Information communication technology (ICT) essentially means technology used for communication in any situation. It can include any system or gadget that can be used as a communication tool. The telephone and the telegraph were the early examples of ICT. In a sense even the postal system is a form of communication and the process of delivery and the technology used is also a form of ICT. But ICT has come a long way from the telephone and the telegraph.
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The coming of networked systems that includes the local area networks and wide area networks took technology a step further and made communication, especially the written form much faster. But the coming of the internet broadened its scope further and now communication whether it is written, oral or visual can now be transmitted across the world in a matter of moments. This paper is an attempt at studying how ICT has changed the way managers work and also how managerial work has undergone a change. This study will be with reference to the automotive giant Mercedes Benz. It is proposed that the study will focus on the above mentioned issues first and analyse it with regard to the car company in the next section.
Information communication technology
A review of literature with regard to ICT gives an impression that a comprehensive definition of the term does not exist. This could be because the technology itself is developing and hence it would be difficult to assign a proper definition. So the definition given by the Organisation for Economic Co-operation and Development (OECD) is given here since it seems to give a clear picture of the term. The definition which was first given in 1998 is still considered to be adequate though not perfect. According to a document released by the Organization ICT (sector) is “a combination of manufacturing and services industries that capture, transmit and display data and information electronically.” (Annex 1. The OECD Definition of the ICT Sector. 2002, p. 81). The document further states that for a technology to be classified as belonging to ICT, it should also have the following features. “For manufacturing industries, the products of a candidate industry:
- Must be intended to fulfil the function of information processing and communication including transmission and display.
- Must use electronic processing to detect, measure and/or record physical phenomena or control a physical process.
For services industries, the products of a candidate industry:
Must be intended to enable the function of information processing and communication by electronic means.” The document also describes the hardware and software that can be considered to be a part of ICT for both manufacturing and service sectors. They include computers, cables, TV, transmitting and receiving equipment, storage devices and all related equipment not pertaining to manufacture.
The nature of a manger’s job varies from place to place and from organization to organization. The jobs may differ among various sectors of the industry also. Moreover a manager is supposed to do a lot of things which makes it difficult to include everything into a definition. The manger will be required to manage the employees working under him, he will have to execute orders from his superiors, he will have to file reports, he will have to communicate effectively within his department and also with managers of other departments. These are some of the common tasks of all managers.
The sheer variety of tasks a manger has to perform would not fit in a definition. According to a paper titled “Fragmentation of working time and smarter is-solutions”, managerial work can be defined as “a stream of disjointed, fragmented activities occurring at an unrelenting pace.” (Franck Tétard, Fragmentation of Working Time and Smarter is-Solutions: Definition of Managerial Work. 2000, p. 3). Whatever be the nature of a manger’s job, what is true is that it has changed and also keeps on evolving as advances in information communication technologies are introduced.
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Changes in managerial work
There are certain tasks like human relations and management that has not undergone its basic nature ever since the concept of modern business developed during and after the industrial revolution in England. But certain areas have undergone a lot of change after the introduction of ICT into managerial work. Before the development of modern information communication technologies, a manger would have to physically write down reports either by himself or with the help of a secretary. The report will be physically filed and if necessary be sent to the head office by post or by a person. For conferences the manger would need to travel to the place where the conference is held.
For communicating, he would either use the telephone or the telegraph. Even now some of these things may be happening. But there are alternatives by which he can accomplish these tasks. He can store his reports in an electronic storage media and send the same to practically anywhere in the world via email. For conferencing, he can sit in front of a computer monitor at home or office and participate using a video conferencing system.
He can find information about various topics by using the internet and can do complicated calculations using software designed for such purposes. He can post instructions instantly by sending it to the terminals used by his employees. Some of the changes given above are the apparent changes that can be observed by an observer. But in effect ICT has a deeper impact on managerial work as can be seen from the following section.
Impact of ICT on managerial work
As mentioned earlier ICT has resulted in many changes in the nature of managerial work. New dimension to the work done by managers have also evolved. Some of them had a positive impact on the organization, employees and the mangers themselves while others may have had negative repercussions. A few of the important ones are listed below.
