Master of science in business administration Digital business track

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A case study on factors that lead to specific technological frames: The communication of technological developments within Philips

Master of science in business administration Digital business track

Philip Eric Joseph van de Pavoordt

Student ID: 13497944

University of Amsterdam

MSc. in Business Administration: Digital Business Supervisor: Zahra Kashanizadeh

Final date of submission: 24-06-2022

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Acknowledgment

I would like to thank my supervisor Zahra Kashanizadeh for her guidance and constant support throughout the thesis process. The constructive feedback helped me to shape the thesis as it is today. I appreciate the time and effort you took to help me with my academic achievement.

Statement of Originality

This document is written by Philip van de Pavoordt who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its

references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

Signature______________

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Abstract

The execution of a digital transformation is becoming more critical for companies. Given the

disruptive effects of technologies on every area of an organization, top managers often find themselves in a justification issue to explain the change. The successful implementation of new technological developments will depend on the ability to convey the change to its many stakeholders. To shape and organize interpretations of changes, organizations use framing to create a better understanding of the events. Consequently, this study aims to identify and better understand the frames that top

management uses to shape technological changes, also referred to as technological frames. A case study has been designed to gain more insight into this phenomenon. By collecting nine years of data from Philips, the communication towards the external stakeholders regarding technological

developments has been outlined. By means of the Gioia analysis, the data is analyzed through open coding. The results show the three technological frames the CEO used over the past nine years. Two of the technological frames emphasize the internal and external necessity of the technological development, and one frame focuses more on the creation of awareness for the development. In addition, the internal, external, and supporting factors are identified that lead to these specific frames.

Keywords: Framing, Technological frames, Technological developments

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Contents

Acknowledgment:... 2

Abstract: ... 3

1 Introduction to the study ... 5

2 Literature review ... 8

2.1 Digital transformation ... 8

2.2 The concept of framing ... 9

2.3 Concept of technological frames ... 11

2.4 Types of technological frames ... 11

2.5 Congruence of technological frames ... 13

3 Methods... 15

3.1 Research strategy ... 15

3.2 Case selection ... 16

3.3 Identification of stakeholders ... 17

3.4 Data collection ... 17

3.5 Data analysis ... 18

3.6 Validity and Reliability ... 18

4 Results ... 20

4.1 Internal necessity of the technology development ... 21

4.2 External necessity of the technology development ... 22

4.3 Creating awareness about the technology ... 24

5 Discussion ... 28

5.1 Revisiting the main findings in literature ... 28

5.2 Theoretical implications ... 31

5.3 Managerial implications ... 32

5.4 Limitations and direction for further research ... 32

6 Conclusion ... 34

7 References ... 35

8 Appendix ... 39

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1 Introduction to the study

Digital transformation has been a recurring topic in study and management practices over the last few years (Bharadwaj et al., 2013; Kraus et al., 2021; Piccinini et al., 2015; Vial, 2019). The reason for this is that companies more frequently find themselves in a rapidly changing environment where they must change with the times to remain competitive (Chanias et al., 2019). Unlike born-digital

companies, such as Uber, established companies often have to overhaul their entire organization, business strategy, and operations when they incorporate digital technology (Tumbas, 2017). Given the disruptive effects of digital technologies on practically every area of an organization's inner and outer environment, many organizations have made the creation and execution of a digital transformation a top priority (Chanias et al., 2019). A successful execution of a digital transformation will depend on an organization’s ability to implement new technologies, structures, and processes but also on the ability to convey the new changes to its many stakeholders. The importance of ensuring both understanding and acceptance of new strategies among key components of the organization is a central element of these journeys (Fiss & Zajac, 2006). Significant changes within a company tend to be controversial since they include rearranging priorities and disrupting established relationships. In the early literature Dutton and Duncan (1987) already described this will nearly always result in a justification issue where the top management must clarify why the change is happening. This study aims to create a better understanding of the frames that top management in established organizations use to frame technological changes.

One important premise within the extensive social cognitive research is that people act on their perceptions of the world, enacting certain social realities (Smircich & Stubbart, 1985; (Fiss & Zajac, 2006). The symbolic frames that organizations hold are implicit guidelines that organize and shape their interpretations of events (Weick, 1979b). According to Gioia and Chittipeddi (1991, p. 1), a frame can be described as: ''definitions of organization reality that serve as vehicles for understanding and action''. Therefore, researchers have suggested and executed numerous research topics regarding

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the frames that aim to create and legitimate the meaning of change within a company (Fiss & Zajac, 2006).

Digital technologies drive technological changes, which are frequently at the heart of a digital

transformation. One of the elements that continually generates substantial uncertainty and complexity within a digital transformation is the adoption of digital technologies. Top management relies on the so-called ‘technological frames’ to cope with these challenges (Spieth et al., 2021). A Technological frame is part of the above-mentioned symbolic frames that impact the change within a company (Cornelissen & Werner, 2014). Spieth et al., (2021, p. 1) describes the technological frames as follows: ‘’Technological frames determine how actors interpret, assess, and shape a technology’s development usage and trajectory’’.

