The Effects of Digitalization on Managing Project Teams

Abstract: Background: In various industries, market power is concentrated on a few major companies, which makes competition increasingly challenging for small and medium-sized enterprises. Those SMEs are furthermore impacted by the characteristics of their industry and need to change constantly and adapt to maintain competitive in this challenging market environment. The IT sector is characterized by a high degree of digitalization, quickly changing customer needs, and short lifecycles. Thus, many IT firms apply agile working methods, increase working in teams, and use different digital tools and applications. In many cases, those adjustments also impact the organizational structure of the firm and require a change in management. Purpose: In the context of a medium-sized IT firm, this study aims to evaluate the effects of digitalization on management innovation in project teams. Method: To gain a deep understanding of the researched topic, we chose a qualitative interview-based study. We collected the data for this single-case study in semi-structured interviews and applied purposeful sampling (theory based). For the data analysis, we used content analysis (open code; grouping; categorization). Conclusion: We developed a framework describing the influence of digitalization on management innovation in six dimensions, which emerged in the study. Those dimensions are project teams, virtual teams, communication & collaboration, trust, technology, as well as leadership & management. Digitalization strongly influences management innovations in all six identified fields. Digitalization, management innovation, and the respective field are interdependent. In our case, we found that digitalization acts as an enabler or simplifier for management innovation in all six dimensions.