Information and Communication Technology-Related Developments in Overseas Markets - Thesis Proposal Example

How changes and developments in communication and information technology may influence the coordination of firms’ worldwide operations. Introduction Information super highway or the internet has revolutionized the use and abuse of information and communication technology (ICT) in almost every sphere of commercial and non commercial activity. ICT has acquired a significant dimension in the coordination efforts of companies in their global operations. ICT is increasingly becoming the world’s most important determinant of commercial and trade related issues and actions (Browning, 2008). For instance its significance in the internal and external communication strategy of the firm in its global operations can be seen with regard to the level of its applications in coordinating inter-country and intra-country operations. The changing ICT environment at overseas branches and operations of firms has such a big impact on the ICT related decision making process. While multinational companies (MNCs) have been making use of ICT as the main investment related strategic policy alternative, smaller firms too have been making use of it in order to achieve positive synergies in communication. However while the former have being able to increase their net investment expenditure on ICT on a larger scale, the latter have only been able to increase ICT related investment on a smaller scale. As a result a clear dichotomy between the two entities can be noticed. MNCs have adopted growth oriented communication policy measures primarily with the intention of enhancing growth drivers such as merger and acquisition (M&A) related synergies while smaller companies have basically relied on capturing niche markets (Higgins, 2002). ICT related benefits have come to be identified with positive organizational outcomes as well. Therefore internal and external growth drivers of firms operating internationally are mostly determined by either the success or the failure of the average firms ICT policy. In fact according to recent World Bank reports nine out of ten companies engaged in international business operations have invested a greater percentage of asset related investment funds in ICT. This is because that such investment brings about a qualitative shift in their operational environment and capabilities. Such capabilities include incremental growth rates in financial management cash flow, quality, sales revenue and profits. While MNCs have successfully made use of ICT to achieve these organizational goals, smaller firms have been less successful because they lack adequate resource portfolios to engage in competition at every level of operations (Downes & Mui, 2000). Despite a series of ICT related investment successes by big businesses, there have been some policy related lags too. For instance the operational environment of business organization is constantly influenced by the changing circumstances in the global environment. The current economic downturn has played a very important role in changing the fortunes of many firms. Falling demand and supply constraints have forced many business organizations to adopt variety of ICT policies in their international operations (Cranor & Greenstein, Eds., 2002). According to available statistics already there are signs of falling ICT related investments in overseas operations of firms, though so far no fully-fledged study has been undertaken into a comprehensive assessment of the impact of the economic downturn. ICT strategy requires well defined organizational goals and such organizational goals might vary from one business organization to the other. For example manufacturing firms are faced with a different set of policy alternatives while service organizations have a completely different set of priorities and opportunities. Therefore it is very important to consider manufacturing firms and service firms separately. After all manufacturing businesses operating in international markets have much less flexibility in carrying out cross boarder imports and exports. On the other hand service organizations are able to carry out such operations by using ICT as the integral denominator in coordinating activities seamlessly (Klingemann & Sobell, 2007). Determining the nature and the extent of the ICT influence in coordinating activity in the international operations of firms is related to the organizational outcomes and/or goals while international market-based operations essentially influence the organization’s communication strategy to such an extent beyond the domestic level (Jensen, 2000). On the other hand firms adopt far reaching changes to the existing ICT policy and communication strategy with such huge expenditure programs when they expand into overseas markets. Given the opportunities that exist for such expansion and the way in which those opportunities acquire such a significant dimension in the international competitive environments would impact on the organizational goals. Thus environmental factors other than the nature and extent of market oriented competition and penetration would have an impact on the firm’s strategic intents. It’s not a secret that firms respond to the changing environment of competition abroad by adopting new ICT infrastructures. Therefore such strategic intents enable the firm to achieve corporate goals to such an extent that other variables remaining constant the ICT policy and coordination activities within the firm enable the management to design and plan ICT programs in recognition of the existence of such opportunities and their relevance