Impact of the Internet on Management Functions - Case Study Example

 Abstract What a piece of work is man how noble in reason and how invincible in creature (Shakespeare). The great dramatist has given a true picture of his thoughts and the modern progress in the fields of science and technology has proved it. Ever since man has started to observe, think and reason he has been wondering about the world around him. He tried to find the ways to organize the disorder prevailing in the observed facts about the natural phenomena and material things in an orderly manner. Information Technology is the field of science which played an important role in changing the ways of life. Internet has made this world a global village. It has reduced the distances between countries. Although, internet is compulsory in all the fields of science and technology, business, etc. but in this paper we will discuss its role in the management operations. The application of the internet technology to traditional business and administrative activities has introduced considerable advantages and facilities those have given the business a new life. The purpose of this paper is to show how internet technology has dramatically altered the way businesses operate. I will assess and analyze the impact of the internet on a given industry sector or management function. E-business presents buyers and sellers an innovative form of communication and offers an opportunity to generate new marketplaces (Kenneth, 1998). In common it is recommended that the development of E-business outcomes in higher firm productivity and competence as a consequence of lower search and transaction expenses. Internet offers millions of people throughout the world to be in touch with each other by transferring computer files, searching databases, exchanging electronic mail, and even chatting with each other (Kalakota, 1997). The purpose of internet-based electronic commerce or E-commerce in manufacturing is at the moment receiving a global attention for the rationale that its promise of reducing the manufacturing costs and just-in-time or JIT applications (Godin, 1995). The Internet-based electronic commerce is quickly emerging as an entirely innovative method to carry out business and to take steps together with customers, suppliers and competitors. Ecommerce covers a numerous aspects of buying/selling relationships. It also covers lots of operations surrounded by the production processes. Throughout the earlier decade, consumers have utilized the internet as an inventive information standard and corporations have standardized it as a new method for distribution. Certainly, the internet is touching the socioeconomic behaviors and cultural activities of organizations and individuals (Soliman, 1997). In particular, younger age group who are awarded with new telecommunication and information devices, are inclined to place additional worth in its exercise for time off behavior, spend additional time on the internet for their personal requirements, and direct online consumption by joining in e-shopping and e-auctions. For these causes the analysis and forecasting of the innovative generation’s behavior patterns are a significant aspect in setting up business models in several zones of the economy, particularly in distribution and telecommunication industries (Cawley, 1997). So many studies have been performed on the scope to which the internet influences us. E-commerce is most likely one of the majority popular subjects between most of the studies on the effects of the internet. Several studies regarding business to customer internet shopping have been done to recognize main factors influencing buying decisions on the internet, which comprise, in common, the psychographic and demographic characteristics of customers and the excellence of products or services. Numerous reported their results regarding E-commerce and internet practice, claiming the potential of e-commerce as an innovative retail channel (Kende, 2000). Though, the majority studies have not taken into account the computer network environment as a main part of their analysis. I have researched several studies and in this paper I have presented the most recent thoughts and trends regarding the internet impacts on the industry sector or management function. In current few years, a variety of business activities and transactions on the internet has augmented and gone on to rise rapidly. E-commerce has been transformed from tentative and hazardous business adventures into legitimate and sophisticated business carry outs. At the same time as the long-established techniques of carrying out business are up till now in existence, e-commerce has opened up a fresh frontier for individuals and companies to join in economic, business, and trade activities. Sales capacities in Ecommerce are added up in billions of dollars. The expansion of business on the internet has significant impacts on business information services in terms of distribution, access, information production, organization and retrieval. Web sites presenting business information on the internet are propagating in a range of formats and wrap virtually each business area. While governments at all stages and well established publishing corporations that conventionally recommend business information are up till now dominant in offering most important products, thousands of small businesses have developed their own websites to market, support and sell their goods and services (Liu et al, 2000). In the next section I will present the discussion that: How internet