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Technology in Business Lecture

1 Introduction

Over the years, technology has become increasingly important and now features in almost all aspects of daily personal and business routines.

1.1 What is Technology?

The word technology elicits images of alien-looking robots pushing articles on a conveyor belt in a factory or equally, pictures of vast revolutionary machines. Technology, however, is so much simpler. For example, the wheel, a simple pulley or a new fast-acting kitchen cleaning recipe are modest examples of technology.

Technology includes the practices, skills, knowledge, methods and procedures that humans use in the production of goods and services, or to achieve a specific objective in a less complicated way.

1.2 Technology in Business, Society and Consumers

This chapter will extensively explore technology and its relationship to the contemporary business world. In addition, given that businesses exists within society and are dependent on consumers, the chapter will also analyse how technology shapes consumer behaviour and expectations as well as major technological developments within businesses and societies.

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1.2.1 Technology in Business

The current technological era is called the ‘information’ or ‘digital’ age. This era began in the 1970s. The information age is characterised by a shift towards an economy based on the rapid transmission of large amounts of data and growth of information-based industries.

Technology has altered operations within large and small organisations. Organisations are constantly looking for ways to enhance their production and create more business. As computers emerged, businesses also changed their infrastructure to take advantage of the benefits of computers. For instance, airlines began using computers to book flights for their clients and banks automated their withdrawal and deposits systems, among many other operations.

Currently, many businesses in the world conduct their operations using personal computers or other technological communication devices. Computers provide organisations with a way to increase efficiency within business operations and secure confidential corporate information

1.2.2 Impact of Technology on Business

Creation of flexible work environment

Technology allows individuals to work from anywhere including at home, from the office, on the road, in restaurants and even abroad. Electronic mail, video conferencing and chat groups enables an employee or employer to be constantly privy with business operations developments, and receive and send daily deliverables, among others.

Besides, by using online advertising, businesses access a pool of international employees, which helps increase their competitiveness in the global world.

Critics of technology argue that the fact employees no longer have to be in the same physical location to be productive, undermines the personal relationships and level of skill exchange that would have been achieved when the personnel worked in the same physical environment. Meeting clients or colleagues over the internet is less personal as compared to face to face communication.

Online Stores

Examples of popular online stores in the UK are Amazon, Tesco and Argos. Consumers are increasingly using online platforms to find reviews of products such as electronics, clothing, and groceries before making any purchases. Many businesses and service providers appreciate the fact that many potential consumers could be obtained during this information gathering stage of the purchase process. As a result, manufacturers, wholesalers and retailers set up online stores which have lower operating costs compared to brick and mortar stores.

An online store allows the business to increase its presence and reach markets beyond the immediate neighbourhood.

Critics of online stores argue that online shops have an unfair advantage over brick and mortar shops given the low overhead costs. For instance, Amazon sells books at a lower price compared to physical stores that have to factor in costs such as rent and electricity.

Instant Feedback from Customers

Customer needs and preferences are constantly changing. Successful businesses must keep up with these market changes. Technology has allowed businesses to access instant feedback regarding the goods and services they offer.

Online tools such as product reviews, survey programmes, for example, Google Forms, social media comments and instant messaging allow customers to provide their complaints, give compliments or any feedback to organisations with ease. Managers within a business, in turn, use this information to improve their operations.

Often, feedback through digital means such as the social media is usually public. A negative comment regarding a customer experience can instantly go viral - reach thousands of people within a short time- and influence business profitability, in most cases, negatively. For instance, in 2009, the United Airlines broke a renowned musician’s (Dave Carroll) guitar. After the Airline had failed to compensate the singer for the damage, Dave wrote a song titled "United Breaks Guitar,” in which he expressed the frustration with the airline. The musician uploaded the Song on YouTube where it went viral in just a few days. Within four weeks, the company's stock price had dropped by 10% (Carroll, 2012).

Identify any instances you know in which bad online customer feedback negatively impacted a company’s productivity in the UK

Inventory Tracking

Using barcodes, a manufacturer or retailer can track the progress of inventory. A similar technology to a barcode is the radio frequency identification that reads electronic chips attached to a product. Unlike a barcode, radio frequency identification technology uses radio waves and picks signal as long as the identification tag is within range and thus is useful in fleet tracking (Ajami & Carter, 2013).

