Effects of Information Computerized Technology Used by Kuwaiti Managers in Small Businesses Sectors - Research Proposal Example

RESEARCH PROPOSAL INTRODUCTION In the modern era, information technology is increasingly being recognized as a vital resource for the organizations relative to capital and human resources. It has brought about a revolutionary transformation in each and every facet of the contemporary organizations. They are considered to be an indispensable tool for recording, gathering and analyzing business transactions. Many of the experts believe that as labor was the key resource in agricultural age, capital was in the industrial age; similarly, information will be a resource of paramount importance in the post-industrial age (Sheth, 1994). The significance of information in the contemporary era has increased thousand folds and organizations are increasingly realizing that quality information has become an invaluable source to organizational success. Information technology has shaped the way that information is collected, presented and analyzed for the managers. For this purpose, top management has recognized the role of information technology and they are investing billion of dollars to arm themselves with strategic weapons against the competitors. They know that in this period of cut-throat competition information technology is the only available tool that can increase the efficiency and effectiveness of the organization. Information technology can increase organizational efficiency and effectiveness in many ways. Firstly, it can reduce the operating costs by automation of various processes. The trend of computerized billing and account management testifies of the above value provided by information technology. Secondly, it enhances the quality of product or service by providing quality assurance which can be also described as reducing the number of errors per unit of activity. Thirdly, they provide value added services which can be a source of competitive advantage either through differentiation or low-cost. Federal Express utilizes information technology to inform there customers about the status of packages in the transit which differentiates it from its competitors. Finally, its most important mileage comes from business intelligence which improves the quality of strategic decisions. Many of the supermarket stores have shifted to adopt information technology to analyze the trends of their customers and target customized products to them. STATEMENT OF THE PROBLEM Small businesses have proved to provide innumerable benefits to the developing and transition economies and it is generally considered that Small and Medium Enterprise organizations play a pivotal role in revitalization and development of the economy. However, their impact on the economy can only be apparent if provide real advantage to the economy through healthy profits which can be possible through deploying various resources including information technology. Although we know that information technology holds cardinal importance at the heart of larger organizations but their significance can not be underestimated to the smaller organizations. The literature identifies that small firms are increasingly adopting computer based information systems (Farhoomand and Hrycyk, 1985; Mahmoud and Malhotra, 1986). However, there is a dearth of this trend in the Middle Eastern region of Asia especially in Kuwait. This exiguity of information technology in small businesses of that region had produced adverse consequences on their quality of decisions, cost, service quality, and resource utilization. Further, to be more specific, they are currently facing serious issues like of erroneous customer statements, slow billing of the customers, and untimely reporting within the organization. BACKGROUND SIGNIFICANCE OF THE STUDY This study on a holistic basis would examine the impact of information technology on the quality of decisions made by small business in Kuwait. However, to a lesser extent the study will also help in describing the factors which inhibit small businesses to adopt information technology. The effects of the information technology on small business will be analyzed from various level and perspectives which includes but not limited to strategic, tactical, and operational. Hence, if we get acquainted with the benefits of this research than there are higher chances that small businesses in Kuwait will adopt information technology to improve the quality of their decisions. Thus it would be a stepping stone for the rehabilitating the growth of economy and development of the small organizations to Larger corporations. Secondly, it will help the entrepreneurs to pre-plan about the information technology factor before investing funds into their businesses. DESCRIPTION LITERATURE REVIEW Small business firms are strongly embracing the concept of information technology and this increasing trend towards adopting IT in small businesses can be attributed to several factors. Farhoomand and Hrycyk (1985) identified that cost of equipment, accessibility of computer resources, and user-friendly software are the most prominent factors in spurring adoption of IT in small businesses. Despite the strong adoption of Information Technology by the small organizations, yet it still pales in comparison with large sized