dominates the Industry and Business Sector, then the section following it will discuss the Internet and Businesses Startup and Present State, this section focuses on the starting collaboration between internet and business and the present stages of there working. The next section visualizes the Impacts of the Internet on Industry Structure, and then proceeding section contains complete discussion on the Impact of the Internet on Operations and Management. Then I will discuss the Negative impacts of the internet on industry sector and E-business. The future of the Internet based Business and enterprise management is next topic in this paper. Then last section contains the conclusion and references. How Internet Dominates the Industry and Business Sector During the research I have found out the factor that has mainly contributed to the successful incorporation of internet into industry sector or management function, which is business information. Not only business information alone: but its continuous availability in a rapid and useful way. If you have current business information availability through more proper and faster channel then your business flourishes (Kotler, 1997). You have business information on current trends to market your product, you can use this faster medium to advertise and market your product; you can mange your business that is located on other place with the help of current business information about it and many other implementations. So the internet is the only medium that fits and offers all facilities to transfer process and manage your business information (Kotler, 1997). Before going into the depth of our main topic let’s discuss about business information. Information can be understood differently in special contexts. It can be described as a data, knowledge, product, statement, facts, and energy. Information is deemed communication when people communicate and trade thoughts and data with one another. People turn out to be informed during the communicating and exchanging course of action. Information is frequently considered as facts, like as an event that took place. Although facts may have an effect on the people’s decisions regarding subject of what they map to do. Information is frequently regarded as data. Digital symbols of zeros and ones may denote nothing to several people but contain a great deal of information for computer scientists. Information is frequently viewed as knowledge. But knowledge goes far further than awareness of facts and symbols (Cawley, 1997). It is alarmed with interpretation and reading based on facts and experiences and reaches an elevated level of intellectual capacity. When information is considered as a product it has an economic importance and can be demanded and supplied at a convinced price level in a competitive market. Individuals or organizations possessing information pertinent to their decision making would be able to take full advantage of their wellbeing and play down risks and costs and have improved control over the situations they are in. The mainly relevant and practical definition of information for the field of business is that information is an expensive commodity (Kotler, 1997). A number of people achieve information for entertainment. Others search out information for making business decisions. In spite of the reason of getting information, they are all keen to pay for information. When an information product is priced, demanded, and sold in a competitive market, it has an economic value. The scope of business information is as spacious as the field of business and would able to be improved by conceptually classifying it beneath standard of business disciplines or subjects. Like any other goods and services produced in an industrialist economic system, business information produced by profitable organizations is planned to generate profits (Vassos, 1996). Business information on the internet: The rapid increase in use of the internet not simply has dramatically changed the method business is conducted, but as well as has a wonderful impact on the way business information is provided and utilized. Business information resources that have appeared on the internet would able to be categorized into main business areas, like as corporation information, finances, finance and investment, international business, real estate, and promotion (Mougayar, 1997). Internet and Businesses Startup and Present State In year 1981 the number of internet hosts was just 213. In the year 1999, this number rises to 56,218,000. The number of web sites has been mounting exponentially from the time when 1994, when web browsers having better quality were developed. Web browsers very much facilitate the exercise of the internet. The appearance of the internet, mainly the World Wide Web, makes it probable to do business online. E-commerce has turned out to be a speedy growing industry. Businesses have been pouring on to the internet in current years. By 1999, dot-com registrations had accounted for 79 % of total dot.com, dot-net and dot-org, and registrations joint (Shin et al, 2004). The business sector is becoming a dominating and driving force on the internet. Businesses employ the internet to market goods, negotiate business contracts fill out orders, and carry out marketable transactions (Shin et al, 2004). A number of corporations have previously integrated the internet interested in their tactical planning, as the internet has turned out to be an indispensable division of their business operations. Financial and investment services are