Additionally, the radio frequency identification tags can be implemented inside objects or plastic coverings for protection against elements. Other identification technologies such as barcodes can only be tagged on the object exterior. However, the costs of the radio frequency identification are high and, in some cases, prohibitive to small and medium enterprises.


Technology allows organisations to outsource some or all of their activities to national or international entities. Outsourcing allows businesses to focus on core business activities, thus, lowering costs associated with overhead services. Common operations that business outsource include hiring, customer services and technical support.

In some cases, large companies such as electronic manufacturers outsource manufacturing functions to areas with the lowest costs of production including in foreign companies

Outsourcing is a controversial practice especially when the operations are moved to foreign nations. Critics of outsourcing argue that transferring factories to other countries reduces jobs available in the home country. Additionally, variance in the organisational cultures of the parent and outsourced organisation could lead to further complexities.

1.2.3 Negative Impacts of Technology in Business

Constant Training for Employees

As new technologies emerge, the company has to invest heavily in training to take advantage of the new technology.

While young employees easily adapt, senior employees may resist involved changes, which in turn, could potentially lower productivity. Moreover, training can be a costly venture, especially if after the training, an employee leaves the company.

Spam and other malicious activities

The extensive integration of technology exposes companies to malicious parties and activities, for instance, spamming. Spam refers to the sending and receiving of unsolicited electronic messages. Spam is widespread and potentially dangerous to recipients of spam emails. Most organisations use spam filters. However, the spam filters are not often effective and sometimes divert legitimate message as spam. Through spamming, malicious parties gain access to confidential corporate information and thus are able to pursue their malicious agenda, for instance, solicit payments, terminate normal operations and so forth.

1.3 Impact of Technology on Consumer Behaviour and Consumer Expectations

Information technology has driven changes in the customer behaviour and expectations on brand, goods and services, fields.

This section discusses some of those changes observed in the modern consumer.

Preference to Convenience

The modern consumer is highly prejudiced towards convenience. Customers all over the world pay a premium to have their purchases delivered to their doorsteps.

A large number of customers in the USA who have subscribed to video streaming made the subscription because they wanted to watch the videos at their convenience (Morris & Currie, 2016).

As a result, customers will always prefer businesses that tailor their service delivery towards convenience.

Social Media Specialisation

Almost everyone has an active online life in a given social media platform (s). Often, clients with certain characteristics prefer one social media platform over the other. For instance, LinkedIn is highly associated with professionals. Therefore, individuals who are active on LinkedIn seek to network with professionals.

Accordingly, for a company to reach its clients, the organisation has to identify the platform with the highest numbers of its target audience. Businesses that create a social media account with no prior research to determine their targeted audience often waste resources.

Consumer expectations have changed as well. For instance, consumers expect retailers to know client needs and provide solutions. This is not as hard as it sounds. With the advent of digital technology, sellers are able to track the online activities of consumers using tools such as digital ‘Cookies’ and provide solutions based on browsing patterns.

Think back 10 years ago, how did organisations establish and keep contact with their customers?

Fun Activity: Think back 10 years ago, how did you communicate with your friends?

2 Importance of Technology to Business

Technology plays an important role in all business regardless of size. Technology influences internal and external communication, business operations, the quality of talent within organisations, marketing and advertising and customer relationship management. Technology also influences a company’s research capabilities.


Communication involves the passing information from one individual to another. In an office setting, technology has revolutionised the way managers, employees and colleagues interact within an organisation by providing instant communication.

Electronic mail allows colleagues to correspond over long distances. Additionally, executives can hold meetings over the internet instead of travelling to company headquarters, thus saving on travel time, accommodation and food.

Externally, companies are increasingly using digital media to update customers, suppliers and other relevant stakeholders regarding company activities.

However, one of the main setbacks regarding online modes of communication is insecurity. Third-party organisations can try to access confidential company information being sent electronically. In addition, there are cases where hackers have taken over a company's social media pages and posted inappropriate or potentially harmful content. In turn, this has necessitated businesses to invest vast amounts of resources to achieve the secure transmission of company information, which, depending on company needs, is very costly. 

