Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

Digital Transformation and its Impact on

Organizations’ Human Resource Management

WHITE PAPER
December 18, 2017

Abstract:

Digital transformation has revolutionized employee engagement and organizational

communication. This paper studies the influence of digitization on organization’s human
resource management (HRM) function in the context of Stakeholder Theory. It highlights the role
of business leaders, HR teams and employees in shaping interorganizational communication
juxtaposed the technological, social and behavioral changes. While focusing on internal
communication tools such as e-mails, intranet, newsletters, etc., the paper reviews
opportunities, challenges, risks and industry best practices in the engagement of stakeholders.

CONTENTS

INTRODUCTION 2 TECHNOLOGICAL ENGAGEMENT AND

CHALLENGES 15
KEY TERMS 4
APPENDIX 14
LIVING THE DIGITAL CHANGE 7
REFERENCES 18
STAKEHOLDER MANAGEMENT VS STAKEHOLDER
ENGAGEMENT 11

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

INTRODUCTION:

In the recent years, digitalization has deepened the reliance on data analytics, social networks and

mobile technologies, and has dramatically reformed the role of communications in businesses. In

order to utilize technological advances towards the engagement of stakeholders, as well as

adapting to the digital transformation, several organizations have taken essential steps to develop

a strategic framework for organizational priorities. Business leaders have played a vital role in

changing paradigms by fostering newer perspectives of people communication, reducing

functional hierarchies and endorsing internal and external stakeholder engagement. It is evident

that while digitalization has brought numerous challenges, it has also given organizations an

opportunity to reshape their public image, construct meaningful value-based dialogue on public

platforms, and reinforce their objectives through a well-designed human resources management

function.

The Digital Transformation Initiative (DTI) launched by the World Economic Forum in 2015 is

one such attempt to function as a platform for organizations to understand the change and embrace

newer opportunities and themes, arising from the latest developments in the digitalization of

business and society. The initiative states potential risks encountered by diverse industries and

sectors along with a model of change (Digital Transformation, 2016). The report states, “By 2025,

it is predicted that Millennials will be 75% of the workforce, requiring us to engage, develop, and

retain this new generation of talent in new ways”. Studies also show that ‘transformation,

leadership, and strategy are the core skills of the future’ (McInnis-Day, 2014).

Digital disruption has wrecked almost all industries and has made the traditional communication

models redundant. To survive in the ‘digital-first world’, organizations have introduced an agile

and flexible strategy to communicate with their internal and external stakeholders. Digital

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

technology such as file-sharing, social-sites, online-advertising and electronic books have created

challenges in maintaining workflows, managing processes, planning resources and streamlining

communications amongst the stakeholders (OpenText, 2015). In the context of stakeholder theory,

this paper argues that interorganizational stakeholder relationship affects the nature of external

communication and is publicly negotiated. The author says that the nature of Human Resource

Management is redefined when internal sentiments are publicly shared. The paper also focuses on

internal and external portals such as Glassdoor, LinkedIn, internal HRM sites, etc. that reshape the

stakeholder relationships.

This paper aims to help business leaders, HR professionals and academicians in understanding the

role of leadership in digital transformation and assess its impact on the Human Resources (HR)

function of any organization. While considering the industry best practices of recruitment, training,

performance management, learning and development, compensation and employee engagement,

the paper provides insights and tools for business communications model changes within the

organization. By unlocking new levels of engagement and introducing technological tools for

stakeholder engagement, the author defines roles of business leaders, functional heads and

employees in adopting this digital change. With the focus on communication as the epicenter of

digitalization, the paper aims to present its correlation with interorganizational and stakeholder

theories with practical applications and suggestive changes.

