Joining Forces with a Digital Twin: A study exploring the potential of a Digital Twin of an Organization in mitigating the impact of cognitive biases in strategic decision-making

Sammanfattning: Title: Joining Forces with a Digital Twin: A study exploring the potential of a Digital Twin of an Organization in mitigating the impact of cognitive biases in strategic decision-making Seminar Date: June 3rd, 2022 Authors: Qendresa Balaj and Dennis Weber Supervisor: Pauline Mattsson Course: BUSN09, Degree Project in Strategic Management Keywords: Strategic Decision-making, Innovation Management, Cognitive Biases, Digital Twin Purpose: The aim of this thesis is to investigate how a digital twin technology, specifically, a digital twin of an organization, can assist managers in making better decisions by mitigating the impact of cognitive biases. Research Question: How can a digital twin technology help mitigate managers’ cognitive biases when making strategic decisions to steer their company’s innovation management? Theoretical Foundation: This chapter provides an extensive literature review of key theoretical components, which helps set the stage for the reader. Beginning with an introduction of theory about the strategic decision-making process, followed by a brief outline of the implications of knowledge management on strategic decision-making in innovation management. It proceeds with situating the concept of digital twins of an organization in the literature on digital twins and describes the dominant characteristics. The chapter rounds off by introducing cognitive biases in information systems research and outlining the relevance of strategic decision-making. Methodology: In order to fulfill the purpose of this thesis, a qualitative multiple-case study was conducted with an abductive research approach. The empirical data was collected through six online semi-structured interviews, two with experts and four with practitioners. Conclusion: The findings show that a digital twin technology can help mitigate manager’s cognitive biases when making decisions to steer their company’s innovation management by (1) providing a holistic overview of elements and their interrelations, (2) presenting data and information in a visualized way, (3) forecasting solutions and outcomes using simulation, (4) capturing knowledge that was previously only in people’s heads, and (5) providing a common database that allows speaking the same language. It is argued how these capabilities serve as enablers to better-informed strategic decision-making and how they can help counteract biases that have been identified to occur prior to having a digital twin of an organization available.