Term Paper on Business
Introduction: IT is essential for any organization’s survival let alone thriving in today’s cut throat and highly competitive business environment. The rapid pace of change in today’s business environment has made information systems and information technology vital components that help keep an enterprise on target to meet its business goals. Information Technology has reshaped the basics of business. Customer service, operations, product and marketing strategies, and distribution are heavily, or sometimes entirely, dependent on IT. The computers that support these functions can be found on the desk, on the shop floor, in the store, even in the briefcases. Needless to say, nowadays IT and its expense has become an every day part of business life-a rather indispensable ingredient in several strategic thrusts that businesses have initiated to meet the challenge of change. The impact of advanced technology coupled with fierce competitive forces on the American corporate culture is no secret. These two factors have completely revolutionized organizational setups across the American corporate landscape. In the discussion that follows a humble attempt has been made to scan the impact caused by IT and ruthless foreign competition over the American organizational structures and culture, customers and workforce. Role of Information Technology: To discuss the role of IT in organizations, in its entirety, would be a challenging task. The umbrella term of IT encompasses so much in itself that to name all what falls beneath it would take reams and reams of paper and even then much would be left deprived from a mere mention. Studying and capturing all the possible roles which IT is playing for our business set-ups is even more daunting. However, on a general level one can carve out three vital roles which IT plays in almost any type of organization. They are as follows: - Support of business operations - Support of managerial decision making - Support of strategic competitive advantage To illustrate the relevance of these points let us consider the example of a commercial bank. As a customer one has to deal regularly with information systems (ATMs, Online transactions etc.) that support business operations of every commercial bank whenever a transaction (deposits, withdrawals etc.) is carried out. For example most of the banks nowadays use computer based information systems to help them record customer profiles, keep track of the credit history, pay employees, evaluate sales (credit cards, debit cards, other banking products) trends. Banking operations would grind to a halt without the support of such information systems. Information systems also help the management of the bank make better business decisions and attempt to gain a strategic competitive advantage. For example, decisions on what products need to be added or discontinued, assessing the rate of returns,
investments that are to be made on those products etc. are typically made after an analysis provided by computer-based information systems. Not even this but even the day-today management of banks demands a thorough involvement of information systems for performing activities such as ascertaining the balance in a customer’s account or transferring cash in any branch outside the city etc. This not only supports the decision the decision making of the management of the bank but also helps them look for ways to gain an advantage over other banks in the competition for customers. Gaining a strategic advantage over competitors requires innovative use of information technology. For example, a multinational bank has recently launched a service known as “Drive”, in which they have given their customers the luxury of buying cars on credit. Some of the most distinguished characteristics of this service are online submission and processing of applications, selection of the installment plan by the customer, selection of the insurance plan, round the clock inquiry services etc. Thus, strategic information systems can help provide strategic products and services that give a business organization a comparative advantage over its competitors. Impact of IT on organizational structures: In recent times, technology has evolved into an ever increasing phenomenon in the workplace and it is amongst the most talked about subjects in the business world. More and more businesses, large and small, are trying to incorporate the latest technology into their operations. The appeal of the whole information technology arena is that it is designed to make people and organizations more knowledgeable, efficient, and/or profitable. A key advantage of information systems is to be able to simplify organizational structures. For many years it has been argued that IT will enable larger spans of control and the flattening of group ware. However, caution needs to be exercised. As delayering is not right for every organization and should not be done indiscriminately. Research on whether IT encourages centralization or decentralizations produced ambivalent results. Many companies have centralized operations (for efficiency) while at the same time decentralizing their activities. It now seems clear that IT enables a greater variety of structures. In particular it enables more flexible and fluid structures –networked structures, dispersed team and teams that come and go as needs change (as in the virtual organization). The ability of new organizational culture to meet the modern corporate demands: The overwhelming change brought by intensive global competition and a dynamic technological environment has affected organizations in every possible aspect. From customers to employees (whether in-house or out- house), competitors to stakeholders everyone is feeling the bump. For example, the tasks that employees used to perform within an organization are being drastically affected by the increased mechanization and application of technology as a part of the production process. In many settings, tasks previously performed directly by human operators are being automated, changing the human's task to one of supervisory control. Thus technology has a direct bearing over the issues of job satisfaction and design. There are people who don’t subscribe to the idea of
fully automated or virtual organizations due to concerns of job security and change in working procedures- which perhaps are quite valid and merit management’s attention. On the other side of the fence, there are employees who realize the importance of adopting with the changing times and the significance of keeping abreast with the latest technological developments. Such class of employees happens to be a strong proponent of change and therefore greatly supports rather religiously stand by every restructuring initiative (such as Business Process Reengineering, Enterprise Resource Planning etc.) taken by the management to incorporate technology in the organizational spheres. On the customers end, there is also a lot of activity. With the advent of e-Commerce, interactive marketing, Sales force automation, Customer relationship management software and the like the buyer of the modern world has become all the more powerful. Customers of today are no longer the passive customers of the past who used to sit back and view the advertising campaigns of different companies and then make the purchase decision. Today he is more informed, knowledgeable and cruelly intolerant to companies that fall even slightly short of their expectations. This is largely because of the multitude of options that are there at his disposal. Now a relevant question that arises at this point is that whether the new organizational structure that has been shaped by the collective forces of technology and ever increasing competition would be able to meet the new challenges posed by the contemporary world or not. This is something which only time could tell. There is certainly no doubt about the capacity and potential of the modern organizational culture to meet the modern demands and live up to the expectations of the customers, employees and all stake holders. But whether they will be able to translate their potential into ground realities is something the entire American society needs to look forward to.