Information technology, especially the internet, exerted strong influence on organizational systems. It has enabled flexibility and the establishment of decentralized and dispersed business organizations. Conception of the organization based on the principle of ‘integrated decentralization’ is the opposite of concentrated and centralized organizations that had dominated the traditional organizations of the past. Information technology has largely contributed to the establishment of integrated decentralized organization because companies have been able to decentralize their parts in the general area, and then to integrate them at a centralized level, with the establishment of specific functions for all decentralized areas. This paper further discusses the impact of IT on the design of organizations, as well as the place and role of man in the information society

Anđelković, M.

Cherpak, Antonina Yevhenivna

Paić, S.

Черпак, Антоніна Євгенівна

Institutional Repository of Vadym Hetman Kyiv National Economic University

9СЕКЦІЯ 1
1. АКТУАЛЬНІ НАПРЯМИ РОЗВИТКУ ТЕОРІЇ
ТА ПРАКТИКИ УПРАВЛІННЯ
M. Anđelković,
PhD, Associate professor, Faculty for business studies and law,
University Union-Nikola Tesla,
maja.andjelkovic@fpsp.edu.rs,
S. Paić,
MSc, Faculty for business studies and law, University Union-Nikola Tesla,
suzana.pajic@fpsp.edu.rs,
A. Cherpak
PhD, Doctorate student, Management department of Kyiv National
Economic University
antonina.cherpak@gmail.com
IMPACT OF IT ON ORGANIZATIONS IN MODERN CONDITIONS
ANNOTATION: Information technology, especially the internet, exerted
strong influence on organizational systems. It has enabled flexibility and
the establishment of decentralized and dispersed business organizations.
Conception of the organization based on the principle of ‘integrated
decentralization’ is the opposite of concentrated and centralized
organizations that had dominated the traditional organizations of the past.
Information technology has largely contributed to the establishment of
‘integrated decentralized’ organization because companies have been
able to decentralize their parts in the general area, and then to integrate
them at a centralized level, with the establishment of specific functions for
all decentralized areas.
This paper further discusses the impact of IT on the design of
organizations, as well as the place and role of man in the information
society.
KEYWORDS: information technology, impacts, design of the
organization.
1. Introduction
Although information technology, especially internet, is not a
revolutionary innovation compared to earlier technological
innovations such as electricity, railway, internal combustion engine, it
can be concluded that it has far more changed all areas of life and
10
work than any other technological innovation before. Internet has
abolished national barriers, connected the world and expedited the
movement of goods, capital, people and ideas tremendously.
Therefore, it is often said that the world is moving from nation states
towards internet.[2]
Revolutionary aspect of internet is evident from its impact
expressed and manifested both in the corporate business sphere, but
also in non-profit organizations, state level and the personal life of
every individual. When it comes to corporate organizations, the
internet has reduced its size and depth and enhanced the power of
small companies, which all has fueled the development of
entrepreneurship and facilitated the creation of organizations with
neither location nor space, ‘virtual companies.’ Each individual
impact on certain elements of the corporate system has successively
changed other parts of the organization as well as the organization as a
whole, including the relationship and especially communication with
the environment in which the organization operates.
2. The impact of IT on the organization
The introduction of IT in the organization created a radical change
on various issues. There is no doubt that the traditional understanding
of the organization is unacceptable today because it was based on the
size (value of assets recognized in assets, location of buildings and
warehouses, etc.) and the economy of scale as the traditional criteria
for assessing the quality of the past. Miniature forms dominate on the
business scene in modern conditions evident in the statement ‘big is
bad, small is good.’ For example, a large multinational company in
the U.S. that deals with electrical engineering, Asea Brown Boveri, is
divided into 1,300 companies and 5,000 autonomous units. One of the
most famous leaders of the business world, president of GE Jack
Welch says: ‘What we’re trying to do is to get the soul and the speed
of a small company within the body of our great company.’ Paul
Allaire, chairman of Ziroksa, is doing something similar. Then there’s
AT & T, Grand Metropolitan, Coca — Cola, Johnson & Johnson. The
list goes on. When AT & T announced that it would split into three
separate companies, the value of stocks increased by $ 10 billion.
Therefore, it is evident that in the modern sense, large companies may
be also be internet companies, i.e. companies with a few employees, no
office, retail, warehouse and other facilities and technical equipment if
they possess information technology. Accordingly, internet companies
with few employees can generate large turnover and profits and can
operate in a number of countries, even continents. Towards this fact leads
11
the following statement: ‘I own a company called Megatrends Ltd. and
we have 57 joint ventures in 42 countries, and we have only four
employees including myself. We get everything done through
subcontracts. Therefore, we are a multinational company. I am present in
42 countries. Still, I am not a large, but a small company.’[3].
We should add one more alpha plus to all this. Thanks to IT,
smaller companies have become stronger and threaten to undermine
the big ones. Now former David has become Goliath, which has
completely turned around the traditional meaning and understanding
of the organization, but also its design. Large companies have been
decomposed into smaller parts so that each part with the results that
can be expressed may become a ‘profit center’ performing distribution
on its own level according to achieved results. Nevertheless,
decomposed parts do not act independently. Thanks to IT they can be
re-integrated and thus create the so-called ‘integrated decentralization’
which operates on the principles of financial concentration and
decentralization of business. In this way, a synergistic effect is
achieved, as the quality of the new organization.
Given the above, the international business scene has changed.
There has been a reduction in the share of the 500 largest companies
ranked in the world by the renowned business magazine Fortune two
times at the end of the second millennium in relation to the share
which they had in 1970. The 500 most successful companies in 1970
participated in the overall U.S. economy by about 20 % , while thirty
years later they participate with about 10 % with a tendency of
further reductions.[1] It is estimated that it will continue to decrease
with a tendency that in 2020 it will be reduced to below 3% per cent,
which would dramatically change the current global business
infrastructure.
The reason way the internet companies can be so small and at the
same time so great is that the internet as a technology iscompletely
decentralized to the level of an individual. It actually consists of