Davidson (2006) describes the researchers in the domain of technological framing continue to develop unique studies that illustrate the frame content in a specific environment. However, more research must be done on the structure of a technological frame in general. According to Spieth et al. (2021) insights into the characteristics of technological frames, such as their content and structure in general, is lacking. It is important to gain insights into these characteristics to understand the organization's interrelation with its context and technological frames (Hoppmann et al., 2020.; Kaplan & Tripsas, 2008). In addition, the literature also lacks substantial strategic implications for companies on how top management shapes reactions to technological developments and implementation with their

technological frames (Furr et al., 2012). Furr et al., (2012) also explains the interesting study prospects on how leaders shape technological frames to manage their consequences purposefully.

Therefore, this study attempts to contribute to the understanding of technological frames and their influence factors that lead to a specific frame. To provide a deeper understanding of this phenomenon, this qualitative study explores the technological frames that a company uses over several years with a case study. For the case study, the focus will be on the communication of Koninklijke Philips NV (From now on, referred to as Philips) with their external stakeholders regarding ongoing technological

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development. The aim is to answer the following research question; What are the factors that lead to specific technological frames?

The research starts with reviewing the current literature on framing and technological frames. This literature is used to gain knowledge regarding the topic but will not be used to structure the study. The Quarterly Earning Calls of Philips are collected to analyze the communication with the external stakeholders. An inductive approach will be used in this research, using open-source coding. The technological developments mentioned by the CEO are collected from the documents, and the associated reasons for development are coded. The identified reasons are grouped and eventually result in different specific technological frames. The findings of this case study are presented in the fourth chapter, and they will be discussed in the fifth chapter with the perspective of the current literature. Furthermore, chapter five describes the limitations and improvements of the study as well as directions for future research. Finally, in chapter six, the research question will be answered, and the conclusions of this study are drawn.

The case study is conducted in the specific environment of Philips which makes it challenging to reach generalizable conclusions in the research of technological frames. Therefore, this paper is particularly relevant by gaining insights into how technological frames are structured. More specifically, in this study the internal, external and supporting factors that lead to a technological frame are identified. In addition, the study can be used for future cross-case analysis that can generate insights on the differences in technological frames of companies.

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2 Literature review

To create a common basis for understanding, the terminology for a digital transformation, the concept of framing, and a literature on the technological frames will be explained.

2.1 Digital transformation

Strategic transformation has been at the core of developing literature in both strategy and organizational theory for a while (Fiss & Zajac, 2006 Bharadwaj et al., 2013). An important

development within this literature is that strategic change is increasingly seen as a shift in structures and processes in addition to a cognitive reorientation of the organization. This often involves a redefinition of the organization’s mission and purpose (Fiss & Zajac, 2006). For many pre-digital firms, developing and implementing a digital strategy has been a top priority during the last decade.

Given how digital technology has changed nearly every element of an organization's activities

(Chanias et al., 2019). Pre-digital organizations are well-established businesses that were profitable in the pre-digital economy while operating in conventional sectors. (Ross et al., 2016). To remain competitive in the market and be able to adopt these digital technologies, companies often need to change their processes and business models (Tumbas, 2017). These new digital technologies can transform an organization’s product, service, customer communication channels, and business models (Hess et al., 2016).

The existing literature has suggested many definitions regarding the terminology for digital

transformations. Therefore, digital transformation terminology will be described to provide a common basis for understanding. The extensive and varied literature on digital transformations faces a shortage of consensus on digital transformation (Warner & Wäger, 2019). Consequently Hanelt et al. (2021, p.

2) conducted a meta-analysis of the literature on digital transformation and characterized it as:

‘’Organizational change that is triggered and shaped by the widespread diffusion of digital

technologies’’. A digital transformation strategy is thus a response to the challenges of managing the growing landscape of digital initiatives and related infrastructures (Henfridsson & Bygstad, 2013)

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An important implication of these digital transformation strategies is that the success will depend not only on the organization’s ability to implement new technologies but also on the organization’s ability to convey the new processes, structures, or business models (Fiss & Zajac, 2006; Hess et al., 2016).

Fiss & Zajac (2006) emphasize the importance of both the understanding and acceptance of new strategies. These elements are essential to ensure that the organization can adequately conduct the change.

2.2 The concept of framing

A strategic shift, such as the digital transformation stated above, typically entails reorganizing priorities and disrupting long-standing connections; as a result, such change is often challenging for internal and external stakeholders. Nearly every significant change that will impact companies demands a justification problem (Elias, 2009; Fiss & Zajac, 2006).

A central premise of social cognitive research is that people act based on their interpretations of the world (Smircich & Stubbart, 1985). The frames of reference held by organizations are implicit guidelines that serve to organize and shape their interpretations of events (Weick, 1979b). According to Gioia and Chittipeddi (1991, p. 1) a frame refers to ''definitions of organization reality that serve as vehicles for understanding and action''. Through interaction, this will involve the symbolic expression of assumptions, knowledge, and expectations. The goal of an organization can be to shape an

individual’s interpretation and guide them to make sense of the action taken by them (Orlikowski &

Gash, 1994)

Few concepts are as self-evident in management and organizational research traditions as that of frame or framing (Cornelissen & Werner, 2014). The widespread popularity and use of the concepts have led to rich research streams, ranging from work in managerial cognition and decision-making to strategic and organizational change. The popularity of this subject can be seen as something positive but can

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developed along many different paths (Cornelissen & Werner, 2014). Research on framing has been done at the micro-level where it primarily looked at behavior on individual perceptions and actions in a certain context (Hodgkinson et al., 1999). Research at the meso level has focused mainly on how, by framing language and behavior, strategic management tries to get others to participate in their change through actions and social behavior (Kaplan, 2008). At last, this wide range of research at the macro level has provided a broader understanding of differences in behavior between social groups and the creation of cultural framework (Fligstein & Mcadam, 2011).