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Automation of Business Operations

Technology has enabled businesses to automate operations such as record keeping, hiring, accounting, customer relationship management, selling and others. Automating business processes:

  • Saves on time,
  • Minimises errors and allows instant correction of errors, and
  • Minimises organisational labour needs

The overall result from integrating technology is a highly efficient operating environment that has few labour-intensive processes, which point to low operating costs.

On the other hand, critics of automation argue that automating business operations result in loss of employment as computers take over tasks previously done by human beings.

Define technological unemployment. Do you think technology results in loss of jobs?

Fun Activity: Identify and discuss instances in which automation of business operations results in loss of employment for individuals.

Human Capital

Human capital is perhaps the most important asset a manager can have. Successful organisations have invested heavily in identifying, recruiting and retaining the best skill. The critical roles undertaken by today’s human resource manager include employee career development and talent management.

To ensure that employee development and retention positively impact organisational performance, human resource supervisors employ computer technology to assess the organisation’s strengths, weaknesses and gaps in organisational performance. This test is carried out regularly to show an organisation’s performance in relation to its employees over a given period.

Additionally, the human resource executive is expected to be up to date with the changes and trends relating to hiring, recruiting and retaining top talents in the organisation. Managers use the internet to target potential employees, conduct personality and aptitude tests to determine whether a candidate is suitable for the organisation. This process saves time and costs.


Success in attracting and retaining the best customers lies at the heart of marketing. Marketing involves advertising, public relations monitoring and sales promotion to create business growth. With the advent of technology, the most popular type of marketing is digital marketing. Some of its advantages include:

  • Lower costs compared to traditional marketing channels such as TV, Print and Radio commercials,
  • Simple to measure the impact of advertising. Some forms of digital marketing such as social media and emails allow a marketer to measure the number of people that viewed a marketing campaign, demographics, past purchase trends and other information,
  • Great exposure - The campaign can potentially be seen anywhere around the world at a low cost, especially if an advertisement goes viral,
  • Easy and instantaneous access to consumer feedback, and
  • The ability to stay connected with customers 24/7.

What are the characteristics of a viral internet campaign?

Fun Activity:There is no bad publicity’ do you agree?

Customer Relationship Management

Channels of communication such as client portals on company websites, regular online newsletters, email or short messaging allow organisations to stay in touch with their customer base. Using internet tools, customer services teams are able to constantly communicate with consumers, evaluate their satisfaction levels and receive feedback on wide-ranging business-related issues.

Organisations also use CRM (Customer-Relationship-Management) systems to collect consumer needs data, create client profiles and develop new services or improve existing products. 


Traditional research involves researchers travelling to the field to meet respondents and conduct interviews. While primary research is still a popular way to acquire information especially in previously unexplored areas of research, technological advancement has brought information closer to businesses.

Governments, private enterprises and non-governmental organisations conduct numerous studies each year, publish reports and upload findings online. Often, the reports are made available to the public for free or at a small cost. A business that invests heavily in technological infrastructure saves money and time because it accesses relevant information conveniently.

2.1 Overview of The Importance of Strategising in Response to Digital Technology

According to a 2015 research in the US market by Yasav (2015), more than 50% of respondents reported to have conducted purchase-related tasks through their mobile phones during the three-month period preceding to the research.

Respondents stated that they constantly use online technology to research and purchase products, sometimes in just one website.

As a result, it has become imperative for retailers to create new strategies to gain the attention of the digital consumer.

3 Innovation

3.1 Definition and Types of Innovation

Innovation is the creation of a new idea or a new way of doing things. Economists focus on two general categories of innovation:

  1. Product Innovation, and
  2. Process Innovation

Product innovation is defined as the act of bringing new ideas into the market that create new products or improve on the existing products. For example, the creation of personal computer is an example of product innovation. Product innovation can be broadly classified into two types: tangible and intangible innovation. Tangible innovation includes products such as personal computers while the computer software and mobile applications are intangible forms of product innovation.

