The Unintended Consequences of Digital Innovations

The Unintended Consequences

of Digital Innovations

An explorative study about the unintended consequences of using

digital information- and communication systems.

Name: Peter Jan Veneboer Student number: S3538753

Date: 20.01.2020

MSc: BA Strategic Innovation Management (SIM) Supervisor: Dr. W.G. (Wim) Biemans Co-assessor: Dr. K.J. (Killian) McCarthy

Word count: 12.558

MSc. BA Strategic Innovation Management Faculty of Economics and Business

University of Groningen

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“Where should I search? Which system should I use to find the right information?

And how can I find the right information within that system?”

– Innovation Director of a Governmental Institution in The Netherlands

“Sometimes I can find something about our organization faster via Google

than I can via our own systems.”

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Abstract

In existing literature of innovation management the unintended consequences of innovation is an under-researched phenomenon. While unintended consequences might have a significant impact on the performance of the organization, little is known about this topic. In order to deepen the knowledge in the field of unintended consequences of innovation, this thesis examined the unintended consequences of digital innovations. A qualitative research approach is used in the form of semi-structured interviews. The findings of this thesis contribute to existing literature by mapping the unintended consequences of digital innovations and by providing a framework that explains what type of unintended consequences exist, how they emerge and how they develop. The results show that the unintended consequences can be divided into the following three categories: 1) Anticipated Unintended Consequences; 2) Unanticipated Direct Unintended Consequences and; 3) Unanticipated Indirect Unintended Consequences. Furthermore, this thesis explains what organizational characteristics and personal characteristics (of employees) make organizations more or less susceptible to unintended consequences and what factors amplify the existence and severeness of unintended consequences.

With the insights of this study managers are better able to understand: 1) how unintended consequences emerge; 2) how they are interlinked and develop and; 3) what organizational characteristics and individual characteristics of employees make organizations more or less susceptible to unintended consequences. In this way, managers will be better able to use digital innovations efficiently while reducing the risk of undesirable outcomes.

Key words: unintended consequences, undesirable outcomes, innovation, digital innovations,

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Table of Content

2.4 Unintended Consequences of Digital Innovations ... 10

2.5 Effect on the internal organization ... 11

3. Methodology ... 11

3.1 Selection procedure of organizations and interviewees ... 11

3.2 Data collection ... 13

3.3 Data analysis ... 15

4. Findings ... 15

4.1 Perceived benefits and disadvantages of digital innovations ... 16

4.1.1 Benefits of digital innovations ... 16

4.1.2 Disadvantages of digital innovations ... 17

4.2 Unintended Consequences of digital innovations ... 18

4.2.1 Anticipated Unintended Consequences ... 19

4.2.2 Unanticipated Direct Unintended Consequences ... 21

4.2.3 Unanticipated Indirect Unintended Consequences ... 22

4.3 Differences between functions (in relationship with Unintended Consequences) ... 24

4.4 Organizational characteristics (in relationship with unintended consequences) ... 25

4.5 Coherence of results ... 28

5. Discussion and implications ... 28

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5.2 Managerial implications ... 29

6. Limitations ... 30

7. Recommendations for future research ... 31

References ... 33

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1. Introduction

With over 1.5 billion monthly active users in 2019, WhatsApp is the most popular mobile messenger app worldwide. On average 65 billion WhatsApp messages are sent every day.1

In the past few decades innovation has led to impactful products and services that changed the way we live, work, interact and behave completely. Especially the introduction of the world wide web, the smartphone and the rapid diffusion of the new technologies that these innovations brought, largely impacted and shaped the world we live in today.

With the introduction of many (disruptive) innovations that followed each other quickly, not only people, but also organizations had to adapt continuously in order to deal with this rapidly changing environment. When they did not anticipate fast enough, they were outdone by competition soon (Christensen, 1997). Famous examples like typewriter producer Smith Corona, camera manufacturer Polaroid or NCR could not adapt quickly enough and vanished or had major problems, because the world was changing faster than they could anticipate (Danneels, 2011; Pisano, 2015; Rosenbloom, 2000). These examples stress the importance of innovation management.

Existing literature on innovation management mainly focusses on the benefits of innovations and the positive effects they bring to an organization (Sveiby et al. 2009). However also (undesirable) unintended consequences exist; a phenomenon of which little is known in current literature. One of the main reasons why there has been done little research about this subject, is due to the fact that innovation literature is largely colored by a so called “pro-innovation bias”, which is about the fact that scholars (unconsciously) assume that the outcomes of innovation are positive (Kohli & Melville, 2017; Rogers, 1983; Sveiby et al. 2009). However, this is not always to case.

A simplistic example that shows an unintended consequence, can be found in the example of e-mail and WhatsApp. Both these systems are intended to enhance communication and make it easier to share information between people and organizations. However, in practice, the availability of e-mail and Whatsapp also seems to increase stress, this is explained by the fact that people feel compelled to be available 24/7 and have to respond fast, at any moment of the day (Bucher, Fieseler & Suphan, 2013; Samaha & Hawi, 2016). This example shows that the introduction of a well-meant innovation to enhance internal communication might eventually end-up in the undesirable unintended consequence of stress. One could argue that this situation may result in less efficient employees, which might eventually harm (the performance of) the organization.

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Currently, some research has been done in order to map the consequences of innovations and how to prepare and deal with innovations within organizations (Kohli & Melville, 2017). However, most of this research focusses on the implementation phase of innovations (Sveiby et al. 2009). Therefore, little is known about 1) the unintended consequences of innovations (once they are fully implemented) and; 2) how they are used in practice (Cameron & Webster, 2005).