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

KEY TERMS:

Stakeholders, Stakeholder Management and Engagement

According to Freeman’s definition, stakeholder is 'any group or individual who can affect or is

affected by the achievement of the organization's objectives' (Freeman R. E., 1984). In the recent

times, (Carroll & Buchholtz, 2009) say that stakeholder is “an individual or a group that claims to

have one or more stakes in an organization. Stakeholders may affect the organization and, in turn,

be affected by the organization's actions, policies, practices and decisions.” According to the

stakeholder theory of organization, employees are internal stakeholders of the company (Freeman

R. E., 1984). He also says that employees can be one of the most important stakeholders for any

organization. The stakeholder approach to internal communication emphasizes on the needs and

preferences of employees, as against the previous focus on managerial inclinations (Welch M. ,

2012). Freeman, at first, struggled using ‘internal stakeholder’, as he anticipated businesses

focusing on external stakeholders such as suppliers, society, government, shareholders, customers

and creditors. However, later, he recognized employees as a diverse group of people who have

stakes in the organization (Evan & Freeman, 1988).

Thus, understanding internal stakeholders is imperative in engaging them in a dyadic relationship.

Welch and Johnson argue that internal stakeholder groups have to be identified according to

geographical, occupational and structural levels in order to classify them into separate groups,

instead of calling this diverse group as one cluster (Welch & Jackson, 2007). Therefore, the HR

teams have to form multiple small and big clusters to ensure targeted communications across all

divisions and hierarchies. (Friedman, 1970) believes that organization itself should think of

forming groups of stakeholders according to their interests, needs and viewpoints and this should

be imbibed in the purpose of the organization.

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

In the book Strategic Management, A Stakeholder Approach, Freeman (1984) says that traditional

approaches of management and strategic decision-making are not helping managers anymore to

develop new paradigms of change. Therefore, he defined ‘Stakeholder Theory’ as a conceptual

approach to tap opportunities and increase productivity. He believes that the primary objective of

the stakeholder approach is “to manage and integrate the relationships and interests of

shareholders, employees, customers, suppliers, communities and other groups in a way that

guarantees the long-term success of the firm”. There are different definitions and approaches

discussed in the theory.

Organizational and Internal Communication Design

Organizational communication comprises of various forms of communication ‘that flow among

and between organizational units and groups’ (Cornelissen, 2002). It can happen at various levels,

and can involve small or big team members, interpersonal and dyadic interactions, small groups

or teams, written or oral communication within or across organizational departments or units,

organizations regardless of geographical boundaries. While the primary focus of

interorganizational communication is value creation, studies have found that humans relations are

based on social interaction and attention (Ansoff, 1965). (Deetz, 2001) has classified internal

communications in two ways. The first and most common approach focuses organization within

which internal communication happens: a “phenomenon that exists in organizations”. The second

approach emphasizes on communication at the center of information-sharing, relationship-

building, and making meaning or constructing organizational culture and values: “a way to

describe and explain organizations”. Research shows that this is a combination of people,

messages, meaning, practices and purpose (Shockley-Zalabak, 2008), and it is the basis of

contemporary organizations (Gillis, 2006).

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

There are several networks and roles in organizational communication ‘such as gatekeepers (who

filter communication to a specific manager or upward through the organization), liaisons (who

mediate interaction between two groups), bridges (a group member who mediates interaction with

outside individuals), cosmopolite or boundary spanner (one who monitors the environment and

brings new information into the organization), cliques (members who communicate more with

each other than with other members), and grapevines and rumor networks (where members

communicate through informal and social networks about salient, time-sensitive topics)

(Trenholm, 2005) (Neher, 1997) (Miller, 1997).

Communication within these networks and roles can be managed by the HR teams in order to

facilitate vertical and horizontal communication. While vertical communication usually takes

place between managers and their subordinates, horizontal communication is the exchange of

messages between the same hierarchy. According to (Cornelissen, 2002), there are two parts of

vertical communication: “Upward communication consists of messages from subordinates to

superiors, whilst downward communication occurs when information flows down the hierarchy

from superiors to subordinates”.

According to the Institute of Public Relations, internal communications is an important

communication tool to build trust, motivate employees, create a shared identity and build

engagement besides providing important information about the work, organization, environment

and each other. It is one of the important platforms that help employees express their voice, share

opinions, celebrate and remember accomplishments. Lastly, the study of Interorganizational

communication is an overarching term used to study a wide gamut of entities and organizing acts

that comprise of several relationships.

