There are questions that need to be answered in this work, and they are:
What is globalization? When a company has branches overseas, does it necessarily mean it is a global organization? How can IT help a global organization in the chaotic and complex world? How does an organization implement its IT infrastructure?
The complexity and unpredictability that characterize our global and chaotic business environment elude comprehension and therefore control. Order and chaos are inherently unstable states.
Need to go global
The world of organizations and managers has expanded dramatically in the last decade. Suppliers, customers, competitors and personnel now move easily across national borders (Cray and Mallory 1).
Expansions, downsizing, merger and acquisitions, all these contribute to change and ambiguity in an organization.
The global environment
‘The future is not what it used to be’ (Sussland 4). This is now the global age; many authors say ‘we are living in a global village’. This is because of the internet and Information Technology. Organizations in the ‘physical’ world are now connected virtually.
The complexity and unpredictability that characterize our global and chaotic business environment elude comprehension and therefore control (Sussland 4). They say computers have simplified work; it seems this is an oxymoron. Technology and communication revolution could be complicating things and events in the workplace.
From proximity to a global setting
Traditionally management’s mission was to direct and to control all activities. It established roles, responsibilities, and allocated resources to centrally impose structures and systems. The controls were designed to keep the organization operating in a stable way, following the practices that had proven efficient in the past. The desire to keep things under control engenders a reverence for tools and techniques. (Sussland 6).
Information Technology has created new paradigm shifts in organizational processes. Organizations have to react to changes. IT applications provide easy handling in the strategic operations and other functions of the organization. But a software package has to be studied and learned, and constantly monitored for its efficiency. It has to be maintained because continuous usability can make things to malfunction. This malfunctioning may involve the entire system, the people, and other activities surrounding its implementation.
IT in a global organization
The use of Information Technology is one of the most powerful engines of growth (Schwab iii). IT allows an organization to cope with the complexities of globalization.
From traditional to modern
Organizations that have gone global have to reorganize, reevaluate and reprogram the outdated functional programs and activities, align and realign them to the present trends in order to improve and be competitive. Personnel and field people, ordinary employees, and everyone involved in the day-to-day activities have to be refocused and reoriented on the new tools of business. IT application needs training and continuous learning for the personnel.
Role of IT
IT plays a crucial role in globalization. Without IT and the internet, it would be very difficult for top management and subsidiary management to get things done. In globalization, fast and immediate communication are needed. At an instance, decisions have to be made, and people can be managed remotely. This is why some CEOs of organizations just prepare to have a vertical set-up or structure. They can manage remotely. However, delegating powers to overseas managers is also possible and still very much applicable to global organizations. If something goes wrong, decisions can still be reinforced by new decisions coming from the top. This is because of effective means of communication.
Another important contribution of IT is databasing. With this new tool, companies and organizations are able to amass vast amount of data and information from inside and outside.
Structure of IT global firms
Global firms operate in many nations, not just one or two, and their products and services correspond to various needs of the consumer, the global consumer. Global firms rely on functions such as marketing, finance, operations, human resource management, and accounting. With globalization, these functions have to be integrated, including products and services. In knowing how a firm prepares for globalization, the vertical and horizontal linkages within the organization are to be assessed. Global firms use many different structural forms in preparing for globalization. The question of centralization or decentralization mostly depends on the strategy the firm pursues and the type of structure it pursues.
Example of IT Application
Enterprise Resource Planning started with the integration of production systems and other functions in purchasing, financial, human resources, and many other functions (Shi Jingsheng and Halpin 214).
It began with the complexities associated with production where a lot of labor resources along with underlying functions and activities were involved. They have to be integrated to simplify production and other departments.
Enterprise Resource Planning as a technological tool uses a software to help management of a particular company to efficiently and effectively use their resources for the integration and simplification of the different functions of the industry (Nah et al 5).
ERP as IT Application
ERP is an IT application that can be configured to make the functions or job of the different department manageable and simplified. It also requires the organization to reengineer and change (Holsapple 325). There is also the capability to share knowledge and the role of IT alignment between ERP and e-business project (Ash and Burn 33). IT integrates various transactions that carry voluminous data and information of business all throughout the organization (Markus et al 245).
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Jingsheng Shi, Jonathan and Halpin, Daniel W. Enterprise Resource Planning for Construction business management. Journal of Construction Engineering and Management, March/April 2003, 10.1061/129:2~214!, 2003.
Nah, Fiona Fui-Hoon, Zuckweiler, Kathryn M., and Lau, Janet Lee-Shang. ERP implementation: Chief Information Officers’ perceptions of critical success factors. International Journal of Human-Computer Interaction, 16 (1), 5–22, 2003.
Schwab, Klaus. Preface. The Global Information Technology Report 2002-2003: Readiness for the Networked World (GITR). Eds. Dutta, Soumitra, Lanvin, Bruno, and Paua, Fiona (pp. iii-iv). Oxford, New York: Oxford University Press, Inc. ,2003.
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