The effects of retail channel integration through the use of information technologies on Firm performance - Essay Example

? Overview of article The article “The effects of retail channel integration through the use of information technologies on Firm performance” gives a vivid insight into the strategy that can be employed to integrate activities across multiple channels. This resolution lies in the use of information technology, a solution that offers a promising opportunity for most of the retail firms. This is because it is directed towards the enhancement of the relationship that exists between them and their customers. This is, in addition to improving the performance, of the firm in virtually all sectors (Sambumurthy, 2003). This can be tied to the fact that the goal of most firms is to improve people’s lives through their services and products. This is, in addition to, making profits that can enable them stay in the market for a long time. Therefore, in the article the author asserts that most consumers do value flexibility of any company as concerns the available offers and order completion procedures that take the minimal time. To offer this flexibility, a firm should be able to integrate and ensure convenience of the various channels entailed in the business. This has seen the authors of the article acknowledge the adoption of information technology in the retail industry. They view it as a major step towards exemplary performance of firms who use it in carrying out their business. This is because automation and amalgamation of business processes across both customary and online channels increases the flexibility on both the satisfaction of consumer and the performance of the firm (Sambumurthy, 2003). Throughout the article, the authors have focused on the constructive effects of information technology just to encourage those who are not into it to try out. They base this on the fact that by integrating both traditional and contemporary Channels within the retail industries efficiency and integration is improved. These effects, in one way or another, function to the act of the firm as well as customers who are among the key stake holders in any given firm. Another fact is that environment has a role to play because its dynamism is a sure moderating factor of the effects brought about by competence and modernization. All these attributes are aimed at inciting firms to employ this technique in both the retail and service sectors especially to those firms that have both physical and online operation (Khosrowpou, 2006). Critique of article In the modern world of business, there has been increased shift towards the creation of positive environment that enhances productivity and efficiency. Thus, why many firms resolve to employ CRM software to provide a dependable platform for both customers and firms. This, in part, corresponds to the message in the article discussed. However, even though there is the persistence of adoption of technology, it should be noted that it is not for all companies to use it for some use “excel and outlook” in a stationary surroundings to uphold their information. In such a company, high technology such as use of CRM software is undoubtedly inappropriate. Therefore, the article has not emphasized on what companies are eligible to this high technology, for this is most prominent in growing businesses who are obliged to manage customer’s information with reliable software especially in the constantly changing business environment (Sambumurthy, 2003). However, the article has a valuable message concerning the ways in which businesses can manage change. This is because the modern day organizations have become complex, uncertain and more unpredictable, and, therefore, invention of ways of overcoming these challenges. Therefore, the advent of globalization demands that companies keep themselves up-to-date either through the latest technology or management fad (Lin-Bin et al, 2010). This vertical integration has numerous effects on the factors that lead to firm’s performance such as increasing firm size and reducing uncertainty. However, it has also its own disadvantages that include reduced flexibility in allotment of investment. This is, in addition to the difficulty with, managing a various business types and less competitive pressure. Evaluation in reference to management theories There are different management theories that are currently used in the society as regards the many ways of operating a business. Therefore, most of them focus on how societal forces on organizations can be developed and understood. The humanistic perspective goes back in time to late 19th century when emphasis were put on understanding of human behavior, desires and mannerisms in the work place. Mary Parker and Chester Bernard were pioneers of this humanistic perspective on management as a way of ensuring a company’s success (Khosrowpou, 2006). It thus combines the different job descriptions with motivation theories to arrive at a point that swiftly opens into success of the company. The classical, scientific theory is somehow explained in this article given the management and organization of work and people. This is because, this theory places emphasis on analyzing a job to map out the best possible way of performing it to improve productivity. This is because the article emphasizes the adoption of technology in retail incorporation to advance the efficiency of the firm. This is because of the researches that had been carried to find ways to cope with modern day challenges that man arrived at by trying to improve efficiency. Technology came in as a tangible strategy to achieve this efficiency and satisfaction. Therefore, as the article discloses, information technology is a brilliant strategy, for, through it, there can be integration of