Digital transformation may fail even if a business, industry, or environment can integrate technological tools, operations, and capability at every level and function. The intentional and prioritized transformation of business and organization processes, capacities, and models to maximize the value of digital technology’s changing and increasing effects on society now and in the future, is what we mean by “digital transformation” (Vaska et al., 2021). Resistance to digital transformation change is the main contributor to why digital transformation fails. The incorporation and acceptance of change have played a significant role in the organization’s current operations. Dissatisfaction among the company’s top executives, management staff, and transformational managers may be exacerbated by a lack of competency in these groups’ attitudes and leadership styles. Scholars have found out that the lack of communication by the company’s management at all stages of its change contributes to employee resistance to digital transformation change.
Regardless of how logical the change may be, individuals may fear losing essential things if they embrace it. For example, individuals may oppose change if they believe it will cost them a lot of time and effort. As a result of a lack of trust, a scenario like this might occur throughout the transformation process leading to digital transformation failure. Various publications are devoted to figuring out the underlying causes of each person’s resistance. In addition, there are several literature reviews on the development of management counsel on how to tackle these challenges (Scholkmann, 2021). Also, some of these studies examines resistance as a human trait or attitude that contributes to the failure of digital transformation. Organizational resistance or antagonism to the desired change may be explained by various factors, including people’s values, motives, emotions, and cognitive conceptions. In this literature review, the challenge of overcoming the reluctance of employees to digital transformation Change as the key reason for failure in digital transformations is studied in depth.
Employee Resistance to Digital Transformation Change
To remain competitive in the digital economy, businesses must make rapid changes to stay current. Companies must convert themselves into trustworthy business transformation partners and respond quickly to market shifts and client expectations to remain at pace with their competition. Scholars demonstrate that organizational barriers to change are a significant reason for the failure or poor progress of the majority of these transformation endeavors. Breaking past these obstacles is tough because individuals and businesses have different reactions to change. As a result of decades of study, several theories, and models, managing change successfully has become a critical ability in most businesses. According to (Kapur 2018), enterprises that follow a deliberate strategy transform progress from one state to the next. However, a significant obstacle that organizations encounter when they go through transitions is the presence of resistance (Solis, 2017). There will always be a degree of reluctance to embrace new ideas and ways of doing things. Organizational resistance may be a sign that employees are skeptical about whether or not the proposed changes will be adopted and impact their day-to-day lives. As an alternative to dismissing criticism, firms should quickly identify and address these problems (Kostakis & Kargas, 2021).
While an industry is expanding, it is vital to have a strong idea of how resistance develops and effects individual attitudes. There are several ways in which the organization’s opposition manifests itself. First, people are disturbed by change, whether favorable or bad, since they need stability (Das et al., 2020). Individuals are averse to change since it necessitates altering their work habits, job descriptions, authority structures, and personal habits. It was observed that resistance from workers was the most common hurdle to substantial transitions in firms studied by (Repovš et al., 2019). Furthermore, the authors claim that management must pay equal attention to the human aspects and the technological aspects.
Resistance as a Psychological Feature or Disposition
As an organization’s opposition to embracing digital transformation grows, its difficulty in overcoming these obstacles (Solis, 2017). According to Kotter (n.d.), an organization’s environment is a barrier to change because of resistance. Lewin argues that there will constantly be forces opposing and urging change, and that this resistance must be dealt with. (Burnes & Bargal, 2017). As a follow-up to Lewin’s work, Kotter and Schlesinger (2013) examined a few more reasons for resistance to change. There are various reasons for this, including habit, fear of the unknown, concern about the influence on the economy, a belief that change would only bring about bad things, and a general aversion to it. To put it another way, resistance to change might be motivated by the fear of losing something valuable or significant (Eliot partnership, 2022). All of these factors must be considered when formulating sound change management methods.
There is a substantial body of research on the unfavorable attitudes of employees regarding the execution of a transformation program. Systemic (cognitive) and behavioral (emotional) resistance may be categorized, where systemic refers to a lack of information, skills, knowledge, or management capabilities, while behavioral refers to preconceptions, perceptions, and responses. Employees aren’t the only ones who show opposition; bosses afraid of the unknown and the status quo also offer resistance (Llopis, 2017; Issah, 2018). Mosadeghrad & Ansarian (2014) found that top management’s inability to support and commit to change is the most severe impediment. It has been suggested that if the criticism is regularly communicated implicitly and passively, it might slow the rate at which transformative projects advance (Iasbech and Lavarda, 2018).
