The Role of Internet-Enabled Platforms for Entrepreneurial Firms - Essay Example

 The Role of Internet-Enabled Platforms for Entrepreneurial Firms Introduction In the prevailing business scenario, market competition and technology is dominating the business process. In the words of Mitchell et al. (2002), rapid development in information and communications technology (ICT) has brought upon the transformation of the business firms. Multinational firms are operating in all over the world from a single point of contact, direct communication networks are being used for customer interaction, data collection and, sharing and analysis are being performed from a shared database accessible from any corner of the world. All these activities are conducted with the support of internet based services. The role of internet based platforms in the contemporary scenario has also allowed the management of organizations in enhancing the effectiveness of their decision making process (Kuratko, 2005). The aims of this report is to analyze the role of internet based platforms in context of the entrepreneurial firms. The report will compare the theoretical underpinnings of technology use and innovation with the ongoing practices in the practical situations. Selection and Justification of Journals Considering the essentiality of analysing the theoretical papers relevant to the subject topic, the researcher has selected all the sources from journals approved by Association of Business Schools (ABS). The papers selected for performing the study are related with the entrepreneurial knowledge and performance in context of innovation and technological intervention. For instance, Knowledge Spillovers and Strategic Entrepreneurship by Agarawal, Audretsch and Sarkar (2010) focus on the information management process and the factors resulting in knowledge spillovers in firms. The paper highlights the implications of using internet based services as well as other technological means for managing information resources in business. On the other hand, Lawson and Samson (2001) considered the enhancement of innovation capability of a firm and the approaches for doing the same in their paper Developing Innovation Capability in Organisations: A Dynamic Capabilities Approach. The paper argues the point that innovation management can be included within organisational capabilities. Sullivan and Weerawardena (2006) in Networking capability and international entrepreneurship: How networks function in Australian born global firms concentrated on the process of internationalisation of small firms with the help of innovation and technological means. The factors driving the SMEs to expand their market place and the role of networking were the key theme of the paper. This paper helps in understanding the roles of entrepreneurs in a larger market and how they use their technological resources for driving results. Realizing Product-Market Advantage in High-Technology International New Ventures: The Mediating Role of Ambidextrous Innovation Hughes et al. (2010) analysed the role of ambidextrous innovation process in the strategic decision making and performance of firms in relation to high-technological use. Apart from these resources, other journals used in the study also conform to the criteria of ABS. The researcher has ensured that all the sources are authentic and cited in other academic papers also. Entrepreneurship and Innovation As per the observations of Rauch et al. (2009) and Lawson and Samson (2001), the relationship between innovation and entrepreneurship is based on the compatibility of the entrepreneurial skills with the needs of the business. However, Zahra (2008) broadened the scope of the relationship by stating that innovation is used as a means for initiating changes in business processes for improving its performance. Aligning both these statements, it can be noticed that technological innovation can help a business in initiating its transformation process. On the other hand, Krueger (2007) mentioned that entrepreneurial skills such as vision and leadership are also being influenced by technological innovation. Innovation for an entrepreneur can be of any form, it may be a new product development or changes in the existing system of work. In relation to technological aspects, one of the most common examples of technological innovation in business systems can be Enterprise Resource Planning (ERP) implementation. Implementation of ERP is performed in order to connect the functional departments of a firm and also improve the database management system of the company. However, it needs a stable and high performance internet system in the organisation (Bingham, Eisenhardt and Furr, 2007). Considering the example of ERP, the influence of internet on the relationship between entrepreneur and innovation can be highlighted. Apart from this, other forms of technological innovation that are vibrant in the present scenario include social media marketing process, cloud computing, etc. Agarawal, Audretsch and Sarkar (2010) noted that firms are now operating in a virtual environment along with the real world because of extensive use of internet based services. The communication process has moved from telephones and meeting to social media networking or information sharing on company website. Even the service structure of the firms is changing as internet has created a virtual market with the concept of online shopping. Considering the implications of these changes for an entrepreneur, Hughes et al. (2010) stated that internet has simplified the