Process innovation, on the other hand, is defined as a new way of doing things or delivering goods and services. For example, booking a flight online instead of going to the airline company headquarters.

Innovation is inherently novel. However, contentions arise regarding how much of novelty is required to justify a product or process as an innovation instead of an imitation (applying an already existing concept into a new business).

There are numerous explanations of innovation. All of them are relevant. Greenhalgh and Rogers (2010) sum the definition of innovation succinctly as follows;

“A product or process can be new to the firm, new to the domestic market, or new to the world market. Clearly, the last of these, global novelty, is sufficient to qualify the product or process as an innovation…being “new to the firm” is an insufficient test for innovation, as the firm in question may simply be adopting a product design, or a production method, introduced by a competitor. We define an innovation as new to the firm and new to the relevant market” (2-5)

3.2 Innovation versus Invention

This chapter would be incomplete without distinguishing between innovation and invention.

Greenhalgh and Rogers (2010) argue that for a new product or process to be categorised as an innovation it must be introduced into the market.  Invention on the other hand is an innovation that has not been introduced into the market.

Gault (2013) also argues that, invention is the initial conceptualization of an idea while innovation is the initial commercialization of an idea and further adds that the time lag between invention and innovation can be as long as several decades.

Furthermore, innovation occurs when an individual improves an already existing process or product while invention is the first introduction or creation of a product or a process.

What do you understand to be the difference between invention and invention?

Fun Activity: Indicate whether the following concepts are inventions or innovation.



The Wheel

The Apple iPod

The Light bulb

Laser Pointer

Bar Stool

3.3 Importance of Innovation to Business and Diffusion Theory of Innovation

3.3.1 Increased profitability

The profitability and success of the new product depend on the value (price or otherwise) of the product and the availability of substitutes.

In case the product is highly valued, has no close substitutes and the business has established intellectual property rights on the new product, the involved organisation acts as a monopoly and realises abnormal profits.

An example of such a product would be a new and important drug. These abnormal profits will continue to be generated until the intellectual property rights are modified, or another third party develops a superior drug that acts as a substitute for the existing one.

3.3.2 Increased edge against competitors

Brutal competition in the modern business world drives organisations to seek new and novel ways of doing things or face extinction. Through continuous innovation, a company can re-invent itself based on the prevailing customer preferences, environmental factors and competitors.

Technological development such as of online shops that address the needs of consumers who prefer convenient shopping enables businesses to remain competitive.

3.3.3 Increasing the business net worth

Innovation results in the creation of new or improved products and processes. To protect inventions, organisations establish intellectual property rights or patents on their inventions.

The intellectual property rights ensure that the business owners benefit from an invention and are able to recoup the initial investment. In the case of patents, users of the relevant technological innovations are legally required to pay royalties to the owner of the invention. These fees are recorded as assets on the company’s books of account, thus, increasing the organisation’s net worth.

3.3.4 Responding to Contingencies

A contingency is an occurrence for which the organisation has not planned for but is potentially detrimental to business operations. By creating a culture of constant innovativeness, companies increase their market sustainability levels or minimise the negative impacts of unlikely events (Ngo & O'Cass, 2013).

In conclusion, a business that does not constantly innovate its products and processes will die (Chesbrough, 2013).

3.4 Diffusion of Innovation Theory

The most popular and comprehensive theory on innovation is Everett Rogers’ Diffusion of Innovations theory. This section covers basics, discussion and critics of the Diffusion of Innovations theory. The most contentious issue regarding innovation pertains to the diffusion or movement of innovation. When does innovation end? How does innovation travel? When is a new idea no longer an innovation but an imitation?

