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Since the publication of Alfred Chandler’s Strategy and Structure (1962), The Visible Hand (1977) and Scale and Scope (1990), researchers of business policy and organizations have claimed that a firm’s strategy, structure, and managerial processes must ‘fit’ with one another (Teece, 1993). They have also accentuated the difficulties in achieving this fit and, in particular, the problems of changing an organization’s design and processes to fit new environments or strategies. We live today in a physical as well as a virtual world. In our virtual world, we release a tremendous amount of data (Ivang et al., 2009; Hagberg et al., 2016). Digitalization is the integration of digital technologies into everyday life, which means computerization of systems and jobs for better ease and accessibility (Mahaldar & Bhadra, 2015). Consequently, adoption of digital technologies has profound implications for business practices, including marketing planning and implementation to support the change of the business model. Through linkage, the internet of things (IoT) facilitates productivity in society, which reduces our environmental footprint (Holmlund et al., 2017). Many are of the opinion that it offers us a chance to put a stop to our current carbon-based civilization and reset to a renewable and sustainable society.
Swedish industry has been automated within living memory (Holmlund et al., 2017), and the digital maturity of firms in their internationalization endeavours is an important issue. This is of particular importance in the case of small and medium-sized enterprises, which produce their goods and services for export at production sites in Sweden to a much larger degree than multinational companies do, and are more susceptible to new digital, foreign competitors situated in local markets than the multinational enterprises are.
Our research does not conceptualize digitalization as merely a technology issue – as commonly envisaged (Caputo et al., 2018). Digitalization is viewed as an approach and a capability to create value by means of existing and new technologies. Nevertheless, the capability to exploit the benefits of digitalization and manage its challenges varies on a national and sectoral basis (Fremont, Eklinder-Frick, Åge & Osarenkhoe, 2018; Eklinder-Frick et al., 2020). That is to say, the capability to utilize gathered data for something more than just reducing production costs. According to Teece et al. (1997), three dynamic capabilities are necessary in order to meet new challenges. Organizations and their employees need the capability to learn quickly and to build strategic assets. New strategic assets such as capability, technology, and customer feedback have to be integrated into the company. Existing strategic assets have to be transformed or reconfigured.
Against this background, it is pertinent to mention that firms use digital transformation in different ways. Some use it to improve the internal organizing process of innovation and operate more efficiently and effectively (Adak, 2015). Others use it to refine the way they connect to- and collaborate with consumers, product suppliers, and other firms, even when the latter are rivals (Andersson & Mattsson, 2016). Still others leverage digital transformation to build two-sided platforms and remodel their role and impact in entire industries by changing the rules of competition (Martínez-García, 2013). These benefits do not come without challenges, however, and may hide important trade-offs (Cennamo & Santalo 2015; Fremont et al., 2018).
The basic tenet upon which this paper rests, which differentiates it from extant literature, is a recognition that digitalization is an oxymoron, i.e. paradoxical. This is due largely to the fact that as long as the development of digitalization is based on technology that is equally available all over the world, but at the same time hampered by a firm’s capability to utilize its benefits, it might, from a Swedish perspective, be viewed as a threat, yet also as a great opportunity. In order to determine the availability of research in the area, a systematic literature review was carried out using the PRISMA guidelines (Moher et al., 2009). The selection process ultimately yielded two relevant articles (Eklinder-Frick et al 2018 and Fremont et al., 2020). Neither of the two discussed the prerequisites and critical factors (the positive and dark sides of the phenomena) from SMEs perspective. Their emphasis is on controversy and friction as well as inter-organizational challenges within digitalization efforts prevailing in multinational national enterprises. This emphasizes the need of further research.