Organizational Agility: Online Retailing at a Glance

Proceedings of the 28 International Business Information Management Association Conference th 9-10 November 2016 Seville, Spain ISBN: 978-0-9860419-8-3 Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth Editor Khalid S. Soliman International Business Information Management Association (IBIMA) Copyright 2016 Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth Conference Chair Khalid S. Soliman International Business Information Management Association, USA Local Chair Ángel Jesús Varela Vaca University of Seville, Spain Conference Advisory Committee John F. Affisco, Hofstra University, USA Abdul Rahman Ahmad, Universiti Tun Hussein Onn Malaysia, Malaysia Omar Al-Azzam, University of Minnesota Crookston, USA Hesham H. Ali, University of Nebraska at Omaha, USA Najiba Benabess, Norwich University, Northfield, USA Az-Eddine Bennani, Reims Management School, France Emil Boasson, Central Michigan University, USA Regina Connolly, Dublin City University, Ireland Reggie Davidrajuh, Stavanger University College, Norway Susana de Juana Espinosa, Universidad de Alicante, Spain Xiuzhen Feng, Beijing University of Technology, China Mohammad Ayub Khan, Technologico de Monterrey, Mexico Sherif Kamel, The American University in Cairo, Egypt Roman Povalej, University of Karlsruhe (TH), Germany Alcina Prata, ESCE, Portugal Muhammad Najib Razali, Universiti Hussein Onn Malaysia, Malaysia Joseph Sarkis, Clark University, USA Najib Saylani, Florida State College at Jacksonville, USA Magdy Serour, InContext Solutions, Australia Amine Nehari Talet, King Fahd University of Petroleum & Mineral, KSA Abraham G. van der Vyver, Monash University, South Africa Dianne Wingham, Australia Paul H.P. Yeow, Monash University, Sunway Campus, Malaysia Program Committee Chokri Abdennader, University of Sfax, Tunisia Haslinda Abdullah, National Defence University Malaysia, Malaysia Azura Abdullah Effendi, Universiti Sains Malaysia, Malaysia Mohd Helmy Abd Wahab, Univ. Tun Hussein Onn Malaysia, Malaysia Mirela Ionela Aceleanu, The Bucharest University of Economic Studies, Romania Nicoleta Acomi, Constanta Maritime University, Romania Oluwasogo Adediran, Covenant University, Ota, Nigeria II Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth Disposition in Digital Records Management and Information Systems: A Conceptual Analysis…..…… Sherry. L. Xie and Guanyan Fan 459 A Model of Work-Family Enrichment and Job Satisfaction………………………………………………. Burhanudin, Heru Kurnianto Tjahjono and Majang Palupi 464 Why People Use Facebook: Analysis of Factors influencing Users in the Czech Republic……………… Jitka, Novotová 470 Regulatory Pressure and Bank Capital and Risk Behavior in Pakistan……………………………………. Samina Riaz, Venus Khim-Sen Liew and Rossazana Bt Ab Rahim 482 Pricing Strategy and Efficiency Advertising Activity................................................................................... Ekaterina Kalmykova and Galina Fangmann 492 The Impact of Innovation and Technical Progress on the Economy………………………………………. Gavril Stefan and Oana Coca 497 The Relationship between Monetary Policy and Foreign Direct Investment in Romania during 20032014………………………………………………………………………………………………….. Valentin Mihai Leoveanu 507 Further Professional Education Reflecting Market Needs In Gastro-Services In The Czech Republic......... Jan Chromy 523 Code of Ethics and Accountants’ and Auditors’ Activity…………………………………………………. 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Josef Myslin 562 Organizational Agility: Online Retailing at a Glance………………………………………………..…… Florina Pînzaru, Sergiu - Octavian Stan and Elena-Mădălina Vătămănescu 573 The Main Fields of Technology for the Top 10 Universities in PCT Patent Application………………… Petr Zdralek, Ruzena Stemberkova, Pavla Matulova, Petra Maresova and Kamil Kuca 577 Process Framework of Information Modeling for BIM Execution Planning……………………………… Josef Myslin 582 L’Effet du Pays d’Origine du Client sur la Perception de l’Hospitalité dans un Espace Marchand: Une Etude auprès des Clientes Tunisiennes et Saoudiennes……………………………………………………. Ghali Zohra XVI 592 Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth Organizational Agility: Online Retailing at a Glance Florina Pînzaru Faculty of Management, National University of Political Studies and Public Administration Bucharest, Romania [email protected] Sergiu - Octavian Stan Doctoral School in Management, Bucharest University of Economic Studies Bucharest, Romania [email protected] Elena-Mădălina Vătămănescu Doctoral School in Economics and International Business, Bucharest University of Economic Studies Bucharest, Romania [email protected] Abstract The present paper intends to approach the issue of organizational agility in the context of a fast-changing global environment. The focus is oriented towards the online retailing sector which has been subject of multiple changes and developments over the past years. The study advances a preliminary outlook on the topic, setting the general parameters for further investigations and interpretations. As the results posit, agile endeavors applied in retail industry offer a pertinent answer to specific exigencies of the new globalized market, providing opportunities for