In order to deepen the knowledge in the field of the unintended consequences of innovation, it is required to develop more theory about this topic. In order to do this, there is chosen in this research to examine the unintended consequences of digital innovations. In this research, digital innovations include digital information- and communication systems that are used within organizations. In the digital era we live in today, these systems play a major role in many organizations and are a constant point of attention since new technologies emerge in a rapid pace (Kendzia & Björck, 2018). Organizations continuously have to deal with digital innovations in their daily operations. They have to work with, or want to work with those new systems in order to increase efficiency, stay ahead of the competition, or because they need the new systems in order to meet the demands and increasing expectations of both customers and partners. Because of these developments, organizations are under an increasing pressure to apply these digital technologies (Kohli & Melville, 2017). It is assumed that when organizations use digital innovations, unintended consequences may emerge that affect (the workforce of) the organization. Therefore, this explorative study aims at mapping the unintended consequences of digital innovations. This study contributes to the extant literature of innovation management by examining the unintended consequences of digital innovations in order to deepen the knowledge, understanding, and implications in this field of research. With the outcomes of this study, managers obtain better insights in what kind of unintended consequences exist, how they emerge and how they might impact the organization. With these insights managers obtain a better understanding on how to anticipate on unintended consequences, which gives them the ability to reduce the negative effects and exploit the potential of the positive effects that unintended consequences bring. Management is responsible for the outcomes of their actions and therefore, should be aware of potential unintended consequences of the digital innovations that are used within their organization (Tan, 2004). In order to explore this topic, the research question in this study is: (1) What are the unintended consequences of using digital innovations within an organization and; (2) how can organizations anticipate on them?

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2. Theory

To get a richer understanding of the focus of this research, this chapter reviews the extant literature of the key concepts that are used. First the main concept ‘unintended consequences’ is described, giving definitions and classifications of the different types of unintended consequences that are known. Then, the general definition of innovation is described followed by an explanation of the concept ‘digital innovations’. After that is described how digital innovations relate to unintended consequences. In the end the exact scope of this research is explained.

2.1 Unintended Consequences

According to Merton (1936), consequences can be defined as “those elements in the resulting situation, which are exclusively the outcome of either the action, or of an interplay between the action and the objective situation” (p. 895). This consequences can be broken down into two different groups: intended- and unintended consequences.

Merton (1936) claims that there are five factors that are the reason that consequences occur and that limit the possibility to anticipate on consequences. These factors are: 1) The lack of foreknowledge; it is a fact of life that humans cannot know and predict everything. 2) The presence of assessment errors in assumptions; like wrong selections, actions or evaluations. 3) The presence of myopia; which means that one desires the beneficial consequences of an action so much, that they are blind to consequences. 4) Presence of fundamentalism; which is about the feeling that something must be done because of certain fundamental values, with no consideration of consequences. 5) Presence of the so called self-defeating prophecy; which refers to the situation in which change initiatives are met with cynicism, because of failures in the past and because of that, further increase the risk of failure.

Unintended consequences is the focus area of this study. In existing literature unintended consequences and unanticipated consequences are often used interchangeably (Rogers, 1983; Hill, 2003). However, there is a significant difference between these terms. Unintended consequences can either be anticipated or unanticipated, while unanticipated consequences can never be intended (Baert, 1991; Saha, 1998; Zwart, 2015). A good example of this is when a person intentionally drives against red light because he or she needs to be on time somewhere. This person can anticipate that other drivers will be angry, even though it was not the person’s intention to make those other drivers angry. The intention was just to be on time and therefore, drive against red light.

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Figure 1. Unintended consequences of innovation. Derived from Sveiby et al. (2009)

As can be seen in figure 1 there the following concepts are used: anticipated/unanticipated, intended/unintended, direct/indirect, desirable/undesirable. This sequence of constructs is derived from the paper of Sveiby et al. (2009) and covers the majority of (classifications of) innovation outcomes that exist (Roger, 2003; Merton, 1936; Sveiby et al. 2009). Important to note is that in extant literature sometimes different terms of innovation outcomes are used. The most frequently named synonyms are: foreseen/unforeseen (Mortimer, 2016), expected/unexpected (Williams, 2014) or positive/negative (Haanaes, 2013; Merton 2013; Heerad, 2011).

The figure shows that intended consequences are out of the scope of this research. This is done since these consequences are known on forehand by organizations and mainly exist out the known benefits and disadvantages that occur when using or implementing innovations. In this study the unintended consequences are examined from the ‘adopters perspective’ (Freeman, 2010). This means that this research focusses on the perceptions and experiences of the people (managers and subordinate employees) within companies that have to deal with the digital innovations.

2.2 Innovation

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in subsequent production processes, it is called a process innovation (Bozeman and Link, 1983).

2.3 Digital Innovations

In order to deepen the knowledge in the field of unintended consequences of innovation, this research focusses on the unintended consequences of digital innovations. Based on the paper of Bozeman and Link (1983) digital innovations can be described as new technologies. However, in extant literature multiple conceptualizations and different keywords are used to describe digital innovation. A recent study of Kohli & Melville (2017) examined this topic and found three main conceptualizations that describe digital innovation(s): 1)‘Information technology innovations’. This concept is used to refer to the organizational adoption and diffusion of new IT‐enabled processes, products, and services (Fichman, 2004; Jeyaraj, Rottman, & Lacity, 2006). 2) The concept ‘Digital innovation’ is used to refer to a product‐centric perspective involving new combinations of physical and digital products to form new products (Lee & Berente, 2012; Yoo et al., 2010). 3) The concept ‘Information Systems innovation’ is used to denote the application of new information technology within organizations that requires significant change and leads to new products, services, or processes (Fichman, Dos Santos, & Zheng, 2014; Swanson, 1994).

