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January 20, 2009



Information technology can be defined as computers, computer software, and

telecommunications equipment and today’s world is in the centre of a technological
revolution known as information technology. In the words of Turban et al. (2002),
“the collection of computer systems used by an organisation is termed information
technology (IT).” Turban et al (2002) defined management as a process by which
organisational goals are achieved through the use of resources (people, money,
energy, materials, space, and time) and the success of management depends on the
skilful execution of managerial functions such as planning, organizing, directing and
controlling. Furthermore, author has mentioned the role and importance of control in
organisations and provided the opinion of Flamholtz (1996) but, unfortunately, forgot
to give reference at the end. In order to control the operations of the organisations in
today’s competitive business environment, role played by information technology
becomes important.

This essay will review literature and attempt to show: role of information technology
in management. This essay is broadly divided into four sections. Firstly, it will
critically evaluate how investments in information technology by management of an
organisation can be of strategic importance for a firm. Secondly, relationship between
internet, which is a part of information technology, and organisations would be
reviewed. Furthermore, effects of e-commerce would be investigated and lastly, legal
aspects of information technology and its role in growth of economy would be


According to Francis (2007) developing effective management skills to deal with

specific challenges and problems of each organization is the urgent needs of many
businesses and organizations in the global competitive environment, rapid changing
of technology and environment. Author of the essay presents an opinion that in order
to be at competitive advantage an organisation should have successful information
technology infrastructure. Author has backed up this opinion by O’Brien’s (2003)
view that proper use of information technology is helpful in gaining advantage in
today’s environment. Then author has given few examples how competitive
advantage can be created but did not provide any evidence or reference. But, author’s

opinion can be supported by O’Brien (2003) argument, which means information
technology is useful in creating information systems for organisations that helps in
gaining competitive position in the marketplace.

Author mentions Turban et al. (2002) viewpoint which supports the point that
information technology creates innovative applications that helps in building strategic
advantage over competition. But, at the same time, author argue that success of
information technology should not be measured on few grounds like efficiency in
reducing cost, time and proper utilisation of resources. H/she argue that success is not
build on these factors alone and presents the opinion of O’Brien (2003) to back the
point. According to O’Brien (2003) other points that should be included in measuring
success can be the effectiveness of information technology in supporting an
organisation’s business strategies, enabling its business processes, enhancing its
organisational structures and culture, and increasing the customer and business value
of the enterprise.


Author has tried to propose how management can best utilise the internet to improve
and expand the operations of the organisations. For this, author has presented the
opinion of O’Brien (2003) as well. Author has presented the benefits that internet
provides but, at the same time, h/she has argued on the threats posed by internet that
should be taken into consideration by management before trying to take advantage of
technology. Moreover, under this heading author has effectively mentioned the
viewpoints of Laudon and Laudon (2005) and Turban et al. (2002) to prove the


Information technology is playing an important role in managing the operations of an

organisation. O’Brien has, broadly, divided the information systems into operations
support systems and management support systems. Author has focussed on
management support system. According to O’Brien (2003) management support
system helps in gathering information that is helpful in effective decision making.

Management support system is further divided into management information systems,
decision support systems, and executive information systems.

Author has provided the opinion of O’Brien (2003) and Turban et al. (2002) regarding
the definition of electronic commerce. According to O’Brien (2003) e-commerce is
buying and selling, and marketing & servicing of products, services and information
over a variety of computer networks. But, Turban et al. (2002) proposes that e-
commerce has a broader perspective that is not only buying and selling but servicing
customers, intra-firm transactions, etc. This opinion is also supported by Rahman et
al. (2000) in the view that e-commerce is the application of technology toward the
automation of business transactions and workgroups and is a way to open new market,
improve communications, speed delivery times, simplify business processes and
maximise customer relationship marketing.

Author has further defined the categories of e-commerce. These are business-to-
business, business-to-consumer, and consumer-to-consumer. Author has presented the
definitions of e-commerce categories and is of opinion that these categories are a
result of an effective management of information technology.