process of business decision making and management without doubt but has also increased level of competition in the market place. Thus, it can be noted that the relationship between entrepreneurship and innovation has boosted the transformation process of business but has also reduced the control of the entrepreneurs on business functions. Inclusion of Internet Enabled Platforms in Entrepreneurial Strategies As mentioned in the previous segment, two most commonly used internet based platforms are social media networks and ERP systems. Other crucial aspects include cloud computing, information sharing channels, database management techniques, security systems etc. Sullivan and Weerawardena (2006) noted that internet has long been a part of the corporate world, but the growth in its use mainly initiated during the later part of the 20th century with the network boom. The changes in resources and means of business have also modified the roles and responsibilities of entrepreneurs. For instance, owner of a business can consult the information provided by the ERP software for measuring the performance of the workforce and take appropriate decisions. Big organisations such as Heinz have reported that inclusion of ERP has accelerated their business productivity and helped them in meeting their market demands; meanwhile, Marriott International uses cloud computing for updating their customer database and sharing it across their global operations for improving their service structure (Coviello and Jones, 2004). According to Lages, Silva and Styles (2009), entrepreneurial decisions are not based on intuition but on information and hence, managing the flow of knowledge among the departments of a firm is crucial to business decision making. With the help of internet services, this can be performed in accurate and faster manner. Zhou, Yim and Tse (2005) opined that the most beneficial use of internet is the improvement of communication networks. Firms can now communicate with their entire stakeholder base by employing internet based means such as online publications via company websites or chat systems, social media networking, video sharing, etc. These aspects have enhanced the value for business interaction process and also boosted the operational processes. Another crucial role of internet based platform is change management. Hertog (2000) stated that internet based platforms or in broader sense, information and communications technology has initiated rapid changes in business systems. Any updates in the ERP or communications systems can influence the work structure of the firm and hence, needs effective change management processes (Scott, 2006). In this regard, internet based platforms have helped entrepreneurs in monitoring the response of the workforce in change management processes of firms. Social Entrepreneurship and Internet In the words of Zhao (2005), social entrepreneurship is the approach by the owner of a business to solve a problem related to a society or community. The willingness of business houses to make a positive impact on the society is explained in the concept of social entrepreneurship. Relating this concept with internet, the first major element that springs to mind is that of social networking sites. Most of the scholars such as McElwee and Atherton (2005), O'Cass and Weerawardena (2009) and Pittaway et al. (2004) have analysed social networking sites as a means for performing online marketing activities of business firms and also developing a steady communication channel with their stakeholders. However, Schaltegger and Wagner (2011) analysed that social media networking has increased the transparency in the business process and has helped them in reflecting their involvement towards social expansion to the world. Gray (2006) criticised that social media networks have shifted the balance of power between buyers and sellers. As customers have unlimited access to the market information because of social networks, the social entrepreneurship process can be created positive as well as negative impact of the brand image of a firm. One such instance of negative brand influence was during the Gulf of Mexico oil spill in 2010 by British Petroleum (BP). During that period, BP was highly criticised for the action and their stock performance dipped in the real-time market. Social entrepreneurship however involves a wider scope than that of social media networks. Groen (2005) noted that social entrepreneurship has been positively influenced by internet based platforms in terms of promoting their vision and generating awareness among the target stakeholders. Social media networks have helped social entrepreneurs in informing their customers regarding the issues being tackled for social development and in the process, has also attracted investors and shareholders for firms. In other words, social media networks have amplified the size of audience for the social entrepreneurs. Open-source appropriate technology is one such example that has allowed the social entrepreneurs to connect with themselves and engage in problem solving for the global communities. Role of Internet Platforms in Information Resource Management Information resource management as defined by Åmo and Kolvereid (2005) is the process of ensuring that the technological resources of a firm are being used in an optimal manner to solve the business problems. Information resource management has also been defined as the process of creating a stable network for ensuring effective communication and knowledge transfer within the functional departments