Technology Factors In Organizational Environment

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Technology Factors in Organizational Environments

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IT IN ORGANIZATIONAL ENVIRONMENTS 2

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SUBJECT: Technology Factors in Organizational Environments

Information and Communication Technology has developed drastically in the recent years. ICT

has become more indispensable especially in the business world. With the advanced technology,

sophisticated equipment, and wireless or internet communication, business transactions have

become more efficient and effective. Organizations have experienced a substantial increase in

business opportunities at the global level, where those that have embraced the advanced

technologies can compete more favorably in the international market. Similarly, both external

and internal environment have been influenced by IT development in the business platforms. For

example, the decision-making process, by organizations’ executives, has been facilitated by the

use of sophisticated decision-making software. Consequently, IT integration in organizations has

reduced the worker’s workload, which means more can be done at a relatively shorter period.

Additionally, global business transactions have become easier, leading to the fast growth of E-

businesses. This memo elaborates on different technological issues affecting organizations’

environments (both internal and external).

Development of E-Business

Development of computer and related technologies has diminished the distance and location

factor affecting the way of operating a business. A study by Postolov et al. (2014) focuses on the

small business operations using e-business profoundly discussing “opportunities and threats”

IT IN ORGANIZATIONAL ENVIRONMENTS 3

rising use of “the Internet and the electronic business” (p. 104). Small enterprises can benefit in

penetrating the external environment through the proper application of e-technology. However,

small firms need to be cautious of the technology since it “also brings certain drawbacks or

threats” (Postolov et al. 2014, p. 104). A study by Zhu et al. (2004) elaborates on how

“technology-organization-environment framework” (TOE) affects their e-business operations (p.

18). The findings indicated that the TOE framework and technology readiness are the primary

factors that influence the value of electronic commerce (Zhu et al., 2004, p. 18). Similarly,

according to Zhu et al. (2004), “value, while financial resources, global scope, and regulatory

environment” have a substantial effect on e-business valuation (p. 18). Similarly, efficient use of

electronic technology in business, especially by small enterprises and entrepreneurs, leads to

smooth operations.

The success of small firms, especially in the global environment, is dependent on how well they

apply the modern technology in their operations. Use of e-technologies ensures effective control

of trade operations by enforcing sufficient supply of materials, timely distribution of products

and services, and proper documentation while reducing service costs (Postolov et al. 2014, p.

105). It also helps small business create strong relationships with international and developed

enterprises across the global through effective communication, which helps them grow in the

world market. According to Postolov et al. (2014), through electronic business, small enterprises

can “access the global markets and global supply chain of materials,” International customers

and sophisticated promotion and marketing methods (p. 107). Contrary to the tremendous

success from the use of e-technology, firms experience several drawbacks. Determining whether

e-technology is valuable towards the organization’s performance and factors affecting the value

of e-business are some of the challenges faced by the management (Zhu et al., 2004, p. 19). The

IT IN ORGANIZATIONAL ENVIRONMENTS 4

management should, therefore, evaluate how useful the technology is and what are the

drawbacks of using the technology.

In developing countries, large firms have more advantage over small enterprises. However, small

companies are in a better position in developing e-business as compared to large companies in

developed countries (Zhu et al., 2004, Pp. 43-44). Similarly, how well organizations perform is

highly influenced by Information Technology (IT).

Impact of IT on Organization’s Performance

IT magnitude of importance in an organization is influenced by several factors. According to

Melville, Kraemer and Gurbaxani (2004), both “internal and external factors” such as

“complementary organizational resources of the firm and its trading partners, as well as the

competitive and macro environment” dictate the extent of IT significance in an organization (p.

283). Similarly, Emphasis should not be put internal perspective in the performance rating.

Performance is denoted by effectiveness, which is the attainment of the organization’s goals in

its external environment through achieving a higher competitive advantage (Melville, Kraemer &

Gurbaxani, 2004, p. 287). Additionally, for organizations in the same line of productions,

competitive advantage can be gained through implementation of advanced information

technologies, making one business stand out compared to its competitors (Melville, Kraemer &

Gurbaxani, 2004, p. 287). Since technology is well advanced in the world business environment,

the performance of an enterprise in the global market is highly dependent on how well they have

integrated ICT in their operations of activities.

Although IT influences performance, in some cases application of technology may not lead to

profits. Melville, Kraemer and Gurbaxani (2004) state that, “although in highly competitive

IT IN ORGANIZATIONAL ENVIRONMENTS 5

markets firms may apply IT more efficiently, profitability may suffer as gains to IT application

compete away,” (p. 306).This is why the management should be very careful when embracing

technology to ensure it serves the organization positively. Additionally, small organizations can

be the most affected by technology if they fail to implement it correctly. They have to compete

with large and developed firms for the same markets; therefore, they should be cautious and take

strategic steps in making their product and services unique. Consequently, adoption of

technologies such as Electronic Data Interchange can be vital.