Based on the definition of Bozeman and Link (1983) and the concepts Kohli & Melville (2017) the following definition is created and used in this study to describe digital innovations. Digital innovations are: “Digital information- and communication systems that are new to an organization and that significantly change the process of how the organization communicates and shares knowledge”. This research focuses on the unintended consequences of digital innovations. Important to mention is that digital innovations are the output of innovation activities. This means that the focus in this paper will be on the use and application of digital information- and communication systems (digital innovations), but not on the process of creating innovations.

2.4 Unintended Consequences of Digital Innovations

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getting a better understanding on what kind of unintended consequences occur and emerge when a digital innovation is already implemented and fully in use by an organization.

2.5 Effect on the internal organization

The desired outcomes when an organization starts to use digital innovations are often: 1) to increase efficiency of (internal) processes or; 2) to create new products and services, which eventually should maximize profits (Cooper & Zmud, 1990; Kohli & Melville, 2017). Since unintended consequences may have a negative effect the organization and with that may hinder the organization to reach this desired outcomes, it is essential to know how exactly unintended consequences impact the organization. Therefore, in order to narrow the scope of this research, there is chosen to focus on the internal organization and to examine how unintended consequences affect the way the internal organization functions. Unintended consequences might also affect external parties (like clients, suppliers or partners), however they fall out of the scope of this research.

3. Methodology

According to Van Aken, Berends & Van der Bij (2012) theory development is needed when a business phenomenon has not yet been addressed in academic literature. In existing literature of innovation management, little is known about the unintended consequences of innovation. Therefore, exploratory research is needed to develop new theory in this field of research. A qualitative research approach seems most appropriate to investigate such a phenomenon.

For this research, interviews are used as research method to collect the data. Interviewing is an established qualitative research method which has a high response rate and which is able of collecting fairly rich insights into how respondents experience a situation (Eisenhardt, 1998). Also the data that interviews can provide is necessary to investigate the ‘why’ of relationships. This is important because, next to the fact that unintended consequences need to be identified, it is also important to know how they occur and what their impact is on the organization. This chapter describes the research process by explaining how the selection procedure, the data collection and the data analyses were conducted.

3.1 Selection procedure of organizations and interviewees

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with this size make use of these systems. Organizations from diverse industries are selected in order to increase the variance in the data. In order to select the right respondents the theoretical sampling approach of Eisenhardt (1989) is used. This theory includes that the interviewed organizations and employees are not randomly selected, but that they are selected because of theoretical relevance. Selection of organizations

Based on the scope of this research, there is chosen to conduct interviews at two types of organizations: 1) Organizations in The Netherlands with > 50 employees that are founded before 1991 and; 2) Organizations in The Netherlands with > 50 employees that are founded less than 10 years ago. This distinction is created because it was assumed that these two types of organizations have different experiences with digital innovations. In 1991 the digital revolution became in a rapids (Kendzia & Björck, 2018). Therefore, the organizations that are founded before 1991 made through the transition from non-digital to digital while the organizations that were founded less than 10 years ago most likely used digital innovations from the start. It is assumed that these groups show different results due to their affinity and experience with digital innovations.

Selection of interviewees

Within each selected organization two interviewees were selected. For each organization a(n) (innovation) manager and a subordinate employee. This distinction had been made, since it was assumed that different functions have different experiences or perceptions about the unintended consequences that exist. Therefore, it was important that both the person that had a role in implementing the digital innovation (In this research called: ‘decision makers’) and the people that are actually using the digital innovations in their daily work (In this research called: ‘users’) are interviewed. It was assumed that in general the (innovation) managers are the decision makers and that their subordinates are the users. Selection procedure

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conclusions can be drawn. The limit of sixteen interviews was set due to the limited amount of time that was available to conduct the research.

3.2 Data collection

The data of this research consists solely of qualitative data in the form of semi-structured interviews. This interviewing technique consists out of several key questions that help to define the areas to be explored, but also allow the interviewee (or interviewer) to diverge in order to pursue an idea or response in more detail (Britten, 1995). In Appendix 1 the interview guide can be found. The semi-structured interviews helped interviewees to talk more openly about their experiences and provided the opportunity to adapt to specific directions and situations while still controlling the major theme (Seidman, 2013; Yin, 2013). In order to strengthen the reliability of the results and to prevent that interviewees influenced each other, the interviews were always done separately. In total fifteen interviews at eight different organizations were conducted.

Table 1 on the next page provides an overview of the conducted interviews. The table shows the selected organizations (left) and the corresponding interviewees (right). As can be seen in the table, there are conducted two interviews at seven of the eight organizations. The interviewees consist of both decision makers as well as users. In some cases however, the interviewee is both the developer and the user of the systems since they also use the systems their selves. This was no problem, since it enabled the interviewees to provide information from two perspectives.

