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The Impact of Technological Change on Business Essay


Introduction

The first fifteen years of the twenty-first century saw dramatic technological advances, most notably in the field of information technology. The personal computer has changed status from affordable to required in the private as well as a range of professional sectors, which was dictated both by the gradually reduced price of hardware and the rising demand for data processing capabilities.

The business sector was not an exception, and nowadays a decent technological basis is required for the successful functioning of any business entity, from a small company to a giant corporation. The impact of this change is huge and can be observed in a variety of manifestations, from the redistribution of responsibilities, with employees being to a large extent relieved from the mechanical calculations and automated tasks, to the emergence of new, unprecedented business phenomena such as virtual companies and electronic payment systems.

The multitude of changes in the field of business can be grouped into several broad categories. The essay aims at evaluating change introduced by advances in communication and the emergence of the field of e-commerce which, despite being criticized by some experts for being the primary contributor to the controversial process of globalization, as well as some minor discrepancies, remain two largest positive influences on business in the last fifteen years.

Communication

Argument

While it is obvious that effective and diverse means of communication have been at the disposal of entrepreneurs for more than a century now, it is undeniable that the development of the informational technology, especially the emergence and popularization of the Internet, has significantly increased the potential of the existing techniques and gave way to the new opportunities. For instance, video conferencing has been a familiar concept for around fifty years now.

However, it is only with the emergence of the fairly modern digital signal transmission technology in the eighties that the relatively affordable solutions could be introduced to the market. The dedicated Internet-based conferencing devices were available for sale since 1992. However, the true change has happened in the 2000s, with the appearance of software capable of making video calls for all users instead of just the organizations willing to pay significant sums of money for the equipment (Krizan, Merrier, Logan, & Williams 2007).

In essence, it meant the dramatic diversification of the audience capable of making video calls from corporate entities and wealthy individuals to small firms and local businesses to ordinary clients. Another notable application of the communication capabilities of the Internet is the creation of cloud services – a relatively young concept of distribution of tasks performed by the computers within a network. While this may be used for the distribution of computation capabilities, it is most often associated with the shared storage and communication with a certain database or resource using any access point capable of Internet connectivity.

Cloud services are used by companies and other business entities, and their popularity is growing rapidly as of today (Jones 2013). The cloud networks allow effective resource use and substantially decrease costs and time required for network maintenance, which allows for a much more effective time management and a reduced slowdown in the company’s performance. It should be noted, however, that the concept is still in the development phase, and while the possibilities it offers are impressive, it still has several difficulties, which may introduce adverse effects into the business process when misused, such as the unusually high cost as a result of the incorrect planning.

As such, while the value of cloud computing for business is undeniable, it is advised to be viewed as a potential contributor to the nearest future rather than the current perfect solution (Avram 2014). While the comfort and ease of use of the newly introduced communication methods serve as proof of their value for the business, it is the possibility of market diversification and changes in employment practices that should be viewed as their prime benefit. First, the access to communication coupled with the possibility of sharing documentation makes it sufficiently easier to establish offices in other locations, allowing for the relatively effortless market growth (Leamer & Storper 2014).

As the distance plays a little role and the Internet is already almost ubiquitous, the expansion can reach a national and even global scale. The same can be said about employment. Improved communication significantly increased the capabilities of working outside the office and freelancing. As of 2015, around a third of the United States’ workforce is engaged in freelance, with 69 percent of the respondents stating the advances of technology as a defining factor for becoming a freelancer (Matthews 2015).

At the same time, the majority expresses their satisfaction with the current state of the market and the belief that it will gain in both reliability and efficiency in the nearest time. Finally, the communication has redefined the outsourcing – the practice of assigning part of the business process to an external party (Fuchs 2015). While this does not necessarily involve large distances, there is a clear indication of the tendency to search for the parties outside the country, for better resource management and logistics, but much more often for the cost efficiency of hiring the skilled workforce. This is especially viable now when digital information has become a commodity and is easily transferable over the Web.

As a result, it is a common practice nowadays for a company to hire personnel overseas. Such strategy usually results in mutual satisfaction, as the company seeks job markets with wages lower than the domestic ones but still offers the specialists the workplace and the pay which is adequate or even high by the employee market’s standards. Admittedly, this latest practice is the most controversial and presents several social and economic issues.

Counterargument

Two concerns exist regarding the outsourcing and freelancing possibilities provided by technological advances. First, some analysts suggest that the growing number of freelance specialists leads to a situation where employers tend to seek the cheapest contractors, which are usually also the less skilled ones. This leads to the necessity of the high-profile freelancers to lower their demands to comply with the job market.

Besides, the tendency to hire the least skilled workers compromises the reputation of distance employment as a concept, as an employer is less likely to seek more qualified specialist after an unsatisfying outcome and will instead turn away from the freelance market altogether (Eha 2013). The second concern deals with the globalization and outsourcing performed in the third-world countries. Human rights activists often state that the companies “exploit” poorer countries by taking advantage of their inability to provide payment to their citizens and pay their remote specialists insufficient wages (Hartman, Arnold, & Wokutch 2003).

