Why do we need to study technology?

We need to study technology in order to improve the quality of lives of many people particularly in basic needs in food, clothing, shelter and education. With the study of technology we can make inventions but with these, there are problems arise that's why continuing effort to improve inventions makes the study of technology inevitable in human life. There are many studies about technology out there like in communication, medicine, transportation and many more but for me the most important study is in environment because mother earth is our only home to live for us, human.

We need to exert more effort, finances, and time on how to give care and love on our environment. The food we eat, the water we drink, the fresh air we breathe, the things we touch and see came from seas, mountains, farms, watershed that we need to preserve and grow now. Again we will not be here in more than two thousand years without technology. That's why I'll go for technology in a good way especially for environment.

We need to study technology

We need to study technology in order to improve the quality of lives of many people particularly in basic needs in food, clothing, shelter and education. With the study of technology we can make inventions but with these, there are problems arise that's why continuing effort to improve inventions makes the the study of tecnology inevitable in human life. There are many studies about technology out there like in communication, medicine, transportation and more more but for me the most important study is in environment because mother earth is our only home to live for us, human.

We need to exert more effort, finances, and time on how to give care and love on our environment. The food we eat, the water we drink, the fresh air we breathe, the things we touch and see came from seas, mountains, farms, water shed that we need preserve and grow. Again we will not be here in more than two thousand years without technology. That's why I'll go for technology in a good way specially for environment.

MIS 2 - Assignment 9

Information technology (IT) is "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware", according to the Information Technology Association of America (ITAA). IT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit, and securely retrieve information.

Today, the term information has ballooned to encompass many aspects of computing and technology, and the term has become very recognizable. IT professionals perform a variety of duties that range from installing applications to designing complex computer networks and information databases. A few of the duties that IT professionals perform may include data management, networking, engineering computer hardware, database and software design, as well as the management and administration of entire systems. Information technology is starting to spread farther than the conventional personal computer and network technology, and more into integrations of other technologies such as the use of cell phones, televisions, automobiles, and more, which is increasing the demand for such jobs.
When computer and communications technologies are combined, the result is information technology, or "infotech". Information technology is a general term that describes any technology that helps to produce, manipulate, store, communicate, and/or disseminate information.

In recent days ABET and the ACM have collaborated to form accreditation and curriculum standards[2] for degrees in Information Technology as a distinct field of study separate from both Computer Science and Information Systems. SIGITE is the ACM working group for defining these standards. Information technology (IT) changes rapidly, seriously challenging IT management. In response, many organizations create a formal group of IT professionals to evaluate emerging IT so they can better cope with its change. A survey based on structured interviews was mailed to a nationwide sample of 1,000 IT organizations. Two hundred forty-six respondents provided data to identify categories of coping mechanisms to handle changing IT. Five categories emerged: Education and Training, Internal Procedures, Vendor Support, Consultant Support, and Endurance. Organizations apply Education and Training more extensively than the others. Thus the research contributes to understanding the means by which organizations cope with rapid IT change. The research also found that organizations with a group dedicated to investigating emerging IT cope more extensively, but not more successfully, than do those without one. Thus the research contributes not only by providing an understanding of how organizations cope with rapid IT change, but also by suggesting the need to achieve more from the group charged with emerging IT.

A stream of research has been done on the individual use of information technologies (IT). Their purpose was to find out how technology was received and utilized by the users. The researchers knew that information technologies could add significant value to an organization in terms of productivity increases and performance improvements, but technologies were constantly evolving over time, and as a result, adoption behaviors of individuals were changing with them. Traditionally, the earlier models of innovation adoption represented marketplace deterministically and proposed improvements based on assumptions of certainty. They claimed that although more recent adoption models integrate some dynamic effects (i.e., learning and risk), the basic recommendations had not changed much for decision-making. In fact, the only distinction came from the fact that the later models improved the traditional models by elaborating on them and by providing understanding of additional variables. We think that the traditional models underestimate the forces of changes and uncertainty that dominate today's innovative markets, which are full of continuous processes of technology development, improvement, and application.

Thus, it is the objective of this paper to provide a conceptual framework for discussion of how technologies get diffused through their acceptance by the users and to understand the characteristics of technologies, users, and organizations in the face of changes and uncertainty. Our paper draws on various branches of previous research. From the marketing perspective, we look at several researchers who have discussed the models of and/or issues of innovation adoption. We begin with Kamien and Schwartz and Reinganum] who present models of firm adoption of innovations, examining the factors affecting a firm to adopt a certain innovation. Gatignon and Robertson describe the implications of organization adoption decisions in a competitive environment. Bass develops a mathematical model to examine the timing of adoption of new products and applies it by empirically testing demand growth for consumer products. This model later becomes widely adopted, extended, and applied in empirical research. Mahajan et al. review extensively the deterministic models for diffusion of innovations. Whereas Kalish and Sen discuss how the marketing mix variables impact diffusion, Eliashberg and Chatterjee provide thorough review of the stochastic models for innovation diffusion. From a strategy viewpoint using the diffusion of innovation theory, a stream of researchers has contributed to the subject matter.

They have examined various factors, generally regarded as determinants of IT adoption and usage, in their studies. Examples of these factors include individual user characteristics, innovation characteristics, and environment characteristics. Similarly, Information Systems (IS) researchers have addressed the issues of acceptance and diffusion of IT by providing varying answers to what are the factors determining IT usage by individuals, and discussing the relevance of different IT usage models. For example, the theory of reasoned action (TRA) developed by Fishbein and Ajze] helps to predict and understand human behavior in making adoption decisions. In their review, Igbaria et al. incorporate the concern for the determinants of behavior and relations among beliefs, attitudes, subjective norms, intentions, and behaviors. Determining how the relevant factors affect each other to lead to a decision-making is the primary focus of the TRA model. Ajzen also introduces the theory of planned behavior (TPB) model as an extension of an earlier TRA to consider the situations where individuals do not have complete control over their behavior. TPB was designed to predict individual adoption behavior across different settings and can be applied to IS use as well. Davis et al.’s well- known technology acceptance model (TAM) is an improvement of the generic TRA model. TAM adapted certain components of the generic TRA model and applied them to the particular domain of computer technology, and more broadly, to the information technology.

The difference between the two models is that in place of the TRA’s attitudinal determinants, TAM introduces two key variables, perceived ease of use and perceived usefulness, as having central relevance for predicting computerbased technologies user acceptance behaviors. Although previous models of IT acceptance provide useful insights, more research is needed to determine the key factors affecting or motivating individuals to use computer-based information technologies for various purposes. In light of this need for more research, our paper tries to extend previous research by examining the major determinants of IT adoption and diffusion based on what other researchers have done and by proposing an additional determinant of IT adoption that is of important relevance. As such, the purpose of this research is to seek better and valid measures for predicting and explaining IT use by individuals in network computing environment. Our research differs from other previous studies in that we try to move away from the old ways of thinking and pursue new ideas. Recognizing that the computing environment has changed due to the development of innovative technologies and the growth of the Internet, we scrutinize carefully the changes which have occurred and propose an enhanced IT acceptance (usage) model which can help to explain the new phenomenon of technology adoption in today’s distributed network computing environment.

Thus, we present an extended and improved model of IT usage by reexamining the key determinants of IT usage, taking account of the changes in user needs and computing environment. We believe that only by understanding various factors affecting the IT adoption and diffusion can we truly understand how and when individuals use information technologies. The paper proceeds as follows: In section , we discuss the relevant prior literature and the motivation for the study. The core of our study is contained in section. The model of IT usage (acceptance) and theoretical rationales are presented in this section. Section discusses the contribution of the model of IT usage in IT adoption research. Future research directions and issues not covered in this paper are outlined in section. We conclude in section . The topics of interest which are relevant in the study of user acceptance model of IT (IT adoption) are network externality, complementarity, diffusion of IT, user acceptance of IT, etc. We review the relevant literature on each of the topics to provide background information and theoretical support for our research, and especially to set the stage for a constructive discussion of our IT usage model. We try to integrate the ideas derived from the different disciplines to contribute a new body of knowledge to the area of IT adoption and diffusion research.

We argue that until now, research on IT has primarily focused on the problems and issues of IT use in the context of individual computing environment. In particular, the field of economics has studied the diffusion of externality-related products such as telephone, focusing on the positive externality. These studies introduce positive externality but they rarely mention negative externality. An example of negative externality is illustrated in the following example. When we have many people using the World Wide Web (WWW) or collaborating in some other ways, people get easily overwhelmed by the volume of information they come in contact with. As a result, it becomes difficult for them to get organized and seek out the information they need in a timely manner. Thus, we have an information glut. As seen, there are definitely both positive externalities (i.e., characteristics of network environment, especially the Internet) and negative externalities, as in blocking in phone lines. We now look at the topics that are relevant to the study of IT adoption and diffusion in greater details.

These are the three changes likely to have substantial impact on USEP's services in the next three years:

Online Voting of Election in Clubs, Organizations, Local Councils of different colleges and Campus Student Council

This change in school services is based on the System Analysis and Design and Software Engineering project proposal which is the Project E-Vote. I think this project is feasible in the next three years. Based on the Project E-Vote description, it offers features such as simultaneous online elections as it aims to cater more than one election at a time. Project E-Vote features a customizable election page where the administrator may choose to generate a different election page depending on the demand of the organization. Project E-Vote also features an automated storage system that is more efficient in terms of capacity and data security. Project E-Vote marks an automated counting of votes thus consumes less time during canvassing. The development of Project E-Vote is a move that tries to solve the problems faced during elections conducted within the university such as the large cost of manual elections and election fraud. If well develop this application may be an inspiration to other organizations that conducts elections. The first part is the manual system, which involves accepting of candidacy. The second part is the automated system, which involves online casting of votes, automated counting of votes, data storage and also a part of data process.

