A Framework for the Impact of IT on Organizational Performance Essay Example

  • Category:
    Business
  • Document type:
    Article
  • Level:
    High School
  • Page:
    1
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    603

IMPACT OF IT ON ORGANIZATIONAL PERFORMANCE 5

A Framework for the Impact of IT on Organizational Performance

Impact of IT on Organizational Performance

Introduction

Information technology has a significant effect on the performance of a contemporary organization. More often than not, technologies have been innovated that have disrupted the operations of one firm while making other firms better. According to Jacks, Palvia and Schilhavy (2011) firms that perform better than others in the global marketplace are those that show responsiveness to technology. A firm has to have an internal IT capability if it is to sustain a competitive advantage in the ever-changing global marketplace. This therefore points to the relative importance of IT in the performance contemporary organizations.

Theory background about the Title

The title of the article is “A Framework for the Impact of IT on Organizational Performance”. The impact of information technology on the performance of an organization was questioned in the 1990s where most people questioned its capability. However, scholars who supported IT in organizations conducted various studies that showed IT could lead to enhanced productivity and profitability. Studies that have been conducted in the twenty-first century have showed that IT can be a source of competitive advantage for contemporary organizations (Jacks et al., 2011).

Aim of the Study

The rationale of the study was to examine various studies that have looked at the impact of IT on organizations. The studies provided a basis for the scholars to make their arguments on the impact of IT on organizational performance.

Hypotheses

The study had no hypotheses, but the authors examined two research questions in order to realize the aim of the study. The first research question was about the “dominant firm-level variables in organization IT literature”. The other research question was about the “dominant antecedents’ processes that affect firm level performance” (Jacks et al., 2011 p.845).

Findings, Conclusions and Recommendations

The firm-level variables that were identified in organizational literature by the authors were categorized into three. They were categorized in the ways in which they impact on organization performance such as profitability, productivity and intangible benefits. In terms of profitability, IT impacted on sales and revenue growth, higher return on investment and enhanced market share. IT also impacted on the productivity of a firm by leading to higher labor productivity and operational efficiency. The intangible benefits that a firm accrued due to include customer loyalty, public image, customer satisfaction and social productivity (Jacks et al., 2011).

The study concluded that literature on organizational-IT had previously identified two firm-level variable, productivity and profitability but their study included another variable, intangible benefits. The study that revealed that IT can impact on a firm’s performance in terms of profitability, productivity and intangible benefits. IT impacts on each of these variables in several ways that are documented in the study.

The impact of IT on organizational performance is without a doubt an area of interest in research. Its impact on the performance of contemporary organizations cannot be underestimated. It is therefore up to the organizations to find internal capabilities in IT and capitalize on them as a way of enhancing their performance. Moreover, the organizations that are still lagging behind in terms of technology should find ways of being responsive to technology if they have to realize higher performance. Furthermore, future studies should examine how each of the variables identified has been impacted by IT by looking at data from firms that have proactively responded to technology.

References

Jacks, T., Palvia, P., Schilhavy, R., & Wang, L. (2011). A framework for the impact of IT on organizational performance. Business Process Mgmt Journal, 17(5), 846-870.