The development of this topic in a wide range of directions makes it important for this research to indicate the level at which the frames will be examined. Within this research, the focus is on the meso- level frames that help shape and understand the change within the organization. The meta-research of Cornelissen & Werner (2014) has described four different types of frames that have been studied in the extensive meso level literature. These different frames on meso levels are shown in Table 1. As previously mentioned, this research is focused on technological frames, but the table below is used to give more context to the concept of frames, or framing.

Table 1: Frames on meso levels (Cornelissen & Werner, 2014)

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2.3 Concept of technological frames

As introduced in the introduction, a technological frame focuses on how technological development is interpreted, assessed, and shaped (Spieth et al., 2021). Davidson (2006) described that recognizing how individuals of an organization perceive the technology, will be critical to guiding their behaviors and obtaining desired results. Companies must deal with an increasing number of technological developments. This complicates the uncertainty and complexity that emerge as soon as new technology is introduced to the stakeholders.

This factor of uncertainty and complexity of digital technologies makes their understanding and appraisal difficult for two reasons. (1) When people first experience digital technologies, they are unclear of what they are, need time to learn how to use them, and are unsure how they will affect their business operations (Kaplan & Tripsas, 2008). (2) As they expand abstract features that enable new types of cooperation and work processes, these digital technologies add significant complexity (Bailey et al., 2010; Nambisan et al., 2017). Furthermore, the top management of incumbent firms can create a technological frame that promotes, controls, and overrides the interpretations of technological

developments for their stakeholders (Davidson, 2002). These leaders can rely on their interpretative conceptual frames, also known as 'technological frames’, to concentrate on the relevant elements of the technological developments, assess their usefulness, and ensure that the changes are well understood (Cornelissen & Werner, 2014).

2.4 Types of technological frames

Orlikowski & Gash (1994) first expressed their main concern about how individuals of organizations understand information technology and how their perceptions impact IT-related actions. They claimed that technological frames provide an intriguing and valuable analytic viewpoint for describing action and interpretation that is difficult to achieve with other theoretical concepts. Orlikowski & Gash (1994) created a Technological Frame of Reference (TFR) for research regarding the interpretive processes related to information technology in organizations. This TFR framework resulted in a

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basis of research into the interpretative elements of IT and organizational change (E. Davidson, 2006).

The TFR framework is based on the concept that technological frames are unique to users, technology, and the organizational environment. Each case study that analyses the technological frames within a specific organizational environment gives a lot of information about the organization's interpretative processes and outcomes (Walsham, 1995; Spieth et al., 2021). Although frames are domain-

dependent, various frame domains have established some common characteristics through time (E.

Davidson, 2006).

Orlikowski & Gash (1994) identified three frame domains that influenced organization members understanding of technology. These domains are also commonly used in a variety of organizational context to explore frame content in relation to other technologies. Then Davidson (2006) identified three similar frame domains that are widely applicable across the many case-studies that were performed.

Table 2

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The literature revealed three limitations of technological. The limitations, according to Gal & Berente (2008) and Davidson (2006) are technologically concentrated, temporally bound, and individually focused. The technology-centered limitation implies that there are frames in the larger organizational and social context that impact research. Gal & Berente (2008) identify a second limitation: frames are temporally since they are only studied at one point in time. The third constraint is that the analysis is done at an individual level. Individual frames exist, however related groups may share or have similar frames. These frames emerge as a result of encounters with the technology. Gal & Berente (2008) key concern is that past frame studies have simply used interview data to determine frames, ignoring how frames are generated and modified through social interactions.

2.5 Congruence of technological frames

In the early development of the literature on technological frames, it was recognized that there is a difference in how different social groups view a technology (Orlikowski & Gash, 1994). Davidson and Pai (2004) suggests that since various social groups view a technological object differently, these groups will develop different meanings of the technology depending on their experiences. The

knowledge goals of various groups affect and restrict such interpretations. Orlikowski and Gash (1994, p. 180) mention the congruence within technological frames. They describe the congruence as the following: ‘’As referring to the alignment of frames on key elements or categories. By congruent, we do not mean identical, but related in structure and content’’. They also argue that incongruence in organizational groups is the main reason why the implementation of new technology is difficult in business processes, there is moderate acceptance and there is often resistance (Orlikowski & Gash, 1994). This congruence of frames, however, has led to more complete and easier use of the new technology (Puri, 2006). Though it has been suggested that simply understanding the variations between frames isn't enough to enhance user acceptance of the technological development. The approach presented by Orlikowski & Gash (1994) does not address concerns connected to structural features of misalignment (Davidson & Pai, 2004). Rather than being an interpretative construct, technological frames also lead to view of the observable world (Puri, 2006).

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The congruence within these technological frames arises mainly from different groups within an organization. These different groups may have different technological frames. As a result, everyone's technological frames have an impact on their technological behaviors. Various groups may have incongruent technological frames, that can lead to difficulties in technology implementation. Diverse technological frames suggest different approaches to understanding and interpreting technology (Olesen, 2014). For this reason, it is also important that while examining the technological frames within a specific organizational context that the audience with which is being communicated is properly identified. This is because the technological frames can then arrive at their intended outcome (Olesen et al., 2013)

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3 Methods

This chapter starts with a description of the research design adopted from this study. Subsequently the chosen case is presented as well as the reason for the selected case. The method chapter continues with the explanation of the data collection process and concludes with the data analysis strategy. This section aims to make a clear approach of the steps taken in this qualitative study. This will increase the ability for a cross-case analysis or future research. It also gives a good insight into the quality of the study.

