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Impacts of Information Technology on Global Operations of Businesses Essay

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Updated: May 20th, 2019

William Shakespeare, the famous writer and poet, referred to the world as a stage and all the people in it as players in the game of life (Dimitrova, 2002). At that time, these words seemed to be sophisticated because of people found it difficult to truly understand what they meant. However, as time has passed by, these words have become clearer to us. The world has become very informed.

There is a smooth flow of information from one end of the world to the other. At the same time, the boundaries that separated nations are now permeable. People travel easily from country to country. At the same time, the production of goods and services has also expanded. The world has a variety of goods and services from which a consumer can choose from. As a result, the rate of consumer satisfaction has greatly increased.

Lastly, the economy of many countries has grown and expanded beyond their physical borders. Countries from far and wide can now trade with one another at ease. With the advancements in technology, a person in South America can easily strike a deal with another one in Russia without the two of them coming into physical contact.

A simple word can be used to describe all this; Globalization. It is due to the effect of globalization that the world is operating on a global scale. It brings people together to work as a team in order to achieve specific goals and objectives.

Finally, it ensures that there is socioeconomic and political development in all states of the world. Globalization has made the world to be uniform due to the synchronization of social, cultural, technological and commercial aspects of life which originate mainly from western countries and spread to the rest of the world.

The advancements that we have been experiencing in the field of information technology have played a critical role in ensuring that businesses operate on a global scale. The innovations of new technologies especially in the field of production and communication have made it easier for businesses to operate on a global scale. This is what is termed as techno-globalism by scholars (Jugger, 2009).

Techno-globalism has made it easier for businesses to produce their goods or services and market them at ease. As a result therefore, businesses are now earning more profits and stand a higher chance of growing and developing as compared to the times when many organizations did not embrace information technology (Jugger, 2009).

Information technology has developed the operations of businesses to operate on a global scale. As a result, businesses are able to produce, market and sell their products in almost any part of the world.

On the other hand, technological development has become a key factor in the determination of the future prosperity of businesses. A business that has the latest technology has a competitive advantage over another business that still uses inferior technology.

This could be either in production, sales and marketing or internal organization. As a result, the business that has superior technology will grow and develop at the expense of those businesses in the same field that still embrace outdated technologies.

The level of trade has grown remarkably over the last few decades as a result of the advancements that are being experienced in the field of information, communications and technology (ICT) (Jovanovic, 2011). These advancements have also increased the number of tradable services in the field of IT and ICT which have made the offshoring and outsourcing of services to be much easier.

The ease in the tradability of these services and the increased independence of the location has contributed to the offshoring of services by many companies in the west (Kapila, 2009). Companies are now outsourcing services such as support, customer care, research and consultancy.

The main reason behind this is that outsourcing for services is much cheaper and the end result is desirable. The development in IT and ICT has led to the globalization of services all around the world.

With the revolution in IT and ICT, the location of companies is not of a high concern as it used to be. The advancement in technology has made the transmission of inputs and outputs to be much easier. These processes can now be conducted digitally and transmitted via electronic means. Companies have therefore offshored much of their services especially white collar jobs to improve their sustainability and efficiency.

The customer care for the giant computer manufacturer Dell, for example is located in India (Kurtz, 2010). When local residents call the customer care, they are being served with an operative who is located in India. Many employers have embraced this move and replaced much of their staff in the US and UK to reduce their operating expenses.

Globalization and information technology have also influenced the manner in which companies market their products and interact with their customers. Companies have embraced the use of technology in order to survive the stiff competition in the specific markets that they operate in.

Some of them, for example, have incorporated the use of social networks and brand communities as a communication strategy of reaching and engaging customers. This because social networks and brand communities are the easiest and most efficient ways through which consumers can be reached as a result of technological changes that the world is currently facing.

Most organizations and business companies therefore have stopped stop using outdated methods of reaching out to consumers. Some have incorporated the old methods with the latest ones.