hundreds of million (the figure is constantly changing) autonomous
parts, which in turn can become integrated and create a billion
autonomous parts. Therefore, the internet is indeed a network, but it is
also completely decentralized, and then integrated into system again.
The above represents a radical shift that has changed the world and
will continue to change it in terms of connecting the continents and
national communities. The point is that the world will not be
dominated either by America or China, but by the net. It is not about
who will join China, but who will join the Chinese, American, and
soon Indian internet, i.e. who will access the global network.
12
Internet is an universal but flexible technology that enables the
creation of virtual organizations of a wide range and designs. The rule
is that there are no rules and that any organization can be uniquely
designed, which means that information technology has created the
conditions for the creation of different organizations, on different
bases and criteria. This is perhaps the biggest impact of IT that is
ignored or insufficiently understood. Basically, various organizations
are flexible, innovative and learn better than the traditional standard
and universal organizations that were based on classical Taylor-Faylo
basis. ‘In the national industry, where all the organizations are the
same and resemble one another using the same technology, the same
business processes and organizational forms of the same , there are
fewer opportunities to learn from each other.’(In an innovative
context, diversity should be seen as a potential source of innovation,
not as obstacle)
Information technology, especially the internet has reduced the life
span of the organization, while at the same time resulted in the
increased life expectancy of people. Other types of technology did the
same thing, but here we face a radical reduction or decrease of the
lifetime of the organization never previously seen in the past.
However, any organization can find itself in the ‘flower of eternal
youth’ if they timely introduce technological and organizational
innovations. On the other hand, IT has a positive impact on the
extension of the life span of people. It turns out that today a highly
developed countries have the highest level of IT development and that
they have the longest life expectancy, which is over 80 years of age.
Their life span is about twice longer than in the developing countries.
This statement is logical, since IT has improved all the elements of the
standard of living which had a positive effect on quality of life, or the
life-span.
Therefore, it can be concluded that information technology had an
important impact on the organization as an element of the
management process, because it changed the classical design of the
organization. Technology has reduced the classical hierarchy of
traditional organizations making it faster and more flexible, and more
democratic. Fans of the internet and critics of bureaucracy by
introducing information technology did try to promote the idea of the
end of the hierarchy, changing, therefore, someone’s rights to give
orders and obligation on the part of others to execute orders.
However, it should be noted that the hierarchy will never be
abolished, as it exists in nature and is embodied in Darwinism, where
‘the big swallow the small;’ in modern times to ‘ the fast swallow the
13
slow.’ Accordingly, with the introduction of information technology
in corporate systems the hierarchy will remain, perhaps in an even
more severe form, but instead of a hierarchy that is based on the
power and the right of one to issue orders and other commitments to
fulfill orders, this hierarchy shall be based on knowledge, skills and
abilities. As information technology is used for teaching and learning
as the most valuable resource, at the global level at the top of the
hierarchical pyramid will be the countries that have the knowledge,
and regarding corporate organizations scholars will be privileged and
will be located at the upper levels of the hierarchy, while the people
with scarce knowledge shall occupy lower positions, with ignorant
people at the very bottom of organizations, if at all.
3. Resume
It is evident from the above text shows that the introduction of
information technology in corporate organizations has radically
changed their design. This is only natural, because it shows that the
introduction of information technology is a strategic change that must
accompany the re-engineering of both the organization and
management processes. The most important quality that is obtained by
introducing information technology in corporations is to create
conditions for an ‘integrated decentralization’ in which to decentralize
business functions, and to concentrate on high-level personnel,
manage money and company development. Therefore, development
of information technology has led to a new corporate philosophy on
which modern business is based, and that is the phenomenon of
integrated decentralization, through which one can achieve a
significant competitive advantage. Regarding the above, we should
keep in mind the statement by Andrew Grove: I am absolutely
confident that in the future, all companies will be internet companies.
References
1. Fortuna, Februar, 2001. p. 17
2. John Naisbitt explains this in detail in his paper entitled: «From
National States to Networks», published in the book: «Rethinking the
future», Nicholas Brealey, London, in 1997. pp. 212-228
3. John Naisbitt: From nation states to networks» in books: Bethinking
the future, Nicholas Brealey Publishing, London, 1997. p. 213.
4. L. Jessup and J. Valacich: «Information Systems Todey, Prentice Hall,
London
5. P. Drucker: «Moj pogled na menadžment», Adižes Institut, Novi Sad,
2001.
14
6. R. Goffee and G. Jones: Creating the Best Workplace on Earth, HBR,
maj 2013.
7. S. Hagg, M. Cummings, A. Phillips: Management Information
Systems, McGraw_Hill, Boson, 2007.
8. T. Bateman and S. Snell: «Management — The New competetive
Landscape, McGraw-Hill, Irwin, Boston, 2004. six edition,
9. T. Wheelen and D. Hunger: Strategic Management and Business
Policy, Prentice Hall, New Jersey, 2004.
10. V. Vučenović: Menadžment-tehnologija i filozofija, Želnid,
Beograd, 1998.
11. Ž. Radosavljević: «Menadžment u modernom biznisu», PA, Novi
Sad, 2007.
УДК 336.71
Баріда Н. П., к.е.н.,
доцент кафедри банківської справи,
ДВНЗ «Київський національний економічний університет
імені Вадима Гетьмана»
Nbarida@ukr.net
МОНЕТАРНА ПОЛІТИКА
ЯК ІНСТРУМЕНТ ДЕРЖАВНОГО УПРАВЛІННЯ ЕКОНОМІКОЮ
АНОТАЦІЯ. Розглянуто роль монетарної політики в системі заходів
державного управління економікою. Обґрунтовано особливості та за-
вдання монетарної політики в період посткризового відновлення сві-
тової на національної економіки.
КЛЮЧОВІ СЛОВА: монетарна політика, державне управління еконо-
мікою,стійкість грошової системи, інструменти та завдання монетар-
ної політик
АННОТАЦИЯ. Рассмотрена роль монетарной политики в системе
мер государственного управления экономикой. Обоснованы особен-
ности и задачи монетарной политики в период посткризисного восс-
тановления мировой на национальной экономики.
КЛЮЧЕВЫЕ СЛОВА: монетарная политика, государственное управ-
ление экономикой, устойчивость денежной системы, инструменты и
задачи монетарной политики.
ABSTRACT. The role of monetary policy in the system of state control of
the economy. Grounded features and objectives of monetary policy
during the post-crisis recovery of the world on the national economy.