3.1 Research strategy

This thesis will seek to identify the factors that lead to the specific technological frames. This will be done within a specific single bounded context over a longer period. Therefore, this study requires an explorative approach (Saunders et al., 2019). As a result, a qualitative research method is appropriate since it will aim to create new insights into the way companies can make better and more effective use of these technological frames in the future (Saunders et al., 2007). To create these new insights, social interactions need to be explored and understood in more context. This qualitative research will be performed by using the case-study approach. The choice of a case study comes from the ability to understand the phenomenon and the dynamics presented in the case. (Eisenhardt, 1989). This is to gain new insights, unveil unforeseen leading factors, or validating previously known results regarding the technological frames.

For this study, the focus will be on communication regarding technological developments over a period of nine years. The choice for this specific time will be further discussed in the case selection (paragraph 3.2). A single case study approach with a within-case analysis is used here. A multiple case study with a cross-case analysis has not been chosen since the main objective is to describe,

understand and explain what happened in a single bounded context (Miles H. S., 2020, p. 95)

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In this study, a grounded theory analysis will be used with an inductive approach. This is because the phenomenon is not researched often in this single organizational context and over a longer period (Miles H. S., 2020, p. 95). For this reason, open-source coding will be used.

3.2 Case selection

Furthermore, a public traded company is selected that is active in the Netherlands. The company needs to be chosen based on two criteria relevant to this study. (1) The company has undergone a digital transformation with many technological developments in recent years. (2) The data concerning top management statements need to be available over the past few years. The reason for this is to gain a complete insight into the communication of top management towards the external stakeholder, which will address the research question.

The company selected for this case study is Philips. This company has been chosen because it meets the above-mentioned criteria. Philips announced in 2008 that it wanted to take a different strategic direction, namely, to become a leader in the healthcare innovations market. This transformation started in 2012 and the data from that time has been collected. In 2012, the company appointed a different Chief Executive Officer (CEO) to accomplish this transformation who is still the CEO to this day. For this reason, the period from when Francious van Houten became CEO has been chosen. If 2012 and a number of years before would be included, this would not result in complete data. At that moment there would for example be 1 year of data from the previous CEO and 9 years of data from the current CEO. For this reason, it was decided to leave 2012 out of the scope of the study.

As of 2013, Philips has seen a lot of change. It has undergone the necessary structural changes, there have been many divestments and acquisitions within the portfolio, and the transformation into a healthcare organization has been successfully carried out. The motivation for the case of Philips consists mainly of this transition and the technological development that the company has experienced because of it. In other companies, it would have been more interesting to consider how different CEOs communicated compared to each other and what structural differences or patterns could be observed.

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After considering several other companies, Philips was chosen because of the turbulent environment and transformation journey the company would find itself in.

3.3 Identification of stakeholders

In the literature review, it has emerged that in the analysis it is important to have a clear understanding of the audience. Olesen (2014) explains that change is seen as an interpretive process, and this can be triggered by certain circumstances. It is further explained that when analyzing these interpretive processes, the interpretations of change can be a critical factor in the study. To correctly understand the communicative process with external stakeholders, these have been summarized in the appendix (Appendix 1)

It can be concluded from this overview that the stakeholders mainly consist of financial parties who also have economic interests in Philips. Most of the participants in the earning calls have the title analysts.

3.4 Data collection

For the data collection method, the database of NEXIS Uni will be used. Within this database, the quarterly earnings call of Philips is published. Every quarter, the financial results are explained, and any prospects for the coming months are mentioned. This is done by means of an earnings call. Within the database, the earnings call from Q1 to Q4 are collected over a period of 9 years. The purpose of retrieving this data from the dataset is to collect statements of the CEO on technological

developments. Qualitative data analysis will then examine how technological developments are framed.

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3.5 Data analysis

A grounded theory approach is most appropriate as it enables the researcher to analyze a phenomenon in a context that is not very commonly researched (Miles H. S., 2020, p. 95). To analyze the collected data, we will use the Quioa methodology. This method often describes how events happened over time and gives a clear systematic approach to new concept development (Gioia et al., 2013).

Within this method, the analysis will start with open coding in Excel. This will result in identifying the first-order codes based on the quotes and text. We will then continue to axial coding. Here the codes are grouped based on relationships, patterns, or categories in the second-order themes. Finally, we will aggregate the themes in separate dimensions. The purpose of coding is to identify and classify the relevant data to answer the proposed research question. Weick (1990) stated that approaches such as systematic document coding, coding of recordings of private meetings, survey questionnaires and interviews are the best to be used to assess cognitive structures.

This method fits well with the study since this research seeks to identify factors that lead to a technological frame within Philips. First-order codes will provide a description by which the technological development is outlined. These identified codes will be reviewed numerous times and will eventually lead to themes that represent the factors. A clear systematic approach where the results derived from the data is needed to analyze a large number of documents.