In Table 1 the names of the organizations and interviewees are left out in order to the secureness of their privacy. Therefore, when there is referred to the interviewees in the text, first the code of the organization will be stated (A-H) followed by the number (1-15) and the role of the interviewee (user, decision maker or user/decision maker): [Org. X, Respondent X (X)]. For example when a quote is used from the Product Owner of the Pension Administration Organization, there will be referred to this interviewee as: – Org. C, Respondent 6 (user)

The interviews were audio-recorded while simultaneously field notes were taken. The field notes helped to generate follow-up questions during the interviews and made it more easily to transcribe the interviews and find differences between the interviews afterwards (Phillipi & Lauderdale, 2018; Eisenhardt, 1989). Most of the interviews were conducted face-to-face. This enabled the interviewees to speak more openly and gave the possibility to do longer and more in-depth conversations. The average length of the interviews was 64 minutes and all were hold in Dutch.

3.3 Data analysis

After collecting the data, the method for data analysis as described in the article of Strauss & Corbin (2008) is used as a base for the analysis. This implies the data analysis starts with transcribing the interviews. Then, coding is used to order and break down the data into topics so they can be examined and compared more easily. After this process, axial coding is used to identify relationships among the coded data. Axial coding is the process of relating categories and concepts (codes) to each other, via a combination of inductive and deductive thinking.

In the analysis the interviewees at the same organizations are compared with each other (decision makers versus users), but also comparisons have been done between interviewees across the selected organizations. This cross-analysis is performed in order to identify patterns or differences in order to discover what type unintended consequences occur and whether they differ between functions or type of organization.

4. Findings

This chapter contains the main insights and results obtained from the interviews. The results in this chapter provide an answer to the main research question in this paper which is: ‘What are the unintended consequences of using digital innovations within an organization?’.

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4.1 Perceived benefits and disadvantages of digital innovations

This section describes the main benefits and disadvantages of digital innovations that came forward. While nearly all organizations experienced implementation issues, most respondents perceived the use of digital innovations as very positive. Important to note is that these are the benefits and disadvantages as the respondents perceived them.

4.1.1 Benefits of digital innovations

First, all interviewees confirmed that new digital information- and communication systems are implemented in order to increase efficiency by making it more easy to share information and knowledge or by enhancing internal communication. In order to check whether the systems indeed brought an increase in efficiency, the interviewees were questioned about their experiences with the systems. The perceived benefits that came forward in the interviews are:

1) More information available (5/8 organizations): The benefit that was most frequently mentioned by the interviewees was that a lot more information is available since the use of information systems. Especially the interviewees that made through the transition from non-digital tot digital experienced this very consciously and perceive this as very positive.

2) Better understanding of the whole organization (3/8 organizations): New information and communication systems made employees much more aware of the whole organization. Especially the existence of information systems like Intranet are perceived as positive. Multiple interviewees stated that, although not everyone uses it even frequently, the existence of Intranet serves as a real binder for the organization. The following quotes illustrate this:

“In the year 2000, the intranet was set up for our organization. Before that time I had no overview of the organization at all. I had no idea what other departments were doing and what they looked like. Since the arrival of the intranet I have a much better view of the organization. The intranet serves as a kind of binder. Now I truly understand what I am a part of.”

– Org. B, Respondent 3 (decision maker/user)

3) Increase in efficiency of performing routine tasks 3/8 organizations): In multiple interviews the increase in efficiency by using new information- and communication systems is mentioned. As the interviewees state, especially routine tasks can be executed much more efficient because of the implementation of new information- and communication systems.

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information- and communication systems save them time. They mainly assig this to the fact that less meetings, less documentation, less traveling time and less other operational tasks are necessary. 5) Better contact with other departments and divisions (4/8 organizations) : Since the emergence of digital innovations, different departments and divisions have much better contact. Especially the interviewees that experienced the transition from non-digital to digital perceived that they could reach their fellow colleagues from other departments or countries much easier.

6) Enabled possibility to work more flexible (less site-specific) (3/8 organizations): The existence of digital information- and communication systems has led to the situation that not all employees have to work at one location or office. More than half of the respondents work partially from home or work at multiple locations during the week. The greatest advantage that the interviewees perceive is that they can organize their time and work more efficiently while still being able to contact all of their colleagues.

4.1.2 Disadvantages of digital innovations

Next to the benefits, the respondents also experienced disadvantages of the use of digital innovations. These disadvantages are not unintended consequences since the organizations anticipated for them and, although undesirable, the organizations took them into account on beforehand. Therefore, they are described by the interviewees as intended. The main perceived disadvantages of using new information and communication systems that came forward in the interviews can be categorized into three subjects: 1) Limitations of systems; 2) Integration problems and; 3) Wrong use of new systems.

1) Limitations of systems

The most frequently mentioned disadvantage of new communication- and information systems is about the limitations of communication systems. These limitations are all related to the fact that the communication systems cannot substitute for real life personal contact. According to multiple interviewees, systems are limited since they lack the presence of emotion, texts can be misinterpreted and collaboration goes less smooth. The following example illustrates this:

“I noticed that face to face contact is still very useful in addition to the digital systems. Miscommunication can occur through the use of JIRA or Skype. You can misinterpret text and moreover you get to the point less well. Personal contact does not have these disadvantages.” – Org. B, Respondent 4 (user)

2) Integration problems

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attributes (Rogers, 1983). The results of this research confirm this. In the implementation phase, the integration is described as a time consuming process in which it is difficult to integrate new systems within the organization. The interviewees mainly attribute this to the fact that new systems are complex, but also because the advantages of new systems are not perceived as better than the existing standard. 3) Wrong use of new systems

The last disadvantage that emerged is related to the fact that new communication or information systems are often used for the wrong purpose. The results show that it can happen that the wrong systems are used to solve a certain problem. What happens than is that organizations choose and implement a system, without thinking about the purpose properly. The following quote illustrates this:

“Many firms use IT to solve organizational problems. What happens then is that automation (IT) solutions are used to solve organizational problems. That does not solve the problem, since is does not change something within the organization, it just makes a process go faster.” – Org. H, Respondent 15 (decision maker/user)

4.2 Unintended Consequences of digital innovations

After mapping and analyzing the results of the interviews it became visible that there exist multiple unintended consequences that occur at the majority of the organizations. It also appeared that the unintended consequences that came up are all linked and that they exist in a causational sequence. Figure 2 provides an overview of this unintended consequences and shows how the different unintended consequences are interlinked.