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

B. LIVING THE DIGITAL CHANGE

Digitalization is not a niche prerequisite only for tech companies anymore. It is a key-stone

requirement to achieve exponential growth across functions, domains and geographies. According

to the studies, the focus of HR is on changing the nature of organizations, planning the future of

workforce in the digital economy and in shaping organization’s image in the global market. The

World Economic Forum talks about the future of an Internet of Things (IoT)-enabled workplace

and cogitates that it has the potential to ‘increase operational efficiency, blur traditional industry

boundaries, optimize human-machine collaboration, and maximize productivity’ (Digital

Transformation, 2016). With wearable devices, prescriptive data and technology that understands

the expectations of people, employers are striving to provide valuable experiences to its

employees. Organizations are adopting industry trends and encouraging the use of apps such as

Buffer and Slack, virtual whiteboards, and hybrid video conferencing facilities to engage their

employees across the world. An article published in Forbes highlights the need to intertwine the

company’s vision, product information and updates with a platform to share voices, for a well-

oiled digital marketplace (Daniel Newman, 2017).

1. Empowering Leadership Management

The increasing use of technology within the organizations, coordination and communication on

several mediums, multiple levels and complex structures (e.g. social media) has led to increased

interorganizational collective efforts. Research shows that there are several modes of

organizational communications but leadership is central in decision-making and defining rules for

the group. Leaders in the organization also play a major role in managing expenditures, resources,

efforts, recruitment and employment. These specialized and fixed roles define boundaries of public

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and private communications in a social space, initiate formal coalitions, and reinforce institutional

commitments.

Researchers argue that the role of collaborative efforts changes in scenarios where heavy emphasis

is on the leadership to create an impact (Shumate, Atouba, Cooper, & Pilny, 2016). For instance,

when CEOs use social media to communicate with their audiences, it creates a positive impact on

the employees and its stakeholders (See Appendix 1). On a contrary, (Deetz, 2001) believes that

power relations, bureaucracies and forms of domination and control might be harmful to the

employees. He says ‘the central goal of critical theory in organizational communication studies

has been to create a society and workplace that are free from domination and where all members

can contribute equally to produce systems that meet human needs and lead to the progressive

development of all’. Moving forward from bureaucratic communication to a more embracing

communication with societal and technological shifts, business leaders have focused on

transparency and governance while paying attention to communication culture and stakeholders

(Aakhus & Bzdak, 2013). The role of leadership has therefore been crucial in defining

relationships, forming structures and facilitating interorganizational communication. Leadership

roles also create centralized networks or decentralized groups according to the jobs and roles

defined by them. Curry (1992) says that leaders play an important role in driving the change in the

digital-first world-

“The direction and support of leaders are required for the change to take place. And the term

"leader" is not limited to the chief executive officer. The role and the function of leadership are

different. The role is a formal designation vested in contractual arrangements; the function is an

informal designation in which responsibilities or activities associated with leadership are shared

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

among members of the organization. Consequently, "leader" might refer to a number of individuals

participating in the change process.”

2. Changing Organizational Environment

Research shows that interorganizational communication relies on structures, forms, and processes

of relationships which in turn rely on information communication technology (ICT), mainly to

collaborate relationships, manage communication flow and define structures within the

organization. Leaders concretize these linkages, form robust networks and usher information

sharing to form interdependencies that are related to resources, staff and outcomes (Deetz, 2001).

The role of communication and technology also depends on the factors such as culture, political

and ideological views, anonymity and secrecy, the size, legal status and dynamics around the

nature of the organization (Scott C. , 2013). Similarly, (Pfeffer & Salancik, 1978) (Shumate,

Atouba, Cooper, & Pilny, 2016) discuss that organizations must exchange resources and reduce

the dependency on external factors to survive in any environment. According to a (Deloitte, 2016)

study, the changing needs of HR heavily rely on the following disruptive themes:

• Digital megatrends, including but not limited to, cyber, data, cloud, social and mobile

• A multi-generational workforce including millennials or first-generation digital citizens

• Merging work and life with hyper-connected employees

• Emergence of a new set of digitally skilled employees

• Business models under stress from digital disruption

• The employee being perceived as the first consumer of the employer’s brand

With this transformation, the HR leaders should be able to quickly adapt to the industry trends,

provide training to the existing employees and hire the right candidates into the dynamic digital

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structures. Moreover, the study states that HR should help other organizational leaders in gaining

digital competences to lead the organizational transformation. In the context of HRM, the

managers engage with multiple levels of employees. This can be well-associated with (Rowley,

1997)’s network theory of stakeholder influences to review how organizations respond to

compound and symbiotic needs of multiple stakeholders and to discern their reaction in different

situations.