3.6 Validity and Reliability

Qualitative case studies are less generalizable than quantitative research. For this reason, maximizing their validity and reliability is crucial (Eisenhardt & Graebner, 2007). Several criteria must be fulfilled in order to optimize the study's quality of its findings (Yin, 2003). To do this, validity must be

enhanced. Validity is concerned with assessing if the chosen research technique measures what it should measure (Saunders et al., 2019). This study acknowledges the fact that the data collected was analyzed based on one person. This increases the likelihood that the research contains bias. If and how

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this affects the study cannot be estimated. To increase validity, a consistent analysis process is described, allowing the path that led to the results to be followed (Yin, 2017). This path is enhanced by, documenting all quotes retrieved from data, coding scheme, and a full explanation of the data analysis approach. This increases the potential of the study to be replicated to achieve comparable outcomes.

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4 Results

This chapter presents the findings that resulted from analyzing the quarterly earning calls of Philips.

This in-depth analysis is structured following the three-level coding process as explained in the chapter above. The coding of the data resulted in 159 relevant quotes. For each dimension, findings are discussed per second-order theme supported with some examples of the first-order codes and quotes.

The analysis of the data results in three different kinds of technological frames. In the coding scheme, these are represented as the aggregated dimensions. The connected second order themes present the factors that lead to the specific technological frames. The first order codes provide a description that relates the factor for the technology development*1.

Figure 1: coding scheme

*1: In the data, the quotations describe the technology, technology change, technological development, and technology development. To have a unified term,

from now on the study will mostly talk about technological development which is comprehensive.

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4.1 Internal necessity of the technology development

The internal necessity of technology development is one of the technological frames used by the CEO.

With this frame the technological developments are described and shaped by several internal reasons.

These internal reasons are divided into two themes: impact on organization and the inner confidence.

Impact on organization

One of the reasons that the CEO used to describe the internal necessity of the technological development is the impact that it will have on the organization. In the Earning Calls, the CEO

mentions the impact on the organization in different ways. He explains that technological development is necessary for the impact that it will have on the development and performance of Philips. In this way, the need for change is made clear and shaped by the impact that technology has on the organization. The following quote gives a good illustration of the impact that technological development has on the development within the organization:

‘’we will also start with the rollout of our new integrated IT landscape, embedding standard business processes which will fundamentally simplify the way we work.’’

By naming the effect that the technology will have on the development of the company, the CEO conveys the reason for the change. By naming this internal importance, he places it in context with stakeholders through which they see why it is needed.

Another frequently mentioned form of emphasizing the impact on the organization is by describing the impact on performance. By illustrating the impact on the company's performance as the reason for technological development, the CEO shows the necessity of the development in a different way. By illustrating the impact on performance, the CEO can create a meaning for the stakeholders that this is positive for the progress of the company:

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‘’ we launched the latest version of our IntelliVue Guardian solution in Europe, which has expanded our global leadership in patient monitoring solutions.’’

The quote shows that it is important for Philips to develop the technology so they can increase their global leadership in patient monitoring solutions. This shows that the internal necessity of the technological development is there to ensure that performance of the company improves.

Inner confidence

Another theme that indicates the internal importance of technological development is inner confidence. The CEO describes the reason for technological development by addressing the competitive advantage of the technology and the internal confidence of Philips regarding the

technological change. So, the technology is described as important by the inner confidence that Philips has about the development. The following quote gives an indication of this confidence:

‘’Our breakthrough R&D investments are delivering tangible results as we received regulatory clearance from the FDA for the Philips IntelliSite Pathology solution, which is the first and currently only digital pathology solution for primary diagnostic use, enabling us to market the solution in the United States.’’.

This quote highlights the reason why Philips believes it is important to develop the technology. The CEO mentions that the technology is the first and only solution. This means that Philips needs the technology to create a competitive advantage. This is seen as an internal reason for the technology development.

4.2 External necessity of the technology development

The external necessity of technology development is another technological frame used by the CEO.

Within this frame, technological developments are not described and shaped by internal reasons, but

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the various external reasons. These external reasons are divided into two themes: Customer development or market development.

Market recognition on technology

A theme that indicates the external reasons for the technological development is the recognition that Philips receives from the market about the technology. The CEO describes that the technology is recognized in the market and uses this as a reason to show that the technological development is important. In the collected data it can be seen that he describes the recognition from the market in two ways. The CEO describes that the recognition on the technological development comes from the customer and market professionals. The data revealed mainly customer recognitions:

‘’ Reactions from customers to the expanded portfolio of end-to-end patient care management solutions from the hospital all the way to the home have been very positive’’

In the quote, the CEO shows that this technology development is important since the feedback from the customers has been positive. Another reason within this theme for the development of technology is the positive recognition from market professionals. An example of this can therefore be seen in this quote:

‘’There are several thousands of medical professionals in a variety of medical specialties using this solution across the world, and this number is growing rapidly’’

In this quote, one can see that the CEO describes the importance of the development with the reason that it is used by professionals in the market.

Market pressure

Another external reason the CEO uses to describe the importance of the technological development is

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technology is needed. Within these market pressures, a distinction can be made that the technology was developed because it was required in the market, by having an impact on market development and in response to customer demand. With these reasons, the CEO wanted to describe the importance of the technological development based on the pressure of the market. This is for example well reflected in this quote:

‘’Addressing the growing need for healthcare in growth geographies, we have launched an innovative integrated defibrillator and patient monitoring solution; it's called the Efficia, in India and

Malaysia.’’