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As is shown in Figure 2 the unintended consequences that appeared could be divided into three categories:

1) Anticipated Unintended Consequences (AUC): This is the first categorization that can be made. These unintended consequences are largely anticipated for by organizations. They emerge because of the existence of organizational characteristics and individual differences between employees. 2) Unanticipated (Direct) Unintended Consequences (UDUC): These unintended consequences are unanticipated for and result directly from the AUC.

3) Unanticipated (Indirect) Unintended Consequences (UIUC): These unintended consequences are unanticipated and are more indirect in nature. They emerge due to the existence of multiple preceding UDUC. Consequently the figure shows that the third type of unintended consequences (UIUC) eventually result in inefficiencies for the organization.

This section explains how these different types of unintended consequences emerge, how they are linked and how they eventually result in these inefficiencies. In Appendix 2 the total list of unintended consequences (as extracted from the interviews) can be found.

4.2.1 Anticipated Unintended Consequences

The Anticipated Unintended Consequences (AUC) directly result from the existence of individual differences of employees (personal characteristics) and organizational characteristics. The AUC are:

4.2.1.1 Existence of multiple (old and new) systems simultaneously

The first AUC is the existence of old and new systems simultaneously. The main explanation for why this happens is, according to the interviewees, due to the presence of risk aversion (organizational characteristic). According to the interviewees, their organizations want to avoid a loss of information and because of that keep the old systems online. Even after a new system is already fully implemented.

“Despite the fact that a new, more efficient system has been around for more than 5 years. It is true that due to risk averse behavior, but also from the fact that it is difficult to let go of old working methods, a lot of old systems continue to exist alongside the new ones.”

– Org. A, Respondent 1 (decision maker/user)

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own working methods and routines. Especially when old systems keep existing next to the new one(s), they do not adapt to the new systems and keep working with the old systems, even though the new systems is more efficient. Another explanation that emerged, is that many employees have the perception that they do not have enough time to fully exploit a new system or the time to learn how the basics work, because they are too busy with their daily tasks. This perception strengthens the unwillingness to work with a new system and strengthens the need to work with the old system. The last personal characteristic that was mentioned as a factor that causes the existence of old and new systems simultaneously, is age. It appeared that differences between generations play a major role in how systems are used. The following quote elaborates on this:

“One of the big pitfalls is that there is a hughe difference between young people and the older people. Most HBO and WO trainees are working all together in Zwolle. They rapidly come up with new processes and start new projects. The older guard cannot keep up with that. They do not understand that quick how the new systems work.”

– Org. F, Respondent 11 (decision maker/user)

As is mentioned in the quote, the younger guard is more used to working with new technologies. They adapt fairly easily to new systems while the old guard faces troubles by adapting and comprehending the new systems. They cannot always keep up with the pace of their younger colleagues. Because of this, the older guard might stick to their own routines and use their own systems instead of the new ones.

4.2.1.2 Use of different systems per department and per function

The second notable unintended consequence is that within the majority of the organizations different systems are used per department, but also per function. It appeared that there is often no single way for internal communication or internal knowledge sharing. The interviewees describe this as an unintended consequence because in most cases the plan of the organization is to work with one (or a small number of) uniform system(s). The main explanation that the interviewees give for this unintended consequence is that different departments have different tasks and therefore, not all systems are relevant to use. Also department size and the location of staff of a department partially determine which systems are used. Especially regarding the communication systems. The following quote gives an example of why certain communication systems are not equally relevant to all functions/departments:

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This example shows that different departments and functions seem to prefer different kind of systems. Other respondents confirm this. For example, in a few interviews was mentioned that IT departments more overly prefer to use Slack, while the other departments prefer Microsoft Teams. This leads to the fact that two different systems are used, while they are used for the same purpose. Uniformity fades, which is perceived as undesirable.

4.2.1.3 Different use of the same systems

One of the main aims of using digital information- and communication systems is to make sure that information and knowledge can be documented and shared easily. In general organizations try to create a uniform way to do this properly. However, according to the interviewees, in practice people work, write, save and document differently. Because of this, employees use the same systems differently. Next to that, the interviewees stated that they all have their own working methods and routines. Some interviewees even stated that they do not want to work in a very structured, uniform way, because it counteracts with how they are used to work. So, although systems exist that are trying to enhance efficiency by providing a more structured and uniform way of working, the individual preferences, working methods of employees lead to the fact that the same systems are used differently by employees.

4.2.2 Unanticipated Direct Unintended Consequences

The second type of unintended consequences that appeared are the unintended consequences that are unanticipated and a direct result of the preceding Anticipated Unintended Consequences. This second classification is mainly made to make the process more clear of how the first visible unintended consequences eventually result in the third type of unintended consequences (indirect, unanticipated). Therefore, this type of unintended consequences helps to create a better understanding of how unintended consequences develop and how they are linked.

