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 set-ups 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.
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