3. Digitalization and Interorganizational Communication

According to research, interorganizational communication is an all-embracing study of reciprocity

of messages and adding meaning to these messages, channeled through networks, alliances,

collaborations, coalitions, consortiums, partnerships, joint ventures, and relationships between the

organization and its stakeholders (Shumate, Atouba, Cooper, & Pilny, 2016). According to (Scott

& Lewis, 2017), there are several exchanges of messages within the organization that profit from

common corporate goals, macro cultures and pre-established standards. He defines interlocks as a

common overlap between memberships and associations within the organization. They also say

that ‘According to institutional theory, corporate interlocks are formed because organizations seek

legitimacy’.

Primary stakeholders of institutionalized HR networks are employees, support staff, their-party

employees and shared services, whereas secondary stakeholders are consultants, agencies,

potential employees and relatives of employees, all interconnected in a network of associations.

‘Networks are a function of exchange of resources, information flows, and strategic partnerships

that manifest through a range of personal to more institutionalized ties’ says (Doerfel).

For instance, employees use various forms for interorganizational and external communications to

communicate about the company goal, mission statement, values, products and services, activities,
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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

financial reporting, etc., which in turn adds value to the overall brand. This also makes the

organization more accountable as compared to others who don’t communicate using various

platforms. According to the study (see Appendix 2), 55% of the consumers believed that social

media helps employees share experiences and the ways in which they found the organization to be

more accountable in the consumer market.

Research shows that individuals who follow the institutional rules tend to reproduce messages

aligned to the institution’s propositions. (DiMaggio & Powell, 1983) in their study report that, ‘as

organizational leaders, managers, and employees adopt and follow institutional rules, their

organizations become more similar to each other’. This boundary-spanning interorganizational

communication can be found across organizations, which in turn leads to organizational change

and decision-making (McPhee & Zaug, 2012). (Lammers & Barbour, 2006) find that formal

knowledge, rationality and independence are key factors of institutional theory of organizational

communication that offer powerful guides of behavior. Using technology in Human Resource

Management can be one of the powerful tools that can institutionalize organizations, identify

cultural and societal blocks and offer real-time solutions to societal, behavioral and sociological

challenges within the organization. On a contrary, research also shows that technology in HR is

also replacing human talent and skills, and in turn, is reducing jobs in HR teams.

4. Digital HR: Employee Training and Skill Development

Change management can be a bottleneck in leading the organizational change. It can be time-

consuming and expensive at times, and may incur technological or ideological barriers. Paving the

path through digital disruption for HR can be challenging, especially when the organization needs

to embrace new capacities, enhance connectivity and innovate products to be market- compliant.

For instance, SAP SuccessFactors, a leader in HR business applications upgraded their design

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system to cater to various recruiting, talent management and employee engagement needs of a

70000+ global workforce that included part time, virtual, and project-based employees

(SuccessFactors, 2016). They designed 13 new capabilities that could enable global collaborations

across HR, develop a culture of learning and serve as a central communication platform for a

diverse workforce (See Appendix 3).

In spite of the challenges, digitalization in HR can help the organization in introducing training

modules across geographies to co-create, engage and brainstorm with cross-functional teams and

foster an internal innovation ecosystem. Research shows that employee engagement is linked to

job satisfaction, higher productivity, greater loyalty and motivation (Welch M. , 2012) (Men, 2012)

(Taylor & Kent, 2014). This also acts a way sustainable way to network with the industry and tap

talent.