4.2.2.1 Abundance of digital systems

The abundance of digital systems existed at six of the eight organizations that were interviewed. The abundance of digital systems is a direct result of two of the three preceding unanticipated unintended consequences: 1) The existence of old and new systems simultaneously and; 2) the use of different systems per department and function. The abundance of digital systems is perceived by the interviewees as an undesirable unintended consequence which shows that employees do not work in a uniform way. 4.2.2.2 No consistency within the systems

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executed in a consistent and uniform way, are executed across several systems, following various methods. This is undesirable for the organization, because these inconsistencies make it less clear for employees where to find the right information. It may even lead to a loss of information. These last situations are elaborated in the following subsection.

4.2.3 Unanticipated Indirect Unintended Consequences

The third type of unintended consequences are the most indirect and most visible unintended consequences that appeared. They are unanticipated, indirect in nature and have a have a visible impact on the daily operations of organizations.

4.2.3.1 Fragmented knowledge and information

The first notable UIUC is that knowledge is fragmented and widely diffused over the systems that are used by an organization. Instead of having all the knowledge, information and communications within one or a few systems, information and knowledge is scattered over the different systems that are used. Mainly this is a consequence of the abundance of digital systems.

The unintended consequence that knowledge and information fragmented is highly related to the other two UIUC. The fact that knowledge and information is fragmented makes it harder for employees to find the right information and might even lead to a loss of information.

4.2.3.2 Inability to find accurate information

The second notable UIUC is that employees are often unable to find the right information. This is very undesirable since the aim of digital systems is often to increase efficiency by making it more easy to share, save and find information. The first explanation that is given by the interviewees for the inability to find the right information is that there exist too many digital communication- and information systems simultaneously. Due to this large number of digital systems, information and knowledge is diffused and fragmented. As is illustrated in the quote below, this diffusion of knowledge makes it difficult for employees to find the right information, since they do not always know where to find it and how to find it. The following quote illustrates this clearly.

“Information and knowledge are often located in different places. As a result, I cannot always find the right information. Then I ask myself: ‘Where should I search?’, ‘Which system should I use to find the right information?’ And how can I find it within that system?”

– Org. B, Respondent 4 (user)

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difficult, because people write, save and document different. A further explanation for this is that information is hard to find because different people use different keywords for the same information. In the interview with the Incident- & Change Manager of a pension administration organization this clearly came forward:

“Knowledge might get lost because there is too much knowledge. Everything is saved in the system, but difficult to find. For example, you do not know which words to look for precisely because everyone enters documents differently.”

– Org. C, Respondent 5 (decision maker)

This example shows exactly why information can be difficult to find. A Project Manager from a governmental institution gives an additional view on this:

“Unintentionally, a kind of "smoke curtains" arise. Information systems are used, but each uses it in its own way, making it a haze of information. … sometimes I can find something about our organization faster via Google than I can via our own systems”.

– Org. A, Respondent 2 (user)

So even though information does exist somewhere in the system(s), not all employees know how to find it or do not know at all whether certain documents exist. This situation results in multiple inefficiencies. For example, when people do not know that certain information exists, it might occur that they exploit something again. In this case, tasks are executed twice which is costly and time-consuming. 4.2.3.3 Loss of knowledge and information

The loss of knowledge and information is the last UIUC. The main explanation for why information is getting lost, is due to the abundance of digital systems and due to existence of multiple systems simultaneously. In the interviews it appeared that different systems are often not integrated properly. This leads to the situation that information is being copied from system to system in order to obtain an overview of all the information. The following quote of a Senior Contract Manager at a governmental institution illustrates this:

“The existing systems do not work together. Each project team chooses their own system. It is frustrating to see that there are so many different systems that do not work together. Especially since the same information must be entered in multiple systems (...) I have to copy every change to each separate system. Over and over."

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As is mentioned multiple times in the interviews, copying does not always go fluently. In the process of copying, certain information may not be copied right or information may be totally forgotten to include which results in a loss of information. The second explanation for why knowledge might get lost is due to the inconsistencies within the systems. As stated in the previous section it may happen that, although information does exist somewhere in a system, employees cannot find it. This might lead to the fact that employees may perceive the information as being lost. A last explanation for why information is getting lost, is also a result of the abundance of information, but then specifically about the existence of different systems per department and function. Because some departments or functions prefer to work with different systems, not all information is available for the whole organization. For example, when only the IT department uses slack, their fellow colleagues most may have no access to that information. This results in the fact that it is unclear where information is stored or whether it exists at all.

4.2.3.4 Resulting Inefficiencies

All unintended consequences eventually result in inefficiencies for the organization. Fragmented knowledge, the inability the find the right information and the loss of knowledge and information are all time consuming and costly for the organization. When employees use digital information- and communication systems they need additional time to select the right systems and need extra time to find the right information within these systems. When information or knowledge is (perceived as) lost, employees need to execute tasks or research again which is, next to the fact that is very time-consuming, also very costly for the organization.

4.3 Differences between functions (in relationship with Unintended Consequences)

In this section is examined whether there exists a relationship between the functions of the interviewees and the unintended consequences that emerged. Before the analysis it was expected that there would be visible differences in how employees with different functions perceive and experience unintended consequences. It was likely that there would be differences between employees that had a role in implementing the digital innovations (decision makers) and the employees that mainly use the digital innovations in their daily work (users).

