Digital Transformation and its Impact on Organizations' HRM

This white paper, prepared by Pranjali Galgali from Rutgers University, examines the profound impact of digital transformation on Human Resource Management (HRM) within organizations, framed through the lens of Stakeholder Theory. The paper explores how digitalization has revolutionized employee engagement and organizational communication, highlighting the roles of business leaders, HR teams, and employees in navigating technological, social, and behavioral changes. It focuses on internal communication tools such as email, intranet, and newsletters, while also addressing challenges and opportunities in stakeholder engagement. The paper delves into key terms like 'stakeholder' and 'organizational communication,' and discusses the evolution of leadership in the digital age. It emphasizes the importance of adapting to digital changes to reshape public image, foster value-based dialogues, and reinforce organizational objectives through effective HRM practices. The report also offers insights into industry best practices for recruitment, training, performance management, and employee engagement, with the aim of providing practical tools for business communication model changes. The paper further discusses the impact of digital disruption on traditional communication models, and emphasizes the need for agile strategies to engage both internal and external stakeholders. The paper also focuses on internal and external portals such as Glassdoor, LinkedIn, internal HRM sites, etc. that reshape the stakeholder relationships.

Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University
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Digital Transformation and its Impact on
Organizations’ Human Resource Management
WHITE PAPER
December 18, 2017
Abstract:
Digital transformation has revolutionized employee engagement and organizational
communication. This paper studies the influence of digitization on organization’s human
resource management (HRM) function in the context of Stakeholder Theory. It highlights the role
of business leaders, HR teams and employees in shaping interorganizational communication
juxtaposed the technological, social and behavioral changes. While focusing on internal
communication tools such as e-mails, intranet, newsletters, etc., the paper reviews
opportunities, challenges, risks and industry best practices in the engagement of stakeholders.
CONTENTS
INTRODUCTION 2
KEY TERMS 4
LIVING THE DIGITAL CHANGE 7
STAKEHOLDER MANAGEMENT VS STAKEHOLDER
ENGAGEMENT 11
TECHNOLOGICAL ENGAGEMENT AND
CHALLENGES 15
APPENDIX 14
REFERENCES 18

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INTRODUCTION:
In the recent years, digitalization has deepened the reliance on data analytics, social networks and
mobile technologies, and has dramatically reformed the role of communications in businesses. In
order to utilize technological advances towards the engagement of stakeholders, as well as
adapting to the digital transformation, several organizations have taken essential steps to develop
a strategic framework for organizational priorities. Business leaders have played a vital role in
changing paradigms by fostering newer perspectives of people communication, reducing
functional hierarchies and endorsing internal and external stakeholder engagement. It is evident
that while digitalization has brought numerous challenges, it has also given organizations an
opportunity to reshape their public image, construct meaningful value-based dialogue on public
platforms, and reinforce their objectives through a well-designed human resources management
function.
The Digital Transformation Initiative (DTI) launched by the World Economic Forum in 2015 is
one such attempt to function as a platform for organizations to understand the change and embrace
newer opportunities and themes, arising from the latest developments in the digitalization of
business and society. The initiative states potential risks encountered by diverse industries and
sectors along with a model of change (Digital Transformation, 2016). The report states, “By 2025,
it is predicted that Millennials will be 75% of the workforce, requiring us to engage, develop, and
retain this new generation of talent in new ways”. Studies also show that ‘transformation,
leadership, and strategy are the core skills of the future’ (McInnis-Day, 2014).
Digital disruption has wrecked almost all industries and has made the traditional communication
models redundant. To survive in the ‘digital-first world’, organizations have introduced an agile
and flexible strategy to communicate with their internal and external stakeholders. Digital

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technology such as file-sharing, social-sites, online-advertising and electronic books have created
challenges in maintaining workflows, managing processes, planning resources and streamlining
communications amongst the stakeholders (OpenText, 2015). In the context of stakeholder theory,
this paper argues that interorganizational stakeholder relationship affects the nature of external
communication and is publicly negotiated. The author says that the nature of Human Resource
Management is redefined when internal sentiments are publicly shared. The paper also focuses on
internal and external portals such as Glassdoor, LinkedIn, internal HRM sites, etc. that reshape the
stakeholder relationships.
This paper aims to help business leaders, HR professionals and academicians in understanding the
role of leadership in digital transformation and assess its impact on the Human Resources (HR)
function of any organization. While considering the industry best practices of recruitment, training,
performance management, learning and development, compensation and employee engagement,
the paper provides insights and tools for business communications model changes within the
organization. By unlocking new levels of engagement and introducing technological tools for
stakeholder engagement, the author defines roles of business leaders, functional heads and
employees in adopting this digital change. With the focus on communication as the epicenter of
digitalization, the paper aims to present its correlation with interorganizational and stakeholder
theories with practical applications and suggestive changes.