The CEO makes it clear that technology must be developed in response to addressing the growing need for healthcare in growth geographies. Another reason, resulting from the pressure of the market for the development of technology emerges from this example:

‘’We introduced Philips Hue Phoenix, which is an adjustable luminaire, something our customers have been asking for; and the Philips Hue Go, a portable wireless luminaire. Both products feature all the smart connectivity features of the Philips Hue family.’’

This given example illustrates how the CEO uses the customer demand to describe the importance of the technology.

4.3 Creating awareness about the technology

Within the three technological frames identified, the first two deal with the internal and external necessity of the technology. The third and final technological frame is more about creating the awareness about the technology. This awareness creation of the technological development is done within three themes. These themes consist of; creating context, explaining the incremental

technological developments, and explaining the added value of the technology. This technological frame has been used a lot by the CEO over the years. One of the reasons why this frame has been used a lot may be because of the many technological developments that Philips has done. In addition to

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highlighting the internal and external need, the CEO also creates awareness and understanding when communicating about the technological change.

Creating context

One of the ways in which additional awareness was created was through the importance of context.

This understanding and awareness is shaped through the creation of context around the technological development. Within the frame of creating awareness about the technological development, it can be wise to tell more context and make sure that through the context, the external stakeholders can get a better understanding of what the technology is about. In the earning calls of Philips, it can be seen that the context is created in different ways. For example, the CEO partially focuses on the technology itself:

‘’At the annual conference of the Radiology Society in North America, the RSNA, in Chicago, we introduced a new Vereos digital PET/CT system, which features a twofold increase in resolution, which leads to higher image quality and increased accuracy to improve diagnostics, treatment planning, and workflows.’’

From this example, it is evident that the CEO creates the context by explaining the benefits that the technological development has. By explaining these benefits of the development in question, the external stakeholder gets a better idea of the context. Another way to create this context is by giving the technological development an explanation:

‘’we recently introduced a Philips DreamStation Go portable CPAP solution. DreamStation Go is a compact and lightweight device designed to provide sleep therapy for travelers with obstructive sleep apnea.’’

The CEO also explains context in the data in a different way. He does this by explaining what the

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society and the customers mainly as the buyers. The impact on consumers therefore adds to the context for which Philips' technological development is intended:

’The unified imaging informatics ecosystem, which Philips -- which comprises Philips' Vendor- Neutral Archive and Universal Viewer, aims to improve collaboration and enhance patient care for a population of over 1.2 million people’’

Incremental technological developments

Another way of creating awareness within this technological frame is by explaining the incremental technological developments. In the data, we can see that the CEO pays attention to these steps in the technological development in different ways. With these different ways, he explains how the technology is developed. In this example, you can see how he depicts the ongoing process of the technological development:

'Highlighting our strengths in smart diagnostic systems, we expanded the incisive computed tomography platform with the launch of precise suite,....''.

From this it can be derived that they are building on an already existing technology. The data also shows that the CEO does this by indicating that the technology is being developed after the success that the earlier version brought:

''In Personal Care, we celebrated the sale of our 1 billionth male grooming product, and we continued the OneBlade success story as we rolled out the Philips OneBlade Face + Body in further markets''

In addition, the CEO shows a number of times in the data that the technology is developed jointly with a partner party or that they acquire the knowledge by making an acquisition. The following quote describes technology development based on acquisition:

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‘’Last month, we further strengthened our Digital Pathology business by acquiring PathXL. With this complementary acquisition, we can build on our digital pathology solutions offering and leverage PathXL's capabilities in the fast- growing image analysis and tissue pathology software field

Explanation of added value

The final way the CEO creates additional awareness around the technology development is to explain the added value of the technology. This creates awareness, as at that point the external stakeholder has a better understanding of why the technological development is being done. In the data, it is observed that the CEO explains the added value of the technology in two different ways. He illustrates the added value it has on the customer and the added value it has on the market. This quote gives a good illustration on the added value of the technological development on the customer:

‘’These applications allow clinicians to provide more efficient and high-quality care to patients who are transitioning from the hospital to home by enabling better access to, and deeper analysis of, patient data and how patients manage their health. ‘’

By explaining the added value for the customer, the CEO creates awareness to the external stakeholders regarding technological development. The other way in which the CEO explains the added value is for the market:

‘’We also have been expanding our efforts in interventional oncology, as we are convinced that image-guided therapies will have a positive transformational impact on cancer treatment.’’

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5 Discussion

This chapter will elaborate on the main findings presented in the previous section. Additionally, the results are discussed in the perspective of existing literature and the implication of the study for theory as well as practitioners are discussed. Eventually the limitations and improvements with additional directions for further research will be addressed.

This research offers a thorough analysis of how the technological developments are shaped towards the external stakeholders of Philips. In chapter four is this done with an inductive approach to identify the leading factors that result in specific technological frames.

5.1 Revisiting the main findings in literature

Spieth et al., (2021) state that to expand the literature, more research needs to be done into

technological frames that contribute to the overall development of the phenomena. An example is the structure of technology trajectories (Davidson, 2006) or the use patterns of technologies within a corporation (Anthony 2018). However, this research gives no insights into these individual conditions of technological frames, and the identification of patterns is minimal. In the research an attempt has been made to unveil patterns regarding the technological frames by connecting radical moment within the context of Philips with the results from the data. Unfortunately, this did not lead to any obvious patterns and only individual notable points were noted. Since this is outside the scope of the study and also did not provide any interesting conclusions, a summary of these has been placed in the appendix.