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this they feel that they are unable to do or change something about the choice, which makes them frustrated. This is especially visible in the more hierarchical organizations.

The second notable relationship that appeared is that the interviewees with a technological (IT) background or the interviewees that stated that they have affinity with technology (IT), often described consequences as problems, but not as unintended consequences. They explained that new technologies always have some weaknesses or teething problems and therefore, do not describe this ‘problems’ as unintended consequences. This is striking, since the interviewees with less or no technological background described similar consequences directly as unintended, unanticipated or unexpected. The following example illustrates how employees describe consequences that emerge from communication and information systems:

Technology is often blamed if digital systems do not work well. But that is nonsense. The problems that often occur are often caused by a lack of rules and agreements about how to communicate with each other or how knowledge is shared via a system”…. “Besides, you have your own responsibility. If you have lost information because you saved it wrongly, then it is your problem. According to me, those are not unintended consequences”

– Org. H, Respondent 15 (decision maker/user)

It may look like this finding is contradicting to the results that are shown in the previous chapter. However, this is not the case since employees with an IT background do acknowledge that the consequences that emerged are indeed unintended. They however, assign the unintended consequences more often to the inabilities of people than the (limitations of ) the systems, while people with a less technological background assign the unintended consequences more often to the systems.

4.4 Organizational characteristics (in relationship with unintended consequences)

In this section the relationship between the characteristics of the selected organizations and the unintended consequences is examined. This is done in order to assess which type of organizations are more (or less) susceptible to unintended consequences and to examine to what extent the different organizations are impacted by these unintended consequences.

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the larger, international, organizations have a higher rating on hierarchical structure and accountability, just like the non-profit (governmental) organizations.

Table 2. Overview of the characteristics of the selected organizations.

After analyzing the organizational characteristics and linking them to the unintended consequences that emerged in this research, the following relationships were found: (1) Non-profit organizations that have a high degree of accountability are more susceptible to unintended consequences than other types of organizations. (2) Organizations with a large amount of (distinct and rather unrelated) departments seem to experience more unintended consequences that are caused by the existence of multiple systems simultaneously. Interviewees describe this to the fact that employees perceive their own department as most important and are very turned inwards. (3) Organizations that have a technological background experience less unintended consequences than companies with no technological background. They describe undesirable outcomes sometimes as IT-issues that need to be solved, rather than that they perceive them as unintended consequences. They state that technical problems simply do arise when making use of digital innovations.

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No further differences are found between the organizations that are founded more than 10 years ago and the organizations that are founded less than 10 years ago. At both groups the same unintended consequences were visible. Important to note is that the majority of the selected organizations are founded more than 10 years ago, which might have led to the fact that there was not enough data available to find notable differences.

4.5 Coherence of results

Most of the unintended consequences are closely linked to each other, are connected or have causal relationships. As is described in the previous sections, also organizational characteristics and the individual differences between employees (personal characteristics) have a moderating effect on the (impact of the) unintended consequences.

In order to obtain a clear view on how all findings cohere, a framework is created (figure 3). The figure lists the different categories of unintended consequences and shows that organizational antecedents are the trigger for the unintended consequences and that inefficiencies are the undesirable outcome of the unintended consequences. The model also shows that the organizational characteristics and the personal characteristics (of employees) have a moderating effect on the unintended consequences. They have an influence on how susceptible organizations are for the unintended consequences and they indirectly have an effect on to what extent the unintended consequences lead to inefficiencies.

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5. Discussion and implications

This thesis aims at exploring what kind of unintended consequences of digital innovations exist. This chapter contains the theoretical contributions and managerial implications. Subsequentially the limitations of this research will be discussed, followed by suggestions for future research.

5.1 Theoretical contributions

This thesis made a number of theoretical contributions by examining the unintended consequences of digital innovations using the following research question: (1) What are the unintended consequences of using digital innovations within an organization and; (2) how can organizations anticipate on them? The answers on the research questions can be found in the following contributions that this thesis made:

(1) Mapping unintended consequences of digital innovations.

In current literature on innovation management only a limited amount of information is available about the unintended consequences of innovation. Prior research mainly focuses on the implementation phase of innovations rather than their longer term effects on the organization (Kohli & Melville, 2017; Sveiby et al. 2009). Theory development was needed in order to deepen the knowledge in this field or research. This study contributes to existing literature by providing an overview of unintended consequences of digital innovations, found by conducting exploratory research. Figure 2 (p.20) provides an overview of the main unintended consequences that are found. Since this research is conducted at organizations from different industries (Governmental, ICT/IT, Technical services, Electronic Devices, Accountancy and Pension Administration), the results of this thesis are applicable to a wide range of organizations.

(2) Providing a categorization of unintended consequences

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(3) Providing a framework that explains how unintended consequences emerge, how they are interlinked and how they eventually affect the organization.

One of the main contributions of this research is that this research provides a framework that does not only show an overview and categorization of the unintended consequences, but also gives the concrete interpretation of them (Figure 2, p.20). The results of this thesis explain how the (different types of) unintended consequences emerge, how they develop, how they are interlinked and how they eventually result in inefficiencies for the organization.

(4) Providing the insight that not all organizations are equally susceptible to unintended consequences because of different organizational and personal characteristics.