Then author has mentioned the problems that can be posed by internet technology and
h/she has backed up this statement by stating Laudon and Laudon (2005) opinion.
According to Laudon and Laudon (2005), “businesses that are unclear about their
online strategy, and its relationship to their overall business strategy, can waste
thousands of dollars building and maintaining Web sites that fail to deliver the desired
results.” They have proposed another problem of trust, security and privacy.
Furthermore, author has provided the viewpoint of May (2000), and Kapferer (2008)
to further support the viewpoint of Laudon and Laudon (2005). Author believes that
e-commerce can be utilised as a tool for building relationships with customers and has
provided May’s (2000) opinion for this.



Author has mentioned about electronic contracts that are updated versions of
traditional contracts for the people doing business over the internet. According to the
author, it has been found that EC Directive on electronic signatures 1999 and EC

Directive on e-commerce 2000 are the two principal legislations governing e-
commerce. To achieve similarity in operations on a global scale, a new convention on
the use of electronic communications in international contracts was approved by
UNCITRAL (The United Nations Commission on International Trade Law) in 2005.

Author has failed to give due information about role of IT in economic growth.
Author has just mentioned that IT has played an important role but h/she has not
given any evidence or reference for that. Furthermore, author states that India and
China have grown faster than Europe and North America but again fails to provide
evidence that on what basis h/she is stating this. Riew (2006) argued that more use of
information technology resulted in growth of U.S. economy and this brought down
the unemployment rate in the 1990’s (1992-99) to an average of 5.7 percent, from the
high of 7.3 percent for the1980s.

In the words of Dicken (2007), “Technological change is, without any doubt, ‘a
fundamental force in shaping the patterns of transformation of the economy’. Self-
evidently, therefore it is one of the most important processes underlying the
globalisation of economic activity.” Yartey (2006) suggests that global economy has
been driven by growth of information technology and integration of world markets.


Author has understood the topic in detail and this is visible from the way h/she has
presented the opinions and arguments. The focus of author’s research is up to the
point and information delivered in the essay is knowledable.

Author has thoroughly analysed the role of information technology in building

competitive advantage for the firm. He has presented the advantages as well as
acknowledged the problems that can be created in and by the process. Author is
critical enough to bring this point into notice that an organisation should not think that
success of information technology can be measured by few factors only. Rather it
should try to make it successful by looking at it from broader perspective.

Author has presented a clear point of view on role of internet in organisations and
how this technology can be utilised for the benefits of the organisations. But author
has also stated the threats that technology can pose if not handled properly.

Author has defined clearly what e-commerce constitutes of and what are the support
systems created by technology and how these support systems can be utilised by
managers. Author has critically reviewed the benefits and drawbacks of internet
technology and tried to present a view on how these issues can be taken care of.

Author has thoroughly understood the different parties, acts, conventions, and model
involved in legal aspects of e-commerce. Author has precisely mentioned the details
in a clear manner. But, author has failed to mention the role of information technology
in business and financial success. Even though author has mentioned the role of
information technology in economic growth and given the example of faster growing
economies like China and India but this statement lacks evidence. Then author has
mentioned benefits of e-commerce under the heading of legal aspects and economic
growth, which is not required there.


Dicken, P. 2007. Global Shift: Mapping the changing contours of the World
Economy. 5th ed. Sage: London

Francis, M., 2007. Effective Management. Guest Articles. Available from [Accessed 17
January 2009].

Laudon, K.C., Laudon, J.P., 2005. Essentials of Management Information Systems:

Managing the Digital Firm. 6th ed. Prentice Hall.

O`Brien J., 2003. Introduction to Information Systems: Essentials for the e-Business
Enterprise. 11th ed. McGraw-Hill/Irwin.

Riew, J., 2006. The U.S. Information Technology Revolution and Its Impact on the
U.S. Economy and Beyond. CIRJE Discussion Papers. Available from: [Accessed: 15
January 2009]

Sharma, K. S., 2005. Socio-Economic Impacts and Influences of E-Commerce in a

Digital Economy. In: Kehal, H. and Singh, P.V. Digital Economy: Impacts,
Influences and Challenges. USA: IGI Publishing. Available from:
bookid=8531&chunkid=0710198753. [Accessed 17 January 2009].

Turban,E., McClean, E., and Wetherbe, J., 2002. Information Technology for
Management. 3rd ed. John Wiley & Sons: U.S.A.

Yartey, A. C., 2006. Financial Development, the Structure of Capital Markets, and the
Global Digital Divide. The International Monetary Fund Working Paper.