Businesses can create a competitive advantage through the use of information technology. Information technology has greatly affected the manner in which businesses operate. Normally, it has been the organization which influences the manner in which it uses and integrates IT in its operations.

However, due to the technological advancements, many organizations depend on IT in the normal running and operations. As a result, it is information technology that affects the manner in which a business operates. Information technology has managed to create more options and opportunities for businesses in the markets that they are operating in.

Through the use of this technology, managers can easily determine their strengths and weaknesses. This in turn makes such organizations to operate in manner that is more effective and efficient. The management of an organization plays a critical role in ensuring that their organizations operate in a smooth and efficient manner. Through the use of information technology, the management of an organization can improve on:

  1. Business strategy
  2. Organization structure
  3. Organization culture
  4. Management process and working conditions

These are essential factors to ensure that a business operates in an effective and efficient manner hence stand at a competitive advantage.

Through the use of information technology, organization can be able modify their business strategy in order to meet the needs and requirements of their customers. Through the use of various strategies and techniques, an organization can be able to meet these needs and demands hence maintain its customers and earn new ones in the process.

Information technology is also useful in ensuring the sustainability of global operation of a business entity. A business can, for example, modify the services that it used to provide on a personal scale and deliver them through the use of networks, RSS, blogs and so on. With the use of information technology, a business entity can have systems that operate throughout.

This will make the accessibility of product information to be much easier. In addition, it will bring the product closer to the customers. This will in turn reduce the operating costs and increase the market share of businesses (Andidas, 2003).

For a business to have a competitive advantage, it must have a strong organization culture that is valuable, rare, inimitable and organized. Information technology has played a critical role in ensuring that organizations have a strong organization culture.

Through the use of electronic mails and group wares, information technology has increased the ease and efficiency of communication within an organization and externally with other stakeholders. With the use of these technologies, information can flow in all directions of the organization without being distorted.

This makes communication between employees, their suppliers, customers and other stakeholders to be much easier. This has made all the parties who are affiliated to the business to feel as part and parcel of the organization. This has in turn increased cooperation, motivation and team work amongst them. As a result, they work together as a team to achieve the goals and objectives of the organization.

The management of organizations has also benefited a lot from information technology. While using the technology, the management of many organizations finds it easier to monitor the conduct and progress of its employees (Kauppien, 2004). In addition, the management can access the information of proper management tools and system that it can adopt and apply.

Finally, through the use of IT, the management of an organization can record, store and retrieve information of its employees, customers, suppliers and stakeholders either on the internet or other databases. This in turn makes the running of an organization to be more effective and efficient (Kauppien, 2004).

From the discussions that have been presented, it is evident that information technology has modified the manner in which organizations operate in the world. IT has enabled businesses to have a global effect.

This is due to effective and efficient production and sales and marketing techniques that have been discovered as result of embracing IT. Information technology is therefore a resource which an organization can use to have a competitive advantage over its rivals (Millon, 2007).

References

Andidas, K. (2003) Toyota Prius: Marketing Communications Plan. Journal Of Technology, 4 (12), 31-55.

Dimitrova, A, n.d., Challenging Globalization: The Contemporary Sociological Debate About Globalization. Web.

Jovanovic, M. (2011) International Handbook on the Economics of Integration: Competition, Spatial Location of Economic Activity and Financial Issues. Sacramento: Edward Elgar Publishing

Jugger, S. (2009) The Power of Advertising. Admap Magazine, 14 (2), 51-55.

Kapila, U. (2009) Indian Economy since Independence. New Delhi: Academic Foundation

Kauppien, H. (2004) Communication Strategies and Market Entry. Helsinki: Swedish School of Economics and Business Administration.

Kurtz, D.L. (2010) Contemporary Marketing 2011. New York: 2011

Millon, D. (2007) Piercing the corporate veil, financial Responsibility, and the limits of limited Liability. Emory Law Journal, 56 (5), 1309-1382

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