Business technology trends
A paper titled “Eight business technology trends to watch” in the August 2007 issue of the McKinsey Quarterly has predicted the way technology will lead the way business is done in the future. Most of what has been said in the article is already seen in managerial practices in modern organizations. The article says that the trends given will be more and more seen in the future. One of the trends is what the authors term as co-creation.
Co-creation is essentially an outsourcing practice, including not just technical experts but also others like customers. The example they have given is the Wikipedia site from Google. “Consumers also co-create with companies; the online encyclopaedia Wikipedia, for instance, could be viewed as a service or product created by its distributed customers.” (Eight Business Technology Trends to Watch. 2008).
Once whereas managers only needed to interact with only their own staff or other recognized contractors, now the added dimension of inputs from even non-technical persons will create new challenges. This online interaction is something new which has been brought about by advances in ICT. They have to sift through a lot of irrelevant suggestions and ideas before they decide to accept one. Another related trend that has already gained much acceptance is outsourcing. Even though this trend is found more in the software industry, it is being increasingly found in manufacturing and other sectors as well.
The authors call this trend “tapping a world of talent”. A manger sitting in Germany will have to interact with an outsourcing agent, probably in China. The challenge will be language, the cultural differences, and work practices among other things. The article lists a few more trends that will become increasingly used in the workplace. ICT is enabling automation across a wide range of business activities like designing, supply chain management, business forecasting, human resources, customer relationship etc. what is more, all these activities are becoming more interconnected making managerial work more complex. Another trend is the use of more science in business.
Nowadays complex forecasting methods and other statistical calculation are being increasingly used. Even though they can be done using computer software, today’s mangers have to be familiar with them. This has resulted in such subjects learnt by statisticians now being added to a business management curriculum. Managers now have huge volumes of data from which they can extract information. Such data is now available mostly for a fee from many professional organizations through their websites.
Strategic partnership in Logistics
The logistics process in large organizations is becoming more and more complicated as companies expand outside their national territories. Increased outsourcing which is facilitated by advances in information communication technologies has resulted in a process where diverse suppliers, resellers and other strategic partners. Unless this is handled efficiently, the logistics planning and effectiveness may suffer.
What is essential is forming transparent and strategic partnerships with all relevant groups in the whole logistics process. “The construction of strategic partnership in logistics service field provides with a stable and effective logistics support and guarantee system for automobile enterprises, reducing the self-operation costs and obtaining high-quality service.” (Joe 2008). This process is an additional burden and responsibility for managers of concerned departments like manufacturing, logistics, purchase, sales etc.
International financial management
The globalization process facilitated through advances in ICT has resulted in financial transactions across the wide variety of markets especially those in developing countries like India, China and the new markets of the erstwhile Soviet Union. “Technology has reduced the cost of communications, increased the power of computers, shrunk the globe, and made national boundaries less significant.” (Das 2004, p. 34). Technology has also reduced communication and transaction costs and has made it faster and more reliable. There have also emerged competent organizations that make these financial transactions possible. These organizations can also measure and analyze market risks for clients. Moreover, different financial systems, financial policies, currencies, stock markets etc will complicate the matter of financial management. The manager of the new age being a participant in these changes has to be competent enough to understand and grasp the complexity of the financial transactions.
New IT Skills
Managers now have to learn a host of IT skills right from the basic ones like using the internet, using basic programs like word processing, spreadsheets etc. This task would not be considered difficult and most would be knowledgeable in this field. But there are other areas that mangers would find more challenging. ICT has enabled a lot of work once done by hand to be transferred to computers.
Designing, drawing, animation, art creation etc now can be done on specialised software. While this has made for greater flexibility, accuracy and clarity, managers of such departments will now have to familiarize themselves with skills to use these programs at least to a certain extent. What was once done by hand will now have to be done on a computer using a different set of skills and knowledge. If the manger belongs to the old school he would have to learn these skills or be found wanting. “ICT offers new opportunities for new kinds of art work (time-based work, animation, three-dimensional imaging, digital photography, video, performance). (Addison and Burgess 2003, p. 96).