Learning and Development Tools: To facilitate innovation and transfer of knowledge,

organizations encourage the use of Learning Content Management Systems such as Coursera,

Moodle, ATutor, FFront, Lynda, etc. With the use of virtual classrooms, meetings and conferences,

organizations get an opportunity to collaborate with other similar organizations, build networks,

improve efficiency, reduce costs and get access to innovative approaches. Incorporating e-learning

platforms is a tested method to improve the efficiency of existing employees as well as to attract

potential talent.

Electronic Pay Slips and Payrolls: In the digital age of HR, payroll management systems are one

of the firsts implemented. These basic tools not only offer leave management, documentation,

process management and payment integration systems, but also help in linking vacation tracking

with communication channels (Out-of-office emails). This is one of the most important digital HR

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tools that help save paper, costs, and efforts, that can be stored, managed, retrieved and integrated

with overall human resources management solutions within minutes.

Daily Task Management and Job Allocation: With daily task management systems like

Robohead, Asana and other internal process management/HR systems, apart from the internal HR

systems, employees can take control of their work and manage their time well. Staying connected

on virtual platforms gives them the flexibility to work from home or from any part of the world

with the use of IoT platforms

Survey and Feedback: The HR teams make use of feedback and survey management tools such

as SurveyMonkey, Google Forms, Type Forms, etc. to gauge employee sentiment and map the

organizational objectives with employee engagement. This helps them to get suggestions, reactions

and comments on various employee and employer-centric aspects.

Electronic Performance Management: Employers use various analytical tools to gather reliable

and up-to-data information to enable performance tracking and decision-making. Performance and

appraisal management software’s like Workforce Performance Management (WPM), Suite

Systems, SuccessFactors and Talent Management Software help to methodically document and

organize employee performance data vis-à-vis pre-determined targets and the results achieved

along with the reimbursements, succession planning and other related HR systems. Studies show

that the newly ‘developed three-tier model (HR business partner, shared services and corporate) is

implemented by less than 20 per cent of organizations overall, but it is extremely common to those

in the world-class bracket’ (El-Khoury, 2017).

On a whole, digital HR plays a vital role in training employees, identifying talent, and

revolutionizing HR processes with the use of digital apps platforms, and streamlined process

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systems. The following map (see Appendix 4) shows the rating trend, percentage of respondents

across the globe who believe that Digital HR is ‘important’ and ‘very important’.

C. STAKEHOLDER MANAGEMENT VS STAKEHOLDER ENGAGEMENT

It is common to use both stakeholder management and engagement to improve organization’s

decision-making and accountability. By nurturing human capital, organizations can plan for long-

term using innovation and take the risks towards business sustainability and changing

environments. (Aakhus & Bzdak, 2015) discuss that stakeholder management is an ongoing

practice, as a function of communication design. They argue that ‘the communication design

practice framework provides a path for opening up the black box of stakeholder engagement to

advance communication competence in professional practice and organizational communication’.

Information, culture, technology and messaging helps leaders promote transparency and promote

problem-solving within the organization (Hunter, Menestrel, & H-C, 2008). This can be correlated

to how HR supports organizations in retention- by investing in employee engagement initiatives

and making the workplace appealing to the right talent at the right time.

1. Communication Design and Social Networks

Engagement and retention are two main important aspects of Human Resource Management

(HRM). Studies show that by investing in employee engagement initiatives and internal

communications, organizations strive to appeal to the workforce. It is therefore crucial for

organizations across domains to adopt novel technologies to support digital practices, the freedom

to communicate, flexibility to work and convenience to collaborate (Skroupa, 2016). Research also

shows that organizations adopt innovative and collaborative techniques and encourage the use of

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digital platforms, giving talent the rules to live by and the freedom to live with them–allowing

employees the flexibility to work from wherever is most convenient to them. However, this could

eventually prove burdensome to employees as they are constantly connected. (Rhenman, 1968)

mentions conflict and stress as a leading cause of differences and assumptions in distorted

communication or unsuccessful information flow. Multiple levels and variety of information

within the organization of network theory can also question credibility, reputation and can lead to

a confused environment.