increasingly widespread on the internet. Millions of little investors are able to get real-time stock quotes from services offered by several online brokerage firms. Banking transactions are able to be prepared over the internet. Customers can shop in virtual malls. Innovative car buyers are proficient to look over the features of innovative cars in virtual show rooms. There are reasons for the expansion of commercial use on the internet (Liu et al, 2000). The eventual aim of private enterprises is to produce profit, which is, of course, a dynamic power of the capitalist financial system. Private enterprises engage in exercise a crucial role in humanizing productivity and generating wealth. In common, there are an amount of conducts of making profits: by increasing income or reducing expenses. Increasing sales will raise incomes. Whole business everyday expenditures are able to be condensed by cutting administrative and operating expenses. The internet can be employed to conquer both purposes. A corporation can arrive at out to its customers and market its products and services by making use of e-mail and creating web pages. Customers can not merely obtain information on the company’s products and services; they can as well correspond with the corporation’s sales and service representatives if they have queries concerning the goods. The business can accumulate a huge deal of its financial resources by using the internet to carry services, offered guidance programmers, hold virtual meetings, cut travelling operating cost, make stronger internal communications, speed up buying cycles, and reduces long distance phone call and fax expenses (Liu, 1998). Impact of the Internet Industry Structure Venture’s accomplishment depends not simply on internal procedures, as well as on an enterprise’s background. Additionally, it also depends on the enterprise’s business in which it has a competitive benefit, as its background and manufacturing are not one and the similar. I have collected five points those are illustrating the critical feature of an enterprise’s capability to realize market value as given below: (Vitt et al, 2000) First is the industry competition: The Internet intensified business competitiveness. More competitors: The internet gets rid of the time phase constraint to business, permitting the number of competitors to persistently enhance, fueling competition. The next factor is Competitive pricing aggravated: The purpose of the internet permits prominent and low set costs to turn out to be base level costs, growing competition (Liu et al, 2000). The second one is barriers to entry: The internet’s outcomes on barriers to entry are summed up in these areas: Using the instance of the service industry, an industry that has not refined absolute employ of the internet, the results of bringing in an non market concern such as the internet smashes down barriers to entry. For the innovative internet market or those businesses that have organized complete utilization of the internet, the internet creates barriers to entrance increase; this is personified in capital barriers and user blockades (Kalakota, 1997). The third point is replacement products: Substitution of customary products and services production. The manifestation of the internet fashioned latest techniques for release of services and goods, reasoning customary means of service and manufactured goods relief to turn out to be obsolete and alternates. Substitution of product and service content: The materialization of the internet transports inventive commercial application, escorting in innovative competitive products and services. This carries new difficulty to existing and traditional industries. The forth one is decrease in goods supplier’s bargaining power: Although the internet has placed new vendors to handle with additional customers, it has acutely augmented the pressure for several individual business’ state of competitive affairs; if a business’ individuality and exceptionality is not prominent adequate, a consumer’s buy margin turn out to be extremely large. This guides to lesser bargaining authority on the part of the supplier (Mougayar, 1997). The last point in this scenario is bargaining power of the consumer increases: Market clearness is quite important with the internet, permitting consumers the capability to estimate products at one time crossways a variety of suppliers. This permits them to simply find the most excellent bargain in a short amount of time. As internet value gets better, understanding its force on business is increasingly significant. These regions are: (Carlton et al, 1998) Present business circumstances, Changes to barriers of entry, The allocation of facility between consumers and suppliers, And the contour and structure of competition over alternate supplies. Now I will discuss about value chain. How value chain has changed or effected through internet’s impact. The pattern of value and value achievement is at the spirit of business operations. Value chain analysis techniques can smash down business operations into a number of interrelated strategies, behaviors, and assists analyze the value creation procedure. One business’s value chain comprises key objectives and auxiliary objectives (Shin et al, 2004). I want to discuss the example of the Dell. Dell Inc. has altered value chain methods by the internet: Intra-logistics. In practicing close dealings with other companies. Dell firms totally restore their intra-logistics. For instance: Dell acquired a computer monitor from Sony for put on the market. The