This research does provide an insight into the characteristics of technological frames, such as the structure. More precisely, this research gives insight into the structure by identifying the factors that lead to specific technological frames. To provide the insights this study provides an analysis with an inductive approach. By analyzing the data of Philips from the past nine years, more specifically how they communicate with the external stakeholders, it was sought to answer the following research question: What are the factors that lead to specific technological frames?

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In the results section, three technological frames that the CEO of Philips used were revealed, and the factors that lead to these frames were identified. In the following section, these findings will be discussed in the light of literature.

Technological frames

In the results, three different specific technological frames have been identified. (1) The first technological frame used by the CEO is the internal necessity of the technological development.

Within this frame, the technological developments of Philips are shaped and described by internal reasons that define the necessity of the technology. (2) The second technological frame used by the CEO is the external necessity of technological development. Within this technological frame, the necessity for the development is described using reasons based on the external environment of Philips.

(3) The third and last technological frame that resulted from the data creates awareness about technological development. Whereas the first two frames emphasize the need for technological development as a result of Philips' internal and external environments, the third emphasizes the importance of external stakeholders understanding what the technology entails.

In line with existing research, the identified technological frames can be categorized within the three domains of Orlikowski & Gash (1994). The three domains of technological frames identified by Orlikowski & Gash (1994) are generic in the context of social interpretations around introducing new ICTs in organizations. The literature describes the domains as the nature of technology, technology strategy, and technology in use. The literature review section (chapter 2) explained the frame domains.

According to Spieth et al., (2021), the antecedents of technological frame theory must fit the newly identified frames. In the table below, the identified technological frames will be linked to the frame domains of Orlikowski & Gash (1994) in table 3.

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Frame domain (Orlikowski & Gash, 1994). Technological frames within Philips Nature of technology - Creating awareness about technological

development

Technology strategy - Internal necessity of technology development - External necessity of technological

development

Technology in use X

Table 3

By categorizing the technological frame in the domains of Orlikowski & Gash (1994) it can be seen that one of the three frames relates to the 'nature of technology' and two of the three relate to 'technology strategy'. It is highly likely that this has to do with the type of audience the external stakeholders represent. In the literature review, the theory around the congruence of technological frames has been discussed. This section notes that the literature describes that different groups give different meanings to a technology (Davidson & Pai, 2004). For this reason, it is also essential that while examining the technological frames within a particular context, the audience with which is being communicated is adequately identified (Olesen et al., 2013). Interpretations of change in the

organizational environment by relevant stakeholders are crucial catalysts for interpretative shifts within the organization (Bartunek, 1984). In the methodology, the external stakeholders have already been described, and it could be concluded that the stakeholders mainly consist of financial parties with economic interests in Philips. Most of the participants in the earning calls have the title analysts.

Therefore, this may explain why 2 out of 3 frames used by the CEO in his communication can be categorized under the frame domain 'technology strategy’. This is because these are the stakeholders where it is beneficial for Philips if they understand the investment choice of technology development.

Leading factors

The technological frames are derived from different factors. Several internal and external factors were identified that lead to the following frames: internal necessity of technological development and

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external necessity of technological development. These factors describe the internal and external reasons the CEO explains to illustrate why technological development is necessary. Technological development's internal necessity is described for the following reasons: impact on the organization and the inner confidence. The external necessity of technological development is described by the external reasons: market recognition on technology and market pressure.

In addition, other factors have been identified that cannot directly be placed as internal or external factors. With the frame of creating awareness about technological development, the CEO creates more awareness and understanding among the external stakeholders. The data identified that this is done based on three factors: showing the context, incremental technology developments, and explanation of added value. These factors do not describe internal or external reasons but are seen as factors that support the creation of awareness.

5.2 Theoretical implications

This study aimed to identify the factors that lead to specific technological frames. More precisely, what are the internal, external or supporting factors in the communication of the top management that lead to specific technological frames? By responding to the comments of Spieth et al., (2021) and Furr et al., (2012) in the recent literature, this study contributes to the current academic literature. First, by providing insights into the characteristics of a technological frame, such as the structure (Spieth et al., 2021). By inductively researching how a technological development is mentioned, different factors are derived that lead to why a specific frame is being used. Specifically, this study gives insight into the structure by identifying these factors. Secondly, the research can add value to the literature

development by using cross-case analysis in a future study. Since it is challenging to generalize different findings in the study based on such a specific organizational context, comparing how different companies structure their communication of the technological developments can be interesting. Thirdly, the study touches upon the strategic implications for companies on shaping the reaction to technological developments with their technological frames (Furr et al., 2012). As

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mentioned in the discussion, can the two of the three identified frames be categorized as ‘technology strategy’ that addresses the purpose of the audience.

5.3 Managerial implications

The findings of this research can assist practitioners in gaining insights in the concept of technological frames. By better understanding this concept practitioners can make a more strategically approach when communicating the technological changes. By recognizing that the technological frames exist out of leading factors that address the structure of the frame, the practitioners can use the concept better. When one considers that the framing of technological development will affect how your audience interprets and evaluates technology, the technological frame can lead to a higher utilization rate if used correctly.

5.4 Limitations and direction for further research

It is critical to note that the study entails certain limitations. First, because the phenomenon and answer to the research questions are researched in a single case study, it is tied to a single context.

This means that by performing a single case study, the results are less objective and less generalizable.

