How Mercedes-Benz addresses digital transformation using Holacracy

Purpose – Firms are challenged by digital transformation, as their organizational design is not up to par.
Mercedes-Benz.io, a 100% subsidiary of Mercedes-Benz AG Daimler group, employs Holacracy, a selfmanagement framework that abolishes traditional hierarchies in order to be more responsive to changes. This
paper aims to explore how Mercedes-Benz.io utilizes Holacracy in order to address the challenges posed by
digital transformation.
Design/methodology/approach – Using qualitative expert interviews, the authors show that
organizational life becomes more meaningful but also more engaging and demanding. The authors
highlight that agile principles can be embedded in the organizational structure, a strong contrast to
conventional management design. Decision-making authority and accountability is decentralized toward
employees who face operational realities. This fosters commitment but might prolong the decision process.
Leadership seems to be fairly contextual, and career paths are fundamentally different; development avenues
are rather functional.
Findings – The authors conclude that Holacracy seems suitable for industries where the need for adaptability
outweighs the need for reliability. It leads to increased transparency and accountability but is not a ready-made
solution and requires ample resources.
Originality/value – This study is one of the first that qualitatively assess the changes, implications and
outcomes of organizations that employ Holacracy.
Keywords Digital work, Organizational design, Holacracy, Self-management
Paper type Research paper