According to a book titled “Using Communication Technology: Creating Knowledge Organizations”, author Bettina S. T. Büchel says that the managers of today have to handle what is termed as information overload. In fact, they are now caught in a paradox with the need for large volume of information on the one hand and the large volume of relevant and irrelevant information on the other. “On the one hand, they feel that they cannot operate efficiently without high levels of information, but on the other, the heavy load of often irrelevant information decreases their efficiency and slows down decision-making.” (Buchel 2001, p. 2).
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This information was derived from a compilation done by Reuters way back in 1996 as a result of three separate studies. More than 1300 managers from the UK, USA, Hong Long and Singapore participated. Some relevant statistics were found from the study which might be a cause for concern. 43% of those surveyed felt that decision making process was delayed due to this factor. 38% felt that they lost a lot of time looking for information and 47% felt that all this information makes them loose focus of their real duties.
Nearly half of them (42%) felt that their health suffered, 61% felt that they could not meet many social obligations and 60% felt that processing all this information made them too tired to indulge in social activities. The author is of the opinion that information technology is the culprit and not the solution to this problem. As a solution the article says that companies and managers should take the aspect of information management as seriously as even finance and decisions on it should be taken at the board le Reuters, United Kingdom level of companies. So information management is a new skill that is required for managers today.
This aspect should not be construed as a necessity of managers today. But advances in ICT has resulted in increasing use of automation and outsourcing which has led to downsizing of employees at all levels in an organization. A manger may be at risk to be laid off or given the golden handshake. According to a journal article titled a desktop manager, authors Donald L. Lester, John A. Parnell says that this threat has resulted in managers imbibing three negative qualities namely self preservation, conflict avoidance, and appeasement. (Lester and Parnell 2006). Moreover, managers tend to use technology, especially the internet for inordinately long periods to the extent that they begin to loose their interpersonal skills. The authors refer to managers as desktop managers.
The authors say feel that this is a serious concern and has gone on to explain in detail the major consequences of information overload. This matter could be looked into in little more detail considering the seriousness of the problem. With regard to self preservation the following observations were recorded. The managers who are affected by this problem focus on organizational politics and use to stay ‘politically connected’ with their superiors.
They do this in the hope that a close relationship may prevent them being a candidate for lay off. The book coins a new term administrivia, that is, paying unnecessary attention to the trivial matter of administration in order to escape other more important responsibilities. For this purpose they spend inordinately long hours in front of the computer terminal to give the wrong impression that they are actually engaged in administrative work by using the latest technology. Another tactic that such managers resort is ‘conflict avoidance’. This could be termed as a political tactic whereby the problem is ignored or left unattended in the hope that it will resolve itself without any input from the manager.
They do involve themselves only as a last resort or when forced to do so from their superiors. They also avoid goal setting, both for themselves as well as those working under them. Another practice is to look outside the organization and seek active associations with organizations such as service and socialising clubs to create a feeling that they are important and valuable employees of the company. What is now necessary for managers is not to fall into this trap.
The authors say that proper selection of managers, periodic training to improve job skills, teaching other personal and social skills (conflict, grasp goal setting, interpersonal skills etc) are the solution to this problem. Hence imbibing such skills has become the responsibility of the technology age manager.
With the current level of development in ICT, it is now possible to have a convergence of different media like pictures, sound and moving images. So, managers should have the skills to handle and make use of such technology. (Vittal 2001).
Ignoring the human aspect of employees
This point is again an example of implementation of technology without regard to employees who come at the receiving end. In other words ICT has enabled automatic monitoring or employee or more specifically managerial tasks. Though this aspect has no direct impact on managerial tasks as such, it has in an indirect way for managers to be more self conscious in performing their duties. Evaluation of managerial work is nothing new, but the use of technology for such purposes took most managers by surprise. Once used to being evaluated by humans, the prospect of being evaluated by machines was something new to them.
Even though this study was conducted during the mid 1990’s, evaluation by machines continues to cause a feeling of unease among managers even today. “For example, when an information system is designed, the human consequences are often either totally misunderstood or actively ignored.” (Allen and Scott Morto 1994, 127). This is a new psychological skill that has to be accepted and adopted as routine standard by today’s managers. An anecdotal incident related with this issue can shed more light on the psychological aspect of machine evaluation. The incident is reported in the same book mentioned above.