predictable revenues and consistent profit. The most important insight is that leveraging agility is not only about introducing a new technique in the sales optimization process, but also the assumption of a novel paradigm. Keywords: organizational agility, online retailing, agile policies. Introduction Organizational agility has set itself up as a topical and relevant topic when discussing the organizational dynamics in a highly competitive environment. Business internationalization and globalization, the interconnected world and time-to-market pressures have placed agility to the core of current studies and investigations. Both scholars and practitioners have asked themselves which are the main drivers and strategies applicable by an organization in order to achieve and preserve agility. In accordance with different research angles and disciplines, organizational agility has been addressed from various standpoints, starting with mass customization, technological development, operation and process coordination and knowledge management strategies (Dove, 2005) and finishing with continuous improvement and integrated change management in a versatile context (Sherehiy, Karwowski and Layer, 2007; Williams, Worley and Lawler, 2013). The operationalization of agility covers a wide range of dimensions such as and response capability, adaptability, alertness, flexibility, development, all of the defining the primacies of agile organizations irrespective of the sector or industry. The aforementioned pillars of agility are linked to the attainment of the competitive advantage “that requires strategic thinking, an innovative mindset, exploitation of change and an unrelenting need to be adaptable and proactive. Agility thus becomes a business imperative for survival rather than choice” (Harraf et al., 2015, p. 675). Against this backdrop, Davis (2009) talks about the “restructuring of the business order”, the agile organizations acting towards competitiveness, speed and responsiveness to the evolving external market conditions. Organizational agility stands for an imperative for business success, supporting the firms’ achievement of competitive capabilities in dynamic business environments (Bi et al., 2012; Ghasemi, 2015). Agile organizations act beyond adapting changes and envisage potential opportunities to attain development and progress. In response to the changing and unpredictable business environment, there is a high 573 Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth exigency for a global mindset regarding production, purchasing, selling, distribution opportunities. All the inherent components should adhere to the consistent improvement and update of technology, management, communication and transportation infrastructure, coordination and general harmonization of priorities (Ghasemi, 2015). Here, the investigation of the organizational agility specificity among chained components is indicative of the inter-influences and sectorial effects from a value network perspective (Swafford, Ghosh and Murthy, 2006; Braunscheidel and Suresh, 2009). The Online Retailing Sector – A Preliminary Insight The first part of our paper depicted the theoretical fundaments of agility in the context of organizational change. Also, there were presented various theories and scientific opinions of researchers about the special role of agility within the framework of organizational transformations. In order to particularize the presented constructs, the study will focus on specific benefits of introducing agility policies and methodologies in the case of projects or activities from the retail industry. In this vein, two questions are to be answered: why it is necessary to introduce agile policies and methodologies in the projects/in the current activities of companies? and which are the implications of applying agility policies and methodologies within the companies - will they ensure better results than the traditional models? The imperative of using agile principles in organizational change responds to the need of adapting to the fast-changing context of global retail market. Some relevant big figures are meant to provide a thorough image of the setting. The study of Price Waterhouse Cooper about reshaping the retail experience of online consumers may be considered a milestone. It was conducted in 2012, comprising 7.005 online consumer interviews worldwide (only 1.000 online customers in the United States). Based on the big number of respondents and on the sociological methodology for data collecting, the study may be considered representative for the retail market. Analyzing the results of the study, we can resume the following key points (PwC 2012). Firstly, as far as general purchasing on goods online from the retail market is concerned, the average value shows that more than 40% of the population of the Western Europe purchase goods online (with a peak over 50% in Germany, Switzerland and France). As forecasted for 2015, the figures showed an average of 49% for Western Europe and 70% for UK and The Netherlands. To the best of our knowledge, there has not been released new statistic data liable to confirm the forecasted data values for 2015. Secondly, in what concerns multichannel shopping, the study emphasizes