In his book, Diffusions of Innovation, Everett Rogers (2010), proposes that societies communicate innovations over a given period through a process called diffusion. Rogers suggests that five main factors influence the diffusion process;

  • The innovation - the new idea or process relative in the context of the environment. What is an innovation in Europe may not be an innovation in Asia.
  • Time - Adoption of a new technology is rarely spontaneous. It takes decades for innovation to become widely accepted,
  • Social System - Systems in the society such as media, governance structures and beliefs influence innovation adopters
  • Means of communication - A fast mode of communication will ensure rapid diffusion of innovation,
  • The adopters - they include individuals and organisations such as schools and hospitals. Within a society, there are five categories of innovation adopters;
    • Innovators - They are financially able, highly risk tolerant, high social standing and have a close contact with sources of innovations,
    • Early adopters - They are more critical of innovations as compared to innovators. They have relatively high financial wealth, status and education,
    • Early majority - Of average education, status and wealth. Take longer to adopt a new idea,
    • Late majority - These adopters are sceptical of new ideas and will only adopt an innovation after the majority of the population has taken up the technology,
    • Laggards - They are innovation-averse and hold on to traditions. Laggards have the lowest wealth, status and have little to no contact with innovators

3.4.1 Discussion

Rogers suggests a five-step adoption process:

Roger's Adoption Process

Figure 1: The Adoption Process

Explanation: The individual becomes aware of an innovation, actively seeks information regarding the innovation, considers the cost-benefits of the new technology, tests the usefulness of the innovation and seeks further information. Eventually, the individual or organisation confirms the continued application of the new idea.

To measure the success of diffusion, researchers use the rate of adoption. To improve the rate of adoption, innovators often apply the new idea to a group of people that have the technical know-how.

Some of the criticisms on the Diffusion of Innovations Theory include:

  • Diffusion is difficult to measure because of the complexity of the social systems. Individuals adopt new things for a wide range of reasons apart from wealth, status and education.
  • Diffusion theory assumes that all innovations are beneficial and should be widely adopted. In some instances, innovations conflict with culture, beliefs and traditions, which can be detrimental to the affected culture.
  • The theory assumes that the flow of information is only one way; sender to receiver, and ignores that a receiver may want to send feedback

3.4.2 Business Application

The original diffusion theory has been extended to account for not only diffusion of new ideas but also government policies, technologies, health care, systems of education among others.

Think of an instance where diffusion of innovation was detrimental to the culture and traditions of the recipients of innovation

Fun Activity: Which category of Adopter are you most likely to fit?

4 Technological Developments

4.1 Some Technological Developments in the 20th Century

Technology has advanced since the invention of the wheel to the current levels, where it is highly sophisticated and rapidly improved as businesses try to outdo each other. Some of the greatest technological developments in the information era include:

The Internet and the Web

The internet and the world-wide web (web) are perhaps the greatest inventions of the 20th Century. In just over 15 years, the internet has grown 100-times its original size to connect over one-third of the human population.

The internet allows users to access the web where resources such as documents and videos are located and identified using Uniform Resource Locators (URLs).

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In the corporate world, businesses constantly access the Web for information regarding potential customers, competitors, potential job candidates and so forth.

The top richest companies in the world such as Facebook and Google are based on the internet. Furthermore, every day new ventures dependent on the internet (taxi-hailing applications, online televisions and radios) are emerging and hence serve to illustrate the crucial role technology plays in the modern business world.


Wireless Fidelity allows businesses and individuals with electronic devices such mobile phones, digital cameras and personal computers access a Wireless Local Area Network (WLAN). Organisations often install passwords on their WLAN to prevent unauthorised personnel from connecting to the network.

Given that communication is essential in a corporate setting, businesses need to have a reliable network connection. As a result, corporations have invested in Wireless Connections (Wi-Fi) that are cheaper, when compared with wired connections, to facilitate daily operations. However, Wi-Fi is less secure as compared to wired connections and as a result, without proper security frameworks, hackers can access the organisation’s network and steal confidential information easily.

Office Software

The most commonly used office software are:

  • Spreadsheets - Used to perform calculations. Specialised spreadsheets include Quick books used in the accounting and finance departments,
  • Word processors - These are used to create and edit documents,
  • Presentations - Unlike word processors that are used to store and transfer information within the business, presentations are mostly used when communicating with external stakeholders. Organisations customise these presentations by adding features such as brand colour, logos and taglines to distinguish themselves from other businesses,
  • Database software - Some of the database software are used by the Human Resource department to record information regarding employees. Databases are also employed in factories to keep tab of the inputs in the production processes

Besides, some of the office software have evolved and now are cloud-based, which allows access from multiple users and team development. One such example is Google Documents that contains word processors and spreadsheets, among others.