2. Standard and Enhanced Messages: Internal Communications

Since there are dimensions in internal communications, organizations invest on employee

engagement and corporate communications as a business and consultancy practice. Given the

global scale of businesses, Human Resources and Corporate Communications teams collaborate

to work on strategic messages that engage with a diverse group of employees. This is a

fundamental step in creating engagement with standardized messages and streamlined

conversations on digital platforms.

According to a Deloitte study, integrating technology in communication and engagement can

enhance employee experience and can make it real-time, interesting while improving the work-

life balance. For example, Reliance Jio, a mobile network company in Mumbai, developed a plan

to integrate mobile-first and digital-powered technology in HR functions. Infused with values,

mission and expectations, the platform was used to manage a workforce of 50000+ employees

based in 18,000+ cities in India. First, it allowed recruiters, employees, consultants, etc. to search

and apply for jobs and facilitated HR managers to complete their tasks using cloud-based, mobile-

friendly HRM software. Secondly, all documentation, polices and networks were cohesive with

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the campaign. Third, it enabled saving costs, process management efforts and enabled the

elimination of shared services. (Deloitte, 2016)

Intranet and e-Newsletters: Having portals that share industry updates and stories, helps improve

internal communication and collaboration between employees. These internal social networks are

useful for larger organizations to facilitate inter-departmental and inter-regional interactions. In

addition, it also promotes team spirit, camaraderie, credibility of information and fortifies brand

trust. Studies show that intranet portals improve relationships between hierarchies, encourages

informal conversations that work towards employee satisfaction. They are also useful in providing

documents, announcements and important updates to reach a mass audience.

Email Campaigns: Research shows e-mail is an important form of electronic communication that

has a significant impact on managerial and organizational communication. Some researchers also

believe that e-mails help in eliminating organizational hierarchies, and reducing cultural,

geographical and social barriers in communication (Kiesler, 2014). Having separate email groups

for targeted communication ensures maximum engagement and instills a sense of community in

the workforce.

Virtual Townhalls: This is one of the important leadership communication tools that presents an

open, transparent, direct and collaborative communication platform to share opinions, raise

concerns and post suggestions. Combined with trust and transparency, the community of

employees commit to and follow leaders in taking actions.

Social Media: Communication on internal and external social media platforms (blogs, podcasts,

wikis, chat rooms, discussion forums, RSS feeds, web sites, social networks) have defined a new

age of dialogue. (Smith, 2006) says that ‘New media increase the volume, speed and every-way

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flow of communication, connecting people, giving them a voice and stimulating discussions about

topics of common interest’.

3. Social Media and Crisis Management

Social media when used as an internal communication tool (Intranet, employee connect, etc.) or

as an official external social media channel (Facebook, Twitter, LinkedIn, etc.) to engage with

employees, can be linked to the digital transformation in HR technology. Social media can assist

HR functions in the following ways:

• Help recruiters in searching candidates and checking their backgrounds

• Support branding of the company as prospective workplace

• Monitor employee activities on social media

• Communicate in real-time with standardized messaging across boundaries

• Engage in a dialogue using social, emotional and factual information

• Measure employee sentiment, engagement rate and reach

A study shows that enabling a learning environment with the use of existing resources and

technologies or with the use of newer real-time micro-blogging and business networking sites can

aid interorganizational communication and build cross-cultural, cross-functional networks.

However, the usage of technologies is dependent on employee usage, which is a result of their

expectations, usability, security actors and information needs (Deloitte, 2016). While social media

has given several opportunities for dynamic messaging, interactive communication designs and

measurements, it has also led to an increase in stress levels during crisis situations. Enactment in

crisis situations generally relies on control mechanics, management of stress, the speed of

communication and control tactics (Weick, 1988). The HR plays an important role in managing

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employees during crisis situations with interpersonal communication and official messaging.

Factors such as built trust, employee loyalty and shared value, can help organizations survive

through crisis situations. However, organizations with lower-paid employees and highly paid

managers; distorted communication, bureaucratic relationship or cynical workers can face

difficulties during crisis management and reputation management, especially while handling viral

feeds on social media (Hartong, 2013). Warren Buffet’s famous institutional theory of

organizational reputation: “It takes twenty years to build a reputation and five minutes to ruin it”,

can definitely be true when social media is actively promoted within the organization but not

monitored or managed well during crisis situations.