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KEY TERMS:
Stakeholders, Stakeholder Management and Engagement
According to Freeman’s definition, stakeholder is 'any group or individual who can affect or is
affected by the achievement of the organization's objectives' (Freeman R. E., 1984). In the recent
times, (Carroll & Buchholtz, 2009) say that stakeholder is “an individual or a group that claims to
have one or more stakes in an organization. Stakeholders may affect the organization and, in turn,
be affected by the organization's actions, policies, practices and decisions.” According to the
stakeholder theory of organization, employees are internal stakeholders of the company (Freeman
R. E., 1984). He also says that employees can be one of the most important stakeholders for any
organization. The stakeholder approach to internal communication emphasizes on the needs and
preferences of employees, as against the previous focus on managerial inclinations (Welch M. ,
2012). Freeman, at first, struggled using ‘internal stakeholder’, as he anticipated businesses
focusing on external stakeholders such as suppliers, society, government, shareholders, customers
and creditors. However, later, he recognized employees as a diverse group of people who have
stakes in the organization (Evan & Freeman, 1988).
Thus, understanding internal stakeholders is imperative in engaging them in a dyadic relationship.
Welch and Johnson argue that internal stakeholder groups have to be identified according to
geographical, occupational and structural levels in order to classify them into separate groups,
instead of calling this diverse group as one cluster (Welch & Jackson, 2007). Therefore, the HR
teams have to form multiple small and big clusters to ensure targeted communications across all
divisions and hierarchies. (Friedman, 1970) believes that organization itself should think of
forming groups of stakeholders according to their interests, needs and viewpoints and this should
be imbibed in the purpose of the organization.

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In the book Strategic Management, A Stakeholder Approach, Freeman (1984) says that traditional
approaches of management and strategic decision-making are not helping managers anymore to
develop new paradigms of change. Therefore, he defined ‘Stakeholder Theory’ as a conceptual
approach to tap opportunities and increase productivity. He believes that the primary objective of
the stakeholder approach is “to manage and integrate the relationships and interests of
shareholders, employees, customers, suppliers, communities and other groups in a way that
guarantees the long-term success of the firm”. There are different definitions and approaches
discussed in the theory.
Organizational and Internal Communication Design
Organizational communication comprises of various forms of communication ‘that flow among
and between organizational units and groups’ (Cornelissen, 2002). It can happen at various levels,
and can involve small or big team members, interpersonal and dyadic interactions, small groups
or teams, written or oral communication within or across organizational departments or units,
organizations regardless of geographical boundaries. While the primary focus of
interorganizational communication is value creation, studies have found that humans relations are
based on social interaction and attention (Ansoff, 1965). (Deetz, 2001) has classified internal
communications in two ways. The first and most common approach focuses organization within
which internal communication happens: a “phenomenon that exists in organizations”. The second
approach emphasizes on communication at the center of information-sharing, relationship-
building, and making meaning or constructing organizational culture and values: “a way to
describe and explain organizations”. Research shows that this is a combination of people,
messages, meaning, practices and purpose (Shockley-Zalabak, 2008), and it is the basis of
contemporary organizations (Gillis, 2006).