An improvement for the study would be to conduct a multiple case study to be able to conduct a cross- case analysis. In this thesis, this would be at the expense of quality by a not wide enough timeframe.

Second, the data collected comes from Philips earning calls. In the nine years of collected data Philips only had one CEO. The most significant limitation here is that the communication on technological development has been researched on one person. Therefore, nothing can be said about the bias in the research. For future equivalent research, it is recommended to pick a company that has had several changes of CEOs. It is interesting to be able to do an in-case analysis on how the different CEOs execute communication to stakeholders. Thirdly, a limitation is the single source stream that has been used for the study. It would significantly enhance the research by going deeper into annual reports or news publications. In addition, it would be a substantial improvement by conducting interviews that could lead to other data insights. The difficult part about analyzing these additional streams of data is

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that it is difficult to determine which audience is being targeted. This could then suffer from having the CEO intentionally address the audience differently and the data being difficult to conclude.

Apart from limitations in the methodology, it is important to note the theoretical limitations. In theory, there has not been much research on factors that lead to certain frames that are identified over a long period of time. As a result, this research relies on the commonly researched theory of technological frames. This limits the research by providing a poor comparison of the found factors against the literature.

Despite the limitations, this research offers possibilities for future research. As previously mentioned, can the study be used for a future cross-case analysis. This can result in a comparison of how different CEO’s in different industries communicate their technological developments. The case study also provides a good foundation to further investigate technological frames within Philips. Within Philips, for example, it could be interesting to see which factors lead to different technological frames in the communication to internal stakeholders. This would then allow the communication to external stakeholders to be compared to the communication towards internal stakeholders.

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6 Conclusion

This study aimed to better understand technological frames and the factors that lead to these specific frames. This research used an inductive approach for analyzing quarterly earning calls of Koninklijke Philips from over nine years. In the data analysis, the objective was to review how the CEO of Philips talked about technological developments. Based on this single case study, three different technological frames are presented and the factors that lead to the specific frames are identified.

The internal reasons for technological development are the impact that it will have on the organization and the inner confidence in the development. These internal reasons represent the factors that lead to the specific technological frame: internal necessity of technological development. With this frame the CEO creates the understanding of the technological development by shaping the necessity of the technology for internal reasons.

The external reasons for technological development are the pressure and recognition that Philips receives from the market. These external reasons represent the factors that lead to the specific technological frame: external necessity of technological development. By using this frame the CEO creates the understanding of the technological development by shaping the necessity of the technology by external reasons.

In addition to the internal and external factors, the study also identified factors that lead to the creation of awareness about the technological development. These factors are referred to as supporting. De importance of context, the explanation of the added value, and incremental technological development are the supporting factors that lead to the technological frame, creating awareness about the

technological development.

Moreover, the study concluded with two internal factors, two external factors, and three supporting factors that lead to three different specific technological frames.

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8 Appendix

Appendix 1: Description of participants from the conference call

Company name Job title

Redburn (Europe) Limited Research Division - Research Analyst Deutsche Bank AG Research Division - Research Analyst Barclays Bank PLC Research Division - Research Analyst Exane BNP Paribas Research Division - Research Analyst

Citigroup Inc Research Division - Director & European Medical Technology Analyst

Morgan Stanley MD, Head of MedTech & Services and Analyst

BofA Securities Director in Equity Research and Head of the EMEA MedTech

& Services Team

Joh. Berenberg, Gossler & Co Research Division – Analyst

HSBC Research Division – Analyst

Goldman Sachs Group Research Division - Equity Analyst

ABN AMRO Bank Research Division - Head of Research & Equity Research Analyst

Appendix 2: Comparing data to the context

All the data presented in A and B collected from the Philips website A) Timeline structural changes & emerging activities

• 2012: Philips sold its TV business

• 2014: Philips sold its audio and video business

• 2014: Philips introduces a leaner healthcare structure

• 2016: The company lister its lighting business as a separate company

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• 2016: Philips completed the transformation to an innovative health tech leader

• 2017: Philips sold its Lumileds and automotive lighting business

B) Notable events:

• 2014 poor financial results

• 2017: Philips is reclassified in the stock as a health technology leader by MSCI

• 2019 Slow financial growth

• 2020: Covid outbreak

• 2021: Apnea development problems

In 2014, the financial performance was poor, and looking back at the data; around this time, a small change can be seen in the technology frames used. For example, the internal necessity of the technological developments occurred more often. In specific, the reason for technological development was more often described in terms of the impact it had on the organizational. The assumption can be made that is in line with each other. This may be because the CEO deliberately chooses to shape necessity of the technological development by reason of the impact on the

organization. Notable was that fewer investments in technological developments were mentioned at the end of 2014 and the first half of 2015, but there was a higher focus on efficiency and restructuring.

This can be due to the negative financial performance of that year.

Out of the data resulted that in 2016 the external necessity frame was not identified. This can be due to the result that Philips completed their transformation into an innovative health leader. Following a change in the annual year reports, the assumption is made that this is due to redefining strategic pillars.

It can be observed that the code ' impact on organizational development’ only named in the years 2014-2016. When looking at the context of the end of 2016, this can be the transformation journey to an innovative health leader.

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With the above results, no clear conclusions can be drawn. This is because each finding is individual and therefore does not occur more frequently. Therefore, no pattern has been discovered, but this can be used in possible future research.

Figure

Updating...

References

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