The personal computer was introduced in an office for the first time. The management found that the managers were not familiar with computers and also did not know how to type. A typing tutor was integrated into the program and a loud beep could be heard across the office when an employee made a typing mistake. The end result was that mangers did not make an effort to learn computers for the fear that their mistakes could be seen by everyone in his office. Most of these fears are misplaced, but the manager of today has to understand that technology is often given importance than human relations.
Mercedes Benz: This famous brand is manufactured by Daimler AG of Germany. Daimler Benz which was the earlier name of the company became Daimler Chrysler after it took over controlling shares in Chrysler. Now the company has rechristened itself Daimler AG in 2007. Mercedes Benz has an extensive array of products that include a wide range of car models and a commercial vehicles division that makes heavy duty and medium sized vehicles. This segment includes goods and people movers as well. In fact the company is credited with producing the first internal combustion engine vehicle in the world.
Daimler Benz as the company was earlier known, was named after two individuals who independently created two internally combustion vehicles around the same period in the mid 1860’s. It was Carl Benz who created a three wheeled carriage that could run on its own power in 1865 and nearly at the same time Gottlieb Daimler brought forth his own version which had four wheels. The two eventually started making automobiles independently and also as rivals. It was only after thirty years that the entity of Daimler Benz came into existence The name Mercedes came about because of the insistence of Emil Jellinek who the dealer of the automobiles made by Daimler-Motoren Gesellschaft, the company started by Daimler. The name was that of his daughter Mercedes
An extensive review of literature throws very little light as to the existence of the above mentioned problems within the company. Whatever little that is available is given below. According to the company’s annual report the year 2007 has been a good year for the company with sales of nearly 99 billion euro. With regard to outsourcing, the company which had its main manufacturing operations in Germany now has division in United States, France, South Africa, Brazil, India, Vietnam and Indonesia and China. So managers in these plants will have to interact with each other using communications technology.
New inter personal skills have been developed by the managers so that effective communication can be maintained. With a company of this size Daimler has efficient logistics operations which connect its dealers and suppliers to the company. The company has installed the latest software to keep stock of inventory using the just-in-time system. To improve its logistics in the US, the comp any has a 450,000 square foot facility at New Jersey. This fully automated facility with 1.5 miles of conveyor belting was started in order to supply more than 105 dealers throughout the north eastern part of the country.
In the case of information overload, the company has an Activity Based Costing (ABC). If such systems are not designed carefully it could result in information overload thereby frustrating its management. “As a result of a poorly designed ABC system, management within the organization can be frustrated by information overload.” (Swamidass 2002, p. 397). All the changes in managerial work that has been mentioned above have been experienced by the managerial staff of the company also. The company relies heavily on technology and this includes information communication technology also.
It mangers would have experienced information overload, experienced. The managers would also have experienced the concept of co-creation. There have not been many reports about downsizing in the company and hence the negative skills mentioned above would not have been a factor in the company. Convergence of multimedia would defenityly have taken place and been handled by its managers. They would also have much experience in international finance management and would have to be proficient in new IT skills.
Even though the basic nature of managerial work remains unchanged, the invasion of information technology into this realm has brought about many changes in how they perform their work. Managers now have to know how to use information technology in performing their tasks. They have to be familiar with using computers and also about different software used in the managerial process. They also have to be familiar with a virtual world where communication is mainly through the internet. ICT has had its advantages and disadvantages with regard to managerial work. The advantages are faster and more accurate work with a much larger reach.
The disadvantage is that ICT has made many managers less people oriented and more technology oriented. It has also, in some instances made them addicts of a virtual world making them ineffective as managers. The threat of being laid off has also had negative effects in the behaviour of managers making them resistant to risk taking and being subservient to their superiors. It would appear from what has been said above that the Daimler AG has been able to keep up with the advances in ICT and have also managed in keep its managers well trained and able to cope up with such advancements.
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