4. Confidentiality, Competitive Intelligence and Reputation Management

While employee engagement and interorganizational communication can lead to a healthier

workforce, it comes with deeper complexities such as power grids, information leaks, data

breaches and hacks. While the primary objective of stakeholder theory is to engage and act

according to stakeholder influences, organizations, at times, resist reacting. In the context of

depending on other stakeholders for resources, organizations are forced to react to external and

internal stakeholders (DiMaggio & Powell, 1983). Under the conditions of Institutional theory,

organizations must change or adapt to the market changes in order to survive (Oliver, 1991).

When organizations communicate about internal stratagems, competitive intelligence and financial

data, there are chances of information leaks to the press or directly on social media. It may affect

the product cycles, financial health, reputation and cause low-esteem amongst the employees.

Using a multidimensional approach to resolve this issue is fundamental for HR teams. Policies

related to whistleblowing, social media privacy, regulating information flow and gatekeeping act

as an important factor in ensuring smooth and regular employee communication. Creating credible

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engagement platforms with secured connections and privacy, copyright and intellectual property

rights are essential in HRM (Lange & Lee, 2011).

Appendix 5 shows the impact on leadership and organizational communication on employees’

social media activity as against the absence of organizational communication. It also denotes the

absence of trust in leadership, credibility and use of relevant information. With the advent of

business networking and job-searching sites such as LinkedIn, Indeed and Glassdoor, employees

can share their experiences, advice and criticism on public platforms. Past and present employees

share details about the leadership issues, work environment, professional and personal growth,

individual experiences, salary information, etc., which might be confidential in nature. Therefore,

many organizations make use of reputation management tools to keep a track of what is spoken

about them on these platforms and manage conversations before they turn into crisis situations.

Although corporate reputation heavily relies on financial performance, it has a strong corporate-

centric focus. Like corporate social responsibility is integrated with building reputations,

promoting HR practices and environment can build a positive image (Coombs & Holladay, 2010).

D. TECHNOLOGICAL ENGAGEMENT AND CHALLENGES

According to a Deloitte report, HR is at the forefront of digital transformation and moving to a

cloud workplace with ‘the establishment of Workday in 2005, the acquisition of SuccessFactors

by SAP in 2011, and the purchase of Taleo by Oracle in 2012’. The report illustrates how

technology has softened the barriers between personal and professional lives and has created better

opportunities as compared to traditional HR practices (Stephan, Uzawa, Volini, Walsh, & Yoshida,

2016).

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1. Power Dynamics and Stakeholder Networks

Many researchers believe that newer technologies build structures in the organization and

influence cultural changes. (McPhee & Poole, Organizational structures and configurations, 2001)

argued that there is a solid connection between communications and structure which drives the use

of technology. Researchers also use ‘networks theory’ to understand decision-making, power

dynamics and use of innovation with the organization (Rowley, 1997). With globalization and

shifting trends, the demand for stakeholder management has increased: reshaping the information-

communication designs (Aakhus & Bzdak, Stakeholder engagement as communication design

practice, 2015). (Lammers & Barbour, 2006) believe that organizations have to balance between

microphenomena (concentrating on individual conversations) and macrophenomena (focus on

public conversations) in the institutional theory of organizational communication. The use of

technology such as e-mail, intranet portals, real-time interactive dashboards, mobile-applications

and social media can help HR teams cater to individual and team requirements. For example, (Zack

& McKenney, 1995) observed that organizational environment and structure is reflected through

the use of e-mails with the organization. Such communication campaigns can be used to measure

the reach and evaluate the response.

The below chart (see Appendix 6) illustrates the difference between traditional HR and digital HR:

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Figure 1
Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

These platforms are used for learning and development, recruiting, goal-setting, mind-mapping,

collaborations, information-sharing, payrolls and database- management (Deliotte, 2016).