Based on the developers’ project proposal document, the application provides the following benefits:

• It minimizes the cost of an election.
• It minimizes the time needed for canvassing the vote’s cast.
• Election procedure is automated thus eliminates or minimizes election fraud and cheating.
• It could cater to any election within the University.
• It can be integrated with other existing systems and databases.
• It has a concept of green computing as it minimizes the use of paper materials.
• It may be developed further to cater future problems concerning elections.


Online Passbook/Gradesheet

This is another application that will change in the next three years. This is also based on the System Analysis and Design and Software Engineering project. The Online Passbook is comparable to the manual passbook system used by the university. However, the online passbook avoids the students to actually go to each of their respective subject instructors. This could ease the process of retrieving the grades of the students since it can be viewed online. The online passbook has its owns restrictions in which only instructors designated to the subject is authorize to personally put the respective grades of the students and will only retrieve the grades when it’s done. The students, on the same manner, are only allowed to view his grades in which he is enrolled in that semester.

The objectives of this application are to discontinue the use of manual passbook system of the students, to cease manual retrieval and passing of grades of the teachers in the registrar, and to provide an easy and efficient way of retrieving the grades of the students. In accessing the online passbook, the registered student of the university is subjected to a password of his own for security and for him to view his own grade. The online passbook would also give an evaluation of grades of the students instantly. On the other hand, for the instructor, this could also avoid manual distribution of grades to the students of each of the subject they handle. The instructor will have a security password in accessing the system. The instructor will be able to put the grades of his students into the system and it will automatically distribute the subject grades to the corresponding students. It will then also automatically submit the respective subject grades to the registrar.

Online Tutorial of Different Languages

This service change in the University is based on the office of Institute of Languages. Institute of Languages offers language tutorial different languages like French, Arabic, German, Korean, Italian, Portuguese, Mandarin, Nihongo, Bahasa Indonesia, and Philippine Dialects. The International Languages tutorial is a web-based step by step lesson covering basics, pronunciation, but also grammar, vocabulary. It offers audio support for better oral comprehension, a table of contents and an index for faster searches. It offers audio support for better oral comprehension, a table of contents and an index for faster searches. The online tutorial support is well structured and organized. The tutor employs strategies to encourage dialogue amongst students online. The tutor is prompt in responding to my questions or insights. The student expect s a response online within one day.The student would benefit from more interaction online. The student would benefit from more training to communicate online. The benefits of online different languages courses reach far and wide. With the difficulty of the language posing numerous stumbling blocks even for those with the different native language tongue, strong instruction that works is essential. Whether you are taking English as a second language or you need to increase your communication skills in other languges to be a better professional, online courses offer you a great freedom as well as a good opportunity.

Reference:
http://usep-ic.forumsmotions.com
http://wikipedia.org

MIS 2 - Assignment 8

I was hired and have been tasked to develop a strategic information systems plan for a company. These are the questions I would ask the officers of the company:

1. What are the natures of the present IS planning process the organization has?

In this question, I can come up new strategic awareness for the organization. This strategic awareness involves determining key planning issues, defining planning objectives, organizing the planning team, and obtaining top management commitment.

2. What is the current business and working environment the company has?

In this question, I can form a situational analysis. Situational analysis must include analyzing current business systems, analyzing current organizational systems, analyzing current information systems, analyzing the current external business environment, and analyzing the current external information technology (IT) environment.

3. How does the organization conceive present strategy alternatives?

In this question, I can construct new strategy conception. The idea of this strategy conception evolves on identifying major IT objectives, identifying opportunities for improvement, and evaluating opportunities for improvement, and identifying high-level IT strategies.

4. How extensive the present Selecting Strategy is implemented?

With this question, I can make a fresh strategy formulation. This strategy formulation identifies new business processes, new IT architectures, specific new projects, priorities for new projects.

5. What are the impacts of current strategy implementation to the organization?

With this question, I can produce strategy implementation planning. This new strategy implementation planning defines change management approach, defines action plan, evaluates action plan, and defines follow-up and control procedure.

6. What is the current alignment of top management regarding on information strategic information systems plan?

I can formulate new ideas regarding this question. These ideas consists of understanding the strategic priorities of top management, aligning information systems (IS) strategies with the strategic plan of the organization, adapting the goals/objectives of IS to changing goals/objectives of the organization, maintaining a mutual understanding with top management on the role of IS in supporting strategy, identifying information technology (IT)-related opportunities to support the strategic direction of the firm, educating top management on the importance of IT, adapting technology to strategic change, and assessing the strategic importance of emerging technologies.

7. How the analysis phase is done in the previous information systems planning of the organization?

This is the question that needs the knowledge in understanding the information needs of organizational subunits, identifying opportunities for internal improvement in business processes through IT, improving understanding of how the organization actually operates, developing a “blueprint” that structures organizational processes, monitoring internal business needs and the capability of IS to meet those needs, maintaining an understanding of changing organizational processes and procedures, generating new ideas to reengineer business processes through IT, and understanding the dispersion of data, applications, and other technologies throughout the firm.

8. In terms of cooperation, how the systems developers of the organization interact with each other in developing an information system?

In this question, I can come up new strategic cooperation process for the organization. This strategic cooperation process involves avoiding the overlapping development of major systems, achieving a general level of agreement regarding risks/tradeoffs among system projects, establishing a uniform basis for prioritizing projects, maintaining open lines of communication with other departments, coordinating the development efforts of various organizational subunits, identifying and resolving potential sources of resistance to IS plans, developing clear guidelines of managerial responsibility for plan implementation.

9. What are capabilities of current system developers in order to measure and make an assessment to have new plan?

The idea of this capability plan evolves on ability to identify key problem areas, ability to identify new business opportunities, ability to align IS strategy with organizational strategy, ability to anticipate surprises and crises, ability to understand the business and its information needs, flexibility to adapt to unanticipated changes, and ability to gain cooperation among user groups for IS plans.

Reference:
www.wikipedia.org

MIS 2 - Assignment 7

Google

Google's mission is to organize the world's information and make it universally accessible and useful. Search is how Google began, and it's at the heart of what Google do today. Google devotes more engineering time to search than to any other product at Google, because it believes that search can always be improved. It is constantly working to provide you with more relevant results so that you find what you're looking for faster. To that end, it has added services such as personalized search, which tailors results for their clients if the clients are signed in to Google account.

As a business, Google generates the majority of its revenue by offering advertisers measurable, cost-effective and highly relevant advertising, so that the ads are useful to the people who see them as well as to the advertisers who run them. Hundreds of thousands of advertisers worldwide use Google AdWords program to promote their products and services on the web. Advertisers bid in an open and competitive auction to have their ads appear alongside the search results for particular keywords. They can specify the geographic location and time of day for their ads to appear. As a result, people see ads that are so useful and relevant that they become a valuable form of information in their own right. Since we believe you should know when someone has paid to put a message in front of you, we distinguish ads from search results or other content on a page by labeling them as "sponsored links" or "Ads by Google". Google doesn't sell ad placement in search results, nor does Google allow people to pay for a higher ranking there.

Google builds web applications, or "apps", to make it simpler for people to share information and get things done together. Gmail, Google Calendar and Google Docs help people communicate and collaborate more easily, whether planning a wedding or building a business itinerary. The information is stored securely online, accessible from any device with a web connection. And because it lives online, it's easy to share with a group of collaborators. Everyone in the group can work on the same material at the same time, even if they're working in different buildings, countries or continents.

Google’s clients should be able to access all of Google's services wherever they are – even if they don't have a computer nearby. Google makes it easy for them to use their favorite Google products, from Google Maps to YouTube, right from your phone. As mobile devices become increasingly central to people's lives, Google works hard to find new and better ways to help clients get the information they need when they are on the go. A lot has changed since the first Google search engine appeared. Google has grown and expanded its offerings from a single service to dozens, often in as many languages. Google now has thousands of employees and offices around the world. But some things haven't changed: its dedication to its users and its belief in the possibilities of the Internet itself. The 3 big competitors of Google are America Online(AOL), MSN, and Yahoo! Inc.

Google nowadays Google is the most used search engine engine in the world with more than 60% of the world requests made on search engines. Google is also a company providing a large range of services(exactly 149), his more recent ones(the web browser: Chrome) make it now compete with firms such as Microsoft. Some example of Google services: mails, blogs, videos hosting, companies ads, maps, pictures hosting, websites analytics During the last 4 semesters Google generated nearly 20 billions dollars of revenue with a net profit of 4,85 billions. As a comparison for the same period Microsoft(created 33 years ago) got 60 billions dollars and a net profit of 17,6 billions. The value of Google is nowadays estimated to 142 billions of dollars. In the High- Tech sector only three companies have a better quotation: Microsoft, IBM (created 97 years ago) and Apple (32 years ago). Google is physically present in 33 countries around the world with 68 offices: To understand how this company could have been so successful internationally let's study his internationalization steps during the last decade.