monitor, though, was not brought from Sony explicitly to Dell warehouses; as a substitute the monitor components were gathered by Dell at the Sony assemblage plants per a contract reached among Dell and Sony, following which it was sent directly to the end customer. This condensed the constraint for Dell to endorse storage and warehouse services and removed the want for transport among companies (Changchao et al, 2007). Operations: This comprises indispensable actions related with product manufacturing and services. Dell upholds a close link among their user-friendly website and their components gathering place Marketing and sales plan to lead customers to convinced purchases and purchasing techniques. For instance, Dell moved the most considerable element of its marketing operation to their online site, thus dropping costs (Changchao et al, 2007). Customer Service: In conditions of the post-purchase segment this comprises system setting up and setup, and prerequisite or exchange of workings. Dell customers are able to use customer service straightly by means of the business website element committed to post-purchase service, comprising a live-service infrastructure team (Changchao et al, 2007). The significance of internet value chain behavior differs athwart industries. Similar to Amazon.com, industry objective customers based on their background, in keeping trail it online, it permits customers to produce their own value chains (Shin et al, 2004). Impact of the Internet on Operations and Management Now internet has transformed the whole world into a global village and now business is also turned out into a global business and there is incredible scope in it, with the civilization and innovative technology of the Internet, industries should squeezes this fresh technology, include the internet environment into their own, and create a number of appropriate changes: Like organization structure is changing: Internet commerce practices form a risk to the shape and organization of customary business. It eliminates the requirement for entity departments to depend entirely on division of labor and synchronization of only one job; production and delivery can at the present take place in parallel (Kenneth, 1998). Next the Management Styles is also changed: (Lynch et al, 1996) In this new digital management period, for the reason that of the change “one-to-many” information swap to “many-to-many” and the removal of one middle access for communication, proficiency in information exchange has very much augmented. The Production and Operations style change: The Internet’s has an effect on operations summed up in the subsequent regions: Reduction in business expenses: In year1996, IBM Personal Computer Group approved the advanced planning system for sales and production. By means of the system meant that buying specifically determined the required parts for assembly, thus dropping for inventory, growing inventory income, and keeps facility and storage costs at a lowest. Limit the production cycle. Developers utilize the internet to keep up-to-date the present market trends and fresh improvements. Get bigger chances for business dealings. The area of the internet transcends usual business hours, growing sales chances (Shin et al, 2004). Negative impacts of the internet on industry sector and E-business As the aim of this research paper is to discuss the impact of internet on industry sector and business. I have discussed the positive impacts, now its time to have a look at negative impacts of internet on the overall business and management. In this section I will describe few problems, roadblocks, or inhibitors that are associated with doing business on internet. These problems are classified by seeing that is internet is really creating problem in that area. I will discuss few problems and also presents some resolving techniques those are developed till now to resolve these issues. Security: Security is the biggest problem in the present internet business. We have learned about several bank hacking and online business frauds. As technologies evolved there are few evils that also evolved with this and have become a serious danger for the E-commerce nowadays. Most companies are now considering this problem and taking this more seriously for there money transfers and transactions processing. The directness of the internet comes with security risks. Downloading freeware or swiftly tested software of vendors from the internet present the hazards of virus infectivity and creating security holes in a client system. Ear dropping, and hijacking exclusive information by inadvertent parties and hacking by burglars are as well impending dangers in doing business on the internet. Consequently, firewall products, authentication and endorsement products, and safety audit products seem to be required (Cremer et al, 2000). Information overloaded: Gradually the internet is congested through information to such coverage that now the authentic and useful information search is a enormous confront. There is so much information overload on the internet and the information on the subject of any product or and business query results you a bulk of information. The study and finding useful information now became a time consuming job. When internet and WWW are utilized as an information base, the majority of the information base may proffer modest advantage to a person at a definite time. On the other hand, one may not succeed to notice the critical information for the reason that of the difficulty to get perfect search results from such a big information