that more than 86% of global respondents (in comparison with 65% in US), shop across a multiple number of different channels (online shopping, bricks and mortar, mobile applications, TV shopping, catalogue eso.) - even when goods from the same retailer are purchased, the consumers use more than one channel (the highest average of 45% was recorded in Hong-Kong). Thirdly, more than 80% of the respondents (88% in the US) state that they research a product online before purchasing (when they buy computers, books, electronics and music). Also, the worldwide respondents posit that, in 60% of the cases (73% in US), they examine a product online in order to get the best price and best performances for the product. Fourthly, regarding the perception of the respondents about themselves, 69% of the global respondents (72% in the US), consider themselves confident in their expertise about purchasing online products (4 and 5 values on a five-point scale). Considering the aforementioned results, the PwC study concluded that “the single biggest conclusion of our study is that consumers are leading and shaping the multichannel trend, with retailers lagging behind” (PwC study, 2012, p. 4). To face this challenges and forecasting the future trends for 2020, PwC proclaim multichannel shopping as a major force for the retails companies which requires “a significant increase in agility and flexibility by retailers, driven by a deeper understanding of their customers” (PwC study, 2012, p. 4). This engenders a new approach about how retailers track consumer behavior (based on agility measures), how they will operate in the future and how they will manage their supply chains more agile. The perspective of PwC representatives about the important role of agility in the retail industry is also emphasized by other authors, mentors or top consultants in marketing and management fields. In this 574 Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth context, the editors of Thought Works Magazine, consider that “the success in the next few years is going to be defined by “Retail Agility”, the ability to take advantage of the emergence of a plethora of new markets, channels, products and customer segment which shows no signs of abating” (Thought Works, 2012, p. 1). Similarly, the conclusions of a relevant study conducted in 2015 by L2Inc., in the retail market, comprising over 82 brands across six sectors, approach the changing retail landscape and the drivers of higher degrees of agility (L2Inc., 2015, p. 2). More than 80% of the analyzed brands applied agility policies and specific methodologies in order to satisfy easier, quicker and better the demands of their customers. In the majority of the cases, they used a complex solution based on customized eplatforms with strong cloud capabilities. The usage of cloud capabilities is strongly recommended for retailers, as more than 76% of Internet users leave an e-commerce site in less than two minutes if they are unable to locate the product. The agility advantage consists not only of a better management of customer needs, or stock management, but also of continuous increasing the margin of revenues. All the companies involved in the study declared that, due to agility strategies applied, they gain on average more than 15% in revenues than before changing market strategy. A similar efficient solution for solving the retailers’ problems (in the context of low predictability of the new emerging markets) using agile concepts, comes from the marketing researchers team of GT Nexus. In their study, they bring to the fore - as a major problem – the fact that “many retailers are not equipped to quickly adjust to new customer demand” from many reasons, but especially that “ERP systems track inventory to shipment but, fail to shed light on transit products as they pass through the supply chain ” (GT Nexus, 2015, p. 2). In the same article, the researchers of GT Nexus also found two roots for this problem: sourcing and inventory allocation decision are made 90 to 180 days ahead of consumption (which leads to lost sales and too many markdowns and inventory obsolescence) and supply chain flows are rigid and inflexible (which leads to increasing the transport costs and inventory costs). The solution for solving these problems resides in creating an agile supply chain on a cloud-based platform. This solution offers the possibility to “easily adapt to its environment” and “increase profits to grater revenue from sales” (GT Nexus, 2015, p. 3). Conclusion The present paper intended to elaborate on two main issues: the first one regarding the necessity of using agile policies and methodologies in the retail sector and the second one referring to the implications of agile methods in comparison with the traditional models. Focusing on the presented examples, we may conclude that agile endeavors applied in retail industry offer a pertinent answer to specific exigencies of the new globalized market, providing opportunities for predictable revenues and consistent profit. The most important insight is that leveraging agility is not only about introducing a new technic in the sales optimization process, but also the assumption of a novel paradigm. 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