The Relationship between Information Technology and Global Business
Introduction
Currently, being alive in the 21st century means that information technology is part and parcel of our lives. It is an essential component in every event in our day to day activities, from our homes to our places of work. Globally, in the business society, it is considered that those that are doing business without the inclusion of information technology are not capable of competing in the global market. This is because almost everything in our daily lives is digitized. However, we have to consider the opinion of those businesses not using information technology, because these businesses may have a good argument as to why they do not need it. Therefore, there is a need to discuss the various effects that information technology has had on the business sector from a universal perspective.
Aims and Objectives
This research takes an in-depth look at the impact that information technology has in the business sector globally. The research question is, how the existence of information technology in today’s businesses has an impact on global industry.
The objectives are:
- To find out what positive effects information technology has had on different business societies today and to give an in-depth analysis of these differences.
- To find out the negative impacts of information technology on global business and compare it to the positive effects, and evaluate the two following their aftermaths.
- To determine the performance range of a company given the introduction of information systems.
- To research how productivity is affected by the inclusion of information technology into the business.
Literature Review
It is the 21st century, and therefore technology is now a part of our everyday lives, at home and at work. We can arguably state that almost everything in this world right now uses information technology. From communicating, to learning and most definitely when conducting business. Generally, every business enterprise around the globe uses information technology for a variety of reasons, and somehow those who are neglecting the use of information technology usually are not considered to be capable of growing and competing in the global market.
Information Technology and the performance of a business
Today information technology is known to be the core of several business operations, primary function production, and services as a whole. But still, several companies are failing in their businesses that are IT-based companies because they have poorly aligned their businesses with IT. In this research we will take a look at the impact of IT on the performance of a company; does it affect this area of business? And if it does, how have the different business enterprises taken this specific knowledge and applied it in their enterprises?
The Toyota Company is a great example of a company that has improved its performance due to its collaboration with information systems that have enabled efficiency and promoted quality in the firm. This company can respond to clients almost immediately, and can adapt according to the market’s transitional events while at the same time keeping their suppliers and retailers at bay. The company uses information systems to monitor production, quality, efficiency and the costs incurred when bringing business performance to the top. Oracle electronic business (E-business) software was responsible for the supervision and control of orders, monitoring of internal production, and the system is also responsible for invoice management. It paved the way to the making of cars that customers ordered, hence cutting the creation of the surplus vehicles that people did not want. The value of Toyota has risen due to information technology use since it makes production processes efficient and more effective.
The effects of information technology on the performance of businesses worldwide have had a lot of studies behind it (Beckey, Elliot, & Proket, 1996, McNutt, & Boland, 1999). It gives the organization the ability to expound on their untapped talents through combining technology with their businesses and community, and in this way, new knowledge can be discoverable. (Dennis, 2007)
Productivity and Information Technology
The primary goal of a business enterprise is to make profit, and this can only be possible when the product is high. Therefore, production is what these companies use to measure the effectiveness of technology.
Strassmann (1990), after sampling thirty-eight firms in the service sector, concluded that there is no relationship between Information Technology and the productivity of a firm’s investment. He found that some of the top performers had deeply invested in information technology while others had not. In a nutshell, he said that IT did not make an impact on the production levels of a company since some of the enterprises studied still had good production rates compared to other businesses with a high presence of IT.
Information technology’s contribution to the level of output has been vastly studied by many people and also documented well in many books and journals. But whether information technology guarantees growth in revenue and profits as well as its value in the market sectors is still unclear. Some global industries are not based with information technology but are still industry leaders. Many researchers have a firm belief that without becoming fully integrated with information technology, productivity cannot reach full potential. The impact of information technology is not adequately explored. This gives us the paradox of productivity concerning IT in the global business.