Google is now available in 72 languages, partnership with AOL and first office in Australia in Sidney. Several national acquisitions to extend Google services which at the end extend as well the world services abroad of Google, for example the blog services “Blogger”. Dublin became the first location for Google's regional operations outside the U.S. More than 100 Google domain names are available. Google opens new engineering offices in Bangalore and Hyderabad in India. R&D center opened in Tokyo. The famous Google Maps application is release for Europe. New R&D center opens this time in China. First offices in Mexico and Argentina. Several other acquisitions to extend their services with for each of them translation in several languages. Partnership with China Mobile, the world's largest mobile Telecommunication carrier, to provide mobile and Internet search services in China. Sign partnerships to give free access to Google Apps for Education to 70,000 university students in Kenya and Rwanda. Series of acquisitions and translations of other Google services. As we just saw in ten years Google developed a lot of International marketing structures from simple representation offices to R&D centers to complex partnerships. I did not mentioned it but Google acquired several companies(more than 50). The purpose of these acquisitions was to extend their range of services which are then translated in order to be internationally exportable. I however did not find until now an acquisition of another search engine. Google seems to prefer the partnership(the company keep her brand but use Google, the best example is AOL).

An IT expert would qualify Google as a Geocentric company(the same service for all the world). There are however some slight modifications made to their service which could make think that Google is acting as well as a Regiocentric company, at least on some marketing aspects. The reason which drove me to this conclusion is that Google managers are recruited from all over the world and the power is centralized in the United States. As said in Google's presentation they opened in 2003 in Dublin a location for regional operations outside the U.S. It has been designed to serve Google customers across multiple time zones and languages spanning Europe, the Middle East and Africa. Taking in account that Europe has a very strong addiction to Google I may think that Google has in fact two center of decisions(one for America and one for the rest of the world) However Google has a so huge amount of offices in the United States which make me think that the final decision are taking in the United States which include a hierarchy among those centers of decisions.

Google has latest services, and these are:

Reaching new customers:
• AdWords. Advertising business on Google
• Local Business Center. Making business searchable on maps
• Base: Product Search and more. Posting all kinds of content to Google
• Webmaster Central. Improving website's visibility

Enhancing website:
• AdSense. Earning revenue from website
• Analytics. Analyzing website traffic
• Checkout. Selling online
• Google Ad Manager. Managing ad inventory
• Website Optimizer. Building effective websites
• Google Site Search. Adding site search to website
• Google Friend Connect. Growing viral traffic to site

Increasing productivity
• Google enterprise search solutions. Searching company information
• Google Apps. Communicating and collaborating
• Postini services. Securing email
• Google Geospatial Solutions. Visualizing, analyzing and sharing


Reference:
Google.com

MIS 2 - Assignment 6

Critical Success Factors (CSFs) are defined as being ‘the limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization.’ They are the few key areas where ‘things must go right’ for the business to flourish. As a result, the CSFs are areas of activity that should receive constant and careful attention from management. The current status of performance in each area should be continually measured, and that information should be made widely available.

CSFs are the few key areas where ‘things must go right’ for the business to flourish. It is very important to identify them when aiming to obtain a profound understanding of the business. The very act of determining CSFs may help to crystallize objectives and strategies, and certainly to emphasize priority activities.

Every firm in an industry may have some common CSFs such as access to raw materials or timely delivery, due to pressures on or in the industry. The overall organization, which could have units in many industries, will have CSFs relative to its objectives of diversification, return on investment and portfolio mix. The key area for determining CSFs as part of IS strategy development is the business unit, since this is the practical level to determine strategy. The agreement of the business unit managers as to what these CSFs are is important in obtaining consensus on the major IS/IT investments. There will also tend to be a structured, cascading relationship in a large organization between objectives and CSFs.

Critical Success Factor (CSF) analysis has been the most commonly-used tool in the IS strategies toolkit and its value is increased if used in conjunction with the Balanced Scorecard. The establishment of a set of CSFs against a set of business objectives and measures, within a Balanced Scorecard framework, requires consolidation into a matrix of objectives and relevant CSFs. This is reasonably straightforward, provided there are not too many of either! The priority for dealing with the CSFs is not determined by the CSF (‘critical’ implies that no priority can be set), but by the priority of the objective that caused the success factor to be identified and by the number of objectives that will be affected by its satisfactory achievement. The next stage in the process is not, however, as straightforward. Interpreting CSFs in terms of information and information systems cannot easily be done without reference to the activities of the business and its organizational structure.

Critical Success Factors in Strategic Information Systems:

A second aspect of the analyses of our research base identifies some of the key factors that seem to recur frequently and underpin success. Few strategic information systems show all of the factors, but many show a number. Again, these factors are often at odds with traditional IS/IT approaches and show more commonality with business innovation.

1. External, not internal, focus: looking at customers, competitors, suppliers, even other industries and the business’s relationships and similarities with the outside business world. Traditionally IS/IT was focused on internal processes and issues. Toshiba is using wireless technology for remote monitoring of photocopiers, so that technicians can be dispatched as soon as there are signs of a problem. This reduces servicing costs and, since machines are out of action less often, increases usage and revenue.

2. Adding value, not cost reduction: although cost reductions may accrue due to business expansion at reduced marginal costs, ‘doing it better, not cheaper’ seems to be the maxim. This is consistent with the requirements of companies to differentiate themselves from competitors—better products, better services—to succeed. Historically, IS/IT was seen as a way of increasing efficiency—doing it cheaper—and, while this is obviously important in any business environment, it is not the only way to succeed. At Svenska Cellulosa Aktiebolaget, a Swedish pulp and paper company, foremen use a wireless system to send instructions to loggers in the field, specifying which trees to cut and in what order. This enables the company to coordinate harvesting decisions with inventory and transport requirements and match those decisions to market needs.

3. Sharing the benefits: within the organization, with suppliers, customers, consumers and even competitors on occasion! In many cases in the past, systems benefits have not been shared even within an organization, but used instead to give departments or functions leverage over each other. This reduces the benefits and does not allow them to be sustained. Sharing benefits implies a ‘buy in’, a commitment to success, a switching cost. Almost all of the examples involve sharing the benefits, with suppliers, customers, consumers and competitors, to provide barriers of entry to the industry. For instance, the introduction of debit cards to replace cheque books depended for its success on banks sharing some of the reduced processing costs with the retailers and consumers, since the benefits that the bank could gain depended on the commitment of retailers and consumers. Some would argue that this was achieved by increasing the cost of the alternative (i.e. cheques!).

4. Understanding customers and what they do with the product or service: how they obtain value from it, and the problems they may encounter in gaining that value. In the 1980s, McKesson, the pharmaceutical wholesaler, followed this principle very closely in providing a range of information-based services to drugstores, starting from a simple problem of stock control, solved by delivering products in shelf-sized batches. Black and Decker, a low-cost producer, supplied a value-added service to retailers to enable them to ‘swap’ goods they had over or understocked for the season. They did not want returns, but the retailer could not be expected to predict precisely how many lawnmowers, for instance, would be sold. It helped to solve a customer’s problem. Federal Express has built on its original customer-service system, which tracks every movement of every package, and extended access direct to customers.

5. Business-driven innovation, not technology-driven: the pressures of the marketplace drove developments in most cases. This tends to cast doubt on the idea of competitive advantage from IT, but, in practice, it means that new or existing IT provides or enables a business opportunity or idea to be converted into reality. The lead or the driving force is from the business, not necessarily a traditional route to using IS/IT, which has often been driven by technology, pushed by the IT suppliers and professionals, not pulled through by the users. It is only relatively recently that the latest technology has become of interest to business managers. But the business issue does not change: why take two risks at the same time—that is, a new business process based on new technology? It is a recipe for failure! Keen56 summed it up well by saying, ‘Major failures in using IT are often based on much better technology and bad business vision. Successes come from good enough technology and a clear understanding of the customer.’ An early prediction of the demise of many dot.com ventures?

6. Incremental development, not the total application vision turned into reality. Many examples show a stepped approach—doing one thing and building on and extending the success by a further development. To some extent, this is developing applications by experimentation but also not stopping when a success is achieved but considering what could be done next. This, again, is against the traditional notion of clarifying all requirements, defining all boundaries and agreeing the total deliverables of the system before embarking on the expensive, structured process of design and construction, freezing the requirements at each stage. Prototyping of systems obviously has a key role to play here.

7. Using the information gained from the systems to develop the business. Many mail order and retailing firms have segmented their customers according to the purchasing patterns shown by transactions and then providing different, focused catalogues or special offers. Product and market analyses plus external market research information can be merged and then recut in any number of ways to identify more appropriate marketing segmentation and product mix. This aspect has been exploited particularly well by the ‘direct’ insurers, who are able to target the lower risk, more profitable customers very accurately. Through using the information gleaned from customer transactions, the Britannia Building Society in the UK has developed a sophisticated segmentation strategy based on creating customer propensity models, which have helped the Society increase the average number of products per customer from 1.3 to over 2.0.57 Before Safeway introduced its loyalty card scheme, they knew virtually nothing about customers. They didn’t know who they were, what they bought or even if they were the same customers who shopped at the store the previous week. By introducing a loyalty card scheme, it persuaded customers to tell them what they bought, and yielded significant information such as: most customers aren’t profitable; average shopping range is 250 lines; women are 50% impulsive, men 90%; customers shop for concepts not commodities (e.g. Sunday lunch, kids treat, Italian meal); Feta cheese is the 298th most popular cheese on units sold, but leaps to 25th in terms of basket size.

As discussed above, these factors, in general, imply different attitudes to the use of IS/IT than have prevailed in the past, implying that we need new ways of thinking about IS/IT techniques to uncover such opportunities, and then new approaches to managing these applications to ensure success. Another general observation can be made from these examples, by considering what actually produces the success—information technology, information systems or information. Technology itself is the ‘enabler’, which provides short-term advantage and the opportunity to develop new systems and to capture and use potentially valuable information. But, normally, competitors will be able to purchase the same technology, and any advantages could soon be negated. However, the new information systems that developed, utilizing the technology, could provide advantages that may be less vulnerable to erosion by competitive copying. The potential gain will depend on how conclusively and exclusively the systems alter business processes and relationships.

