Impact of technology on Business

Introduction

The advent of the internet and other technology has made business efficient and easy to manage. Some software can be used to ensure there is reduced wastage in the organization. Some companies have also been able to incorporate robotic technology as a way of increasing efficiency and reducing the cost of running a business. As a result of these technological advances, most companies are experiencing a high growth rate with the reduced cost of operations. Technology changed the nature of industries. Businesses widely use today technology and many companies rely on technology to improve operational efficiency, improve communication, increase profit, reduce costs, increase global presence, improve quality and productivity, and gain competitive advantage. Technologies such as artificial intelligence, virtual reality, mobile phones, 3D printing, and laptops are used in businesses to increase efficiency. Technology is in continuous change, and business needs to adapt to these changes. In this essay, the impacts of technology will be discussed which will include an explanation of the importance of tech followed by the positive and negative effects of technology referring to some businesses as examples.

Impact of Technology on Business

Many organizations widely use technology as it is crucial for businesses variable (Rubin, 2011). Technology is vital for companies as it facilitates communication, increases efficiency, improves productivity, reduces costs, and improves quality and customer relations (Attaran, 2007). Needle (2015) argues that technology enhances customer service and e-commerce as customers will be able to have access or purchase the products or services online anywhere at any time such as Amazon. Many authors agree that technology generates new business opportunities (Needle, 2015; Palo and Tähtinen, 2013; Zeid, 2014; Jussila, Kärkkäinen and Aramo-Immonen, 2014). According to Jog (2015), technology leads to business growth whereas Needle (2015) and Nascia & Pianta (2009) argued that technology is essential as it has resulted in the growth of new industries such as biotechnology. According to Needle (2015), Attaran (2007), and Sikora & Langdon (2005), technology determines the structure and processes of the organization and increases business flexibility. As stated by James (2002), Pispa and Eriksson (2003), Zeid (2014), Sikora & Langdon (2005), and Sinhmar (2014), technology is vital to the development of adequate information infrastructure, as it allows easy access to a wide range of data and information with appropriate security measures to protect intellectual property and provides an understanding of complex data relations, in addition to, optimizing, predicting and analyzing future outcomes. Moreover, Zeid (2014) and James (2002) argue that technology supports the process of business decision making. Technology has led to the globalization of businesses and the expansion on their consumer base increasing the business performance (Roy and Sivakumar, 2007; Chen, Romano and Nunamaker, 2006). According to Mata, Fuerst, and Barney (1995) technology creates economic opportunities. Jamail (2010) held the perception that technology is used to increase sales and market share). Jog (2015), Mata, Fuerst, and Barney (1995) agree that technology creates business value. Moreover, Lin, Chen, and Shao (2015) and Jog (2015) argue that technology creates business value.

Supported by Manardo (2000), Sinhmar (2014), Mamaghani (2006) and De George (2006), Roy and Sivakumar (2007) had the view technology has allowed companies to globalize and allowed the world’s economy to be a single system of dependence. De George (2006) states that globalization has allowed free cross border flow of goods and capital. Holding similar views, James (2002), Kingston (2005), Nascia and Pianta (2009) argued that technology led to an increase in international integration which therefore increased globalization. Mamaghani (2006) argues that business globalization or multinational businesses are capable of attracting local talents, which can work across international borders effectively. Technology broke the geographical and linguistic barriers allowing all countries to share and exchange information rapidly and efficiently (Chen, Romano, and Nunamaker, 2006; Kingston, 2005; Mamaghani, 2006; and Manardo, 2000). According to Roy and Sivakumar (2007), many manufacturers and suppliers are located in low-cost countries such as Nike manufactures in Thailand and Sony in China. Nascia and Pianta (2009) contended that economic openness contributes to inequalities in the society. Therefore, technology-enabled buyers to be easily connected to services and goods suppliers abroad (Roy and Sivakumar, 2007). Roy and Sivakumar (2007) and Manardo (2000) settled that technology allowed businesses to adapt and expand their markets and grow their consumer market to become more global as technology facilitated for brands like McDonald’s, Coca-Cola and Microsoft to be accessible and globally known across the world. However, Nascia and Pianta (2009) argue that the growth of global markets can lead to instability.

