Information Technology in Internztional Management (Essay Sample)

INFORMATION TECHNOLOGY (IT) IN INTERNATIONAL MANAGEMENT
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Information Technology (IT) in International Management
In a number of industries, competition has been globalized and companies, whether domestic or international, must coordinate their activities on a global basis. While many multinationals have an explicit global business strategy, very few have a corresponding international information technology management strategy (Zhu, Kraemer & Xu 2006, p. 1565). A global information management strategy is required because of the growing globalization patterns in many industries and corresponding dependence on information technologies for coordination and operation. However, this forces companies to confront the challenges arising as a result of the need for cross-industry and cross-cultural cooperation.
International management consists of processes of decision making in organizing, planning, leading and controlling in a multicultural environment (Luthans and Doh 2012, p. 23). This field is relatively new and experiences rapid changes. The increasing globalization of the world’s economy and the impact of information technology have increased focus on international management. Success in international platform demands a broad strategic perspective (Ahlstrom & Bruton 2010, p. 161). Leading people and operations on international markets is associated with cross-cultural management and the establishment of effective international structures that encourage an efficient value addition together with managing foreign affiliates. When strategic plans fall short of anticipating components of international operations associated with people, they are more likely to derail. A balanced approach is therefore required for international management. According to McFarlin and Sweeney (2011, p. XVII), the development of strategy and cross cultural management skills are both critically important.
For multinationals, the concerns for coordination involve an evaluation of the way in which similar or associated activities are conducted across countries (Mead 2009, p. 5). Coordination involves managing expertise, goods, information, technology and finances. It also involves sharing and using information about activities within a company’s value chain by different facilities. Various business functions play critical role in such coordination. Information technology management skills enable a company to be flexible in responding to completion in different markets and countries, assess global markets, transfer knowledge, minimize cost, and enhance effectiveness. The cost of coordination has been tremendously reduced by innovations in information technology in the past few decades by reducing both cost and time of communicating information (Cullen & Parboteeah 2010, p. 7).
Patterns of globalization call for an assessment of the skills portfolio required by organizations to effectively participate in their changing market. Many companies are deriving their competitive advantage from by coordinating increasingly complicated networks of activities spread across various locations globally. According to Rodrigues (2009, p. 45), the advantages of industry globalization are associated with performance of activities in the industry’s value chain by a company’s global system. These systems involve creating partnerships with independent entities involving interchanges of information and management process across organizational and national boundaries.
According to Deresky (2011, p. 209), the overriding reason why many big companies adopt an aggressive global strategy is the threat of their own reduced competitiveness. In order for such companies to remain competitive, the companies are pushed to act quickly to establish strong positions in major global markets. According to evolutionary theories of internationalization, it is viewed as an incremental process (Zhu, Kraemer & Xu 2006, p. 1567). In other words, a company which is starting its operations in a global market transforms over time with the deepening of its internationalization. These transformations adopt a particular pattern and are driven by both internal and external selection pressures. The selection pressures are influenced by internationalization. The internal selection factors emerge from a growing complexity, increasing scale, internal diversity and an increased demand for coordination of international operations. The organization is forced to adopt by the internal and external selection factors if it is to survive in international environment. Information technology in this regard becomes a critical tool in this adaptation.
Impact of Information Technology on Globalism, Global Development and International Management
Information technology has revolutionized global development and international management. One field that is critical for assessing the impact is by considering levels of acceptance and adoption. The number of studies and researches on technology acceptance has increased tremendously under various approaches presenting an increase in these initiatives. More specifically, the studies have focused on identifying internal and external factors involved in decisions, intentions and satisfaction about accepting and using of information technology. Overall, the studies suggest that the adoption of information technology has been very fast and this has impacted on globalism and international management in significant ways (Ahlstrom and Bruton 2010, p. 78). The amount of information in circulation today is so vast that it is not possible to manipulate them without technology.
In the past, information systems were founded on file techniques and retrieval of information in large files. However, there have been deep changes in this reality with the popularization of computer and technology. One of the areas where information technology has had tremendous impact is in global corporate strategy. Adopting information technology includes having an organizational intranet and extranet for enhancing communication. Information technology has changed the speed of formulating and evaluating global strategy (Phatak, Bhagat & Kashlak 2009, p. 34). New technologies are assisting in making a real time dynamic strategic process that renders traditional planning cycles obsolete. They have facilitated greater input into the process of strategy planning and execution by everyone in the organization. As such, information technology has increased connectivity and collaboration further accelerating globalization. Global information systems are playing critical roles for multinational companies in strategy implementation.
A critical element in global business environment is cultural distance (Edward & Rees, 2011). Team development and organizational culture are very critical in the development of virtual organizations and globalization. The role of information technology adoption on globalization is moderated by cultural distance (Hill 2011, p. 23). In recent times, interpersonal relationships have been ranked among the most important human resource factors for the effectiveness of an organization’s technological innovations (Lee et al. 2009, p. 79). Every global organization must focus on employee development which is the foundation of the enterprise-value framework for global companies (Edward & Rees 2011, p. 28).
The digital economy has transformed the relations between multinational compani...