to more advanced coordination efforts. MNCs would definitely have an advantage here while smaller firms are not altogether far behind because the latter could still strategically orient themselves to capture niche markets from big firms. Communication strategy and ICT policy play a very important role here. Thesis statement or hypothesis Cross border activities of firms are determined by the extent to which they use ICT to coordinate their international operations. The cost constraint apart, there are other bottlenecks in adopting an international ICT policy or strategy (Turban, Leidner, McLean & Wetherbe, 2007). The strategic operational environment of such business organizations is increasingly being characterized by the changing behavior of consumers. Therefore the real impact of ICT related strategies can be seen in the firm’s ability or inability to achieve ICT related positive synergies in its international operations. The ever increasing intensity of global strategies and ICT related policy shifts have invariably produced a process of global integration, niche market centric differentiation and innovative communication strategy. The centre of this galaxy of activity in the international business environment is the firm. Research aims or goals To establish a set of correlations and regressions between and among the most significant endogenous and exogenous variables that underlie global operations of firms that seek to coordinate their international efforts through ICT related strategies. To identify and address the causal factors of global ICT integration strategy of MNCs and smaller firms. To determine learning outcomes related to ICT policy initiatives of firms operating in international markets. These learning outcomes include the incidence or prevalence of strategic policy framework-based approaches in ICT related developments at the individual firm’s level. To investigate the a priori and a posteriori elements in globalization related issues which have a direct impact on the firms’ international strategic operational environment, more specifically the competitive strategy of the firm in capturing overseas markets and retaining them by using a difficult to copy communication policy (Werbach, 2009). Finally to examine the impact of coordination efforts and communication strategy of the firm on the organizational goals. Research problems What is the current level of ICT integration in the average firm’s global communication strategy as a primary source of coordination of efforts in international markets? Why ICT related global strategies of firms are central to the survival and success of them in an ever increasingly integrated market place? How firms operating in international markets orient their operations to achieve ICT related positive synergies such as big profit margins in niche markets and positive cash flows? When such firms exponentially increase their investments to achieve such synergies? Exponential growth process is perhaps the most dependable metrics-based approach of firms in ICT related coordination activity in international markets. Where such firms locate in order to achieve such synergies? Synergies have been defined to include all related benefits such as M&A synergies and market integration (e.g. EU) synergies. Thus the ICT policy and communication strategy are intertwined with the firm’s overseas operations. Literature Review As the available literature on the subject suggests there is a substantial amount of empirical evidence to support the ICT related overseas operations and their positive impact on growth drivers such as revenues, profits, market share, share price and integration across a number of market segments without truncation (Glaser, 2002). Independent analysts have identified three forces that determine the ultimate growth prospects of MNCs in particular and firms in general. They are, (a). Differences in the local business environment. (b). Level of global integration. (c). Global innovation in ICT in particular and operations in general. The application of processes and procedures in identifying differences in the local business environment is connected with the overall global business strategy of the firm. ICT is a single aspect of this global strategy. If the firm were unable to identify and isolate the important elements in the global operational environment, there would be much less of an opportunity for the firm to successfully integrate in to the global market environment. In other words the strategic global environment of competition and regulations would impact on the local product differentiation efforts of the firm to a greater extent (Lin & Atkin, 2006). Global integration of ICT related activity would have a definite impact on the global operation of the firm. But nonetheless ICT policy of the firm in coordinating international operations is basically dependent on the international business environment and the subsequent operational strategy. Assuming that the firm sells manufactured goods in a number of market segments abroad, such operations will be facilitated by a proper ICT policy. However the policy environment is not completely free from developments elsewhere. For instance manufactured goods require a well developed system of infrastructures such as road and rail networks, a good fleet of vehicles, well trained personnel and above all the latest communication equipment. Thus global integration requires even M&A related expansion. When M&A synergies become available to the firm, it is possible to increase market penetration through intensified communication and coordination. On the other hand a service organization would have much