This research also contributes to existing research by providing new insights in what type of organizations are more and are less susceptible to unintended consequences. It appeared that a high degree of accountability and a slow decision-making process (both governmental characteristics) make organizations more susceptible to unintended consequences while organizations that have a technological background are less susceptible of getting undesirable consequences. Furthermore, the results show that employees that are decision makers and employees that have affinity with technology perceive less unintended consequences than employees who solely use the digital innovations (users) or that have no affinity with technology. Therefore, these insights highlight that not all organizations experience unintended consequences to the same extent.

5.2 Managerial implications

The insights of this thesis provide managers with an overview of unintended consequences (Figure 2, p.20). Furthermore, the insights of this study explain to managers: 1) How unintended consequences emerge; 3) How they are interlinked and how they develop (they are subsequent to each other) and; 3) What organizational characteristics and individual characteristics of employees make organizations more or less susceptible to unintended consequences.

These new insights help managers to identify were unintended consequences might emerge within their organizations and gives them the ability to understand what risk factors cause or amplify the existence of the unintended consequences. In this way, managers are better able to make assessments on how susceptible their organization is to unintended consequences and it enables them to anticipate quicker, so the (effect of) undesirable unintended consequences can be reduced before they affect the organization. Based on this research, managers should:

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increases the chance that old systems keep existing (too long).

2) Limit the amount of different systems. When different departments or functions use different systems for the same purpose, managers need to discover why that happens. They need to assess whether it is possible to use one system for all the departments or functions (for that specific purpose).

3) Make sure that systems are used the same way. Inconsistencies should be avoided, since this leads to the inability to find information or even a loss of information. In order to achieve this, managers can provide the staff with (additional) training on the systems or they can consult experts.

6. Limitations

Although this thesis gives an overview on what type of unintended consequences exist and provides multiple contributions to existing literature and valuable managerial implications, this research includes a few limitations.

The first limitation of this research is about the number of interviewees. The sample size of this research existed out of fifteen interviewees. Although the interviewees represent a wide range of industries and represents employees from different functions (users/decision makers), the interviewees do not represent the whole market and therefore do not represent all the types of organizations where unintended consequences of digital innovations may emerge. They also do not represent all functions of employees within the selected organizations. According to (Biau et al. 2008) a larger sample size is more representative for the total population. Incorporating more diverse industries and more different functions within the organizations would have increased the representativeness of the results.

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7. Recommendations for future research

Based on the findings, contributions, implications and limitations of this research, multiple suggestions for further research about unintended consequences of innovation can be given.

Extend dataset: The findings of this research are based on the fifteen interviews that were done at eight different organizations. In order to discover more unintended consequences or in order to deepen or confirm the insights of this study, it is suggested to extend the dataset in two ways:

- Increase the amount of organizations.

First the data can be extended by increasing the amount of selected organizations. This can be done by: 1) Selecting organizations from more industries in order to make the results better representative for a wider range of organizations or; 2) Increase the amount of selected organizations per industry in order to enrich the current insights. When conducting interviews at more organizations, the results will give a better and more complete view on how different industries experience unintended consequences. Besides, increasing the amount of organizations will increase the reliability of the results and in addition: may confirm and complement the findings that came up in this research. Furthermore it is interesting to increase the amount of organizations that are founded less than 10 years ago, since the current dataset does not provide sufficient data to make a proper analysis (comparisons) on this. It is still expected that there exist some differences between the organizations that are founded in the digital era and the organizations that are founded before the digital era.

- Increase the number of respondents per organization.

Secondly, the dataset can be extended by increasing the amount of interviewees per selected organization. Currently two interviewees are selected per organization, one decision maker and one user. In order to make sure that the data is fully representative for the whole organization and in order to increase the credibility of the data, more interviews are needed. Biased data will be weigh less heavy or can be excluded when more interviews are conducted.

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that employees have with technology/IT more in depth (to what extent exactly do employees have affinity with technology/IT?) and how this relates to unintended consequences.

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Appendices

Appendix 1

Every interview started by asking questions about the interviewee and the organization (1. Background Information) in order to gather the following information:

Name organization: . . . Type of organization: . . . Size (employees): . . . Size (revenue): . . . Founded in: . . . Name interviewee: . . . Function: . . . Department: . . . Working years: . . . Job description: . . . 1. Background information

1.1 Can you shortly introduce yourself?

1.2 How would you describe your organization?

- Culture, formalization, hierarchy, organizational structure, affinity with technology

2. Digital Innovations

2.1 Wat type of digital information- and communication systems are used in your organization?

2.2 What digital information- and communication systems do you use / are you involved in?

2.3 With what purpose do you use these systems? - Did you reach that purpose? (If no, why not?) - Did you expect that?

37 2.5 Are the systems fully implemented?

2.7 Did you experience the transformation from non-digital (or prior systems) to the current systems?

- If yes, how did you experience that?

3. Benefits / Disadvantages

3.1 What is your opinion about the system(s) (that you use)?

- Does it/do they work properly? - Did you expect that?

3.2 What are the main benefits of the system(s)?

3.3 Does/do the system(s) have disadvantages?

4. Unintended Consequences

4.1 What did you expect when you planned/started to use the system?

How did these plans/experience worked out?

4.1 Did you experience unintended consequences when using the systems?

Are these consequences positive (desirable) or negative (undesirable)?

4.2 Could you anticipate the unintended consequences (if present)?

4.3 Could you give an example?

Follow up

Can I also interview one of your fellow colleagues that have to role of user/decision maker?

Can I send/ask you some additional question, when that is necessary?

Important Note (!): during the interview the following questions need to be asked continuously in order to make, confirm or exclude allegations: