The Impact of Technology on International Business


TheImpact of Technology on International Business

TheImpact of Technology on International Business

Theutilization of technology has significantly changed the manner inwhich businesses conduct their corporate operations. The globaleconomy is quite competitive, and technological forces haverevolutionized the traditional business models, hence, unleashing agreater potential in the commercial sector. Technology has enabledenterprises to efficiently conduct their operations globally as aresult of factors such as improved communication, reduced businesscosts, among other aspects. This essay will evaluate the impact oftechnology on international business operations.

Companiesthat are located in different parts of the world can coordinate theiractivities and increase their reach in global markets because oftechnology. Contemporary globalization has opened up new marketswhere firms can sell their products regardless of the size of theenterprise. However, businesses that intend to expand theiroperations globally have to establish management systems that wouldcontrol their activities (Christiansen, 2013). Technology facilitatesfirms to increase the options they would utilize for the managementof critical processes, making them more efficient.

Beforebusinesses started using technology, the management of informationwas primarily through paper records. However, since the 1990s, thenumber of firms that computerize the information they receive frombusiness functions and environments have increased (Christiansen,2013). Consequently, the databases and content stored inorganizations have significantly increased. The business’ softwareoptions make it possible to manage the information after processingit. Firms that conduct their operations globally, therefore, enhancetheir employees’ productivity by utilizing technology in theirinformation systems.

Technologymakes it possible for businesses to interact more, as well as tomarket their products internationally. While the companies thatconduct their operations globally can sell their products throughsocial media, consumers can also establish online communities wherethey share information about goods and brands (Martinez-Lopez, 2013).Computer systems promote the development of the social relationshipsand the interaction that occurs in these online communities.Businesses can also be part of the online communities if they intendto secure feedback about their products, and this can help themenhance their global operations.

Thesize of a business cannot hinder its expansion into global markets ifthe enterprise utilizes technology. Although offline communities canhelp in the marketing of businesses by word of mouth, individualsthat use online platforms interact in a different way since there areno physical cues (Martinez-Lopez, 2013). As a result, the flow ofinformation that occurs through virtual spaces can be more accurateespecially when the community members share an enthusiasm for aparticular consumption activity. Businesses have also enhanced theircompetitiveness by sharing their ideas with their customers indifferent regions globally, and the enterprises can only achieve thisthrough technology (Christiansen, 2013).

Theuse of technology by businesses has enhanced their productivity as aresult of the high processing power that computers have, as well asthe low cost of processing data. Firms that handle large volumes ofdata, such as those that operate on a global scale, benefit the mostfrom the use of technology in their operations. The use ofinformatics by firms in the U.S. has resulted in an increase inproduction by 25 percent since 1995 (Adekola and Sergi, 2016). When afirm adopts the use of technology in its operations, there are highchances for it to include complementary innovations that wouldimprove the work quality and time taken to process data.

Companiesare making use of technology to delegate work to other partieslocated in different regions of the globe. Businesses that usetechnology to outsource jobs benefit from it since they acquirecompetent staff at lower costs. Firms can outsource either goods orservices from any location using technological forms such as theinternet or telephone (Adekola and Sergi, 2016). These bilateraltrade flows evidently have an impact on the employment rates incountries where the businesses that outsource jobs are located. Asthese firms use technology to establish facilities in other regionswhere cheap labor is available, some of the individuals who initiallyheld the jobs might lose them.

Althoughoffshoring has an impact on the job market in the major economies,one has to evaluate its net effect on employment changes. Whilebusinesses in the developed nations outsource a high number of jobsto countries where labor is cheap, the maximum value of the jobs thatpeople lose in nations such as the U.S. is small. For instance, theamount of jobs that people lost in the U.S. in 2003 was less than 2.4of the total employment at that moment (Adekola and Sergi, 2016).This indication illustrates that global businesses cannot usetechnology to outsource all service jobs since the number ofemployment opportunities does not significantly reduce after thedeployment of operating resources.

Asthe number of firms that use technology in their internationaloperations increases, it has become easier to focus on a company’score objectives and enhance the productivity of the enterprise.Businesses realize that they have to keep up with the technologicaladvances including the implementation of automatic orderingprocesses, the maintenance of lean inventories, among others(Neelankavil and Rai, 2015). Firms use technology to conduct theirbusiness activities with customers, as well as other enterprises on aglobal scale. For example, different companies may conduct electronictransactions including the procurement and delivery of businessinformation through e-commerce (Neelankavil and Rain, 2015).

Thelevel of technology that countries have differs depending on anation’s state of development. The majority of internet hosts inthe world are found in developed nations even though they serve 20percent of the world’s population (Adekola and Sergi, 2016).Regions that lack adequate infrastructure to receive internetservices, especially in the developing countries, might have higheroperating costs for businesses that conduct their operations there.Businesses, therefore, have to consider the connectivity of aparticular area before starting their operations since technology isessential for work teams to collaborate.

Firmsthat conduct global operations are increasingly competing as theyseek to enter into new markets and maximize their profits. Manycompanies have turned to information systems for the management oftheir internal production functions. Information systems areessential for the development of new products, increasingproductivity and efficiency, as well as achieving a competitiveadvantage (Christiansen, 2013). These aspects enable a business tocompete in the international marketplace considering that themajority of other global firms participate in strategic planning.

Managementinformation systems are a necessary component of any globalorganization considering that most of them store large amounts ofdata. Information systems increase efficiency in firms by convertingthe data to knowledge, storing, and transmitting it to differentmanagerial levels. The managers in companies that use these systemsevidently find it easy to plan and control functions with theavailability of this information. Individuals that manage globalfirms use Business Intelligence techniques from the informationsystems, and this significantly assists them in the decision-makingprocess (Christiansen, 2013). The collection and analysis of data isan example of how global businesses can utilize technology to improvetheir operational efficiency.

Whenglobal firms use technology in making managerial decisions, they caneffectively compete in the international market since they would betaking a strategic approach to most of their operations. Companiesthat make high-quality managerial decisions through the use ofBusiness Intelligence have a competitive advantage over those that donot use similar systems (Christiansen, 2013). Internationalbusinesses might be affected by a variety of issues that requireimmediate attention, and managers have to make the decisions thatwould be most beneficial to the firm. Therefore, the information thatBI presents can be customized and focused on the identification ofopportunities and problems.

Companiescan use technology to improve the management of sales and purchasesthrough the utilization of Electronic Data Interchange (EDI). Thisform of e-commerce involves the transmission of standardized messagesbetween establishments (Neelankavil and Rai, 2015). Considering thatthe businesses using EDI share information with each other, they canmake purchases by sending messages which are relevant to a particularsale, and transmit it electronically. Businesses can also collaboratewith their suppliers to make use of EDI especially when the shippingorders are within tight schedules.

Currently,companies strive to build their information base since this enablesthem to gain a competitive advantage over other global firms.Technology has altered the business environment, relationships, andpractices. Considering that businesses can now compete globally,national boundaries no longer place restrictions on where customersand suppliers obtain and sell products. Information technologyenables global companies to lock in clients, as well as suppliers,and this helps them to gain a competitive advantage (Adekola andSergi, 2016). Equally significant, technology helps managers toidentify the needs of the global market and the strategic measuresthat their competitors have adopted, hence enabling the, to keepahead of other firms.

Technologyhas altered the business environment in the sense that it hasreplaced the traditional forms of advertising. For a business thatconducts global operations, it is mandatory to have a website thatprovides information about the products and services that the companyoffers (Neelankavil and Rai, 2015). Firms that take this approachhave a higher chance of improving their sales considering that manyconsumers use the online platforms to research products before makingpurchases. However, the possession of a website by a business doesnot guarantee an improvement in the sales since a firm has to ensurethat traffic comes to their site (Neelankavil and Rai, 2015).

Manycompanies rely on technological infrastructure to attract theirpotential clients. A high number of people use the internet, and asthey look for information, they could be convinced to buy a productadvertised in the search engines. Businesses pay for their websitesto appear in the first pages of some of the common search engines,and the number of clicks that potential customers make determines thecost (Neelankavil and Rai, 2015). When people find information abouta particular product, the search engines might offer suggestionsdirecting them to the websites where they could purchase the item.Global businesses can also utilize paid advertisements in searchengines using the contextual targeting technology, where firmsadvertise their products on sites that are related to their goods(Neelankavil and Rai, 2015).

Businessescan utilize different forms of technology to stay in touch with theirglobal partners. Business technology enhances communication processesthrough the use of e-mail, teleconferencing, and videoconferencing(Dunning, 2012). The use of these forms of technology is especiallyconvenient in industrialized countries considering that thecompetition is immense. Firms also stay ahead of their competitorswhen using these forms of technology to communicate since they canobtain immediate feedback, cut costs, and eliminate time zoneconstraints (Adekola and Sergi, 2016). As companies use differentforms of communication offered by information technology, they canreach many people in the global market with their message.

Theuse of technology by firms has enabled them to improve the efficiencyin their international operations. Businesses can use technology toefficiently allocate resources to their subsidiaries, as well asintegrate workflow processes (Neelankavil and Rai, 2015). When firmsseek to achieve this, they might use software that can assess therequirements of their subsidiaries and send it to the centrallocation of the business. Enterprises can also use technology todesign how they would efficiently allocate resources to other firmsand external stakeholders, including suppliers and clients(Neelakavil and Rai, 2015). Companies can manage the relevantinformation effectively through the use of software designed for thatparticular purpose.

Theentry of firms into international markets implies that the businesseshave to utilize technology to conduct a market research. Distributorsand agents also have to be in contact with their partnering firmsafter they sell the goods in the overseas markets. The entry modeinto a foreign market is a significant aspect that every globalbusiness has to consider, and businesses have to conduct research onit before reaching a consensus (Christiansen, 2013). When firms usetechnology to gather more information about foreign markets, theybecome more involved in the business operations in the global arena.

Businessesthat operate globally have to adopt information technologyinnovations if they intend to maintain international competitiveness.Many firms are collaborating with each other to promotetechnology-based growth, and they are also investing in differentforms of information technology. The data-processing industrycomprises of IT consultants and software producers, and it has alsoexperienced tremendous growth (Adekola and Segi, 2016). Globalbusinesses have to obtain the services of information technologyexperts for them to retain their competitive nature. IT workers alsohave to specialize and acquire specific technical skills.


Firmsthat conduct their operations globally increase their employees’productivity by utilizing technology in their information systems.While the businesses that conduct international operations can markettheir products through social media, consumers can also establishonline communities where they share information about goods andbrands. The use of technology by businesses has enhanced theirproductivity as a result of the high processing power that computershave, as well as the low cost of processing data. However, businesseshave to consider the connectivity of a particular area beforestarting their operations since technology is essential for workteams to collaborate. Informationsystems are vital to the development of new products, increasingproductivity and efficiency, as well as achieving a competitiveadvantage.


Adekola,A., and Sergi, B. (2016). GlobalBusiness Management: A Cross-Cultural Perspective. New York: Routledge.

Christiansen,B. (2013). Culturaland Technological Influences on Global Business.Hershey: IGI Global.

Dunning,J. (2012). Multinationals,Technology and Competitiveness.New York: Routledge.

Martinez-Lopez,F. (2013). Handbookof Strategic e-Business Management.New York: Springer Science &amp Business Media.

Neelankavil,J., and Rai, A. (2015). Basicsof International Business.Armonk: M.E. Sharpe.