less trouble in increasing its strategic presence in the market because much of its operations depend on the ability to market the product by using better communication and coordination. For example good customer relations would enable the firm to reach the customer in right time at the right place (Info Tech Employment & Partnerships for Community, Eds., 2009) Finally writers have pointed out that worldwide innovation is essential for the firm’s ICT strategy to succeed (Cowhey & Aronson, 2009). According to a recent research studying the individual firm level innovation have a qualitative impact on the organizational goals and as a result the organization’s communication strategy and coordination efforts in international markets might suffer a setback if the management ignores the positive impact of firm level innovations. Some of the latest research efforts have focused attention on the following three strategies on ICT policy initiatives at firms operating in international markets. (a). Cross border strategy. (b). International strategy. (c). Transnational strategy. Though all three strategies look the same there are some essential differences between them when ICT policy of the firm in its international business environment is taken in to consideration. In the application of cross border strategy the average firm identifies the existing constraints such as differences in regulatory regimes and the ability or inability to practice transfer pricing strategies. For example countries like Canada and US have been arguing over the type of common policies that can be put in place to increase the level of cross border trade (Johansson, McHugh, Pendlebury & Wheder, 1993). Despite the existence of the North American Free Trade Agreement (NAFTA), Canadian, American and Mexican firms have found it increasingly difficult to freely trade because individual firms seek to benefit not so much from free trade but strategic initiatives such as transfer pricing and ICT related investments. Some writers have identified an international strategy involving global operations that enable individual firms to identify and capture strategically important market segments anywhere in the world. However if the firm has a deficient ICT policy and its international coordination efforts are lacking in creating synergies across markets with little or no efforts then it is more likely that international efforts would suffer a setback. In recent years there have been some other research efforts which have identified three organizational communication structure related areas for expansion in overseas markets. (a) ICT infrastructure related developments. (b) Communication policy related developments. (c) Cost related developments. Firms which carry out coordination activity in their overseas markets are essentially influenced by these three spheres of development (Maral & Bousquet, 2002). For instance the latest round of European integration has expanded the EU membership to 27 countries and as a result right now European firms have begun overseas expansion programs even in other continents on the basis of operational scale related cost advantages. Many European firms have expanded in to North America, Asia, Africa and the Middle East due to the availability of ICT related positive synergies. The availability of sophisticated ICT infrastructure – networks, equipment, services and license agreements – has enabled firms seeking to expand overseas an opportunity to identify structure related benefits such as increasing sales volumes through viral marketing efforts. Such structure related opportunities are mostly determined by the communication requirements of the firm. For instance smaller firms that seek to capture niche markets for their products there is very little opportunity to expand on the available scale of operations because niche markets do not allow the management to initiate expensive ICT infrastructure programs. On the other hand according to recent research on the firm’s ICT policy related developments, the strategic operational environment has enabled even smaller firms to initiate ICT policies that would continuously bring about positive changes in their overseas operations. For instance the current wave of international market expansion programs has been attributed to the ever rising expectations of firms that the global economy would sooner or later recover from its ongoing downturn (Silverstein, 2001). In fact ICT policy of firms has not been much adversely affected by the current economic recession. As for cost related developments many firms seeking to coordinate international efforts in overseas markets have been constrained by rising costs of ICT infrastructure. For example not only the prices of equipment have gone up in the recent past, but also service vendors like Microsoft have put in place more stringent service and license agreements. As a result the cost constraint has played a negative role in firm’s overseas expansion plans. In the recent past ICT equipment sales have experienced a decline. However, according to research the decline has occurred mainly due to a fall in demand for final products (Wilhelm, 2004). In other words while bigger firms have been affected largely due to substantial declines in sales in mass markets, smaller firms have less been affected though when it comes to meeting cost related constraints successfully, the latter are finding it more difficult. 2. Research methodology 2.1.Introduction This Chapter presents the research methodology utilised to analyse the research data and describes the various methods used in this study. This research paper basically consists of two data sets – primary and secondary. Primary data set consists of a survey and a questionnaire administered to 40 odd ICT executives and managers at firms with overseas operations. While responses to the survey would be recorded with much more accuracy and detail, responses to the questionnaire would be sifted and collated to identify significant trends and process orientations in company decisions to adopt ICT in the changing overseas markets. Secondary data is being collected through an extensive research effort conducted both online and in libraries. The researcher extensively used the books written on the topic and also studied research journals, reports, graphs, articles, newspaper articles and so on. 2.1.1. Primary research 2.1.1.a. Interviewing Data collection is one of the central challenges in any research project. It is the process through which the opinion of people are collected and categorised. There are many methods of collecting data such as interviews; questionnaires; documents and observations provide invaluable information that is used for policy decisions, marketing strategies, and academic studies etc (Miller and Salkind, 2002). Interviewing is a data collection method in which the researcher asks for information verbally from the respondents. It is the way to access people’s perceptions, definitions, meaning, situation and construction of reality, where it involves discussing or questioning issues with people to collect data unlikely to be accessible using techniques such as questionnaires or observation (Punch, 1998). Interviews are suitable when in-depth information is desired and this type of information is required in order to fulfil the purpose of this research. Therefore the interviewing research method will be followed in this paper. 2.1.1.b. Preparation of questionnaire This is the most important part in the planning of a sample survey, because a poorly designed questionnaire may ruin an otherwise well conducted survey. At this stage it is always advantageous to think in advance what variables and tabulations would be required for later analysis. It is advisable that a dummy tabulation plan should have been prepared in advance, if possible. This would ensure the inclusion of the information, which would be needed for the questionnaire. While preparing the questionnaire the following points were kept in mind in order to overcome the related problems. (i) As few questions as possible were included. (ii) Individual questions were framed in a simple and straight language. (iii) Questions followed a logical sequence. (iv) Highly personal questions were avoided, and if necessary for some enquiry they should be kept at the end of the questionnaire. 2.1.1.c. Administration of Questionnaire Once the questionnaire is prepared it may be administered by three different methods. (i) Direct personal interviews. (ii) Email inquiry (iii) Telephonic conversation. In this study the method of e-mail inquiry was used. This method was applicable because most of the respondents were educated and co-operative and they realised the significance and importance of such a sample survey. The problem of non-response due to carelessness on the part of respondents is expected to be very large, though in the current survey such negligence was minimal. 2.1.2. Survey Statistical surveys are often carried out to collect quantitative information about items in a population sample. While political and government related surveys of people and establishments are too common in health, social sciences and marketing, they are carried out with a particular purpose on mind, i.e. to investigate some facts or information. Many surveys are usually intended to administer questions to respondents. When a researcher administers the questions it becomes a structured interview. When the respondent himself administers the questions the survey is called a self-administered survey or a questionnaire. There are three types of interview: structured, semi-structured and unstructured interviews (Saunders, 2000). This study utilises semi-structured type of interviews due to the fact that it helps the relatively structured interview guide, which includes ratings as well as relatively open questions. This type of interview is the most appropriate choice to gain the data necessary since it allows the researcher to lead informal conversation based on predetermined topics. Generally speaking, an interview is social interaction between two people, with one person gathering information from the other. The interaction is what differentiates the direct methodology from indirect methodology. Structured interviews enable the interviewer to ask each respondent the same questions in the same way. A tightly controlled structured schedule of questions and format is used, very much like a questionnaire. The questions contained in the questionnaire were planned in advance. The interviewer has some discretion how these might be elaborated/explained but the aim is to standardize data as far as possible and to eliminate biases due to different wordings. The questions in a structured interview may be phrased in such a way that a limited option response is elicited. The possible answers are defined in advance so that the respondent is limited to one of the pre-coded responses and thus data analysis becomes relatively easier (Denscombe, 2003). Interviews must be well prepared and must have clear objectives for each interview. Interviews can be conducted after the team has established the topical areas to be covered in the interviews and after the lead investigator has reviewed with the board the objectives of the interviews and strategies for obtaining