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There are several networks and roles in organizational communication ‘such as gatekeepers (who
filter communication to a specific manager or upward through the organization), liaisons (who
mediate interaction between two groups), bridges (a group member who mediates interaction with
outside individuals), cosmopolite or boundary spanner (one who monitors the environment and
brings new information into the organization), cliques (members who communicate more with
each other than with other members), and grapevines and rumor networks (where members
communicate through informal and social networks about salient, time-sensitive topics)
(Trenholm, 2005) (Neher, 1997) (Miller, 1997).
Communication within these networks and roles can be managed by the HR teams in order to
facilitate vertical and horizontal communication. While vertical communication usually takes
place between managers and their subordinates, horizontal communication is the exchange of
messages between the same hierarchy. According to (Cornelissen, 2002), there are two parts of
vertical communication: “Upward communication consists of messages from subordinates to
superiors, whilst downward communication occurs when information flows down the hierarchy
from superiors to subordinates”.
According to the Institute of Public Relations, internal communications is an important
communication tool to build trust, motivate employees, create a shared identity and build
engagement besides providing important information about the work, organization, environment
and each other. It is one of the important platforms that help employees express their voice, share
opinions, celebrate and remember accomplishments. Lastly, the study of Interorganizational
communication is an overarching term used to study a wide gamut of entities and organizing acts
that comprise of several relationships.

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B. LIVING THE DIGITAL CHANGE
Digitalization is not a niche prerequisite only for tech companies anymore. It is a key-stone
requirement to achieve exponential growth across functions, domains and geographies. According
to the studies, the focus of HR is on changing the nature of organizations, planning the future of
workforce in the digital economy and in shaping organization’s image in the global market. The
World Economic Forum talks about the future of an Internet of Things (IoT)-enabled workplace
and cogitates that it has the potential to ‘increase operational efficiency, blur traditional industry
boundaries, optimize human-machine collaboration, and maximize productivity’ (Digital
Transformation, 2016). With wearable devices, prescriptive data and technology that understands
the expectations of people, employers are striving to provide valuable experiences to its
employees. Organizations are adopting industry trends and encouraging the use of apps such as
Buffer and Slack, virtual whiteboards, and hybrid video conferencing facilities to engage their
employees across the world. An article published in Forbes highlights the need to intertwine the
company’s vision, product information and updates with a platform to share voices, for a well-
oiled digital marketplace (Daniel Newman, 2017).
1. Empowering Leadership Management
The increasing use of technology within the organizations, coordination and communication on
several mediums, multiple levels and complex structures (e.g. social media) has led to increased
interorganizational collective efforts. Research shows that there are several modes of
organizational communications but leadership is central in decision-making and defining rules for
the group. Leaders in the organization also play a major role in managing expenditures, resources,
efforts, recruitment and employment. These specialized and fixed roles define boundaries of public

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and private communications in a social space, initiate formal coalitions, and reinforce institutional
commitments.
Researchers argue that the role of collaborative efforts changes in scenarios where heavy emphasis
is on the leadership to create an impact (Shumate, Atouba, Cooper, & Pilny, 2016). For instance,
when CEOs use social media to communicate with their audiences, it creates a positive impact on
the employees and its stakeholders (See Appendix 1). On a contrary, (Deetz, 2001) believes that
power relations, bureaucracies and forms of domination and control might be harmful to the
employees. He says ‘the central goal of critical theory in organizational communication studies
has been to create a society and workplace that are free from domination and where all members
can contribute equally to produce systems that meet human needs and lead to the progressive
development of all’. Moving forward from bureaucratic communication to a more embracing
communication with societal and technological shifts, business leaders have focused on
transparency and governance while paying attention to communication culture and stakeholders
(Aakhus & Bzdak, 2013). The role of leadership has therefore been crucial in defining
relationships, forming structures and facilitating interorganizational communication. Leadership
roles also create centralized networks or decentralized groups according to the jobs and roles
defined by them. Curry (1992) says that leaders play an important role in driving the change in the
digital-first world-
“The direction and support of leaders are required for the change to take place. And the term
"leader" is not limited to the chief executive officer. The role and the function of leadership are
different. The role is a formal designation vested in contractual arrangements; the function is an
informal designation in which responsibilities or activities associated with leadership are shared

