Digital Transformation and Dysfunctions: Case Study of a Japanese Leading Technology Company, Analysis from Socio-Technical Approach

The implementation of digital transformation often fails due to organizational issues. This paper aims to analyze the organizational issues of OMRON Corporation (OMRON) in Japan. The theories are Socio-Economic Approach to Management (SEAM) and Socio-Technical Approach (STA). The digital transformation of OMRON was summarized from a socio-technological perspective. The interview was analyzed with the framework of SEAM’s “dysfunctions.” OMRON has predicted social needs and developed technologies for growing significantly. The findings of interview include bellows dysfunctions and effects. The teammate’s work in the department is too fragmented, and there is little communication and coordination between teammates. This may cause a delay in new product development and quality problems later; In introducing new materials, problems often occur among the R&D department, materials procurement department, and quality department. The problems outside organization and supply chain management will occur when quality problems and responsibilities of delivery on suppliers of materials. The social factors of these dysfunctions are the organization is too vertically divided, and sectionalism is strong. In addition, there are few active communication and challenges because no one takes responsibility. The technical factors are the tremendous success of the company’s past technological developments, and it isn’t very objective toward product development that emphasizes product technology and functions.