Refutation

Even if we assume that the assumption of the adverse effects on the job market is true, and the principles of the free market do not work here, it will ultimately only lead to the termination of the market itself, and its impact on business will not be negative, only balanced back to the status quo. As for the ethical side of the question, while this point continues to be disputed, some experts point to the fact that the developing countries benefit from outsourcing, both globally and individually (Bornstein 2011). Besides, the companies that use the practice continuously report the lowered production costs and the improved operation efficiency (Rockford Consulting Group 2007).

E-Commerce

Argument

While some progress in the field of information technology is responsible for the increased quality of the techniques already known in the business, it has also led to the creation of new business phenomena. Among the more notable examples of these is e-commerce – the practice of establishing trade relying primarily on the Internet (or other networks) as means of communication, transactions, and, when it comes to digital commodities, delivery (Manzoor 2010).

E-commerce offers several advantages that are difficult or sometimes impossible to achieve in traditional trade. First, e-commerce wins in terms of speed of operations as it relies primarily on the hi-end communication discussed above. Besides, user preferences tracking and analytical software make it possible to maximize the efficiency of marketing techniques. Finally, it helps to cut the expenses by eliminating several steps of the supply chain. As the mobile devices capable of Internet connectivity have become ubiquitous, the customers are also granted round-the-clock access and, in most cases, support from the company. Finally, electronic transactions are becoming gradually more common in the field, adding to convenience and reliability.

Counterargument

E-commerce was criticized for its alleged unreliability, lack of safety, privacy breaches, and, above all, the tremendous competition resulting from the availability of the technology. According to the popular belief, e-commerce has allowed flooding the market with small retailers which harm established businesses by their sheer volume.

Refutation

The latter is the most easily dismissible criticism, as e-commerce allows smaller companies to perform in the same conditions as business giants, leading to the fairer picture overall. The alleged insecurity and threat to privacy have long been addressed by the IT specialists.

The modern encryption techniques allow for sufficient safety in terms of both personal data storage and digital transactions, to the point where the e-banking has become more reliable and safe than the traditional trading techniques (Hartono et al. 2014). While there are still instances of deliberate breaches as well as unintended disruptions of the electronic systems, they are becoming gradually less frequent. The users also tend to lend more trust to the electronic transactions (Agarwal, Rastogi, & Mehrotra 2009).

Conclusion

The rapid development of technology, especially in the IT field, has led to noticeable changes in the business. The communication possibilities provided by the Internet coupled with the tremendous popularity of personal computers and mobile devices capable of Internet connectivity have created a unique environment that was immediately utilized by the business companies and entrepreneurs.

This has led to dramatic improvements in the quality and availability of services, the expanded employment possibilities and outsourcing practices, greater market diversification, and, in some cases, the emergence of new business phenomena, such as e-commerce and e-banking. As a relatively young phenomenon that is also changing rapidly, this process was uneven and has been subject to criticism. Some of its effects on business have been questionable but have been addressed since, while others remain debated to this day. Nevertheless, the overwhelmingly positive influence of the technological progress of the recent 15 years on business stands out as an undeniable fact.

Reference List

Agarwal, R, Rastogi, S, & Mehrotra, A 2009. ‘Customers’ perspectives regarding e-banking in an emerging economy’, Journal of Retailing and Consumer Services, vol. 16, no. 5, pp. 340-351.

Avram, M 2014. ‘Advantages and challenges of adopting cloud computing from an enterprise perspective’, Procedia Technology, vol. 12, pp. 529-534.

Bornstein, D 2011, Outsourcing is not (always) evil. Web.

Eha, B 2013, . Web.

Fuchs, C 2015, Reading Marx in the information age, Routledge, New York.

Hartman, L, Arnold, D, & Wokutch, R 2003, Rising above sweatshops: innovative approaches to global labor challenges, Greenwood Publishing Group, London.

Hartono, E, Holsapple, C, Kim, K, Na, K, & Simpson, J 2014. ‘Measuring perceived security in B2C electronic commerce website usage: A respecification and validation’, Decision Support Systems, vol. 62, pp. 11-21.

Jones, E 2013, . Web.

Krizan, A, Merrier, P, Logan, J, & Williams, K 2007, Business communication, Cengage Learning, Mason.

Leamer, E & Storper, M 2014. ‘The economic geography of the internet age. location of international business activities: integrating ideas from research in international business’, Strategic Management and Economic Geography, vol. 32, no. 4, pp 63-88.

Manzoor, A 2010, E-commerce: an introduction, Lambert Academic Publishing, Saarbrucken.

Matthews, B 2015, . Web.

Rockford Consulting Group 2007, Strategic outsourcing: the good, the bad, and the ugly. Web.

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IvyPanda. (2020, September 17). The Impact of Technological Change on Business. Retrieved from https://ivypanda.com/essays/the-impact-of-technological-change-on-business/

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1. IvyPanda. "The Impact of Technological Change on Business." September 17, 2020. https://ivypanda.com/essays/the-impact-of-technological-change-on-business/.


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IvyPanda. "The Impact of Technological Change on Business." September 17, 2020. https://ivypanda.com/essays/the-impact-of-technological-change-on-business/.

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IvyPanda. 2020. "The Impact of Technological Change on Business." September 17, 2020. https://ivypanda.com/essays/the-impact-of-technological-change-on-business/.

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IvyPanda. (2020) 'The Impact of Technological Change on Business'. 17 September.

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