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among members of the organization. Consequently, "leader" might refer to a number of individuals
participating in the change process.”
2. Changing Organizational Environment
Research shows that interorganizational communication relies on structures, forms, and processes
of relationships which in turn rely on information communication technology (ICT), mainly to
collaborate relationships, manage communication flow and define structures within the
organization. Leaders concretize these linkages, form robust networks and usher information
sharing to form interdependencies that are related to resources, staff and outcomes (Deetz, 2001).
The role of communication and technology also depends on the factors such as culture, political
and ideological views, anonymity and secrecy, the size, legal status and dynamics around the
nature of the organization (Scott C. , 2013). Similarly, (Pfeffer & Salancik, 1978) (Shumate,
Atouba, Cooper, & Pilny, 2016) discuss that organizations must exchange resources and reduce
the dependency on external factors to survive in any environment. According to a (Deloitte, 2016)
study, the changing needs of HR heavily rely on the following disruptive themes:
• Digital megatrends, including but not limited to, cyber, data, cloud, social and mobile
• A multi-generational workforce including millennials or first-generation digital citizens
• Merging work and life with hyper-connected employees
• Emergence of a new set of digitally skilled employees
• Business models under stress from digital disruption
• The employee being perceived as the first consumer of the employer’s brand
With this transformation, the HR leaders should be able to quickly adapt to the industry trends,
provide training to the existing employees and hire the right candidates into the dynamic digital

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structures. Moreover, the study states that HR should help other organizational leaders in gaining
digital competences to lead the organizational transformation. In the context of HRM, the
managers engage with multiple levels of employees. This can be well-associated with (Rowley,
1997)’s network theory of stakeholder influences to review how organizations respond to
compound and symbiotic needs of multiple stakeholders and to discern their reaction in different
situations.
3. Digitalization and Interorganizational Communication
According to research, interorganizational communication is an all-embracing study of reciprocity
of messages and adding meaning to these messages, channeled through networks, alliances,
collaborations, coalitions, consortiums, partnerships, joint ventures, and relationships between the
organization and its stakeholders (Shumate, Atouba, Cooper, & Pilny, 2016). According to (Scott
& Lewis, 2017), there are several exchanges of messages within the organization that profit from
common corporate goals, macro cultures and pre-established standards. He defines interlocks as a
common overlap between memberships and associations within the organization. They also say
that ‘According to institutional theory, corporate interlocks are formed because organizations seek
legitimacy’.
Primary stakeholders of institutionalized HR networks are employees, support staff, their-party
employees and shared services, whereas secondary stakeholders are consultants, agencies,
potential employees and relatives of employees, all interconnected in a network of associations.
‘Networks are a function of exchange of resources, information flows, and strategic partnerships
that manifest through a range of personal to more institutionalized ties’ says (Doerfel).
For instance, employees use various forms for interorganizational and external communications to
communicate about the company goal, mission statement, values, products and services, activities,

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financial reporting, etc., which in turn adds value to the overall brand. This also makes the
organization more accountable as compared to others who don’t communicate using various
platforms. According to the study (see Appendix 2), 55% of the consumers believed that social
media helps employees share experiences and the ways in which they found the organization to be
more accountable in the consumer market.
Research shows that individuals who follow the institutional rules tend to reproduce messages
aligned to the institution’s propositions. (DiMaggio & Powell, 1983) in their study report that, ‘as
organizational leaders, managers, and employees adopt and follow institutional rules, their
organizations become more similar to each other’. This boundary-spanning interorganizational
communication can be found across organizations, which in turn leads to organizational change
and decision-making (McPhee & Zaug, 2012). (Lammers & Barbour, 2006) find that formal
knowledge, rationality and independence are key factors of institutional theory of organizational
communication that offer powerful guides of behavior. Using technology in Human Resource
Management can be one of the powerful tools that can institutionalize organizations, identify
cultural and societal blocks and offer real-time solutions to societal, behavioral and sociological
challenges within the organization. On a contrary, research also shows that technology in HR is
also replacing human talent and skills, and in turn, is reducing jobs in HR teams.
4. Digital HR: Employee Training and Skill Development
Change management can be a bottleneck in leading the organizational change. It can be time-
consuming and expensive at times, and may incur technological or ideological barriers. Paving the
path through digital disruption for HR can be challenging, especially when the organization needs
to embrace new capacities, enhance connectivity and innovate products to be market- compliant.
For instance, SAP SuccessFactors, a leader in HR business applications upgraded their design

