational models in digital era.