Information Technology in Managing International Business - Literature review Example

Information technology in managing international business xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Instructor xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date The benefits of adopting information technology in managing international business depend on the size of the firms It is quite evident that the revolution of information technology is sweeping through the globe. Chan and Reich (1999) maintain that, no organization or business can escape the effects of information technology. The constant reduction the cost of accessing, processing and transmitting information is changing the way international business conduct their businesses. Information technology becomes incorporated into all aspects of the business; it provides businesses with the potential to have efficient operations that are cost effective and quick (Chan and Reich, 1999). In relation to numerous business practices, the benefits provided by information technology are many as they provide numerous activities it increase productivity, streamline processes, develop both new and innovative services and products and finally, to enhance a large customer base. More successful international businesses can serve as a catalyst for countries’ economies that are experiencing growth challenge by way of establishing added value. In order to add value, international businesses need to be increasingly agile and innovative through exploiting the potential that is offered by the use of information technology (Chan and Reich, 1999). This paper will discuss the benefits of information technology in managing international businesses depend on the size of the firm. It is evident that large organizations have more resources to adopt new and innovative technology allowing them to have a more competitive edge over their local and small counterparts (Claycomb et al, 2004). Here, information technology enables large businesses improve their efficiency and focus on development agendas that add value. For instance, employees with a good understanding of the potential of information technology can enhance innovation and creativity especially in the research and development areas (Claycomb et al, 2004). In addition to innovation and creativity, IT allows improvement in sales, promotional channels, marketing and assists in the distribution channel through more improved stock control and order tracking services (Ryssel, Ritter and Gemünden, 2004). Companies such as Coca-cola will effectively benefit from the use of information technology through managing their production, establishing new sales channel by way of online marketing as well as business to customer e-commerce. The rapid evolution of information technology, most international businesses designs a website so as to be in a position to display company products and information. According to Claycomb et al, (2004), these large organizations encourage their clients to visit their website so as to find information about new products and company operations. Further, multinational organizations have realized the importance of virtual communication. Through virtual communications, most international businesses are able to hold a virtual conference between businesses in different nations. According to Claycomb et al, (2004), most international businesses find the virtual conference helpful since it saves their time and money. For instance, businesses that want to discuss a business deal should asset a place and time to meet but with virtual conference there is no need for all these (Prasad et al, 2001). In the business environment, information technology is changing the way international businesses operate. Large firms are in a position to enjoy the global business environment. IT, is affecting the way the whole process through which international businesses are creating their products (Dess et al, 2004). Additionally, IT is reshaping the product, its whole packaging so as to create value for their consumers. Here, IT benefits large business more as compared to small businesses through supporting as well as complementing the business strategy relative to the business environment. International businesses understand that strategy development should be a two way processes between business and IT (Porter, 2001). The fact that IT is becoming much more central to the delivery of business strategy and development, there is need for businesses to adopt IT. Dess et al (2004) maintain that, research shows that if IT is not compatible with business strategy development, then the business is unlikely to work towards a common goal at the same time. Dess et al (2004) maintain that, information technology is permeating the value chain at any given point transforming the method in which value activities are performed and the nature of their connection. Here, the benefit linked to information technology is the fact that it affects the competitive force as well as reshapes the way business products meet customers’ needs. This reason explains why the use of information technology has acquired a significance benefit in value activities compared to other technologies. Clearly, every business activity comprise of both information and physical component. Dess et al (2004) maintain that, the physical component include all physical activities need to perform an activity whereas the information component comprises the various steps required to obtain, manipulate and channel information essential to perform activity. Further, IT generates more data as a business performs it various activities. Such technology is important in analysis creating room to use the expanded data (Egan, Clancy and O'toole, 2003). In large organization, IT has constantly increased the ease of connection between organizational departments, individuals and also with other businesses. Applications such as voice messaging, electronic media and social medial has been helpful in facilitating communication as well as coordinating the information needed for organizational processing(Egan, Clancy and O'toole, 2003). Further, IT helps large businesses to eliminate the barriers associated with place and time in decision making. It removes businesses boundaries through allowing easy asynchronous communication between different places so as both time of day and time zone are not a barrier (Pires and Aisbett, 2003.). For large business, IT has enabled them to speed the process of processing information so as to allow timely decision to be made. Here, IT allows task to be performed rapidly thus taking advantage of new opportunities in today changing business environment. Egan, Clancy and O'toole (2003) assert that, IT allows large businesses to develop new uses of IT that offer flexibility while at the same time stimulating different responses. This flexibility enhances customer services. Here, customers are able to have better, faster and efficient services. Increased IT usage by large businesses enables them to create numerous institutional capabilities. Egan, Clancy and O'toole (2003) asserts that, within businesses, information technology speeds up and reorganizes their administrative procedures, the volume of information and higher sharing as well as collaboration of experiences(Georganta and Hewitt, 2004). It is quite evident that these functions are very essential in the context of expanding business opportunities. Due to the significant role IT plays, their sale strategies can have a direct capacity building. Large businesses such as Disney Theme Parks have been engaging their efforts in building their institutional capacity through the use of information technology thus their continuous success (Georganta and Hewitt, 2004). For large businesses as opposed to Small and Medium Enterprises, the benefit of managing information technology in today global business environment have to be moving target but is also the catalyst for