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system to cater to various recruiting, talent management and employee engagement needs of a
70000+ global workforce that included part time, virtual, and project-based employees
(SuccessFactors, 2016). They designed 13 new capabilities that could enable global collaborations
across HR, develop a culture of learning and serve as a central communication platform for a
diverse workforce (See Appendix 3).
In spite of the challenges, digitalization in HR can help the organization in introducing training
modules across geographies to co-create, engage and brainstorm with cross-functional teams and
foster an internal innovation ecosystem. Research shows that employee engagement is linked to
job satisfaction, higher productivity, greater loyalty and motivation (Welch M. , 2012) (Men, 2012)
(Taylor & Kent, 2014). This also acts a way sustainable way to network with the industry and tap
talent.
Learning and Development Tools: To facilitate innovation and transfer of knowledge,
organizations encourage the use of Learning Content Management Systems such as Coursera,
Moodle, ATutor, FFront, Lynda, etc. With the use of virtual classrooms, meetings and conferences,
organizations get an opportunity to collaborate with other similar organizations, build networks,
improve efficiency, reduce costs and get access to innovative approaches. Incorporating e-learning
platforms is a tested method to improve the efficiency of existing employees as well as to attract
potential talent.
Electronic Pay Slips and Payrolls: In the digital age of HR, payroll management systems are one
of the firsts implemented. These basic tools not only offer leave management, documentation,
process management and payment integration systems, but also help in linking vacation tracking
with communication channels (Out-of-office emails). This is one of the most important digital HR

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tools that help save paper, costs, and efforts, that can be stored, managed, retrieved and integrated
with overall human resources management solutions within minutes.
Daily Task Management and Job Allocation: With daily task management systems like
Robohead, Asana and other internal process management/HR systems, apart from the internal HR
systems, employees can take control of their work and manage their time well. Staying connected
on virtual platforms gives them the flexibility to work from home or from any part of the world
with the use of IoT platforms
Survey and Feedback: The HR teams make use of feedback and survey management tools such
as SurveyMonkey, Google Forms, Type Forms, etc. to gauge employee sentiment and map the
organizational objectives with employee engagement. This helps them to get suggestions, reactions
and comments on various employee and employer-centric aspects.
Electronic Performance Management: Employers use various analytical tools to gather reliable
and up-to-data information to enable performance tracking and decision-making. Performance and
appraisal management software’s like Workforce Performance Management (WPM), Suite
Systems, SuccessFactors and Talent Management Software help to methodically document and
organize employee performance data vis-à-vis pre-determined targets and the results achieved
along with the reimbursements, succession planning and other related HR systems. Studies show
that the newly ‘developed three-tier model (HR business partner, shared services and corporate) is
implemented by less than 20 per cent of organizations overall, but it is extremely common to those
in the world-class bracket’ (El-Khoury, 2017).
On a whole, digital HR plays a vital role in training employees, identifying talent, and
revolutionizing HR processes with the use of digital apps platforms, and streamlined process

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systems. The following map (see Appendix 4) shows the rating trend, percentage of respondents
across the globe who believe that Digital HR is ‘important’ and ‘very important’.
C. STAKEHOLDER MANAGEMENT VS STAKEHOLDER ENGAGEMENT
It is common to use both stakeholder management and engagement to improve organization’s
decision-making and accountability. By nurturing human capital, organizations can plan for long-
term using innovation and take the risks towards business sustainability and changing
environments. (Aakhus & Bzdak, 2015) discuss that stakeholder management is an ongoing
practice, as a function of communication design. They argue that ‘the communication design
practice framework provides a path for opening up the black box of stakeholder engagement to
advance communication competence in professional practice and organizational communication’.
Information, culture, technology and messaging helps leaders promote transparency and promote
problem-solving within the organization (Hunter, Menestrel, & H-C, 2008). This can be correlated
to how HR supports organizations in retention- by investing in employee engagement initiatives
and making the workplace appealing to the right talent at the right time.
1. Communication Design and Social Networks
Engagement and retention are two main important aspects of Human Resource Management
(HRM). Studies show that by investing in employee engagement initiatives and internal
communications, organizations strive to appeal to the workforce. It is therefore crucial for
organizations across domains to adopt novel technologies to support digital practices, the freedom
to communicate, flexibility to work and convenience to collaborate (Skroupa, 2016). Research also
shows that organizations adopt innovative and collaborative techniques and encourage the use of