organizations (Morissette and Drolet 1998). The findings of the same study by Morissette and Drolet (1998) recorded that larger organizations with more than 500 employees had higher IT adoption rates (65.7%) compared to small organizations with a capacity of less than 100 employees had IT adoption rates of 32.7%. The literature waxes poetry on the use of information technology and its impact on larger organizations, however, the impact of IT on small businesses have not yet gained careful attention. Even many of the researches prove that the findings based on IT in large organizations can not be generalized to small firms as they are different in there characteristics and they have distinct computing needs (Baldwin et al 1999, DeLone 1988). However, the smaller organizations share a lot of similar characteristics within themselves and the most common denominator is that there owners have profound influence on their businesses as he/she is most likely to be a person who makes decision about the IT investment (Palvia and Palvia 1999). The uses of information technology has restricted to only administrative and operational purpose. Many of the small business use them for accounting, payroll, inventory control and other operational tasks (Burgess 2003). However, there is growing trend towards using advanced application in by small business users is also evident in the literature. Berry and Wood (1998) reported that small business are deploying applications such as database, CAD/CAM, Electronic data interchange, end-user computing and other various advance tools. Almost all of the authors confirm that information is the most vital asset that contemporary organizations posses and it is the most important aspect of decision making in all levels of the management hierarchy. Managers utilize information resource to plan, organize, administer and control all the organizational activities that help in achieving organizational goals. In the current information age, small organizations needs high quality information and there success can be pronounced if they provide superior quality, better prices, and differentiated services as compared to their rivals (Pollard, 2006). The impact of information technology on decision making process is indecisive to an extent in the literature, probably because the data might be outdated. For instance, Some of the authors (Huber, 1990 and Davis 1984) have argued that the process of decision making is highly influence by the use of Information Technology while Dearden (1983) has argued that the impact of Information technology have meagre effects on strategic decision making which might be due to outdated data. The use of information technology on strategic decisions has been thoroughly examined by Mouoy & Schwenk (1995). They have examined the impact of information technology on the various phases of the decision making process mostly in the medium to large sized organizations. There findings revealed that information technology had the highest impact on the problem identification phase of the decision making process. Improvement in accuracy of the data for the identification of the problem set the foundation for rest of the phases of decision making process. The same research also concluded that the use of information technology led to improved data through the use of computer networks. The use of information technology also had an effect on the appropriateness of media used which resulted in timely decision making. Huber (1990) deduced that the use of information technology leads organizational intelligence that is more reliable, timely, comprehensive, and accessible. Many of the studies have confirmed about the substantial benefits that can be derived by utilizing information technology in small firms. It has been confirmed that information technology enhances the quality of decisions as well as it improves the firm’s effectiveness with respect to its competitors. According to the findings of the research conducted by Thong, Yap, and Raman (1996); information technology assists small organizations in developing their markets and customer base, increasing sales turnover, improving profitability, securing a strong position within their respective industry, and gain a competitive advantage. One of the researches clearly shows that those small organizations which possess the tool of information technology have higher revenues than those whom do not posses IT (Berisha, 2009). Doukidis, Smithson and Kybereas (1994) identified other few benefits in addition to the mentioned above which includes; Improved performance within the organization Greater internal and external control of operations New ways of managing the organizational activities Improvement in the management mindset and penetration of the external business environments Possibility of new organizational forms Delivery of high quality package of product and service. AIMS AND OBJECTIVES OF THE RESEARCH The key aim of this research is to analyze the effects of information technology used by Kuwaiti Managers in small business sectors to support their decision making and in a nutshell it would be answering the following questions: What are the dynamic affects of Information Computerized Technology use by Kuwaiti Managers in small businesses sectors to support decisions making? Is there any significant