of a firm (Gibbons and O'Connor, 2003). In the contemporary scenario, almost all the activities associated with information transfer or accumulation is being performed on internet based platforms such as local database or shared database. It was previously stated that international hotel chain Marriott International uses cloud computing for connecting their business networks and enhances the service value of a firm. O'Cass and Weerawardena (2009) however argued that information resources include internal as well external environment of a firm and hence, it is crucial to ensure the security of the database of a firm. Carrying forward the condition of information security for entrepreneurial organizations, multinational firms often create security in their database for reducing information leakage. Nevertheless, internet protocols are being verified to certify that the networking of information is also secure. Lages, Silva and Styles (2009) mentioned that internet based services are mainly considered for information management activities of a firm as well as for performing their marketing and communication functions. Both these activities involve, collecting, analysing and sharing of information in order to improve the business performance of a firm. The role of an entrepreneur is also influenced because of these actions as decision making process becomes easier. Furthermore, with the help of management system accounting and Management Information System (MIS), firms are able to control the flow of information among their internal and external stakeholders of a firm. Entrepreneurial Opportunities and Internet Platforms Entrepreneurial opportunities in relation to the functions and role of internet platforms have expanded in a key manner. Hughes et al. (2010) observed that with the help of internet based platforms, top management of a firm can not only direct the workforce, but also control them in the desired manner. For instance, in case of American automobile giant, Ford, ex-CEO Alan Mulally highlighted extensive communication strategies with the help of internet based platforms such as company website, intranet system of the firm, third-party networks, social media networks, video sharing websites. Mulally was able to transform the entire work structure of the company and its subsidiaries by constantly communicating with the employee base of the firm (Coviello and Jones, 2004). The result of the activities of Mulally was beneficial for Ford. This shows that with appropriate use of technological resources and internet, an entrepreneur can change the performance of their firm as well as gain control over the business results. Although some scholars such as Krueger (2007) and Zhou, Yim and Tse (2005) have noted that internet based platforms have reduced the control of business management on the communication and information related activities of a firm, the outcome of internet usage depends mainly on the nature of use. On the other hand, entrepreneurs are now able to measure the market trends and performance of their firms within moments with the help of analytical tools available in internet platforms. This has simplified the decision making process of firms. Furthermore, Lages, Silva and Styles (2009) stated that growth in ICT and internet services have allowed the firms to drastically expand their customer base, the firms are now able to highlight their services, products and brand image across various geographical regions as well as in the virtual world. Limitations and Future Direction of Research The study has focused on the role of internet based platforms for entrepreneurship. Although the researcher has used all the sources from renowned and ABS accepted journals, there were more journal articles which could have been used in the research. The restricted access of many online sources has also hampered the effectiveness of the study. Another important gap in the research is unavailability of primary data. In order to analyse the role of internet based platforms in entrepreneurial systems, the understanding and concerns of the entrepreneurs in the real world is needed. Nevertheless, because of time and monetary constraints, the researcher cannot perform the same. Considering this study, further analysis and improvement can be made in the subject by expanding the scope of research. Future studies can be made in this subject by focusing on specific internet related services and resources that can help the entrepreneurs in improving their skills and business performance. For instance, the role of ERP and social media will display huge information in context of business management and entrepreneurial development. Another direction for pursuing the study can be made by analysing the change management process of a firm with the help of internet or ICT based services. These study and analysis of these subjects will shed light on the contemporary entrepreneurship process and the use of technological resources in business. Conclusion Use of internet in the business processes has changed the roles, responsibilities, functions and aims of business entrepreneurs. It was noted that internet based platforms are being widely used in the business domain for performing planning and implementation activities. Internet has not only helped in connecting the buyers and sellers, but has also improved the networking within a firm. An entrepreneur is able to control the resources of the firm with constant monitoring while designing the step for business development. 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