Strategy practices and processes in the digital economy: a study of digital banking

Strategy scholarship needs to evolve to maintain relevancy in the digital economy. Strategy practice and process are impacted in the digital economy by blurred industry boundaries, globalised competition, powerful global infrastructure platforms, complex ecosystems, access to plentiful data, high rates of innovation, real-time feedback, integrated multilevel strategy, high levels of experimentation, low initiation costs and low barriers to entry. None of these phenomena is well handled within classical strategy practices and processes, frameworks and theories. A convenient and rapid adaptation to these complex business challenges is entrepreneurial digital native start-ups and Agile business methodologies. However, a synthesis, evolution or optimisation of strategy theory is necessary to sufficiently address the specific challenges of business in the digital economy. The global digital banking industry was chosen for analysis as it is widely considered the ‘most’ digital of any industry and represents an extreme perspective ‘polar-type’ of the digital economy, from which inferences can be drawn. Using an inductive and interpretive methodology based on elite interviews with 39 strategic leaders in digital banking, this thesis examines the processes and practice of strategy making and ‘doing’, identifying five key research areas: digitalisation, strategy, organisational logic, information systems and innovation. The study finds that traditional strategy development and planning forms are not being utilised. First, more dynamic experimentation-based strategic practices dominate with some durable elements of strategy remaining. Second, technology and software development methods play an increasingly important and nuanced role in shaping possible and desirable strategic processes. Third, innovation and strategy need to play a much more comprehensive, integrated and accelerated capability across the entire organisation. This study contributes to the body of business strategy knowledge by providing insight into the practice of strategy development and execution in the digital economy. This will help address conflicting perspectives in the literature, identify implications for strategy scholarship and propose improvements. The findings may be used by practitioners, academics, business leaders, entrepreneurs, investors and managers.