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Technology is known to be at the lead with the touch screen phones and electronic toothbrushes becoming everyday essentials to our lifestyle in the 21st cenrtury. It is evident that technology has played a role in shaping and adjusting the way people live their lives today. Businessdictionary.com defines technology as the application of information to the designing, production, the utilization of services and goods and in organizing human activities.
Technology is essential in the enhancement of growth and development of businesses. A business will strive towards the following dynamics of technological advancements namely; process/product innovations and product/process inventions. This can be achieved only if they engage in extensive research and development. Achieving both of the said dynamics will enable the business utilize resources better and ensure greater rate in the distribution of outputs than the rate of introducing inputs, thus, it will lead to a higher productivity of workforce. This will, consequently, lead to the attainment of a competitive advantage over the business’ competitors. This paper will evaluate and draw upon a selection of the advantages and disadvantages faced by the business within the process of technological development. It should be taken into consideration that technological development may cause both advantages and disadvantages to the business.
Regarding the original statement of how a business can use technological development to enhance its productivity, the business has to evaluate how it can achieve this, and what real benefits are accrued to it. Smith’s model of specialization and division of labor shows that if an organization adapts a basic production process it will utilize the division of labor more efficiently. This results into a more productive and efficient labor force. Those, taking into account the Smith’s theory. are supposed to consider how to use technology to increase productivity. For instance, process innovation, which entails implementing a new or considerably improved method of production or delivery, includes changing equipment, software and technique (www.innoviscop.com/en, 2011).
Businesses that choose application of process innovation will enjoy the following advantages. First, the correct use of technology in the production process and division of labor will allow businesses to forestall a raised productivity resulting from the use of machinery and specialization. One instance where this can be applied is the raising of the conveyor belt; this is a simple process which will facilitate easier flow of goods from one place to another.
Secondly, the conveyor belt also ensures reduced costs incurred by the firm during the long run. Expanding the fixed capital into a greater production process through the use of specialization and new process innovation leads to an increased economies of scale for the firm. However, the business should note that this achievement is associated with the cost. Any business that wishes to excel in the marketplace and aspires to be successful has to consider several costs. For instance, process/production inventions or innovations of new products are associated with high levels of research and development.
Research and development are crucial strategic factors and are vital elements of the survival of a company. In a market that has constant demand shifts, the firm must respond by continuous adaptation of its range of products or services. New technological advances may involve enormous costs due to exceptionally large initial investment of the short term and the view of acquiring a competitive advantage in the long term. In addition, there are costs of training. The firm must consider the cost it will incur in training workers, which may hinder its productivity in the short term. Those with R&D must evaluate if the initial investment is likely to create an advantage or will end up being a waste of finances and time. For example, some businesses maintain older developments while stepping up to new advances, and, therefore, experience more costs in comparison to the benefits. In addition to these factors, the firm must assess its intellectual property rights. These rights may be considerably expensive. Recently, there have been events that show an intellectual property rights clash has seen sale bans in some countries.
A shining example is Samsung and Apple that have met in court for their ongoing patent war. According to www.bbc.co.uk (2011), Apple’s Sydney lawyers claim that Samsung Galaxy tab did infringe patents related to its touch screen interface. The proclamation of intellectual property rights can cost the firm a cost of research and development which is a barrier for release into the market by other competitors. If business is successful in achieving a new, innovative product and already gained correct intellectual property rights, the business is tasked with thinking what it expects to face in the future. Unemployment is the main issue that businesses are likely to face.
After successfully achieving a new innovative product and gaining correct intellectual property rights, it is essential to think what the business is about to face in the near future. The main issue that businesses are facing is unemployment. The new technological advances accelerate processing times, thus, changing the nature of role of the employees within the workplace; therefore, the introduction of technology can have more influence on the business other than just the monetary costs. It can enable a single worker to do a job that would, however, be done by two or three, which leads to increased productivity. However, this makes some jobs unnecessary or outdated.
Additionally, it is cheaper to serve and maintain the equipment after completing the initial installment of technology other than sustaining the amount of labor equivalent to that productivity. Moreover, technology becomes more user-friendly making it possible for junior staff members train faster and operate complex and more sophisticated systems. Technology, arguably, has a strong effect on the quality of decision-making. Harry Braverman, an American sociologist, argues that new technology in workplace will, under capitalism, continuously lead to an increase in the polarization of its workforce into either skilled or unskilled workers (Lewis, 2007; Ian, 2011, p.140). An advantage is, however, evident from this point. Whilst labor intensive jobs are reduced, there comes a rise in creation of new job opportunities. The constant changes in technology mean an increased demand for other jobs such as computer programmers.
The development of technology does not only have an effect on the business communication structure of choice, but also effects the labor force structure. Advanced information technology enables businesses to connect with people all around the globe. This has, in turn, influenced the widening of business opportunities through the advancement of globalization. It is the key part of success in business in the twenty first century. It enables all economies share information efficiently and rapidly through the geographical barriers. This will allow businesses to economically penetrate into various markets while socially approaching different countries.
Information Technology helps channel the cultural gaps between different countries by allowing the ideas and views of different cultures. That may be an advantage to businesses that decide to outsource from different countries. IT has provided the growth and advancement of business mobility. It has brought a clear surge in productivity by developing personal electronic devices used for making orders, sales, inquiries and more. It, also, has brought an upsurge in telecommuting or home working that allows the employee to work from anywhere over the employer company network. This has caused a reduction in the fixed overhead expenses. On the other hand, it is a kind of structural unemployment.
However, the expansion of IT is also associated with several weaknesses. Impersonal perception is one of the weaknesses. Business that chooses to offer solutions and queries through electronic services, for instance, default emails and computerized answer phones may find certain customers disfavoring them. This poses a significant disadvantage on the firm in comparison to its competitors who offer customer services of a higher quality. Security is another drawback. As witnessed recently in tabloids, personal information, for example, text messages and emails face a threat from hackers both in the internal environment and externally. A good example is depicted by the Computer Security’s Survey Report which reports in 2007, 21.1 million dollars arising from financial fraud were lost; 8.4 million dollars were lost to viruses; 6.9 million dollars – through an outsider penetrating and 5.7 million dollars were lost to the theft of confidential data (http://smallbusiness.chron.com, 2011).
Additionally, some technological developments depend on enormous consumption of energy during their production process, which consequently induces negative externalities. The government treats the externalities as a great pollution issue and it has issued permit caps, which allow producers to pollute too. That pollution under this permit experiences a heavy taxation. This can, in turn, discourage the firm’s plans for future investment since the cost of taxation may be higher than future benefits. With the favorable, correct environment, technological change can hold the right mechanics efficiently for successful businesses, but it has to rely on some dynamics in order to achieve this.
In conclusion, firms could enjoy successful benefits of a competitive advantage if they are able to adopt the real technological change right practices. By conducting the required research, developing and choosing wisely on which one to implement, in consideration of the expected future outcomes, the firm is able to induce a reduction of the likely probable flaws in development. However, it is unavoidable to loose manual labor, though this comes with a prospect of developing occupations of higher skill and is an advantage to the industry and to the overall economy.