Resistance Due To Employee’s Perceptions of Fairness and Justice
Rehman et al. (2021) offered a comprehensive analysis of people’s resistance to transformation. The amount of resistance to change varies across workers, depending on how the change is handled. The first step in ensuring that employees are ready for change is to assess the potential effect the change will have on their current norms, expectations, and values, and then consider how best to manage and prepare for it psychologically (Burnes, 2015). Change procedures that impact employee views of fairness and justice and promote healthy supervisor-employee relationships should be given greater attention, according to some research, since they might lead to either supportive or counterproductive responses to change from workers. (Georgalis et al., 2015).
Failure of the Transformation Project to Make Sense at the Initiation Phase
In order to prepare for the change, it is necessary to determine the goal, effectively articulate an objective for increased employee participation, and make preparations the transition. An organization’s ability to successfully undertake an extensive transformation program rests heavily on its ability to anticipate, recognize, and accept the change that is taking place. The commencement of a transformation effort must make sense. Many studies have shown that employees’ willingness to accept change is impacted by the message sent by management (Parsells, 2017). Effective communication is essential during the “change implementation” phase, as defined by Lewin’s paradigm. Communication that emphasizes the main message for change is necessary for change to occur, as stated by (Workeneh and Abebe, 2019). The ability to effectively convey a change’s vision and rationale are critical. Before implementing the modification, it is necessary to clarify the procedure.
According to Venkatraman (2017), firms can no longer rely on their current market positions in the future market because they must develop purpose-driven objectives and strategy manifestations that clearly define the reason for the transition. It’s essential for every board of directors to clearly understand its mission and vision for change (Carlisi et al., 2017). As businesses and teams undergo many transitions, change must be communicated to inspire and lead employees. A lack of clarity or effective communication about changes might lead to a lack of staff buy-in. Valentine emphasizes the necessity of a strong executive monitoring. According to him, improved cooperation across businesses, more consumer involvement, staff creativity and efficiency, and precise data extraction are all benefits of digital transformation that may help your company grow and prosper. There’s a high opportunity for your firm to succeed even under difficult circumstances because of it Leaders must be mindful of the disturbance caused by the shift. An executive’s capacity to assess and interpret the change in light of the organizations past, present, and underlying culture cannot be overstated. (Mallon 2020; By, Armenakis, and Burnes, 2015), in their research, claim that neglecting to recognize the underlying values and beliefs might have detrimental effects for all stakeholders. People’s anxiety and uncertainty may be lessened by implementing changes consistent with the current corporate culture (Erdurmazli, 2020).
Resistance Due To Misunderstanding the Significance of Change Management
According to a recent research, digitization should be handled in a complete manner (Parviainen et al., 2017). Managerial conflicts, project group method, and expertise are all taken into consideration in this author’s research. Change management is also examined after the company’s initial defining of its position, expectations, and sense of direction. Middle management is also mentioned in the literature as a critical component of a successful transition. During this transition phase or implementation, the previously identified influential individuals or change leaders will be driving the transformation process. According to the research, many businesses expect middle managers to lead the change since they don’t understand the relevance of change management. Research by Kapur (2018) found that workers’ attitudes might be severely impacted if middle management was not well trained to handle this transition. Change agents, according to research, need to be equipped with a particular set of skills to be successful. Some writers have suggested that workers who want greater openness, inclusion, and extensive communication are more likely to reject directives to effect change. They must be able to pay attention, engage, and comprehend from the rest of the organisation in intended to assist them in their transition into new roles (Solis, 2017). They must be able to persuade their coworkers and address their worries in order to succeed in implementing this change. There were a number of change leadership attributes discovered by (Akpoveta 2019) that were centered on coaching and building the team.
When determining the company’s future, (Parviainen and associates, 2017) recommend analyzing the company’s digitalization implications. An understanding of ongoing and prospective digitalization trends and the dynamic capabilities of the organization are required to achieve this. Similarly, Lee and Edmondson, (2017) ascertain that, decentralization of management and the creation of self-managing groups have been underlined by several experts during the last few decades. In the same way, Roghé and other authors believe that by doing so, the organization will be able to reduce communication gaps, improve employee morale and become more agile, all of which will lead to faster project completion times. Management and change managers must guarantee that the business and IT strategies of the firm remain in sync even when the company is transitioning. (Manca et al., 2018). (Roghé et al., 2019) and (Walsh & Volini, 2017) show that existing organizational design has to be improved (literally).
Research conducted by Deloitte found that when companies and functions are delayed, leaders driving change can make deeper links with frontline people, allowing them to respond rapidly to change and foster a climate of collaboration. According to the views of Lambert and Rosen (2018), a lack of cross-functionality and insufficient size among the change teams might be a problem. Workers avoid adopting agile approaches because they are afraid of being questioned. Teams and organizations might hit a snag if they have such agile failures. We need to work together more in order to grow and acquire new talents, says Venkatraman, a researcher in the field. Teams and employees would be empowered and energized to respond quickly to changes in the environment if this strategy were implemented.
Pressure on the Employee to Change
According to research by (Parry et al., 2014), this transition period might be stressful for workers since they are being asked to do too much in a short amount of time. Leaders who are responsible for driving change must maintain momentum by focusing on short-term accomplishments and victories, according to Kotter’s study. Enthusiasm and change leaders’ help is considered crucial at this time. Many individuals abandon up throughout the change process if they don’t see short-term successes that instill urgency and show progress. Another significant finding from Kotter’s analysis of diverse firms was that management proclaims victory when things are going well prematurely. There is essentially no momentum left in the process, and this step’s resistors take control and bring the change to a standstill.
When new methods, approaches, and techniques are introduced, managers must take conscious steps to demonstrate how they might boost productivity. For a company’s workforce to thrive, it must provide both intrinsic and extrinsic motivations that foster a feeling of belonging and community, as well as opportunities for growth and development (Goler et al., 2018). Inadequate performance and incentive systems in the workplace may have many adverse effects. One size does not fit all; however, studies have pointed out that rewards and incentives must be aligned with the organization’s strategic aims. Rather than being a simply administrative function, human resources is increasingly taking on the role of a mentor for both managers and employees. By providing ongoing encouragement and support, it elevates the status of middle managers. For this reason, it is crucial to make use of all available resources to ensure that the right individuals are brought in and that the organization’s leaders develop their leadership skills. (Vaska et al., 2021).
In conclusion, researchers and scholars like Venkatraman (2017) and Kotter, Lewin, and Solis (2017) have already noted that organizational impediments to digitalization and the various stages of the change process are consistent with this study’s results. Further, these studies have helped fill in other gaps with additional impediments observed throughout the years. Digital turnarounds may be severely hindered by organizations being too cautious about the obstacles they face. When it comes to implementing change, it might be challenging for staff. This includes discussions on change by senior management and other leaders. Firms must invest in their workers’ training and prepare them for the digital future to avoid becoming a hindrance. Traditional leadership approaches give a more incredible difficulty in dealing with competition’s complexity and rapid growth. It’s time for managers to adopt new approaches like taking chances, embracing ambiguity, and making decisions on the fly. Leaders often focus on the aims and ambitions of a particular department while providing information, which is rare. The whole transition process may be held if there isn’t a unified management front. There must be alignment between business and IT executives from multiple departments and increased engagement with teams and support teams for transformation to be effective.
Many large and small enterprises, both large and small, face both a danger and an opportunity from new digital technologies, which were developed in the pre-digital age. As their sectors become more digital, these businesses will be left behind. In order to accomplish their digital visions, firms must quickly adapt to new procedures, implement agile approaches, and teach their workers to operate in new ways. According to Lewin’s model, many obstacles contribute to resistance, which causes changes to be delayed or fail. Based on our results, we may infer that hurdles and resistance originate at the company’s top and spread down the chain, influencing everyone else. Transforming a company may be difficult if the organization, the project team, and the organization’s agility aren’t aligned. If the company’s transformation vision and objective aren’t clearly stated, it might be challenging to achieve.