Positive effects of Information Technology to global business
Joe Hessert gives out seven ways in which he thinks technology has impacted the business sector in the 21st century (2017). He states the first way to be the way communication has become so easy. A businessperson can coordinate the activities of his company while miles away. He gives an example of Skype video chat in which people can communicate face-to-face and still not be in close proximity of each other. The other way is by taking business strategies to the next level. Businesses nowadays advertise their products via different forms of electronic media. Companies need not advertise on posters to get highly skilled workers, they do so online, and they can acquire any worker of great skills from any part of the world. In addition, businesses can increase their region for the promotion of their products. The profits gained from these new technological techniques from promoting products are quite immense.
Technologies give amplification to a business. IT devices tend to work faster than traditional computing and communication methods. Also, new IT devices are even better than the older devices, enabling even faster response times which aids the increase in revenue for companies since they can provide services on time, in time. Technology improves the business accuracy since almost all the documentation is available via computer; thus, there is no chance left for mistakes; hence one can count on the calculations done by the machine. Business costs drop drastically over time since the cost of hiring human labor is reduced, and the office work is made easier. The IT devices do all the work, and this means that employment levels are lowered making this an advantage. Also, those individuals that are disadvantaged by physical disabilities can still perform well in the job market. For example, some devices enhance voices for those that may have voice problems and hence they can attend meetings and be able to communicate with their clients and be ready to serve them.
Methodology
Methods of Acquisition of Data
Use of questionnaires is considered to be one of the most conventional ways in which information can be obtained from a large business enterprise due to an organization’s hectic packed schedule. The acquisition of the data can be obtained much easier using questionnaires since the questions asked are open-ended or closed-ended, allowing the subject to answer the questions freely without feeling pressured or perhaps offended. Requesting and searching for interview appointments can be very time consuming, so in ideal conditions, the use of questionnaires is quicker way of acquiring information.
Interviews can also be used to obtain data. This method is preferred by many individuals who conduct research because some subjects may ignore the questionnaires sent out, hence getting a one-on-one appointment can be appropriate. It enables to gather data from the direct source, face-to-face with the company executives and employees themselves. The other advantage of this method of obtaining data is that the interviewer can provide more comfortable, personable environment while gathering data, resulting in interviewees providing a more open response.
Obtaining company journals can be done online with the enterprises’ permission, and it is a great source of information needed. Getting an interview may be challenging, and there is no surety that the questionnaires will be answered. Therefore, journals can act as a secondary source of information. To add, geographically dispersed corporations and researchers will have a hard time coordinating interviews, therefore journals can come in handy.
Foreseen Limitations
Every research is bound to have some limitations in the process of acquiring data from different sources. For this research it can be assumed that the following would be inclusive of some of the barriers:
Obtaining and conducting interviews may be difficult since not everyone will agree for their business to be assessed because they may conclude that their competition is trying to obtain corporate secrets.
It may be very challenging to get all the desired companies to answer the questionnaires that are sent out to them. There is a high probability that the surveys will get rejected, resulting in a shortage of research data.
Journals may not have enough of the required information. Some journals may also be hard to obtain, and the process of verifying them if they have credible information may be time-consuming. Some of the journals are hard to access as well, and it also it may be very difficult to retrieve them from the company database considering research is being conducted outside of their organization.
Research schedule/Timeline
This research is set to take about three months from approval. The reason for this timeline is because requesting interviews, delivering questionnaires and receiving the results, and journal research will take some time. Data acquisition, data analysis and translating and formatting this data into a dissertation will also take quite a bit of time.
References
Beckley, R., Elliott, M.A. and Prickett, J.M., 1996. Closing the Gap: Information Technology & the Nonprofit Sector. Nonprofit World, 14, pp.36-42.
Dennis, E. 2007, Information systems for sustainable competitive advantage, Information and Technology.
Hessert, Joe 18 July 2017, socialnomics, accessed 20 Feb 2019, < https://socialnomics.net/2017/07/18/7-positive-effects-of-technology-in-modern-day-business/>
McNutt, J.G. and Boland, K.M., 1999. Electronic advocacy by nonprofit organizations in social welfare policy. Nonprofit and Voluntary Sector Quarterly, 28(4), pp.432-451.
Strassmann, P.A., 1990. The business value of computers: an executive’s guide. Information Economics Press.