difference in use of information technology between the different sectors? Does information technology as a whole in small business sector serve as an administrative or strategic tool to support decision making? What are the influencing sources of Information Computerized Technology use by Kuwaiti Managers in small businesses sectors to support decisions making? Does the level of information sharing differ for different level of users (Employee or Managerial)? If different users are given equal access to the information than does it affects the quality of decision or either it remains the same? What are the characteristics of the users who made high-quality decisions even if they were given equal access to information as others? What must be done to enhance the use of Information Computerized Technology use by Kuwaiti Managers in small businesses sectors to support decisions making (from Information Technology perspective)? RESEARCH METHEDOLOGY There is no statutory definition of “small business” and many of the researches have chosen a variety of thresholds. Some of the researches have chose less than 50 employees as a condition while others have chose less than 100 employees as a standard (Angel, 2001). Since we know that Kuwait is not as densely populated as other countries therefore we will use less than 50 people as a benchmark for conducting the research in different business sectors of Kuwait. There are two basic methods of conducting research; qualitative and quantitative. Quantitative research is mainly designed to manipulate the behaviour of subject of the study in a systematic manner. On the other hand, qualitative research aims to understand the complex social phenomena from the perspective of individuals who were originally experiencing the event. It is more subjective in nature and it expounds the perception of an individual for a subject. This research will deploy a combination of qualitative and quantitative procedure to explore the subject of investigation. Since it is imperative to understand the nature and behaviour of decision making among different managerial levels therefore we will use a structure questionnaire to gather data about decision making at the different segments of the organization. Questionnaires will be used because they are a formalized instrument for asking information directly from the respondents concerning the behaviour, demographic characteristics, and level of knowledge, educational attainment, and / or attitude, beliefs and feelings. They can easily enable us to quantify the results. Qualitative information will be collected through unstructured interviews from the owners and managers who have been attached with the organization for a long time. Since these individuals know each and every aspect of the individual therefore they can better explain the details of the effects of information technology to support decision making in their businesses. REFERENCES ANGEL, T. 2001, Information Technology Usage in Canadian Small Businesses BALDWIN, J R. et al 1999. Growth of advance technology use in Canadian manufacturing during the 1990’s. Research Paper No. 105, Statistics Canada BERISHA, M. 2009, The Role of Information Technology in Small and Medium Sized Enterprises in Kosova, Fulbright Academy 2009 Conference BERRY, R. and WOOD, J. 1998. A survey of information technology use by small business. Proceedings of 1998 ASBE conference, Dallas, Texas, USA BURGESS, S. 2003, Information technologies provide small businesses exceptional opportunities and Challenges, Information Technology Newsletter, 14, 1; pg. 1 DAVIS, D. 1984. SMR Forum: computers and top management. Skan Management Review, Spring, pp.63-7. DEARDEN, J. 1983. SMR Forum: Will the computer change the job of top management? Sloan Management Review, Fall. pp.57-60 DELONE, W H. 1988. Determinants of success for computer usage in small business. MIS Quarterly, 12 (1), pp.51-61 DOUKIDIS, G I. et al 1994, Trends in information technology in small businesses. Journal of end user computing, 6, 4, pp.15-25 FARHOOMAND, F. and HRYCYK, G P. 1985, The Feasibility of Computers in Small Business Environments, American Journal of Small Business, 9, 4, pp. 15-22. HUBER, G P. 1984. The nature and design of post-industrial organizations. Management Science, 30, 8, pp.928-951 MAHMOUD, E. and MALHOTRA, N. 1986. The Decision- Making Process of Small Business for Microcomputer and Software Selection and Usage, INFOR Information Systems and Operational Research, 24, 2, pp. 116-133. MORISSETTE, R. and DROLET, M. 1998. Computers, Fax Machines and Wages in Canada: What Really Matters? Research Paper No. 126, Statistics Canada MOUOY, S. and SCHWENK, C R. 1995. The Effects of Information Technology on Strategic Decision Making, Journal of Management Studies 32, 3 PALVIA, P C. and PALVIA, S C. 1999. An examination of the IT satisfaction of small business users. Information & Management, 35, pp.127-137 POLLARD, D. 2006. Promoting Learning Transfer. Developing SME Marketing Knowledge in the Dnipropetrovsk Oblast, Ukraine SHETH, J N. 1994. Strategic importance of information technology. Advances in Telecommunications Management, 4, pp.3-16 THONG, J. 1996. Top management support, External expertise and information systems implementation in small businesses. Information Systems Research, 7, 2, pp.248-267 Read More