The office software has made basic office operations such as record keeping, salary calculations and client management easy to conduct.

Find out how early offices used to do basic office calculations, record documents and managed databases

Fun Activity: What office software are on your personal computers?

Cloud computing

Cloud computing involves storing and accessing data, information, applications and programs over the internet instead of using the computer’s hard drives. Users pay to store data and access computing resources that are on the cloud.

The benefits of cloud computing include:

  • Quick expansion or shrinkage, as dictated by consumer demand,
  • Metered service - a user only pays based on frequency and size of use,
  • Data presence- in the case of loss of data, a customer can access cloud-stored data, which is replicated in numerous nodes.

Media File compression

Media file compression involves re-writing data in smaller than the original size. Media file compression can take two forms; lossless and lossy compression.

Lossless compression involves recording repeated information as numerals. For instance, an image may have several colour pixels, with one colour pixels repeated severally, which in this case is the blue colour repeated thrice. A compressed version of this data is three combined blue colours. Therefore, in lossless compression, no data is lost.

Lossy compression, on the other hand, involves cutting off unnecessary information. In this case, data is lost and cannot be recovered.

Media file compression is an important innovation that saves space. Businesses can compress their information and store it in a small area as compared to uncompressed data of the same size.

Other forms of new technological developments of the 20th century include online shopping, ATMs, Barcodes, Emails and Open-source software such as Wikipedia and Linux. These developments enable businesses to conduct their operations efficiently, save on time and space, communicate rapidly and reach a wide range of consumers at any one given time.

4.2 Responding to Technological Developments

If there is one constant thing about technology is change. Technology is constantly re-inventing itself, becoming smaller and more powerful each day. It is, therefore, no surprise that at one time the Telegraph was the fastest way to share information across continents and oceans.In any one decade, numerous technologies become obsolete.

Examples of other technology that have become or are slowly becoming obsolete are:

  • Paper maps - replaced by online maps that are based on Global Positioning System (GPS),
  • Versions of Media of Data storage such as floppy disks and DVDs,
  • Earlier Versions of photos and video storage including video cassettes and analogue photo developing techniques,
  • Computer ports. The USB (Universal-Serial-Bus) port has replaced most mice, keyboard and printer ports on personal computers, and
  • Typewriters

It is, therefore, imperative for a business to be constantly aware of technological developments to remain relevant and competitive.

4.3 Examples of Large Companies that have been significantly impacted by Technological Developments

Several large companies in the late 20th century either died, restructured or were acquired by rival competitors when they could not keep up with technological advancements. Some of these companies include:

4.3.1 Blockbuster

Towards the end of the 20th century, Blockbuster was a major seller of DVDs with thousands of retail outlets in the USA. However, the organisation failed to notice or ignored the advent of online video streaming and cable networks. Consequently, online video streaming companies such as Netflix took over Blockbuster’s market share using a more convenient way of sharing videos.

To regain its market share, Blockbusters has to play catch-up instead of leading the industry as it once did. 

4.3.2 Dell

At a time when Hewlett-Packard and IBM sold personal computers through retail stores, Dell created a business model where the company sold its products directly to consumers. With the advent of the internet, Dell’s market share and customer base grew immensely.

However, the company failed to recognise that consumers wanted smaller devices and better services. As a result, Dell lost its market with the advent of mobile phones and tablets. In the recent past, Dell has tried to penetrate the market with mini-laptops and smartphones, but it is no longer the leader it once was.

IBM re-invented itself in time, and it is now one of the largest supplier of business to business personal computers.

4.3.3 Yahoo

Yahoo was one of the first companies to develop a search engine and aggregation services. During this period, Yahoo charged for its services such as emails while upcoming technology companies such as Google offered these services for free. As a result, customers started moving to Google and other free Search Engine and E-mail services.

In an attempt to regain the customer base, Yahoo drifted to include services such as video streaming and job-hunting services. These endeavours, however, did not revive the giant as the company value fell from $100 billion at its highest in 2000 to less than $5 billion in 2016.