In time, however, the existing competition or new entrants enticed into the profitable parts of industry could redefine the relationships by introducing alternative information systems. If the firm wishes to sustain its competitive advantage, it must use the information gleaned from its systems to improve its products or services—to match the requirements of the marketplace or influence its development.

Reference:
Strategic Planning for Information Systems, Third Edition
By: John Ward and Joe Peppard
Copyright © 2002 by John Wiley & Sons Ltd.

MIS 2 - Assignment 5

In the spectrum of organizational change, which is the most radical type of change: automation, rationalization of procedures, business reengineering, or paradigm shifts?

Change is an absolutely critical part of business. And yes, organization does need to change—preferably now and not later, when organization has no other choice. The problem is that people hate it when their bosses announce a “transformation initiative.” They run back to their cubicles and start frantically e-mailing one another, complaining that the changes are going to ruin everything. People love familiarity and patterns. They cling to them. The phenomenon is so entrenched it can only be chalked up to human nature. But while managing change can sometimes feel like moving a mountain, it can also be incredibly rewarding, particularly when organization starts seeing results.

Typically, the concept of organizational change is in regard to organization-wide change, as opposed to smaller changes such as adding a new person, modifying a program, etc. Examples of organization-wide change might include a change in mission, restructuring operations (e.g., restructuring to self-managed teams, layoffs, etc.), new technologies, mergers, major collaborations, "rightsizing", new programs such as Total Quality Management, re-engineering, etc. Some experts refer to organizational transformation. Often this term designates a fundamental and radical reorientation in the way the organization operates.

Change should not be done for the sake of change -- it's a strategy to accomplish some overall goal. Usually organizational change is provoked by some major outside driving force, e.g., substantial cuts in funding, address major new markets/clients, need for dramatic increases in productivity/services, etc. Typically, organizations must undertake organization-wide change to evolve to a different level in their life cycle, e.g., going from a highly reactive, entreprenueral organization to more stable and planned development. Transition to a new chief executive can provoke organization-wide change when his or her new and unique personality pervades the entire organization.

Organization-wide change is difficult to accomplish. Typically there are strong resistances to change. People are afraid of the unknown. Many people think things are already just fine and don't understand the need for change. Many are inherently cynical about change, particularly from reading about the notion of "change" as if it's a mantra. Many doubt there are effective means to accomplish major organizational change. Often there are conflicting goals in the organization, e.g., to increase resources to accomplish the change yet concurrently cut costs to remain viable. Organization-wide change often goes against the very values held dear by members in the organization, that is, the change may go against how members believe things should be done. That's why much of organizational-change literature discusses needed changes in the culture of the organization, including changes in members' values and beliefs and in the way they enact these values and beliefs.

Organization-wide change can be successful. Successful change must involve top management, including the board and chief executive. Usually there's a champion who initially instigates the change by being visionary, persuasive and consistent. A change agent role is usually responsible to translate the vision to a realistic plan and carry out the plan. Change is usually best carried out as a team-wide effort. Communications about the change should be frequent and with all organization members. To sustain change, the structures of the organization itself should be modified, including strategic plans, policies and procedures. This change in the structures of the organization typically involves an unfreezing, change and re-freezing process.

The best approaches to address resistances is through increased and sustained communications and education. For example, the leader should meet with all managers and staff to explain reasons for the change, how it generally will be carried out and where others can go for additional information. A plan should be developed and communicated. Plans do change. That's fine, but communicate that the plan has changed and why. Forums should be held for organization members to express their ideas for the plan. They should be able to express their concerns and frustrations as well.



If you belong to an organization, there are some guidelines in order to achieve a successful organization-wide change for you to do. And these are;
1. Consider using a consultant. Ensure the consultant is highly experienced in organization-wide change. Ask to see references and check the references.
2. Widely communicate the potential need for change. Communicate what you're doing about it. Communicate what was done and how it worked out.
3. Get as much feedback as practical from employees, including what they think are the problems and what should be done to resolve them. If possible, work with a team of employees to manage the change.
4. Don't get wrapped up in doing change for the sake of change. Know why you're making the change. What goal(s) do you hope to accomplish?
6. Plan the change. How do you plan to reach the goals, what will you need to reach the goals, how long might it take and how will you know when you've reached the goals or not? Focus on the coordination of the departments/programs in the organization, not on each part by itself. Have someone in charge of the plan.
7. End up having every employee ultimately reporting to one person, if possible, and they should know who that person is. Job descriptions are often complained about, but they are useful in specifying who reports to whom.
8. Delegate decisions to employees as much as possible. This includes granting them the authority and responsibility to get the job done. As much as possible, let them decide how to do the project.
9. The process won't be an "aha!" It will take longer than you think.
10. Keep perspective. Keep focused on meeting the needs of the customer or clients.
11. Take care of yourself first. Organization-wide change can be highly stressful.
12. Don't seek to control change, but rather to expect it, understand it and manage it.
13. Include closure in the plan. Acknowledge and celebrate the accomplishments.
14. Read some resources about organizational change, including new forms and structures.

In addition to guidelines, there’re principles to embrace in implementing change especially in organization for you to do. The following are four practices that illustrate the organizational change:

1. Attach every change initiative to a clear purpose or goal. Change for change’s sake is stupid and enervating. Change should be a relatively orderly process, but for that to occur, people have to understand why change is necessary and how changes will affect them. This is easier, of course, when the problems are obvious—earnings are collapsing or a competitor has dropped prices 20 percent. But sometimes the need for change isn’t immediately apparent. Competitive threats seem to be emerging, but you don’t know for certain, and still, you have to respond. In those cases, relentless communication about the business rationale for change, reinforced with lots of data, is the best ammunition you have. The larger the organization, the more challenging it will be to communicate the need for change. In big companies, calls for change are often greeted noncommittally. After all, if the organization has been through enough change programs, employees will assume you’ll go away if they just wait long enough. Stick to your guns—your solid, persuasive business case. Over time, logic will win out.

2. Hire and promote only true believers and get-on-with-it types. Everyone in business claims to like change. To say otherwise would be career suicide. But by my estimate, less than 10 percent of all businesspeople are true change agents. Once the next group—about 70 to 80 percent of people working in business—is convinced that change is necessary, they’ll say, “OK already, get on with it.” The rest are resisters.To make change happen, companies must actively hire and promote only true believers and get-on-with-its. But with everyone claiming to like change, how can you tell who is for real? Luckily, change agents usually make themselves known. They’re typically brash, high-energy and more than a little paranoid about the future. They often invent change initiatives on their own or ask to lead them. Invariably, they are curious and forward-looking. These people have a certain fearlessness about the unknown. If they fail, they know they can pick themselves up, dust themselves off and move on. They’re thick-skinned about risk, which allows them to make bold decisions without a lot of data.

3. Ferret out and remove the resisters, even if their performance is satisfactory. This is the hardest of the four practices to implement. It’s tough to let anyone go, but it’s particularly difficult to fire people who are not actually screwing up and may in fact be doing quite well. But in any organization, there are people who will not accept change, no matter how sound the case is. They are so invested—emotionally, intellectually, or politically—in the status quo that they cannot see a way to improve anything. These people usually have to go.
That may sound harsh, but you’re not doing anyone a favor by keeping resisters in the organization. They foster an underground resistance and lower the morale of the people who support change. They’re wasting their own time: They’re working at a organization where they don’t agree with or share in the vision, and they should be encouraged to find one where they do.

4. Look at car wrecks. Most companies capitalize on obvious opportunities. When a competitor fails, they move in on their customers. When a new technology emerges, they invest in it and create product line extensions. But to be a real change organization, you also have to have to look at bolder, scarier, more unpredictable events, assess the opportunities they present and make the most of them. Fostering this capability takes a certain determination, but the rewards can be huge. Take the 1997 Asian financial crisis. Currency traders certainly capitalized on this awful event; they live on exploiting change. But they’re not the only ones who should do this. GE had real success buying undervalued Thai auto loans in this period. Others prospered by buying real estate at fire sale prices. Bankruptcies are another type of calamity that reveals all kinds of opportunities. Of course, they’re tragic to the employees. Jobs are lost, and pensions disappear into thin air. But jobs and futures can also be created from the cinders. With all the noise out there about change, it’s easy to get overwhelmed and confused. But these are the only four practices that matter. That’s it. There’s nothing to be afraid of.

The most radical type of change is paradigm shift. Paradigm shift is the term first used by Thomas Kuhn in his influential book The Structure of Scientific Revolutions (1962) to describe a change in basic assumptions within the ruling theory of science. It is in contrast to his idea of normal science.

The term paradigm shift, as a change in a fundamental model of events, has since become widely applied to many other realms of human experience as well, even though Kuhn himself restricted the use of the term to the hard sciences. According to Kuhn, "A paradigm is what members of a scientific community, and they alone, share.". Unlike a normal scientist, Kuhn held, "a student in the humanities has constantly before him a number of competing and incommensurable solutions to these problems, solutions that he must ultimately examine for himself." (The Structure of Scientific Revolutions). Once a paradigm shift is complete, a scientist cannot, for example, posit the possibility that miasma causes disease or that ether carries light. In contrast, a critic in the Humanities can choose to adopt a 19th-century theory of poetics, for instance.

The agents of organizational change are driving a new paradigm shift today. The signs are all around us. For example, the introduction of the personal computer and the internet have impacted both personal and business environments, and is a catalyst for a Paradigm Shift. We are shifting from a mechanistic, manufacturing, industrial society to an organic, service based, information centered society, and increases in technology will continue to impact globally. Change is inevitable. It's the only true constant.