Many authors agreed that communication became cheaper, faster, efficient, and easy to use. As a result, it has led to an increase in business efficiency (Attaran, 2007). Zeid, (2014) states that because technology allows the availability of different communication tools such as emails, texts, and social media to be used, people will be attracted to the companies. Jussila, Kärkkäinen, and Aramo-Immonen (2014) argued that social media improved communication, interaction, learning and collaboration bringing significant benefits to the organization. Jamail (2010) argues that social media such as Facebook or Instagram can be used as a way of advertisement to increase sales and to attract new customers, which will lead to an increase in organizational profit. James (2002) states that an increase in the volume of the international transaction can be generated through electronic communication. Therefore, technology helped in lowering costs and facilitating communication between businesses, suppliers, and customers across the world (Sinhmar, 2014).

Mamaghani (2006) states that due to the convenience and availability of emails, intranet and social media organizations were able to reduce direct face to face communications with organizations, employees within the organization, suppliers, business partners, and customers. The technology was also critical in giving companies the ability to hold virtual meetings to reduce costs, save time, improve productivity and increase efficiency (Attaran, 2007) (Zeid, 2014). Manardo (2000), Roy and Sivakumar (2007) and Sinhmar (2014) agree that technology allowed people from different backgrounds to communicate with each other which allowed the exchange of views and ideas that helped bridging the cultural gap and as a result, there was an increase in awareness and a reduction in information scarcity.

On their part, Barney (1995), Needle (2015), Roy and Sivakumar (2007), Sinhmar (2014), Sikora and Langdon (2005), Nascia and Pianta (2009), De George (2006), and Mamaghani (2006) agreed that technology helped in cost reduction and reduced staff. Sinhmar (2014) and Wang (2005) stated that technology plays a role in the automation of business processes, which reduced costs and increased productivity, while James (2002) argued that globalization is the main factor in the reduction of costs. Mata, Fuerst, and Barney (1995), and Attaran (2007) also argue that technology increases revenue by increasing productivity. The use of machines increased productivity, efficiency, and reduced human errors, which therefore increased profits (Roy and Sivakumar, 2007). In addition, the use of low-cost sensors to track everything in the supply chain to enhance and improve operations has had a positive effect on many businesses. For example, Amazon automated its business process and used robots in the warehouses to reduce costs and increase efficiency (Shield, 2019) (Bogue, 2016). The use of robots in businesses can increase the opportunity of capturing new markets and customers (Meyer, 2019).

Mattison Thompson, Tuzovic and Braun (2019), Manardo (2000), Sinhmar (2014), Needle (2015), and Sikora and Langdon (2005) state that technology allowed the opening of e-commerce and e-businesses which enable the exchange of information, services, and goods across the internet. As a result, companies will continue to grow because online shopping is becoming increasingly popular because of its convenience (Vakulenko, Hellström, and Hjort, 2018). Mamaghani (2006) states that technology allows businesses to be accessed 24/7 across the whole world giving different customers the convenience and ease to purchase any product from anywhere at any time. Because of e-commerce that is achieved through business websites that are available on the internet business have been able to expand at a fast rate. Furthermore, technology allowed the products to be delivered to the customers anywhere to their door leading to an increase in customer satisfaction (Ballestar, Grau-Carles, and Sainz, 2018) (Sinhmar, 2014).

Manardo (2000) and Wang (2005) argued that technology could help businesses build good customers relationships that can be achieved by sending offers or advertisements of new products to customers through email to enhance customer experience, trust, and loyalty which can strengthen business to customer interaction. According to Mamaghani (2006), technology has enabled companies to monitor individuals, entities, behaviors, events, and objects and the collected data can be used to develop new products or services or create new advertisements or target new customers as technology allows businesses to visualize and process information (Needle, 2015).