In conclusion, the main reason that once giant companies such as Blockbuster, Dell and Yahoo are no longer leading in their respective markets is the failure to observe prevailing market trends and innovate accordingly. These companies fall into either or all of the following traps:

  • Physical trap - investments in old equipment and systems make it expensive for companies to change the old way of doing things,
  • Psychological trap - managers continuously pay attention to the company’s achievements such as large market shares and fail to recognise new threats such as superior services by competitors, and
  • The strategic trap - The organisation fails to anticipate what might happen in the future by solely concentrating on the current business environment.

Identify more examples of companies that went belly up as a result of technological developments.

5 Summary and Issues in Technology on Business

Imagining a business world without the internet, personal computers, IT servers, cloud computing, electronic mail, Wi-Fi, among many other technologies employed by businesses today, is hard. The world of business is dynamic. Technology has positively impacted business operations ranging from customer servicing to back office operations. While critics argue that technology has resulted in the loss of jobs, in the long run, however, researchers have discovered that technology creates more employment.

Technology is also influencing customer behaviour, and expectations and businesses have to keep up with the changing preferences to remain relevant.

Companies like Dell, Blockbuster and Yahoo, buried their heads in the sand in their heyday. Today, these companies are playing catch up with companies that took note of their environment and adopted an innovative approach to businesses.

6 Illustration

The Internet

The aim of this section is to give a chronology of the major Internet-based innovations, show how the advent of the web and major online applications impacted businesses and consumers and examine how IBM survived an era when most of its fellow Fortune 500 companies became bankrupt or were bought out. 

Significant technological developments on the Internet

In 1969, the ARPANET (Advanced-Research-Projects-Agency-Network) was developed and used to connect major universities in the USA. The scientists designed ARPANET to be a means of communication, education and research. The ARPANET marked the beginning of what is known as the internet. In 1972, Ray Tomlinson, a computer scientist at Cambridge, sent the first electronic mail to himself. Ray used the symbol @ to distinguish between his user name and the network address, a practice that persists even today. In 1973, ARPANET was used to connect the Royal Radar Establishment (Norway) and the University College of London (United Kingdom), paving the way for the modern internet. In 1976, the US presidential candidate, Jimmy Carter and his running mate, Walter Mondale, used the internet to organise their election campaign and Queen Elizabeth sent her first email during an army base visit. In 1982, scientists used the word internet for the first time, and in 1984, researchers in the USA introduced the DNS (Domain-Name-System) to replace numerical website addresses. 

In 1989, Tim Berners-Lee (CERN), developed the World Wide Web.

In 1994, the first online ad appeared on Digital marketing has evolved ever since to include short videos, pop-ups and content marketing, among others. In 1996, there were approximately 45 million people connected to the internet. In 1995, Pierre Morad founded an auction site, Echo Bay (E-bay). In 1995, Amazon launched the first online book retailing services. Amazon has popularised online shopping and invented many online selling techniques. In 1998, Google opened its office doors while in 1999, Shawn Fanning, created Napster, the first ever computer application that allowed users to share music over the internet. In the same year, John Malloy funded the development of PayPal, an online money transfer service, at Confinity. Currently, PayPal is the largest internet payment system.

In 2000, the first computer viruses began circulating the internet. They included Love bug, Internet Worm, and Stages. In 2001, Wikipedia was launched. Wikipedia was an application that used crowdsourcing to provide information on almost everything. Wikipedia has become the go-to information platform for researchers and students. As of 2002, there were 544.2 million people connected to the internet. In 2003, spamming, sending of unsolicited emails had become a widespread practice accounting for over half of all emails sent and received.  In 2004 and 2005, Facebook and YouTube launched their services, respectively. In 2007, Apple launched the iPhone that marked the birth of the smartphone and mobile computing. In 2008, in an attempt to challenge Google as the go-to Search Engine, Microsoft offered to buy Yahoo at $44.7 billion. Yahoo declined the offer. In 2004, Facebook acquired WhatsApp, an online messaging system incorporated in 2009, in the largest acquisition deal for Facebook. In February 2016, WhatsApp surpassed the one billion users mark. 