Paradigm shifts tend to be most dramatic in sciences that appear to be stable and mature, as in physics at the end of the 19th century. At that time, physics seemed to be a discipline filling in the last few details of a largely worked-out system. In 1900, Lord Kelvin famously stated, "There is nothing new to be discovered in physics now. All that remains is more and more precise measurement." Five years later, Albert Einstein published his paper on special relativity, which challenged the very simple set of rules laid down by Newtonian mechanics, which had been used to describe force and motion for over two hundred years. In this case, the new paradigm reduces the old to a special case in the sense that Newtonian mechanics is still a good model for approximation for speeds that are slow compared to the speed of light. Philosophers and historians of science, including Kuhn himself, ultimately accepted a modified version of Kuhn's model, which synthesizes his original view with the gradualist model that preceded it. Kuhn's original model is now generally seen as too limited.

Kuhn himself did not consider the concept of paradigm as appropriate for the social sciences. He explains in his preface to "The Structure of Scientific Revolutions" that he concocted the concept of paradigm precisely in order to distinguish the social from the natural sciences (p.x). He wrote this book at the Palo Alto Center for Scholars, surrounded by social scientists, when he observed that they were never in agreement on theories or concepts. He explains that he wrote this book precisely to show that there are no, nor can there be any, paradigms in the social sciences. Mattei Dogan, a French sociologist, in his article "Paradigms in the [Social Sciences]," develops Kuhn's original thesis that there are no paradigms at all in the social sciences since the concepts are polysemic, the deliberate mutual ignorance between scholars and the proliferation of schools in these disciplines. Dogan provides many examples of the non-existence of paradigms in the social sciences in his essay, particularly in sociology, political science and political anthropology. In The Structure of Scientific Revolutions, Kuhn wrote that "Successive transition from one paradigm to another via revolution is the usual developmental pattern of mature science."

Kuhn's idea was itself revolutionary in its time, as it caused a major change in the way that academics talk about science. Thus, it could be argued that it caused or was itself part of a "paradigm shift" in the history and sociology of science. However, Kuhn would not recognize such a paradigm shift. Being in the social sciences, people can still use earlier ideas to discuss the history of science. There is a paralysis in a paradigm. Perhaps the greatest barrier to a paradigm shift, in some cases, is the reality of paradigm paralysis: the inability or refusal to see beyond the current models of thinking. This is similar to what psychologists term Confirmation bias.

In conclusion, for millions of years we have been evolving and will continue to do so. Change is difficult. Human Beings resist change; however, the process has been set in motion long ago and we will continue to co-create our own experience. Kuhn states that "awareness is prerequisite to all acceptable changes of theory". It all begins in the mind of the person. What we perceive, whether normal or metanormal, conscious or unconscious, are subject to the limitations and distortions produced by our inherited and socially conditional nature. However, we are not restricted by this for we can change. We are moving at an accelerated rate of speed and our state of consciousness is transforming and transcending. Many are awakening as our conscious awareness expands.



References:
http://www.managementhelp.org
http://www.businessmirror.com.ph/home.html
http://en.wikipedia.org
http://www.taketheleap.com/index.htm

MIS 2 - Assignment 4

I will discuss the following thoughts and steps with the university president in order to expedite the implementation of the IS Plan of the university.

While the making of strategic choices is often portrayed as the end of a planning process, it is well recognized that in modern organizations, the choices made in any planning process may not be enacted. There are many reasons for such strategy implementation failures, ranging from a lack of understanding as to who is responsible for implementation to reluctance on the part of lower level managers to truly accept the choices made in the SPIS process, perhaps because they disagree with or do not fully understand them.

To avoid these strategic implementation failures, clear implementation plans must be developed. These plans should indicate who is responsible for the implementation of each element of the plan; they should identify specific “milestones” and schedules for the reporting of results to those who are responsible and to top management, and they should specify clear performance goals for each milestone. Such implementation plans cannot be prepared until the desired changes in the major strategic
IS/IT elements have been approved by top management, but they should be developed immediately thereafter and their development should be considered an integral part of the SPIS process.

The steps in order to expedite the implementation of the IS Plan:

1. Strategy Implementation Step – Budgets are also the “real world” of implementing IT strategy, linking the long-term goals of the organization and their short-term execution through the allocationof resources to activities. Unfortunately, research shows that the majority of organizations do not link their strategies to their budgets, which is why so many have difficulty making strategic changes . This is particularly true in IT, according to the focus group. As one manager complained, “no one knows what we’re doing in the future. Therefore, our goals change regularly and at random.” Another noted, “The lines of business pay little attention to IT resources when they’re establishing their strategic plans. They just expect IT to make it happen.” Budgets can affect IT strategy implementation in a number of ways. First, where IT dollars are spent determines the impact IT can have on corporate performance. Clearly, if 80 percent of IT expenditures is going to operations and maintenance, IT can have less strategic impact than if this proportion is 20 percent lower. Second, how discretionary IT dollars are spent is important. For example, some companies decide to invest in infrastructure while others do not; some will choose to “bet the company” on a single large IT initiative while others will choose more focused projects. In short, the outcome of how a company chooses between investment opportunities is reflected in its budgets.

Third, the budgeting process itself reflects and reinforces the ability of strategic decision making to have an impact. IT expert states that because budget processes are inherently biased toward the short term, in many organizations operational needs will systematically preempt strategic ones. In IT, the common practice of routinely allocating a fixed percentage of the IT strategic budget to individual business units, makes it almost impossible to easily reallocate resources to higher priority projects at the enterprise level or in other business units. In addition, several focus group members noted that their siloed budgeting processes make it difficult to manage the cross-business costs of strategic IT decisions. Overall, budgets are a critical element of most managerial decisions and processes and are used to accomplish a number of different purposes in IT: compliance, fiscal accountability, cost reduction, business unit and enterprise strategy implementation, internal customer service, delivery of business value, and operational excellence, to name just a few. This, in a nutshell, is the reason why IT budgeting is such a complex and challenging process.

According to some IT experts one of the major causes of SISP failure is the lack of understanding and emphasis on implementation issues. Plans are likely to remain and gather dust on the shelf unless there is an effective implementation strategy. In order to address this problem IT experts have come up with a “comprehensive and parsimonious set of factors or practices that predict implementation” and suggest that they “may help planners and researchers better understand implementation.” It is highly desirable for the plan to be read by all key stakeholders. The skill set of employees should also come under scrutiny. Implementation can fail if the organization lacks employees with the appropriate expertise. Plans must proactively be put into practice under the supervision of a project champion and any problems at the implementation stage must be sorted out to derive maximum benefit from the plans. As IT experts point out: “too often organizations fail to implement the recommendations from a SISP study.” An implementation strategy should therefore form an integral part of any strategic planning process.


2. Exploration Strategy Step - While exploitation strategy takes a structured, analytical, evaluative, and methodical approach to IS development, the nature of the beast is quite different in exploration strategy, which is about identifying opportunities for the innovative use of IT. While structured approaches can give some signposting for the innovative use of IT, they alone are not sufficient to nurture the creative talents of individuals within the organization. Exploration strategy specifically seeks to encourage and promote innovation and creativity and thereby achieve competitive or strategic advantage for the business. This will involve the use of unconventional approaches such as tinkering and improvisation to unleash the creative potential of bright sparks and visionaries in the organization. Individuals and/or teams might come up with fresh ideas and the feasibility of these ideas has to be tested by creating a prototype. Such experimentation/exploration must be encouraged, despite the possibility of its becoming costly, and may, in the majority of cases, need to be abandoned after the initial feasibility study. This should not involve harsh criticism or loss of face of individuals/ teams. Impact methodologies are part and parcel of any exploration strategy.

In summary, then, exploitation strategies, which take a methodical approach, are concerned with improving operational efficiency whereas exploration strategies, which make use of experimentation and prototyping, are meant to provide competitive/strategic advantage for the business. Both of these strategies are essential for a balanced SISP process. A great deal of work has also been done in the past couple of decades to understand the success factors of many of the strategic planning efforts. These include: organizational issues, resource issues, effectiveness of the planning methods used and the actual relevance of the plan, and, more importantly problems associated with implementing the plans themselves. Many researchers have also argued for an ongoing process of evaluation and review and the consideration of implementation as a critical issue. These calls are not always heeded and the reality is that, many IS planning decisions/documents, rather than being proactively implemented, are left to gather dust on the shelf or in many instances implemented only partially.

Another fundamental problem is that many still question the value of conducting strategic planning. For them, strategic planning is inappropriate/ineffective for responding to the modern fast-changing business world because, by the time plans are developed and implemented, business requirements will have changed (and/or technology moved on), rendering the plans obsolete. As IT expert has observed, many CIOs “have apparently responded to the forces of chaos by throwing in the towel on strategic planning.” His view resonates with that of IT experts, who point out that a lot of (Western) companies have abandoned the idea of a long-term IS planning process altogether. Also a more recent survey in the United States has shown that 39 percent of the respondents had no formal IT strategy at all. Some would go even further to suggest that the emergence of the Internet marks the death knell for strategies and strategic plans. Porter disagrees strongly: “In our quest to see how the Internet is different, we have failed to see how the Internet is the same. While a new means of conducting business has become available, the fundamentals of competition remain unchanged. The next stage of the Internet’s evolution will involve a shift in thinking from e-business to business, from e-strategy to strategy. Only by integrating the Internet into overall strategy will this powerful new technology become an equally powerful force for competitive advantage”.

