CHAPTER 2 LITERATURE REVIEW AND THEORETICAL FRAMEWORK
2.1 Theoretical Background
2.1.3 Synergetics
collaborative innovation of big data. The Chinese government departments jointly issued “the guiding opinions on speeding the establishment of the national integrated big data center’s collaborative innovation system” (NDRC, 2020). Government and enterprises collaborate to foster collaborative innovation. On October 13, 2021, for instance, twelve central firms formed in Tianjin a joint innovation platform for automotive DT. Through this platform, it will accomplish local breakthroughs in key core technologies of DT, investigate new coordination mechanisms and modes, enable industrial transformation and upgrading, and enhance industrial chain coordination (China Network Television: CNTV, 2021).
Collaboration among enterprises fosters the growth of collaborative innovation. For instance, central enterprises in the Dawan district form the Digital Collaborative Innovation Alliance of central enterprises. The collaboration can enhance technology empowerment and offer a platform for digital technology empowerment (Brussels Intercommunal Transport Company: STIB, 2020). Universities and enterprises investigate industrial innovation collaboratively. For instance, prominent Chinese institutions and enterprises investigate the “industry-driven” innovation process and method collaboratively. While recruiting global inventive talents and innovation elements, they investigate the growth of the service industry and support the development of scientific research capability and talent training innovation mode (YNET, 2021).
The NGIT tools can facilitate digital collaborative innovation in enterprises. The interaction between enterprises and their upstream and downstream partners can be coordinated through the cooperation of numerous factors to jointly stimulate creativity (Bi, 2021). Consequently, by depending on the collaborative innovation of cooperation models, technologies, enterprises, and applications, enterprises can achieve the innovation of business models and realize their DT.
between all environmental systems. For instance, the cooperation between different business divisions, as well as the mutual interference and restrictions inside the system (Haken, 1980). Synergy is the impact created by the interaction of systems in a complex open system. Synergy can be broken down into external and internal circumstances.
External synergy means that enterprises in a cluster will achieve greater profitability than a single enterprise because they cooperate to share business behavior and specific resources; Internal coordination refers to the overall effect produced by the joint use of the same resource across various links, stages, and facets of enterprise production, marketing, and management (Haken, Wunderlin, & Yigitbasi, 1995). An enterprise can function as a collaborative system. Collaboration enables managers to maximize resource utilization. This effect, which makes the company’s overall benefit greater than the sum of its individual components, is expressed as “1+1>2” or “2+2=5” (Haken, 2004).
Campbell (2000) said in the Book Strategic Synergy: “synergy occurs when the resources accumulated from one part of the company can be applied to other parts of the company at the same time and without cost”. Ansoff (1964) had introduced the concept of synergy into the field of enterprise management, and synergetics has become the theoretical basis and significant basis for enterprises to adopt diversification strategy. Ansoff (1965) considered that enterprises successfully expand new undertakings by identifying the matching relationship between their own capabilities and opportunities; enterprises can effectively configure production factors, business units, and environmental conditions by seeking reasonable strategic arrangements for sales, operation, investment, and management, so as to achieve a synergy effect similar to increasing returns, allowing the company to maximize its existing resources. Bititci et al. (2007) provided a summary of the corporate collaboration realization approaches, noting that organizations can realize collaboration through the sharing of talents, tangible resources, coordinated strategy, vertical integration, supplier negotiations, and combined forces. Collaboration therefore plays an important role in enterprise management.
2) The Content and Significance of Enterprise Synergy
Not only does division of labor contribute to the effectiveness of management, but so does collaboration. Enterprises can only boost the synergy effect
of the organization, guide enterprises to achieve the value creation of organizational synergy, and realize the effect of 1+1 > 2 by increasing the overall degree of organizational synergy and decreasing the cost of synergy. The purpose of organizational synergy is to identify and actualize the total value. There is internal collaboration, internal organizational collaboration, and external collaboration. When traditional IT techniques promote a high level of cooperation based on information synchronization within the organization, the Internet era transforms enterprise organization’s value and performance optimization from internal to external. Enterprise synergy can be described from three perspectives:
Strategic synergy is that in the strategic management process of determining the long-term goal, development direction and resource allocation of a company with more than two business units, the skills and resources owned by the company form the core competitiveness through communication and exchange within the enterprise, and the core competitiveness is transferred and shared among various business units, so as to improve the overall performance of the company (Poppo, 1995).
Management synergy primarily promotes the digital collaboration of the entire business, from customers to delivery, via technical means such as mobile Internet, AI, and big data, and drives the high degree of synergy of decision-making and management execution via data and technology, so as to enhance management efficiency (Welbourne & Pardo-del-Val, 2009).
Business synergy refers to the integration of various business systems into a unified platform, and the association between collaboration and business is realized by multiple individuals in order to avoid duplication of labor, improve work efficiency, prevent problems between business and internal control, and realize effective cooperation and information sharing of business in order to ensure the normal operation of enterprise business (Majava, Isoherranen, & Kess, 2013).