Utilizing Modern Technologies

Technologies such as Electronic Data Interchange (EDI) have been widely embraced by many

businesses worldwide. EDI involve the exchange of documents electronically within departments

or between different firms. Advanced technology has made EDI easier since one does not require

a mainframe computer to effect it; a personal computer is enough (Kuan & Chau, 2001, p. 508).

Use of such technologies has helped simplify the process of predicting business uncertainties in

dynamic environments. This can be achieved through access to correct information about the

organization’s environment and proper interpretation of that information. According to Galen

and Grodzicki (2011), the “new technological innovations may help evaluators meet” challenges

such as uncertainties by “automatically tailoring information content and form to groups and

individuals” (p. 127). However, adoption of such technologies is dependent on various factors.

Kuan and Chau (2001) state that decision for the adoption of EDI is not solely influenced by

characteristics of the technology, but it “also depends on other factors related to the internal

organization and external environment” (p. 519). Such factors determine the type of technology

to be implemented and at what stage of operation. Similarly, it is important for small firms to

embraces technologies such as EDI since it guarantees increased competitiveness in the long

IT IN ORGANIZATIONAL ENVIRONMENTS 6

term (Kuan & Chau, 2001, p. 519). It is important to note that the modern business world is

highly competitive and still growing at a significant rate; therefore, implementation of such

technologies should not be overlooked.

On the other hand, there are some negative factors associated with IT integration in

organizations’ operations. An example is the threat of job opportunities to employees with poor

skills.

“Technostress” in Organizations

IT has immense significance to organizations, but still, poses some negative impacts in some

instances. According to Wang, Shu and Tu (2008), advancements in the technological part of an

organization mean constant refreshing of “technical skills” by employees (p. 3002). Similarly,

employees have to bear much pressure from dealing with complex systems, which results to

“technostress” that negatively influences their productivity (Wang, Shu & Tu, 2008, p. 3002).

Wang, Shu and Tu (2008) carried their study in China and realized that companies, especially the

IT firms are faced with significant pressure from competition among enterprises in this industry,

since “the IT industry is” growing at a high rate (p. 3003). Consequently, internal environments

are most affected by technostress. This is so because employees do not participate “in the

decision-making processes of new technology introduction,” therefore, they only accept changes

in technology and endures the complications associated with that (Wang, Shu & Tu, 2008, p.

3005).

Similarly, innovation has become the primary strategy for gaining competitive advantage,

especially in the international marketplace. From the study, Wang, Shu and Tu (2008) found out

that “employees perceive more technostress under more innovation environments because they

IT IN ORGANIZATIONAL ENVIRONMENTS 7

feel that encouraging innovation will lead to a more competitive internal environment” (Wang,

Shu & Tu, 2008, p. 3010). Therefore, it is important for the policy makers or the managers to

consider their employees’ skills and help them adopt the new technologies. If an organization is

aiming at achieving its goals, it should consider its competitive environment and strategize on

ways to achieve a high competitive advantage through advanced IT integration. Additionally,

this should be done systematically to ensure that employees are not negatively affected.

Conclusion and Recommendation

With the dynamic technological business environment, a firm cannot apply old operational

methods and expect to compete in an international environment. New technologies are

paramount to both internal and external organizational settings. Proper integration of such

technologies is the “secret” to organizational success. For example, use of e-commerce to carry

out business transactions has enabled firms to operate on a 24hr routine. This has improved

profitability through simplified sales and purchases transactions. Modern business needs to

update their systems to support the new technology for better survival even in the future.

IT IN ORGANIZATIONAL ENVIRONMENTS 8

References

Galen, M. & Grodzicki, D. (2011). Utilizing Emerging Technology in Program Evaluation. New

Directions for Evaluation, 131, 123–128.

Kuan, K. K. Y. & Chau, P. Y. K. (2001). A Perception-Based Model for EDI Adoption in Small

Businesses using a Technology-Organization-Environment Framework. Information &

Management, 38, 507-521.

Melville, N., Kraemer, K. & Gurbaxani, V. (2004). Review: Information Technology and

Organizational Performance: An Integrative Model of IT Business Value. MIS Quarterly,

28(2), 283-322.

Postolov, M. L. et al. (2014). Managing With Organizational Environments-Strategy of E-

Business. Economic Development, (3), 103-122.

Wang, K., Shu, Q. & Tu, Q. (2008). Technostress under Different Organizational Environments:

An Empirical Investigation. Computers in Human Behavior, 24, 3002–3013.

Zhu, K. et al. (2004). Information Technology Payoff in E-Business Environments: An

International Perspective on Value Creation of E-Business in the Financial Services

Industry. Journal of Management Information Systems, 21(1), 17-54.

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