IT expert sides with other and points out that the difficulty in sustaining a competitive position, because of the speed of imitation by rivals, actually strengthens rather than weakens the need for strategic planning. “As buyers become more powerful and business processes and systems more homogeneous, only the strategically astute companies will be able to rise above the competitive free-for-all.” He cites the success of Dell and Wal-Mart, which, despite the acquisition of sophisticated IT systems by competitors, are able to maintain their competitive position primarily through astute business and IT plans and strategies. IT expert believes that such chaotic times “make it more necessary than ever for the CIO to routinely take a strategic view.” IT expert agrees with another: “Strategic planning is more important today than ever before, and it is the very speed of change in today’s business climate which makes it so.” The case for conducting strategic planning is therefore well argued. The unanswered question, however, is: how should organizations go about conducting successful strategic planning? In this chapter we attempt to identify several dos and don’ts for success. More specifically, eight principles for successful strategic planning are identified from the prior literature, and case examples from organizations of contrasting size and structure that report effective IS planning efforts are described. This chapter also emphasizes the need for planning to be an ongoing activity and that IT systems that are planned and developed must be continuously repositioned and enhanced to enjoy long-term sustainable advantage. In the light of these principles is also carried out to determine whether they are valid in the real world of business.

Technical IT Skills/Application Development/Implementation Methodology Step - Technical IT skills are the skills needed to develop IT applications. Technical IT skills include analysis, design, and programming skills, understanding of operating systems, and experience with databases and networking protocols. While these skills can be very valuable, since they are widely available to firms—through hiring employees or consultants with these skills—they are usually not rare or costly to imitate, and thus, by themselves, they are not likely to be sources of distinctive advantages. However, if a firm’s programmers and analysts develop a specialized understanding of the firm’s processes and strategies and are able to conceive unique applications to improve customer service, then such an understanding of a firm’s processes and strategies can be a source of competitive advantage. In contrast to technical skills, application development methodology refers to the higher order (managerial) processes involved in collecting requirements and organizing the development and implementation of IT applications. Carnegie Mellon University’s capability maturity model (CMM) is an example of software development methodology. CMM refers to the structured approach to developing and implementing software applications. However, while it is clear that the requirements of each CMM level are well documented, few organizations have achieved the highest level (CMM level 5) of certification. As higher levels of CMM have been associated with more reliable/predictable, higher quality, and lower cost/cycle time of development firms at higher CMM levels have a competitive advantage in developing and implementing IT applications. Similarly, implementing large IT applications has proved to be a significant challenge. Since large IT applications are more about managing organizational change than about implementing software applications, this is not surprising. Thus, if a firm has figured out the social aspects of implementing IT projects, that firm can achieve a competitive advantage with application development/implementation methodology.


3. IT Platform Step - The IT platform is the set of shared capital resources that provides the foundation on which specific IT applications are built. The primary components of the IT platform are: (1) the computing platform (hardware and operating systems), and (2) the communications network. The characteristic of the IT platform makes the speed of implementation, cost, and value of new IT applications different for different firms. This characteristic is described as “flexibility.” A flexible IT platform allows for more rapid response to emerging business needs, whereas an inflexible IT platform gets in the way of some important initiatives, limiting the freedom of the company to respond to market forces and innovate. On the other hand, less flexible platforms may allow the efficient execution of a narrow and unchanging set of IT applications in a firm. The flexibility of the IT platform is manifested in the degree to which a firm’s data and applications can be shared and accessed throughout the organization. Such flexibility enables an organization to rapidly build and implement IT applications to respond to emerging market needs. A firm’s IT platform is also flexible to the extent that the firm adopts and enforces standards for the components of its IT platform to ensure connectivity and compatibility of its technology platform and share ability of its data and applications.

A flexible IT platform is a complex set of technological resources carefully planned for and developed over time. Because of its path-dependent nature, there can be significant differences across firms in how infrastructure is constituted. Moreover, these differences can be long lasting, since disassembling one platform and erecting a new one can be both costly and time consuming. To the extent that the flexibility of the IT platform varies across firms in an industry, and to the extent that a flexible IT platform enables firms to implement IT applications to support specific processes more efficiently and effectively, the variance in platform flexibility can explain differences in customer service across firms. To the extent that one firm can implement an IT-based strategy that its competitors cannot imitate because of an inflexible IT platform, a flexible IT platform is a strategic resource that can be a source of competitive advantage. A flexible IT platform is an investment for the future that enables the organization to respond quickly to the market. Therefore, though a flexible IT platform may improve the responsiveness of the IT organization, a flexible IT platform may not have any impact on the current level of performance. By investing in a standard platform that ensures compatibility/connectivity and facilitates the shareability of data across systems and units, an organization sets itself to respond quickly to market demands. Thus, though a flexible IT platform may not improve current performance, it may be necessary for the long-term competitiveness of the organization. Also, the more dynamic a firm’s environment, the more valuable a flexible IT platform can be to its long-term survival and growth. The IT platform is thus an enabler (of IT applications), just as highways are enablers of commerce. The IT platform by itself may not provide a competitive advantage, just as highways on their own do not lead to economic growth, but they provide the backbone for commerce that allows economic growth to take place.

A flexible IT platform is more valuable when the firm’s environment is dynamic, that is, when the firm actually requires flexibility to respond to changing customer requirements and different and unpredictable competitive moves. In very stable and mature industries where customer needs and competitors’ strategies are quite predictable, flexibility may not be very valuable. Investing in a flexible IT platform in such environments may actually hurt economic performance as it will increase the firm’s cost of IT operations without any commensurate benefits from the flexibility of its IT platform.


The degree of the relevant stakeholders’ support for higher payoffs from an IT investment is an issue of IS implementation plan. Different stakeholders create different kinds of uncertainties and risks. For example, in procurement-related settings, the success of an IT implementation is often based on what IT experts have called the “missing link”: the degree of actual usage by stakeholders involved with the deployed systems. Similar arguments apply regarding usage of systems that support trade services in international banking, where systems integration capabilities make it possible to achieve highly productive transactional support for trade services and the related banking business partners. The stakeholders can be of numerous kinds, including external stakeholders such as buyers and suppliers, and other industry and technology partners. They also can include internal business partners such as financial and accounting managers, or product design and development, and manufacturing operations staff members. In all of these cases, IT implementations are subject to a variety of relational risks that come up in principal–agent relationships.

Reference:
Information System Planning
Copyright 2005
by: William R. King

MIS 2 - Assignment 3

Based on our interview with the MIS Manager of SAMULCO, the two most frequently experienced causes of frustration of IS professionals and users while working on an IS plan are Resitance to Change and Budget and Financial Constraints.

Resistance To Change


Definition

Resistance to change is the action taken by individuals and groups when they perceive that a change that is occurring as a threat to them.
Key words here are 'perceive' and 'threat'. The threat need not be real or large for resistance to occur.
In its usual description it refers to change within organizations, although it also is found elsewhere in other forms. Resistance is the equivalent of objections in sales and disagreement in general discussions.
Resistance may take many forms, including active or passive, overt or covert, individual or organized, aggressive or timid.


Rationale for resistance

The rationale for resistance is often quite straightforward as people justify their actions to themselves. If you want to overcome resistance to change, you must be able to answer the following points.

Person wants to stay where he is because…
Even if you offer me a bowl of cherries, he may not be very concerned to take what you proffer if he is happy where he is now. People who have been in the same place for a long time are usually in this state. They do not need to change and will view any suggestion of change with distaste.

…His needs are already met here
Needs are basic drivers of action. If needs are not perceived as being particularly threatened and the current situation is relatively comfortable (particularly in comparison with the proposed change) then he will be happier to stay where he am. If people already have their needs met, then you will need to shake the carpet and provide some sort of threat to those needs so they are no longer sufficiently met for the person to want to stay where they are.

…I have invested heavily here
When I have invested a lot of time and energy in building up my position, both socially and organizationally, then any change may mean bad news. Social investment creates a person's sense of identity. Organizational investment gives them control. Sliding down the ladder that I have so painstakingly climbed over the year is a long way from my shopping list. Where people have invested heavily, you will either have to show them how to get to a similar position in the new organization or otherwise reduce the value of their investment (for example by moving the people over whom they have social influence).

...I am in the middle of something important
When I have committed to achieving a goal, either personal or emotional, then a part of my integrity and hence identity may be bound up in achieving the goal. When I have partly completed something, I am also affected by the need for completion, such that I will feel uncomfortable with stopping now. When people are busy, find ways for them to complete the work in the shorter term, perhaps by nudging their goals so they have less to do to complete. If possible, turn their work towards something that will be useful for the new organization.

I do not want to change because…
Even if I am not that happy where I am, I still may not be particularly interested in moving forward with the change.

…the destination looks worse than where I am now
Although I want to move, the final resting place of the change looks significantly worse for me than the current position. I feel it is like jumping out of the frying pan and into the fire. If you want people to voluntarily move, then it must be to somewhere better than they are now. You can create this in two ways: first by making the present position worse (though be careful with this!) and secondly by building a rosy vision to which people can then attach their dreams.

…there is nothing to attract me forwards
If the change is nothing to do with me, if the benefits are all for other people or the general organization, if I just do not buy the 'vision' as sold, then I will feel no pull and I will not buy into the change.You may offer forth a brilliant vision, but do the people buy it? Make sure your communications are clear and couched in terms that people can understand and buy into. Make your visions inclusive, such that people really can and will buy the change.

…I do not know which way to move
If I buy the vision, I may still may not know which way to jump. Some change projects sound wonderful, but people are left wondering what to do (even the managers).Grand plans need to be turned into tactical detail in which people can see and easily take the step forward.