useful information. In many research situations permission requests should be received before the interview takes place. The interviewer should consider the length of the interview to cover his aims, normally between 15 minutes to an hour, provide contact information of the interviewer and it must be determined whom to interview, in what order, what interviewing techniques to employ and what method of record to use (Denscombe, 2003). The following aspects should be considered when defining a strategy for the interview. The questions should make sense and be meaningful to the interviewee. The questions should be related to the interviewee experiences based on what is already known about them. The interviewer must take care to be sensitive to the needs of the interviewee. The interviewer should be aware of the flow of the interview interaction by attempting to move seamlessly between topics and questions. The interviewer needs to focus on issues and topics that are relevant to the research problem and questions. Interview questions have been compiled from the existing literature and detailed in relation to the research topic, aims and objectives, and focused on the main areas described above. The researcher noted all the replies to interviews and then transcribed the data of each interview. Although this was a time consuming process, the richness of interviews’ contents warranted such an effort. 2.2. Secondary research Secondary data was collected through an extensive research effort conducted both online and in libraries. The researcher extensively used the books written on the topic and also studied research journals, reports, graphs, articles, newspaper articles and so on. References were taken from most of the research material available in the field. This study depends mainly on the secondary material, because theoretical analysis is much well facilitated by it than primary material which is basically limited to responses in the questionnaire and the survey. The available literature has been analyzed with specific focus on the online shopper’s changing spending patterns due to the influence of the internet. This researcher has tried to show the most important aspectual overview of the research in the Literature Review. Also there is considerable reflection on the state and relevance of current research. Future research possibilities in the field are discussed in depth to show how theoretical underpinnings evolve with time and space with specific reference to viral and sensory marketing. There is little or no critical literature to support the methodology of metrically determining the feasibility, attraction and obstacles to creating a theoretical conceptual contingency model on the changing ICT related environmental impact on the decision making process of the firm (Dillman & Bowker, 2001). This particular handicap has affected the researcher to a greater extent. However the research methodology segment of this paper places emphasis on the qualitative aspect of it rather than the quantitative aspect. As such the available empirical evidence has been greatly utilized by the researcher to delineate the current line of arguments as expounded in the Literature Review of this paper. Anticipated findings This research study would be focused on establishing correlations and regressions between and among some chosen variables such as ICT related developments in overseas markets where firms operate with a view to expanding in to both mass markets and niche markets. In other words this study would find how ICT related developments at the firm’s level have been essentially influenced by the changing ICT policy environment. Coordination activity at the firm’s level has two distinct elements – the level of operations and corporate goals related to its overall strategy. Therefore this study would seek to establish a probable link between firms’ organizational goals and the ICT related synergies. The assumption that firms operating in overseas markets have been basically influenced by opportunities such as big profits and sales is not necessarily the main line of argument here. This study would prove that the above link is much weaker against the backdrop of overriding concerns for survival against competition. Communication strategy and ICT policy of the firm operating in overseas markets are simultaneously dependent on the available opportunities for expansion and the extent of competition. This researcher has found out an obvious link between strategy and policy in the firm’s strategic operational environment and this link is all the more significant in the context of stakeholders’ concern for market share. Next, the changing demand patterns and supply constraints in domestic markets are set to be behind the firm’s shift in communication strategy and ICT policy. This causal relationship has injected a degree of fear in to firms’ overseas expansion programs. Thus the organizational outcomes are determined by this particular policy shift. This researcher has found out a much stronger correlation between the need to shift the firm’s growth trajectory and the need to put in place communication strategies with stronger emphasis on public relations. REFERENCES 1. Browning, L . (2008) . .Information and Communication Technologies in Action (LEAs Communication Series) , New York : Routledge 2 . Cowhey , P .F & Aronson, J . D . (2009) . Transforming Global Information and Communication Markets: The Political Economy of Innovation (Information Revolution and Global Politics), Massachusetts: The MIT Press. 3. Cranor, L. F., & , Greenstein S. (Edi) . (2002) . 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