base. Search engines are at hand, but development can be made, for instance, to personalize the information search and improved content hunt and concept search (Shin et al, 2004). Lack of applications: Even though the WWW technologies have developed at such a swift rate, the applications on the internet are up till now imperfect comparing to the universe of all business applications that are putting into practice in the conventional ways. Customary business applications are: electronic commerce, online transaction processing, enterprise networking and data warehouse. A number of other applications that are additionally customer oriented are entertainment and education online. Though, there are fairly a small number of applications previously on internet that fall into these groups, there are still chances in re-implementing established applications on the net and/or rising latest applications (Cremer et al, 2000). Lack of proper policy and regulation for business management: Given that there is no obvious guideline and policy on how business has to be carried out on the internet, there will be business and lawful issues that companies would have troubles to deal with. For instance, internet would able to be employed by-pass regulated telecommunication services and could be distorted to perform unscrupulous or yet unlawful businesses. There are as well as subjects regarding intellectual property and officially authorized contracts in electronic forms. The opportunity in this section is to expand products to put into effect the regulation and policy. A number of security technologies used in providing safety features on the internet may be employed in this area (Liu et al, 2000). There is an important issue in which the user is irritated through the receipt of unwanted e-mails, or spam mails. The spam mails typically suffer from delivered instantly like other ordinary incoming mails. On occasion, “spammers” transfer not needed mail to a third party by means of other mail servers as an alternative of their own. These days a number of spam filtering or blocking mechanisms have been urbanized and are at hand, those theoretical setting is based on artificial intelligence. One more common difficulty is the penetration of computer viruses via e-mail. Hacking has been just about since the beginning days of phone systems or mainframe computers, and with the progress of network technologies, hackers at the present smash into any computer, comprising major government systems (Carlton et al, 1998). Future of Internet based Business and enterprise management These days information technology is developing so rapidly that it is hard to forecast properly the future of internet based business and E-commerce. Though, skilled predictions and demonstrations are that internet based E-commerce will radically change the method of carrying out business in close to the future (Shin et al, 2004). It is predicted that in next ten years, the development of internet based E-commerce will exceed the expansion of customary commerce. It is the commercialization of the internet that is most important method to this amazing enlargement in e-purchases. The internet serves as a foundation for all of these inventive opportunities in commerce. With internet commerce at about $8 billion in year 1997, up 1,000 % from 1996, Forrester seemed at which industries were at the centre of the spectacular augment. According to the internet marketing research firm Active-Media projections pointed out that World Wide Web sales all the way through 2002 could total $1.5 trillion, or about 3 % of collective gross domestic product for all countries global. In adding up the market research firm Paul Kagan and Associates released ten-year profits projections for the interactive media industry, signifying that in the year 2007, the internet associated profits is projected to be $46 billion, enclosing goes up from a anticipated $11.1 billion for 1997 (Shin et al, 2004). Conclusions In this paper I have discussed advantages regarding the implementation of the internet in the business and industry sectors. I have provided analysis of factors that have enhanced through the implementation of the internet in the business sector. I have endeavored to explore and offer proof for the impacts of the internet on business and management practices. As I have observed, that internet has presented chances to business never seen before: chances to attain knowledge, to share research, to promote our products, to communicate efficiently as never before. A number of industry organizations launched headfirst into internet applications untimely on, capitalizing on these prospects. Achievement in internet based electronic business relies on how organizations strategically position their products and services throughout other Internet based electronic communities and intermediaries, in addition to on how they make easy the interactions with their consumers, suppliers, and partners (Lynch et al, 1996). In spite of these reimbursements and achievement stories a number of concerns remain to be resolved such as security. It is supposed that this anxiety regarding security will be lessened owing to a sequence of international developments. Other matters regarding the enlargement of the internet are the requirement of: governmental stance, access, reliability at service levels, integrated applications and awareness of the Internet based E-commerce capacities and lastly the relative cost of necessary technologies (Liu et al, 2000). 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