…the journey there looks painful
The final destination may be great, but the journey from here to there looks very uncomfortable. The anticipated pain of the transition is more immediate than the distant and hazy future, and I respond more to this than to any inspiring vision. Make sure the transitional period between now and the final change does not appear so uncomfortable that people refuse to join you. In practice, it may not be that bad -- what counts, though, is the perception of the people, so design the transition well and then communicate it well.

...the destination or journey is somehow bad or wrong
If the transition or the final destination somehow transgresses my values, then I will judge it to be bad or wrong and will be very loathe to join the party.Be careful with the change in working around established organizational and general social values. If you must break an unwritten rule (such as getting rid of people) then do so with appropriate consideration and care.

…I do not trust those who are asking me to change
If my experience of you is that you have been untrustworthy in the past, then I am not likely to buy your vision of the future. If you are going on what I perceive as a perilous journey, then I will not trust you and will not join you. The integrity of leaders is a very important attribute. If you want people to follow you, then you must give them good reason to trust you.

I am not going to change because…
Even if people do not want to change, they may still have to do so, albeit truculently. Some people, how ever, have the wherewithal to refuse.

…I am able to ignore the change
One of the questions I will ask is 'What happens if I do not go along with the change?' If the negative implications for my non-compliance are negligible, then I can happily not join in. This sort of situation occurs when the person in question is so valued by the organization that the idea of them leaving is unthinkable. This is often where difficult choices around change take place. What do you do with the laggards? If this problem is not addressed, then the people around them may take their lead and before long you have a silent revolution on your hands.

…I have the power to obstruct the change
Another reason why a person can happily ignore the change is because they can stop it. People in senior positions often treat change as being a good thing -- as long as it is for someone else. When faced with change themselves, they may do whatever it takes to scupper the change, for example by refusing to give needed access or other support. This is a good test of the senior sponsor of change -- which may need to be the most senior officer in the organization. Those who actively oppose the change must be dealt with -- preferably kindly and in in an understanding way, but ultimately in a firm and final way.


The nature of opposition
When considering stakeholders who are opposing the change, do a deep analysis of their personality to give you better ability to manage their opposition and convert them to the cause of the change. This analysis should help you to decide whether and how you might convert the person to the change cause or, if they are implacable opponents, how you might control or contain their opposition.

Drivers

Beliefs
Beliefs are basic drivers of thought and behavior. If you can understand their beliefs, you can begin to change them.
• What are their beliefs about people? Their rights? Their capabilities?
• What beliefs do they have about themselves?
• How strongly do they hold these beliefs?
• What are the beliefs that they have that led them to oppose the change?
• What beliefs do they have that could be used to help convert them?

Values
Values are guides and shapers of behavior that tell what is right and wrong, good and bad, important and unimportant. Understanding a person's values tells you what they will not do as much as what they will do.
• Are any of their values being transgressed by change actions?
• What are their stress values? Are these being triggered?
• What values can you appeal to, to persuade them to change?

Goals
Goals are the deliberate objectives that we set ourselves to satisfy values and needs. By identifying these and how they are affected by change, you can
• What are their career goals?
• What are their social goals?
• What other goals do they have?
• How are any of these affected by the change?

Perceptions
The perceptions that people have of the change is based on their internal systems and the inferences they make. Perception is reality for the person, even it if is not really true. It therefore makes sense to understand how they perceive the change.
• What are their perceptions of the change? What do they think will happen?
• What are their perceptions of other stakeholders in the change? Do they think others will help them? Do they think others will gain unfair advantage?
• What are their perceptions of those implementing the change? Do they think the change agents will be fair? Do they think they are competent?

Potential
A critical question about opponents of change is what they can and are likely do to oppose the change.
• What power do they have?
• What is the source of that power? (position, expertise, social, etc.)
• How might they use that power? (blocking, persuading others, etc.)
• What would the impact of that action be? (local, widespread, etc.)
• How might their power change?

Triggers
And when you understand the power that a person who is opposing or may oppose the change, the final step is to understand their triggers, those events that would tip them into action.
• What would lead them to use that power? (events, actions, etc.)
• What would defuse them beforehand? (involvement, listening, etc.)
• What would bring them down after they had started resisting? (listening, threats, etc.)
• Who do they listen to? (friends, social leaders, senior people, etc.)
• What could other people do to contain or convert them? (words, action, etc.)

When resistance to change occurs, then it is very helpful to be able to spot it coming and hence respond appropriately to it (rather than be surprised when the change mysteriously fails).

Signs of resistance

Early signs of resistance
If you can catch resistance early, then you can respond to it before it takes hold, effectively nipping it in the bud.

Gossip
When the change is announced, the tom-toms will start beating loudly and grapevine will bear fruit of much and varied opinion. Keep your ear to the ground on what is being said around the coffee points. Listen particularly for declaration of intent and attempts to organize resistance. Grumbling and complaint are natural ways of airing discomfort, so you should not try to squash it (you would fail, anyway). The biggest danger of it is when it is allowed to ferment in an information vacuum.
Respond to gossip by opening it up, showing you are listening to concerns and taking them seriously, and providing lots of valid information that will fill the vacuum.

Testing
Just as a high school class will test a teacher's ability to maintain discipline, so also will some brave soul test out what happens when they resist change. They may, for example, not turn up to a meeting or openly challenge a decision. How you deal with such early resistance will have a significant effect on what happens next. For example you can jump on the person and squash both them and their words, or you can take an adult position, describing what they have done and assertively questioning their motives.

Collectivism of resistance
Resistance can happen both on an individual case-by-case basis or people may band together.

Individual action
Individually, people may resist, although this is generally limited to the extent of their personal power. For those with lower power, this may include passive refusals and covert action. For those with more power, it can include open challenge and criticism.
Handle individual action individually, starting with those with greater power. As necessary, you may need to make an example, and disciplining a senior executive can send a strong signal to other resistors.

Collective action
When people find a common voice in organized resistance, then their words and actions can create a significant threat to the change, even though they are individually less powerful. Trade Unions are a classic example of this.
Organized resistance is usually a sign of a deep divide. People will not go to the bother of organizing unless they have serious issues with the change. Manage collectives by negotiating with their leaders (which can be much easier than dealing with a myriad of smaller fires). You may well need to make concessions, but you at least should be able to rescue some key elements of the change. You can also 'divide and conquer' by striking deals with individual key players, although this must be done very carefully as it can cause a serious backlash.

Visibility of resistance
Sometimes resistance is out in the open, but more often it starts out in a more underhand, covert way.

Covert resistance
Covert resistance is deliberate resistance to change, but done in a manner that allows the perpetrators to appear as if they are not resisting. This may occur, for example, through sabotage of various kinds. Handle covert resistance by showing that you know what is happening and setting in place investigations designed to identify the people responsible.

Overt resistance
Overt resistance does not try to hide, and is a result either of someone comfortable with their power, someone for whom covert acts are against their values, or someone who is desperate. This may take forms such as open argument, refusal or attack.
Deal with overt resistance by first seeking to respond openly and authentically. If the resistance is blind, then you will have no alternative but to defend, for example by isolating and disciplining attackers.

Activity of resistance
Overt resistance does not need to take positive action -- sometimes it can be passive.

Passive resistance
Passive resistance occurs where people do not take specific actions. At meetings, they will sit quietly and may appear to agree with the change. Their main tool is to refuse to collaborate with the change. In passive aggression, for example, they may agree and then do nothing to fulfill their commitments. This can be very difficult to address, as resisters have not particularly done anything wrong. One way to address this is to get public commitment to an action (and you can start small on this), then follow up -- publicly if necessary -- to ensure they complete the action. Then keep repeating this until they are either bought in or give in.


Active resistance
Active resistance occurs where people are taking specific and deliberate action to resist the change. It may be overt, with such as public statements and acts of resistance, and it may be covert, such as mobilizing others to create an underground resistance movement.
Overt active resistance, although potentially damaging, is at least visible and you have the option of using formal disciplinary actions (although more positive methods should normally be used first). When it is covert, you may also need to use to covert methods to identify the source and hence take appropriate action.

Dealing with resistance
Here is a small raft of things you can do to handle resistance, starting with kind and moral approaches and ending with the harsher end of gaining compliance. This whole site has fleets other things you can do, of course.

Facilitation
The best approach to creating change is to work with them, helping them achieve goals that somehow also reach to the goals of the change project. When you work with people, they will be happier to work with you.
This is a good practice when people want to collaborate but are struggling to adjust to the situation and achieve the goals of change.

Education
When people are not really bought into the rationale for the change, they may well come around once they realize why the change is needed and what is needed of them. In particular, if new skills are required, you can provide these via a focused course of education.

Involvement
When people are not involved physically or intellectually, they are unlikely to be involved emotionally either. One of the best methods of getting people bought in is to get them involved. When their hands are dirty, they realize that dirt is not so bad, after all. They also need to justify their involvement to themselves and so persuade themselves that is the right thing to do.

Negotiation
When the other person cannot easily be persuaded, then you may need to give in order to get. Sit them down and ask what they are seeking. Find out what they want and what they will never accept. Work out a mutually agreeable solution that works just for them and just for you.

Manipulation
Manipulation means controlling a person's environment such that they are shaped by what is around them. It can be a tempting solution, but is morally questionable and, if they sense what you are doing, will lead to a very dangerous backlash. Only consider this when change is necessary in the short term and all other avenues have been explored.

Coercion
Even more extreme than subtle manipulation is overt coercion. This is where you sit them down and make overt threats, for example that if they do not comply that they will lose their jobs, perhaps in a humiliating and public sacking. This should only be used when speed is of the essence or when the other person themselves has taken to public and damaging actions.