Many authors agree that technology allows businesses to gain competitive advantages due to the innovation of new products (Mamaghani, 2006), (Nascia and Pianta, 2009), (Sinhmar, 2014), (Wang, 2005), (Needle, 2015). However, Mata, Fuerst, and Barney (1995) argue that for a business to obtain a competitive advantage there must be a valuable strategy, technology must be valued. Heterogeneity of sources in which all companies operate differently, immobility of resources in which other firms cannot imitate such as when WalMart developed its purchase system, and it was able to have temporary competitive advantage until K-Mart imitated the system and therefore, WalMart lost the competitive edge., Additionally, businesses must have technology proprietary. According to Davison (2007) and Mamaghani (2006) there is an increase in business outsourcing and offshoring to reduce costs however, they argue that outsourcing and offshoring can lead to the loss of ‘domestic talent’, loss of intellectual assets and decrease in organizational values which will lead to a diminution in customers satisfaction levels which will impact corporate revenues.

Technology created new jobs as technology generated new employment opportunities such as computer programmers, web designers, and hardware and software designers and led to the growth of new industries (Needle, 2015). Technology will create new jobs while at the same time they will lead to the extinction of jobs and careers that will be replaced by artificial intelligence or machines. Roles that at risk include architects, journalists, and the financial industry while immune jobs include health professionals and teachers (Dodgson, 2017).

According to Sinhmar (2014), Nascia and Pianta (2009) technology resulted in the polarization of employment due to the increasing demand for high skilled workers which has led to job redundancies and unemployment. Nascia and Pianta (2009) and De George (2006) argue that technology is a significant force in the increase in profits and economic growth. As a result, companies can get high revenues. However, Nascia and Pianta (2009) argue that an increase in profit and income leads to the polarisation of wages and inequality, as the majority of people rely on their salaries as their source of income and technology weakened labor position due to the replacement of unskilled labor. De George (2006) disagree and states that technology created new jobs by the globalization of businesses and therefore reduced the unemployment rate in developing countries or low-cost countries where manufacturers are located. However, De George (2006) agrees with Nascia and Pianta (2009) that technology created a high demand for skilled workers. According to Nascia and Pianta (2009), technology resulted in employment polarization as computers were used to substitute routine workers. Sinhmar (2014) argued that technology led to the lack of job security due to the dependence of businesses on technology to reduce costs and due to the continuous technological changes, which resulted in job losses. Therefore, workers must be specialists in their field of work to prevent losing their jobs. Sinhmar (2014) and Roy and Sivakumar (2007) argued that technology helped in dominating culture preventing culture diversity, for example, it is argued that the American culture is influencing young teenagers’ lifestyle in addition to the use of English as the primary mode of communication which can result in the extinction of other languages.

As businesses today are dependent on technology, it is common for employees to suffer from health problems such as eye problems, tension from incorrect posture, blood circulation problems from being seated for a long time and difficulty in breathing (Manardo, 2000) (Sinhmar, 2014). However, these challenges can be addressed by undertaking regular training on the best way to utilize the available technology.

Information privacy and security are other issues related to the use of technology according to Sinhmar (2014), and Mamaghani (2006) as hacking could be used to access personal information or organizational information. The fear of hacking my make customers skeptical about sharing their data with companies. According to Mamaghani (2006) electronic devices such as mobile phones, laptops and PDA’s could be lost or stolen which can result in the leakage of organizational or personal information and negatively have an impact on the organizations, therefore, organizations must develop security system to protect data.

Conclusion

Technology has various positive and negative impacts on businesses. Technology allows organizations to communicate effectively with customers, suppliers, and business partners everywhere around the world using the internet, emails, and social media. Technology is used in many business processes such as marketing, human resource management, and production. Technology also allowed businesses to be accessed 24/7 by anyone anywhere through e-commerce which increased organizational efficiency. However, technology has resulted in the loss of jobs due to the usage of machines, which has affected the health of employees. Additionally, there are security issues such as hacking that have hurt the use of information technology. Technology has many impacts on businesses, and therefore, companies should control the use of technology to reduce the negative consequences.

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