Disentangling the socio-technical impacts of digitalization: What changes for shop-floor decision-makers?

Abstract

With the diffusion of Industry 4.0 technologies, firms can decentralize operational decisions, fostering a data-driven Digital Transformation (DT) across all organizational levels. Digitalized shopfloors can leverage an unprecedented availability of data for better and faster decision-making, resulting in enhanced operational performance. However, limited research has investigated the organizational and individual implications for those who run the manufacturing lines: production managers, supervisors, team leaders, and workers. By adopting a socio-technical framework, this study aims to disentangle the effects that digitalization has on shopfloors’ organizational structures, decision-making processes, and individual competencies, as well as the interdependencies among them. An exploratory approach was adopted, based on an empirical cross-country study involving 34 semi-structured interviews conducted in the Italian and Spanish automotive sectors. Analyzed through the lenses of information-processing, knowledge-based, and dynamic capability theories, our findings reveal through five propositions how digitalization induces a “polarization” of operational decision-making: shopfloors are run by knowledgeable data-empowered production managers and autonomous information-processing team leaders on the front line, with a reduced importance of supervisors. Upskilling needs appear for team leaders but not production workers, whose involvement, however, emerges as a key factor for a successful digitalization and overall performance in initial DT stages. This study contributes to literature on digitalization by exposing managerial tensions and dynamic capabilities, along with a deeper understanding of the micro-foundations of DT in terms of implications for shop-floor decision-makers. Managerial implications are directed at creating awareness about the centrality of production team leaders, and future research avenues are proposed.