How to cause resistance

Here are just a few of the ways you can cause people to resist the change:
• Resist the resistance, fighting back.
• Do not use your sponsors.
• Try to do everything yourself.
• Allow sponsors to be non-committal about the change.
• Use threats and aggressive language.
• Avoid talking to individual people.
• Avoid listening to people.
• Do not visit the various teams affected.
• Spend more time with your allies (and avoiding the troublemakers).
• Ignore those who resist. Keep your fingers crossed they will give up.
• Tell people about your plans and then ignore the plans.
• Give lots of rational reasons why people should do as you say.
• Dive into the details before they have bought the big picture.
• Do not test that people have understood what you have said.
• Lose faith yourself in the change.
• Be vague about what the change will be.
• Avoid being the messenger of bad news.
• Collude with the other person.
• Produce non-specific plans.
• Expect people to instantly understand what took you three weeks to figure out.
• Publicly and aggressively punish those who object.
• Shout down anyone who disagrees.
• Do not change reward systems to align with the change.
• Make 'an exception' for talented people who resist.


Responding to unexpected resistance

What happens when you are in the middle of a conversation or meeting and someone speaks out against the change?

Pause
The natural tendency of many people is to respond immediately, perhaps butting in or cutting the other person short. The voice may be authoritarian and tinged with anger. But think how this appears to other people? The message being sent is 'public disagreement is not allowed'. A likely effect is that the person resisting now has the sympathy of others (and may recruit the others to their cause). It is also very likely that the resistance will just go underground. So the very first thing is to bite your lip, hold your tongue and count to three. Take a moment to pause and assess the situation. What are others doing? Is the person speaking cautious or bold? What does the body language tell you?

Listen
The next step is to listen carefully not only to what they are saying but also to how they are saying it. Listen for the deeper messages between the lines. Listen to their fears, hopes and ambitions. Hear the tensions and emotions. Notice how they are coping. You can also draw out further information, tipping the bucket to ensure you have the whole story. Use appropriate questioning techniques to learn more.

Empathize
Make your initial response one that empathizes with their position. Show first that you understand (even though you may not agree) and respect their right to voice an honest opinion. This and other previous action will have won you many friends -- perhaps even the person in question who may have been expecting you to resist their resistance (which is just what it would be) and is preparing for a fight. When people expect a fight and find only concern, the surprise is likely to change their opinion.

Think
Before you open your mouth, think hard about what you are going to say and how you are going to say it. Done wrong, a response will show your empathy to be false and may cause a bitter backlash.

Respond
Respond in a way that offers the other person a dignified way out. Seek win-win. Use their language. Reframe their position to show a bigger picture.

The income statement is a simple and straightforward report on the proposed business's cash-generating ability. It is a score card on the financial performance of your business that reflects when sales are made and when expenses are incurred. It draws information from the various financial models developed earlier such as revenue, expenses, capital (in the form of depreciation), and cost of goods. By combining these elements, the income statement illustrates just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result -- which is either a profit or a loss.


Budget and Financial Constraints

Financial Constraints and Differential Investment Responses

Since differences in investment opportunities arising from product market exposures do not appear to explain differences in the effects of depreciations on affiliates and local firms, we now consider an alternate explanation: a differential ability to overcome financial constraints.

Local Firms and Leverage Differences

If financial constraints contribute to the relative underperformance of local firms, then the relative performance amongst local firms should be dictated by the level and composition of leverage prior to the depreciation. While data on the duration of debt is not available for multinational affiliates, data on the level and duration of debt is available for local firms. For each local firm, we compute averages of the ratio of total debt to assets and the ratio of short term debt to total debt over the three years prior to a crisis. We then use the sample median level of these averages to classify if local firms have above or below medians levels of leverage and short term debt. Dummies are included in interaction terms in the basic specifications to analyze if highly levered local firms, particularly those with short term debt, experienced the sharpest reductions in investment subsequent to depreciations. Local firms that rely heavily on short term debt are likely to face significant liquidity constraints, especially since interest rates often increase following depreciations. The specifications are presented employ the log of capital expenditures as a dependent variable and the interaction terms of interest are those that discriminate amongst local firms on the basis of the level and duration of their leverage prior to the depreciation. In these three specifications, the coefficients on the post-depreciation dummy indicate how local firms with high leverage, high amounts of short term debt or firms with both characteristics respond to the depreciations. In turn, the interaction terms indicate how the remaining local firms and how affiliates respond relative to these baseline coefficients.

The coefficients indicate that local firms with high leverage are the firms associated with the low investment response. Indeed, the coefficients on the post-depreciation dummy and that variable interacted with the low leverage dummies are of similar magnitude but opposite signs, indicating that local firms with low leverage do not experience a sharp fall in investment. The coefficient on the post-depreciation dummy interacted with the multinational dummy indicates that affiliates increase investment. The composition of debt is emphasized, and, similarly, firms with low amounts of short term debt do not experience a sharp investment drop. Finally, the roles of the level and composition of debt are jointly considered and the results are even more stark. Local firms with low leverage and low amounts of short term debt experience investment increases subsequent to the depreciation as the coefficient on the relevant interaction term is greater, in absolute value, than the coefficient on the post-depreciation dummy alone. The increase in investment experienced by this set of local firms is similar in magnitude to the increase in investment of affiliates, as indicated by the coefficient on the depreciation dummy interacted with the multinational dummy. These results are robust to the use the ratio of capital expenditure to net PPE as the dependent variable. The average investment experience of local firms obscures much heterogeneity that is associated with their level and composition of leverage prior to the depreciation.

The Financing of Multinational Affiliates During Sharp Depreciations

While more granular data on local firms is not available, a closer look at the behavior of multinational affiliates provides further evidence on precisely how they circumvent financing constraints. Table 7 presents regressions that examine growth in different components of affiliate financing subsequent to depreciations. The results demonstrate that local debt, foreign debt (debt borrowed from non-local persons), and related party debt (debt borrowed from an affiliate’s parent) all increase significantly in the year of depreciations. There are two interpretations of these results. First, new capital may flow to affiliates in one of these forms of debt. Second, if debt is denominated in foreign currency, then the reported increase in debt may simply reflect a revaluation of existing loans to reflect the depreciation. This revaluation of existing debt would not necessarily include any new flows of capital. Since increases in debt occur in the year of depreciations and are larger for debt from foreign sources (which is more likely to be denominated in foreign currency), this revaluation effect is likely to explain at least some part of the growth in debt. Examining changes in paid-in-capital provides cleaner measures of new capital infusions from the parents of affiliates. Paid-in-capital consists of the initial capital stock of an affiliate and any new equity infusions. This measure does not include retained earnings. Since this component of financing is measured in dollars, using historic exchange rates for translation when necessary, changes in the growth of paid-in-capital cannot be explained by changes in currency valuations. The data reports regression results where the dependent variable is the growth in paid-in-capital. The paid-in-capital of multinational affiliates increases in the years following depreciations, although this increase is only significant in the year after a depreciation. The coefficient estimates suggest that the paid-in-capital of multinational affiliates increases by 10.8% in the year after depreciations. This result provides direct evidence that new equity infusions from parent companies enable multinational affiliates in emerging markets to capitalize on investment opportunities after depreciations. In combination with the evidence provided on the impact of the level and composition of local firm debt, this evidence further confirms the role of internal capital markets in allowing multinational firms to overcome financial constraints that handicap local firms.

Alternative Explanations

It is also possible that the relative performance of multinational affiliates and local firms reflects other factors associated with the two types of firms. For example, as hypothesized in Blonigen, the depreciations could be accompanied by an increased incentive for foreign multinationals to purchase emerging market corporations and exploit their intangible assets abroad. This explanation of investment dynamics during depreciations, hypothesized in the context of U.S.-Japan mergers and acquisition activity, is less likely to be relevant in the emerging market setting where fewer firms have intangible assets worth exploiting in developed markets. Moreover, much of the evidence presented above is on capital expenditures and therefore is less likely to be driven by acquisitions, as hypothesized in this theory. The differential response of multinational firms could also reflect overinvestment by multinational firms in the aftermath of currency crises rather than constrained under-investment by local firms. If over-investment was operative, it is hard to explain why the analysis of operating exposures discussed above yield significant results. Moreover, analysis presented in Desai, Foley and Forbes does not indicate that multinational firms experience a decrease in operating profits relative to local firms following deprecations. More generally, it is conceivable that other differences between the two samples are driving the results. The descriptive statistics indicate that local firms are larger than multinationals, and such size differences could help explain the results. In order to consider this possibility, interactions of the lag of the log of firm sales and the depreciation dummies have been included in the specifications are presented, and the results are not substantively changed. It is also possible that non-random entry, exit or switching between multinational and local status may conflate the results. In order to consider this possibility, the specifications are presented have been performed using a balanced panel of firms and only those firms that were present two years prior to the depreciations. These analyses generate results very similar to those presented in the paper. Finally, reduced investment by local firms could reflect the corporate governance deficiencies of local firms. Johnson et al. model this possibility and, in their model, stealing increases as investment becomes less profitable in environments with weak governance. To examine the possibility of this alternative explanation, we employ the country-level governance variables used in Johnson et al., split the sample at median levels of these governance variables, and investigate if continued differential performance persists in the subsamples. Splitting the sample at the median level of judicial efficiency, rule of law, or enforceable minority shareholder rights indicates that multinationals outperform local firms in all subsamples. Only if the sample is split at the median level of accounting standards is there a subsample where multinationals do not outperform local firms, and this is the subsample of countries with low, not high, accounting standards.

Reference:
WIKIPEDIA.org