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digital platforms, giving talent the rules to live by and the freedom to live with them–allowing
employees the flexibility to work from wherever is most convenient to them. However, this could
eventually prove burdensome to employees as they are constantly connected. (Rhenman, 1968)
mentions conflict and stress as a leading cause of differences and assumptions in distorted
communication or unsuccessful information flow. Multiple levels and variety of information
within the organization of network theory can also question credibility, reputation and can lead to
a confused environment.
2. Standard and Enhanced Messages: Internal Communications
Since there are dimensions in internal communications, organizations invest on employee
engagement and corporate communications as a business and consultancy practice. Given the
global scale of businesses, Human Resources and Corporate Communications teams collaborate
to work on strategic messages that engage with a diverse group of employees. This is a
fundamental step in creating engagement with standardized messages and streamlined
conversations on digital platforms.
According to a Deloitte study, integrating technology in communication and engagement can
enhance employee experience and can make it real-time, interesting while improving the work-
life balance. For example, Reliance Jio, a mobile network company in Mumbai, developed a plan
to integrate mobile-first and digital-powered technology in HR functions. Infused with values,
mission and expectations, the platform was used to manage a workforce of 50000+ employees
based in 18,000+ cities in India. First, it allowed recruiters, employees, consultants, etc. to search
and apply for jobs and facilitated HR managers to complete their tasks using cloud-based, mobile-
friendly HRM software. Secondly, all documentation, polices and networks were cohesive with

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the campaign. Third, it enabled saving costs, process management efforts and enabled the
elimination of shared services. (Deloitte, 2016)
Intranet and e-Newsletters: Having portals that share industry updates and stories, helps improve
internal communication and collaboration between employees. These internal social networks are
useful for larger organizations to facilitate inter-departmental and inter-regional interactions. In
addition, it also promotes team spirit, camaraderie, credibility of information and fortifies brand
trust. Studies show that intranet portals improve relationships between hierarchies, encourages
informal conversations that work towards employee satisfaction. They are also useful in providing
documents, announcements and important updates to reach a mass audience.
Email Campaigns: Research shows e-mail is an important form of electronic communication that
has a significant impact on managerial and organizational communication. Some researchers also
believe that e-mails help in eliminating organizational hierarchies, and reducing cultural,
geographical and social barriers in communication (Kiesler, 2014). Having separate email groups
for targeted communication ensures maximum engagement and instills a sense of community in
the workforce.
Virtual Townhalls: This is one of the important leadership communication tools that presents an
open, transparent, direct and collaborative communication platform to share opinions, raise
concerns and post suggestions. Combined with trust and transparency, the community of
employees commit to and follow leaders in taking actions.
Social Media: Communication on internal and external social media platforms (blogs, podcasts,
wikis, chat rooms, discussion forums, RSS feeds, web sites, social networks) have defined a new
age of dialogue. (Smith, 2006) says that ‘New media increase the volume, speed and every-way

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flow of communication, connecting people, giving them a voice and stimulating discussions about
topics of common interest’.
3. Social Media and Crisis Management
Social media when used as an internal communication tool (Intranet, employee connect, etc.) or
as an official external social media channel (Facebook, Twitter, LinkedIn, etc.) to engage with
employees, can be linked to the digital transformation in HR technology. Social media can assist
HR functions in the following ways:
• Help recruiters in searching candidates and checking their backgrounds
• Support branding of the company as prospective workplace
• Monitor employee activities on social media
• Communicate in real-time with standardized messaging across boundaries
• Engage in a dialogue using social, emotional and factual information
• Measure employee sentiment, engagement rate and reach
A study shows that enabling a learning environment with the use of existing resources and
technologies or with the use of newer real-time micro-blogging and business networking sites can
aid interorganizational communication and build cross-cultural, cross-functional networks.
However, the usage of technologies is dependent on employee usage, which is a result of their
expectations, usability, security actors and information needs (Deloitte, 2016). While social media
has given several opportunities for dynamic messaging, interactive communication designs and
measurements, it has also led to an increase in stress levels during crisis situations. Enactment in
crisis situations generally relies on control mechanics, management of stress, the speed of
communication and control tactics (Weick, 1988). The HR plays an important role in managing