Akpoveta, R. Y. (2019). Change Leadership Defined – No Longer For a Select Few! https://thechangeleadership.com/change-leadership-defined/
Burnes, B. (2015). Understanding resistance to change–building on Coch and French. Journal of change management, 15(2), 92-116. https://www.tandfonline.com/doi/abs/10.1080/14697017.2014.969755
Burnes, B., & Bargal, D. (2017). Kurt Lewin: 70 years on. Journal of Change Management, 17(2), 91-100. https://dspace.stir.ac.uk/bitstream/1893/25045/1/1.%20LewinIntroV2.pdf
By, R. T., Armenakis, A. A., & Burnes, B. (2015). Organizational change: A focus on ethical cultures and mindfulness. Journal of Change Management, 15(1), 1-7.
Carlisi, C., Hemerling, J., Kilmann, J., Meese, D., & Shipman, D. (2017). Purpose with the power to transform your organization. https://www.bcg.com/publications/2017/transformation-behavior-culture-purpose-power-transform-organization
Das, K. V., Jones-Harrell, C., Fan, Y., Ramaswami, A., Orlove, B., & Botchwey, N. (2020). Understanding subjective well-being: perspectives from psychology and public health. Public Health Reviews, 41(1), 1-32.
Eliot partnership. (2022). Five principles of adaptive leadership. https://eliotpartnership.com/news-insights/five-principles-of-adaptive-leadership/
Erdurmazli, E. (2020). Effects of information technologies on organizational culture: A discussion based on the key role of organizational structure. A closer look at organizational culture in action/ed. by SD Göker.-London: IntechOpen, 125-139. https://www.intechopen.com/chapters/72534
Georgalis, J., Samaratunge, R., Kimberley, N., & Lu, Y. (2015). Change process characteristics and resistance to organisational change: The role of employee perceptions of justice. Australian Journal of Management, 40(1), 89-113. https://www.researchgate.net/publication/273496999_Change_process_characteristics_and_resistance_to_organisational_change_The_role_of_employee_perceptions_of_justice
Goler, L., Gale, J., Harrington, B., & Grant, A. (2018). The 3 things employees really want: Career, community, cause. Harvard Business Review, 20. https://hbr.org/2018/02/people-want-3-things-from-work-but-most-companies-are-built-around-only-one
Iasbech, P. A. B., & Lavarda, R. A. B. (2018). Strategy aS Practice and the role of Middle Manager in organizationS: the future of the field. Brazilian Journal of Management/Revista de Administração Da UFSM, 11(4), 1125-1145. https://www.redalyc.org/journal/2734/273458364012/273458364012.pdf
Issah, M. (2018). Change leadership: The role of emotional intelligence. Sage Open, 8(3), 2158244018800910. https://journals.sagepub.com/doi/10.1177/2158244018800910
Kapur, R. (2018). Organization Development and Change. https://www.researchgate.net/publication/323691508_Organization_Development_and_Change
Kostakis, P., & Kargas, A. (2021). Big-Data Management: A Driver for Digital Transformation?. Information, 12(10), 411. https://www.mdpi.com/2078-2489/12/10/411/htm
Kotter, J. P. (n.d.). Leading change: Why transformation efforts fail. http://leadership4lawyers.com/wp-content/uploads/2014-12-23-LAW-Article-Summary02-Leading-Change-Why-Transformation-Effort-Fail-by-John-P.-Kotter-FIN.pdf
Kotter, J. P., & Schlesinger, L. A. (2013). Choosing strategies for change. Harvard business review. https://projects.iq.harvard.edu/files/sdpfellowship/files/day3_2_choosing_strategies_for_change.pdf
Lambert, D. & Rosen, M. (2018). Digital Transformation: New Realities Require New Architecture. https://community.biz-architect.com/about-ba/digital-transformation-new-realities-require-new-architecture/
Lee, M. Y., & Edmondson, A. C. (2017). Self-managing organizations: Exploring the limits of less-hierarchical organizing. Research in organizational behavior, 37, 35-58. https://www.researchgate.net/publication/319550780_Self-managing_organizations_Exploring_the_limits_of_less-hierarchical_organizing
Llopis, G. (2017). 5 Reasons Leaders Are Afraid To Challenge The Status Quo. https://www.forbes.com/sites/glennllopis/2017/08/12/5-reasons-leaders-are-afraid-to-challenge-the-status-quo/?sh=81491f926fe5
Mallon, D.(2020). How effective organizational decision-making can help boost performance. https://www2.deloitte.com/us/en/insights/topics/talent/organizational-decision-making.html
Manca, C., Grijalvo, M., Palacios, M., & Kaulio, M. (2018). Collaborative workplaces for innovation in service companies: barriers and enablers for supporting new ways of working. Service Business, 12(3), 525-550. https://link.springer.com/article/10.1007/s11628-017-0359-0
Mosadeghrad, A. M., & Ansarian, M. (2014). Why do organisational change programmes fail?. International Journal of Strategic Change Management, 5(3), 189-218. https://www.researchgate.net/publication/275590169_Why_do_organisational_change_programmes_fail
Parry, W., Kirsch, C., Carey, P., & Shaw, D. (2014). Empirical development of a model of performance drivers in organizational change projects. Journal of Change Management, 14(1), 99-125.
Parsells, R. (2017). Addressing uncertainty during workplace change: Communication and sense-making. Administrative Issues Journal: Connecting Education, Practice, and Research, 7(2), 3131. https://dc.swosu.edu/cgi/viewcontent.cgi?article=1273&context=aij
Parviainen, P., Tihinen, M., Kääriäinen, J., & Teppola, S. (2017). Tackling the digitalization challenge: how to benefit from digitalization in practice. International journal of information systems and project management, 5(1), 63-77. https://www.sciencesphere.org/ijispm/archive/ijispm-050104.pdf
Rehman, N., Mahmood, A., Ibtasam, M., Murtaza, S. A., Iqbal, N., & Molnár, E. (2021). The psychology of resistance to change: The antidotal effect of organizational justice, support and leader-member exchange. Frontiers in psychology, 3215. https://www.frontiersin.org/articles/10.3389/fpsyg.2021.678952/full
Repovš, E., Drnovšek, M., & Kaše, R. (2019). Change ready, resistant, or both? Exploring the concepts of individual change readiness and resistance to organizational change. Economic and Business Review, 21(2), 308-337. https://www.ebrjournal.net/cgi/viewcontent.cgi?article=1046&context=home
Roghé, F., Toma, A., Scholz, S., Schudey, A., & Koike, J. (2019). Boosting performance through organization design. https://www.bcg.com/publications/2017/people-boosting-performance-through-organization-design
Scholkmann, A. B. (2021). Resistance to (digital) change: Individual, systemic and learning-related perspectives. Digital Transformation of Learning Organizations, 219.
Solis, B. R. I. A. N. (2017). The Digital Change Agent’s Manifesto. Altimeter, 1-29. https://www.solvisconsulting.com/images/Blog%20Images/Descargables/Altimeter_Digital_Change_Agents_Manifesto.pdf
Valentine, E. (2016). Leading digital transformation: Building technology and information governance capability in boards of directors and the c-suite. https://www.researchgate.net/publication/302025430_Leading_digital_transformation_Building_technology_and_information_governance_capability_in_boards_of_directors_and_the_c-suite
Vaska, S., Massaro, M., Bagarotto, E. M., & Dal Mas, F. (2021). The digital transformation of business model innovation: A structured literature review. Frontiers in Psychology, 11, 3557. https://www.frontiersin.org/articles/10.3389/fpsyg.2020.539363/full
Venkatraman, V. N. (2017) ‘The Digital Matrix.’ https://www.linkedin.com/pulse/digital-matrix-n-venkat-venkatraman
Walsh, B., & Volini, E. (2017). Rewriting the rules for the digital age: 2017 Deloitte global human capital trends. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/HumanCapital/hc-2017-global-human-capital-trends-gx.pdf
Workeneh, M. M., & Abebe, A. S. (2019). Employee readiness to change and its determinants in administrative staff of Bahir Dar University in Ethiopia. Hum Resource Manage Res, 9(1), 1-9. http://article.sapub.org/10.5923.j.hrmr.20190901.01.html