3) Research related to Synergetics
Choy, Lee, Lau, So, and Lo (2004) considered that collaborative management breaks the isolation between internal affairs and affairs of the organization, associates and integrates various resources of the organization, and helps the organization improve management efficiency and standardization through collaborative planning, coordination, operation and control of all management links.
Lee, Olson, and Trimi (2012) thought that enterprises, their value chain partners, and customer groups may better uncover and share value through collaboration. Dobni (2010) considered that synergy is the essential concept and strategy for creating value. The synergy between enterprises can fulfill the requirements of value chain and value network optimization, thereby assisting enterprises in discovering value and enhancing their efficacy. The primary objective of DT is to achieve internal and external coordination through management and balancing (Warner
& Wäger, 2019). DT aims to achieve substantial internal and external synergies and enhance enterprise business (Domazet, 2018).
From an organization’s internal perspective, the implementation of digital technology facilitates enterprise collaborative management. For instance, the work information and business information of employees are presented on the digital value network using blockchain, AI, and big data to help the organization accurately evaluate and decide on contracts or orders; It can determine the organizational efficiency, value discovery, and realization of employees through intelligent computing and value positioning; It can integrate organizational resources through collaboration (Nof, Morel, Monostori, Molina, & Filip, 2006; Schubert & Williams, 2022).
Enterprises make full use of data to promote flexible and effective internal and external collaboration, and realize and continuously optimize the digitally-driven collaborative organization in order to facilitate the rapid reconstruction of the organizational model based on the discovery of new value (Greeven & Williams, 2017). Collaborative management software is a type of management software that arose with the change of an organization from informatization to digitization. It has progressively become the organization’s primary application. It enables the organization’s intelligent mobile office, visual process management, “information island” opening, and cross- organizational collaborative management. It can greatly improve the efficiency of enterprises’ and governments’ collaborative operations and management, and assist enterprises and governments in achieving DT and upgrading (Gou, Li, Lyu, Lyu, &
Zhang, 2019). Using an office automation (OA) system, for instance, can promote the cooperation between superiors and subordinates, make office management more standardized, rational, scientific, and effective, and ensure the efficient completion of various office activities (Yang & Chen, 2015). ERP successfully integrates customer
relationship, supply chain, capital, and enterprise internal information system, thereby enhancing enterprise management efficiency and management decision-making precision (McGaughey & Gunasekaran, 2007). The implementation of Financial Shared Service Center can facilitate the growth of financial management activities in a systematic manner, enhance organizational effectiveness, enhance operation quality, and minimize expenses (Jia, 2020). The implementation of CRM can help enterprises in resolving issues with traffic acquisition and sales transformation. In conjunction with marketing automation technology, it can enhance the customer experience and minimize marketing expenses. At the same time, it can promote cooperation between the marketing and sales departments and boost performance (Roh, Ahn, & Han, 2005).
Externally, DT is a systematic and difficult endeavor that requires the coordinated promotion of the government, industry, and enterprises. Internally, DT is a systematic and complex effort that requires the coordinated support of the government, industry, and enterprises. Government-coordinated industrial development can create a platform for the exchange of governments, research institutions, and enterprises to contribute to the growth of regional digital industry, strengthen the mutual understanding between government and industry, and facilitate the formation of the local industrial ecosystem. The government and enterprises must develop in cooperation. For instance, the Zhejiang government and Alibaba launched the “spring thunder plan” to maximize Alibaba’s digital capabilities, promote the DT and high- quality development of Zhejiang manufacturing, expand the digital marketing channels of Zhejiang manufacturing, and jointly strengthen the training of Zhejiang digital talents (Zhejiang Daily, 2020).
Enterprises and research institutes must advance in coordination. For instance, China information and Communication Research Institute, China Merchants Group, Minmetals Group, China Telecom, China Mobile, China Unicom, Shanghai Pudong Development Bank, Baoxin, and other enterprises jointly established the “joint construction and sharing platform for enterprise digital development,” which established three core institutions: Enterprise IT Digital Maturity Committee, Digital Trusted Service Committee, and Digital Ecological Adaptation Center. Focusing on the digital development of enterprises, government support, technological research,
standard evaluation, adaption testing, and practical promotion will be provided (CPPCC Network, 2021).
Enterprises also need to engage in collaborative growth. Siemens digital industrial software, for instance, has formed a strategic partnership with Chinese automobile manufacturing enterprise and new energy vehicle market leader BYD to assist BYD in implementing a digital enterprise strategy through comprehensive Siemens solutions, thereby enhancing BYD’s development velocity and manufacturing capacity (Huanqiu, 2020).
Enterprises and universities must develop in coordination. Xuandian intelligence and Shanghai Jiaotong University, for example, constructed a joint laboratory to realize resource sharing and complementary advantages of all parties through the combination of industry, university, and research, as well as to explore a new mode of transformation of scientific research achievements of Industry- University-Research collaboration (Changsha News, 2021c).