both advancement and growth especially in the ever expanding realm of information communication and technology (Hill and Scudder, 2002). While there are numerous software applications to be used by these businesses, there is the benefit of supporting decision making by both employees and management. There are various information technology systems assist employees grade their incoming support calls and later tabulate the result so as to understand the different methods of improvement can be employed to employee training to enhance customer satisfaction (Osmonbekow, and Gilliland, 2002). In addition, innovation information technology helps employee to communicate product design capabilities and market requirement across customer and thus, understanding on how to leverage and prioritize resources, knowledge and increasing creative problem solving techniques (Hill and Scudder, 2002). There is an ever growing independence between an organization business capabilities and its information technology. Large businesses have realized that changes in rules, strategy and business process require in changes in telecommunication, databases, hardware and software which define their information technology (Martin and DeHayes, 1998). Hill and Scudder, 2002: Interdependency between information technology and business strategy The use of internet across the globe as increase and therefore large businesses have adopted the use of this information technology to reduce operating cost on a more international scale. Large businesses core processes are effectively accomplished through the use of digital networks (Hill and Scudder, 2002). This interdependency creates operational excellence for these large businesses. According to Kaibori (2001), the benefit of digital operational excellence allows improvement of efficiency thus attaining higher productivity thus increased profits. For instance, Wall Mart one of the leading retail store has linked suppliers to every store through the use of internet thus establishing a superior replenishment system for the organization. Today, global business environment demand large businesses to quickly develop as well as offer products and services that will meet customer wants (White, 2002). Large organization can not be in a position to do this if they do not adopt the use of information technology (Kaibori, 2001). Information technology assists in converting processes with numerous intermediate steps into processes that normally take part directly to the end result. Here, IT allows each function to enter and recover information from its databases each time this information is needed (Kaibori, 2001). According to Kim and Kim (2000), information technology has led to the creation of work flow software that has numerous benefits to large business as compared to small and medium businesses. Work flow software is a software package that normally automates business procedures. The work flow software enable large businesses management in various locations to collaborate, design and manage business information that earlier was handled manually. Also with mobile PDA’s and mobile phones, customers and the large organization are able to collaborate with one another at a more frequent basis (winter, 2000). According to Kim and Kim (2000), this is important in strengthening customer relationship this increased customer satisfaction. The mobile phones have technologies such as instance messaging which large companies’ uses to notify their customer of their new products or improved existing products (Martin and DeHayes, 1998). Clearly, information technology continue to benefit large business such as Unilever as these businesses now operate in a global platform with no regard to time, distance or geographic location. According to Kim and Kim (2000), technology allows these organizations to score the international opportunities thus continue to create value for themselves. A good example is FedEx which an international provider of shipping services is a leading shipping company due to their continuous effort to embed information technology into the business strategic planning (zur Muehlen, M2004). For FedEx, information technology is what runs, connects, and support their business process so as to provide maximum efficiency in their operation as well as carrying out their strategic plans. According to Kim and Kim (2000), despite the numerous benefits of information technologies on large businesses, there are various challenges and risks in implementing IT today. The rapid changes in business environment as well as technology require the large businesses to take the leading role in managing the challenges these changes bring (Leek, Turnbull and Naude, 2003). These risks and challenges can either be external or internal and they range from organizational barriers, changes in the economic environment to complexity of the technology. Evidently, the changing environment in information technology require organizations to adopt a clear vision and mission to fruitfully realize the benefits while at the same time manage the risks (Leek, Turnbull and Naude, 2003). A more clear central strategy and vision will allow integration of IT thus taking advantages of the numerous benefits presented by information technology. Effective use of information technology to deliver goods and services that are tailored to the consumer changing needs is essential to any organization in today competitive business environment (Leek, Turnbull and Naude, 2003). To fully reap the benefits of information technology, large businesses must change the way it uses and views information and technology (Marcolin et al, 2000). There is need for these large businesses to evaluate existing process, look new approaches then effectively reengineer IT in a manner that deliver productivity. While there are various sophisticated systems, the large businesses must adopt flexible IT that provides so as to be in a position to consolidate strong customer relationships (Marcolin et al, 2000). In conclusion organization need to understand that the relationship existing between information technology and business processes is a cyclical one. It is therefore important for new business processes make IT more value and new as well as improved IT make more valuable businesses processes. Large businesses need to remember that the global business environment is changing and thus there is need for them to change with it. Evidently, the world has and is becoming a more dynamic environment and therefore, businesses despite their sizes must be in a position to adapt to the new as well as ever present changes that are occurring at an increased rate. Clearly, information technology is a central part of a company business strategy and can also to be term as a driving force behind globalization. Globalization to large business is a platform that leads new products and new ways of doing business. Additionally, it is very important for large businesses to develop a vision so as to see new technology that are worthwhile for their businesses so as to effectively manage as well as plan new business strategies that will determine their survive in today competitive business environment. Finally, large businesses need to realize that information technology alone does not guarantee a competitive advantage rather it allows integration and collaboration, innovation that is necessary in the implementation and management of business strategies. With effective information technologies, business will have the capabilities to reevaluate, monitor, modify and employ international strategies thus developing a global competitive edge. References Chan, Y, and Reich, B. 1999. Current practices to raise information technology competence in business managers. Simon Fraser University, 1999. Claycomb, C., Iyer, K. & Germain, R. 2004. Predicting the level of B2B e-commerce in industrial organizations. 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