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employees during crisis situations with interpersonal communication and official messaging.
Factors such as built trust, employee loyalty and shared value, can help organizations survive
through crisis situations. However, organizations with lower-paid employees and highly paid
managers; distorted communication, bureaucratic relationship or cynical workers can face
difficulties during crisis management and reputation management, especially while handling viral
feeds on social media (Hartong, 2013). Warren Buffet’s famous institutional theory of
organizational reputation: “It takes twenty years to build a reputation and five minutes to ruin it”,
can definitely be true when social media is actively promoted within the organization but not
monitored or managed well during crisis situations.
4. Confidentiality, Competitive Intelligence and Reputation Management
While employee engagement and interorganizational communication can lead to a healthier
workforce, it comes with deeper complexities such as power grids, information leaks, data
breaches and hacks. While the primary objective of stakeholder theory is to engage and act
according to stakeholder influences, organizations, at times, resist reacting. In the context of
depending on other stakeholders for resources, organizations are forced to react to external and
internal stakeholders (DiMaggio & Powell, 1983). Under the conditions of Institutional theory,
organizations must change or adapt to the market changes in order to survive (Oliver, 1991).
When organizations communicate about internal stratagems, competitive intelligence and financial
data, there are chances of information leaks to the press or directly on social media. It may affect
the product cycles, financial health, reputation and cause low-esteem amongst the employees.
Using a multidimensional approach to resolve this issue is fundamental for HR teams. Policies
related to whistleblowing, social media privacy, regulating information flow and gatekeeping act
as an important factor in ensuring smooth and regular employee communication. Creating credible

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engagement platforms with secured connections and privacy, copyright and intellectual property
rights are essential in HRM (Lange & Lee, 2011).
Appendix 5 shows the impact on leadership and organizational communication on employees’
social media activity as against the absence of organizational communication. It also denotes the
absence of trust in leadership, credibility and use of relevant information. With the advent of
business networking and job-searching sites such as LinkedIn, Indeed and Glassdoor, employees
can share their experiences, advice and criticism on public platforms. Past and present employees
share details about the leadership issues, work environment, professional and personal growth,
individual experiences, salary information, etc., which might be confidential in nature. Therefore,
many organizations make use of reputation management tools to keep a track of what is spoken
about them on these platforms and manage conversations before they turn into crisis situations.
Although corporate reputation heavily relies on financial performance, it has a strong corporate-
centric focus. Like corporate social responsibility is integrated with building reputations,
promoting HR practices and environment can build a positive image (Coombs & Holladay, 2010).
D. TECHNOLOGICAL ENGAGEMENT AND CHALLENGES
According to a Deloitte report, HR is at the forefront of digital transformation and moving to a
cloud workplace with ‘the establishment of Workday in 2005, the acquisition of SuccessFactors
by SAP in 2011, and the purchase of Taleo by Oracle in 2012’. The report illustrates how
technology has softened the barriers between personal and professional lives and has created better
opportunities as compared to traditional HR practices (Stephan, Uzawa, Volini, Walsh, & Yoshida,
2016).

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1. Power Dynamics and Stakeholder Networks
Many researchers believe that newer technologies build structures in the organization and
influence cultural changes. (McPhee & Poole, Organizational structures and configurations, 2001)
argued that there is a solid connection between communications and structure which drives the use
of technology. Researchers also use ‘networks theory’ to understand decision-making, power
dynamics and use of innovation with the organization (Rowley, 1997). With globalization and
shifting trends, the demand for stakeholder management has increased: reshaping the information-
communication designs (Aakhus & Bzdak, Stakeholder engagement as communication design
practice, 2015). (Lammers & Barbour, 2006) believe that organizations have to balance between
microphenomena (concentrating on individual conversations) and macrophenomena (focus on
public conversations) in the institutional theory of organizational communication. The use of
technology such as e-mail, intranet portals, real-time interactive dashboards, mobile-applications
and social media can help HR teams cater to individual and team requirements. For example, (Zack
& McKenney, 1995) observed that organizational environment and structure is reflected through
the use of e-mails with the organization. Such communication campaigns can be used to measure
the reach and evaluate the response.
The below chart (see Appendix 6) illustrates the difference between traditional HR and digital HR:
Figure 1