retail channels that subsequently lead to the enhancement of firm’s efficiency and customer satisfaction. It also has an added advantage where it has been quickly accepted and entrenched into most business systems. However, it is not only in the business system, but also communication part of it has received an outstanding audience, the youthful generation. This quick adoption of IT makes it easy for its successful implemented given its availability and efficiency (Lin-Bin et al, 2010). According to the input output theory which is sometimes referred to as systems theory, productivity is measured depending on the input and output of any given business (Khosrowpou, 2000). This, therefore, means that the amount one inputs into a business is directly proportional to the output he gets at the end of the day. This means that measurement of productivity basing on the input output theory only considers the tangibles that are employed into business. This leaves the reader with the notion that contribution of IT to productivity cannot be measured by this theory. A compelling example is the invention of ATMs in the banking industry. When theory is considered, these ATMs function to reduce the number of transactions in a single day. This means that it leads to reduced input, which theoretically should translate to a reduced output too. However, in actuality, this is not the case. This is because the fact that the introduction of ATMS increased customer’s convenience of bank services is not catered for when theory is applied. This implies that this theory falls out of its application on its provision that production can only be measured in tangibles. This is because, in practice, introduction of ATMs contributes to the increased productivity of any firm. This condition leads to the conclusion that productivity can be measured by both tangibles and intangibles that are not provided for by this theory. Therefore, in practice this theory is null and void hence a significant conclusion that in practice information technology adds much to the productivity of any given firm. Therefore, the article communicates the right information that information technology functions to integrate retail channels that translate into customers being satisfied and improving the efficiency of firms. This subsequently leads to reduced time taken to run a task and reduce costs associated with it. This exemplifies the point that, in a situation where business men have to operate in a complex situation, there must be integration of these business activities. This is because business systems are a part of a larger system and that business systems are in a constant state of change (Fjermestad, 2006). Therefore, an integrated system translates into a successful system that leads to a prosperous firm and satisfaction of all the stakeholders in any given firm. Another point is that the introduction of IT alone cannot produce the desired results, for there must be changes that should be made according to the IT infrastructure, in addition to time. Thus, why some firms that adopt IT do not live to succeed as others did on adoption of the same attribute. Conclusion It is evident that firms that have been vertically integrated through information technology are bound to experience low uncertainty regarding its flow of production. This is due to the strong structure of the association. However, it faces issues with flexibility on the side of production given the involvement of many units that are affected due to modifications effected to comply with technology. Another thing is that integrated firms may have a strong ability to collect and manage customers for an efficient productivity; there still exists difficulties in managing diverse units. It may be difficult to conclude that integration of business activities is an optimal solution. However, it is noteworthy that one gets ideas that it leads to increased performance of firms. However, it is only valid in the sector whose activities require a specific demand translating into a low need for innovation and flexibility. Therefore, integration of retail channels through the use of IT is only successful if certain conditions are met. In other words, this means that integration might be a treat for certain industries. However, it is worth noting that the field of management is still undergoing tremendous changes. Therefore, these traditional theories only function to bring up an improved way of thinking which determines the ways in which companies can improve themselves. Therefore, innovative concepts of keep on to emerging to address these challenges of the modern world in the business sector. Therefore, organizations are most likely to adopt new ways of managing that can best meet their demands in an ever changing environment, as well as cultures. List of References Fjermestad, J., and Romano, N.C. (2006). Electronic customer relationship management. M.E. Sharpe. Khosrowpou, M. (2000). Challenges of information technology management in the 21st Century: 2000 Information Resources Management Association International Conference, Anchorage, Alaska, USA, May 21-24, 2000. Hershey, Idea Group Inc (IGI) Khosrowpou, M. (2006). Emerging trends and challenges in information technology management: 2006 Information Resources Management Association International Conference, Washington, DC, USA, May 21-24, 2006, Volume 1. Hershey, Idea Group Inc Lin-Bin, O., Teo, H., and Sambamurthy, V. (2010). The effects of retail integration through the use of information technologies on firm performance. Journal of operations management.Vol, 4, No.2 p369-382. Sambumurthy, V., Anandhi, B, and Grover, V. (2003). Shaping agility through digital options: reconceptualizing the role of information technology in contemporary firms.MIS Quarterly.Vol, 27, No. 2, pp237-263. Read More