Threshold Concept for Promoting Business Transformation

Authors

  • Yayoi Hirose Toyo University

Keywords:

Threshold concept, Leadership, Business transformation, Business knowledge

Abstract

This qualitative study highlights the importance of considering the threshold concept for promoting the business transformation of large-sized enterprises. The wide range of business literature and experts has debated how traditional large-sized companies can transform conventional approaches and mindset to be competitive. For example, many global enterprises now focus on digital transformation (DX), aiming to disrupt their conventional routines and adopt new DX knowledge and approaches. The literature on leadership identifies how a business leader should behave for their staff to transform their conventional approach, including promoting crisis awareness, setting up a clear strategy vision, and creating a DX department. However, without considering how to transform employees’ conventional way of thinking at the individual level, a leader’s action will be a unilateral announcement, and the company cannot promote company-wide transformation.

In order to get a clue for promoting the recent DX of large-sized traditional companies, this study is based on the past successful cases of two Japanese large-sized conservative companies that completed company-wide transformation and improved corporate business performance from financial haemorrhage in just a few years. The study suggests that, in order to promote corporate transformation, company leaders need to consider how their staff members and middle-managers overcome the threshold concept to learn transformative business knowledge at the individual level, instead of simply promoting crisis awareness and presenting a company goal. The study reveals the usefulness of the threshold concept for understanding transformative business knowledge, as it offers the ability to imagine a successful business scene by disrupting the conventional cognitive frame and adopting new values and approaches. The two cases suggest that by imagining a successful business scene, the employees were able to understand their concrete goal, learn transformative business knowledge, make huge efforts to attain their concrete goal, and ultimately improve their business performance. After overcoming the threshold concept, the employees, through a team effort, actively created their own business knowledge for transformation. This study thus suggests that business leaders who aim to promote DX in traditional companies should consider how company staff and middle-managers will be able to overcome the threshold concept for understanding transformative business knowledge.

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Published

2023-09-05