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These platforms are used for learning and development, recruiting, goal-setting, mind-mapping,
collaborations, information-sharing, payrolls and database- management (Deliotte, 2016).
2. Design-Thinking and Other Challenges
In spite of the digital transformation, the surge in mobile devices usage and the increase in daily
social media usage, only around 20% of global organizations have integrated digital technologies
using mobile apps for employees (Jones & Cooke, 2015). This determines the level of complexity
and challenges in transforming their design-thinking and converting gigabytes of confidential data
from paper to online.
While integrating digital with platforms such as apps, video pods, social sities, and mobile
technologies can be difficult, transcending behavioral shifts and adopting of newer concepts can
be the biggest challenge for HR teams within the organization. In spite of the technological shift,
maintaining an agile development, measurement and robust human resource management system
can be cumbersome too. The absence of decision-making and procedural changes can also create
barriers in the use of digital technologies. Moreover, failure in real-time problem-solving, response
creation and crisis management can also intensify a negative sentiment about a technological shift
amongst the employees (Deliotte, 2016).
In the digital economy, the real complexity for HR can be to keep up with market fluctuations.
However, with an understanding of the primary and peripheral stakeholders, management of
resource allocation and with an overall corporate mission to innovate and redefine user-
experiences, HR teams within the organizations can pave their path through the digital disruption.
By empowering leaders to drive the change, tapping the right talent competencies, creating a
common or shared value within the organization, celebrating the achievements of multiple
stakeholders, and by managing to negative feedback with a strategic mindset, digitization in HR

Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University
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can be successful. The impact of interorganizational communication can be amplified in the digital
space by using a multi-dimensional approach in identifying strategies to engage with primary
networks (different levels of internal stakeholders –employee, staff, shared services, consultants
and agencies) and by using various frequencies of centrality and density (Rowley, 1997).
Integrating theoretical elements and practical solutions in the realm of the digital landscape can
help HR teams in organizations to create a sustainable impact on their stakeholders and navigate
through complexities.
APPENDIX

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Appendix 1: This statistic presents U.S. and UK employee opinions on social media usage of CEOs
and brand trust in 2014. During a survey of 1,000 employees, it was found that 82 percent of
respondents from the United States thought that CEO participation on social media helped to
communicate company values and to shape a company's brand reputation. Source: Survey
conducted and published by Brandfog, April 2014. Source link: 2014 Global Social CEO Survey,
page 8 and 9
Appendix 2:
These statistics present ways in which consumers in the United States believe social media has
increased accountability for brands as of July 2017. According to the findings, 80 percent of
consumers reported that social media allowed them to uncover unfair treatment by brands, and

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another 75 percent had stated that it provided them consumer power over brands.
Source, survey by and published by Sprout Social: Survata, July 2014.
Appendix 3:
The figure below shows the new strategy in cloud solutions by SuccessFactors. These thirteen
capability areas, supported by SAP’s cloud technology, were defined as subjects of the
transformation
Link: https://www.successfactors.com/content/dam/successfactors/en_us/resources/case-
studies/case-study-hr-digital-transformation-sap.pdf

Pranjali Galgali, IOR and Stakeholder Management, MCM, School of Communication and Information, Rutgers University
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Appendix 4: According to this year’s Deloitte survey, only 38 percent of companies are even
thinking about digital HR and only 9 percent are fully ready. Nearly three-quarters of companies,
or 72 percent, believe this is an important priority and 32 percent define it as very important, so it
will be a major area of opportunity for HR in 2016. See the figure for our survey respondents’
ratings of digital HR’s importance across global regions and selected countries.

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Appendix 5: The Weber Shandwick survey found that one-third of employers — 33% —
encourage their employees to use social media to share news and information about the
organization. This sounds risky, but this social encouragement has an outsized impact on employer
advocacy among employees. For example, employees with socially-encouraging employers are
significantly more likely to help boost sales than employees whose employers aren’t socially
encouraging (72% vs. 48%, respectively).
Link:https://www.webershandwick.com/uploads/news/files/employees-rising-seizing-the-
opportunity-in-employee-activism.pdf

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Appendix 6: The Deloitte table illustrates the difference between current HR service delivery
models and digital HR, to understand how radical and profound the digital HR transformation will
be.
Link:https://dupress.deloitte.com/dup-us-en/focus/human-capital-trends/2016/digital-hr-
technology-for-hr-teams-services.html
Figure 2

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