2. Design-Thinking and Other Challenges

In spite of the digital transformation, the surge in mobile devices usage and the increase in daily

social media usage, only around 20% of global organizations have integrated digital technologies

using mobile apps for employees (Jones & Cooke, 2015). This determines the level of complexity

and challenges in transforming their design-thinking and converting gigabytes of confidential data

from paper to online.

While integrating digital with platforms such as apps, video pods, social sities, and mobile

technologies can be difficult, transcending behavioral shifts and adopting of newer concepts can

be the biggest challenge for HR teams within the organization. In spite of the technological shift,

maintaining an agile development, measurement and robust human resource management system

can be cumbersome too. The absence of decision-making and procedural changes can also create

barriers in the use of digital technologies. Moreover, failure in real-time problem-solving, response

creation and crisis management can also intensify a negative sentiment about a technological shift

amongst the employees (Deliotte, 2016).

In the digital economy, the real complexity for HR can be to keep up with market fluctuations.

However, with an understanding of the primary and peripheral stakeholders, management of

resource allocation and with an overall corporate mission to innovate and redefine user-

experiences, HR teams within the organizations can pave their path through the digital disruption.

By empowering leaders to drive the change, tapping the right talent competencies, creating a

common or shared value within the organization, celebrating the achievements of multiple

stakeholders, and by managing to negative feedback with a strategic mindset, digitization in HR

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

can be successful. The impact of interorganizational communication can be amplified in the digital

space by using a multi-dimensional approach in identifying strategies to engage with primary

networks (different levels of internal stakeholders –employee, staff, shared services, consultants

and agencies) and by using various frequencies of centrality and density (Rowley, 1997).

Integrating theoretical elements and practical solutions in the realm of the digital landscape can

help HR teams in organizations to create a sustainable impact on their stakeholders and navigate

through complexities.

APPENDIX

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

Appendix 1: This statistic presents U.S. and UK employee opinions on social media usage of CEOs

and brand trust in 2014. During a survey of 1,000 employees, it was found that 82 percent of

respondents from the United States thought that CEO participation on social media helped to

communicate company values and to shape a company's brand reputation. Source: Survey

conducted and published by Brandfog, April 2014. Source link: 2014 Global Social CEO Survey,

page 8 and 9

Appendix 2:

These statistics present ways in which consumers in the United States believe social media has

increased accountability for brands as of July 2017. According to the findings, 80 percent of

consumers reported that social media allowed them to uncover unfair treatment by brands, and

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

another 75 percent had stated that it provided them consumer power over brands.

Source, survey by and published by Sprout Social: Survata, July 2014.

Appendix 3:

The figure below shows the new strategy in cloud solutions by SuccessFactors. These thirteen

capability areas, supported by SAP’s cloud technology, were defined as subjects of the

transformation

Link: https://www.successfactors.com/content/dam/successfactors/en_us/resources/case-

studies/case-study-hr-digital-transformation-sap.pdf

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

Appendix 4: According to this year’s Deloitte survey, only 38 percent of companies are even

thinking about digital HR and only 9 percent are fully ready. Nearly three-quarters of companies,

or 72 percent, believe this is an important priority and 32 percent define it as very important, so it

will be a major area of opportunity for HR in 2016. See the figure for our survey respondents’

ratings of digital HR’s importance across global regions and selected countries.

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

Appendix 5: The Weber Shandwick survey found that one-third of employers — 33% —

encourage their employees to use social media to share news and information about the

organization. This sounds risky, but this social encouragement has an outsized impact on employer

advocacy among employees. For example, employees with socially-encouraging employers are

significantly more likely to help boost sales than employees whose employers aren’t socially

encouraging (72% vs. 48%, respectively).

Link:https://www.webershandwick.com/uploads/news/files/employees-rising-seizing-the-

opportunity-in-employee-activism.pdf

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

Appendix 6: The Deloitte table illustrates the difference between current HR service delivery

models and digital HR, to understand how radical and profound the digital HR transformation will

be.

Link:https://dupress.deloitte.com/dup-us-en/focus/human-capital-trends/2016/digital-hr-

technology-for-hr-teams-services.html

Figure 2

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Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University

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