Impact of the Internet on Businesses, Consumers, and Technology

Since the advent of ARPANET, communication, research, education and business operations have been considerably enhanced. The web has also been extensively developed and is now very sophisticated. Websites such as Wikipedia, Google, and Yahoo allows users to access critical information at all times with relative ease. Tools of communication such as emails and online messaging applications enable businesses and individuals to stay connected at all times.

In fact, messaging applications have revolutionised the way corporations work by ensuring that every employee remains in the loop even when an individual is not physically in the office. Apps such as WhatsApp were a way of sharing instant messages with friends. However, businesses created employee groups on these social sites ensuring that the employees are constantly aware of what is happening within the organisation. While this is advantageous as it creates a flexible working environment, critics argue that it disrupts the work-life balance as an individual is always connected to what is going in within the company even when on vacation.

Furthermore, online shopping websites such as the Amazon, Alibaba and EBay have changed the way consumers make their purchase decisions. Currently, to make a purchase of a given good or service, most consumers rely on the online product reviews. In some cases, even when a customer wants to buy a product, for instance, a mobile phone, they will most likely conduct an online search to determine the user ratings, product specifications and compare prices.

Moreover, it is widely becoming acceptable that businesses do not have to own assets to become successful; case in point Uber and Airbnb rely on other peoples' taxis and homes, respectively, to make money. Many businesses are following this trend. The creation of such businesses has become possible because of the internet.

The internet has revolutionised the way small businesses conduct their operations. Now, businesses are not confined to their immediate physical environment, but through the web, access a large customer base.

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Prosperous Technological Company: A case of IBM

According to an advertisement by IBM in 2011, of about 25 corporations in the USA in 1900, only two are operational presently. In addition, among the Fortune 500 companies of 1961, only six companies exist today. One of these companies is International Business Machines (IBM). IBM specialises in the development and selling of computer hardware and software, as well as providing IT consultations.

In 1993, IBM was on the brink of collapse. Initially, IBM produced mainframe computers, but these machine’s market had shrunk with the advent of personal computers. At that point, IBM faced two kinds of traps. IBM could not quickly change into a different line of production because of the massive investment it had laid to manufacture mainframe computers. Moreover, the company had been successful in its traditional approaches to doing things, and therefore, had enough reason to avoid re-invention. However, the company did not fall into either of these traps.

Under new management, IBM realised that the major need in the global market was integrating the computing technologies emerging during that period.  IBM’s offers integrated customer services to its clients. At a time when the internet was rapidly spreading, and consumers were getting used to the conveniences the internet presented such as electronic communication and online product purchase (Amazon would be launched 2 years later), IBM realised that customers did not simply want computer hardware or software but excellent client services, comfort, and convenience.

IBM stayed on the look-out at a time of great revolution in the information technology world: consumer preferences were changing, new technology was coming up, and the competition was increasing. Thus, the company re-invented itself and not only survived the market changes that saw many of its rivals exit the market but also became a leader of the pack.

7 Recommended Books

Greenhalgh, C., & Rogers, M. (2010). Innovation, intellectual property, and economic growth. New Jersey: Princeton University Press;

8 References

Ajami, S., & Carter, M. W. (2013). The advantages and disadvantages of Radio Frequency Identification (RFID) in Health-care Centers; approach in Emergency Room (ER). Pak J Med Sci, 29(1) Suppl: 443-448.

Carroll, D. (2012). United breaks guitars. Carlsbad: Hay House, Inc..

Chesbrough, H. (2013). Open business models: How to thrive in the new innovation landscape. Massachusetts: Harvard Business Press.

Gault, F. (2013). Innovation indicators and measurement: An overview. Handbook of innovation indicators and measurement, 3-37. Gloucestershire: Edward Elgar Publishing.

Morris, S. E., & Currie, L. H. (2016). To Stream or Not to Stream?. New Library World, 117(7/8).

Rogers, E. M. (2010). Diffusion of innovations. New York: Simon and Schuster.

Yasav, S. (2015). The impact of digital technology on consumer purchase behaviour. Journal of Financial Perspectives, 3(3), 166-170.

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