Impact of IT on organizations in modern conditions

Name not available

9СЕКЦІЯ 11. АКТУАЛЬНІ НАПРЯМИ РОЗВИТКУ ТЕОРІЇТА ПРАКТИКИ УПРАВЛІННЯM. Anđelković,PhD, Associate professor, Faculty for business studies and law,University Union-Nikola Tesla,maja.andjelkovic@fpsp.edu.rs,S. Paić,MSc, Faculty for business studies and law, University Union-Nikola Tesla,suzana.pajic@fpsp.edu.rs,A. CherpakPhD, Doctorate student, Management department of Kyiv NationalEconomic Universityantonina.cherpak@gmail.comIMPACT OF IT ON ORGANIZATIONS IN MODERN CONDITIONSANNOTATION: Information technology, especially the internet, exertedstrong influence on organizational systems. It has enabled flexibility andthe establishment of decentralized and dispersed business organizations.Conception of the organization based on the principle of ‘integrateddecentralization’ is the opposite of concentrated and centralizedorganizations that had dominated the traditional organizations of the past.Information technology has largely contributed to the establishment of‘integrated decentralized’ organization because companies have beenable to decentralize their parts in the general area, and then to integratethem at a centralized level, with the establishment of specific functions forall decentralized areas.This paper further discusses the impact of IT on the design oforganizations, as well as the place and role of man in the informationsociety.KEYWORDS: information technology, impacts, design of theorganization.1. IntroductionAlthough information technology, especially internet, is not arevolutionary innovation compared to earlier technologicalinnovations such as electricity, railway, internal combustion engine, itcan be concluded that it has far more changed all areas of life and10work than any other technological innovation before. Internet hasabolished national barriers, connected the world and expedited themovement of goods, capital, people and ideas tremendously.Therefore, it is often said that the world is moving from nation statestowards internet.[2]Revolutionary aspect of internet is evident from its impactexpressed and manifested both in the corporate business sphere, butalso in non-profit organizations, state level and the personal life ofevery individual. When it comes to corporate organizations, theinternet has reduced its size and depth and enhanced the power ofsmall companies, which all has fueled the development ofentrepreneurship and facilitated the creation of organizations withneither location nor space, ‘virtual companies.’ Each individualimpact on certain elements of the corporate system has successivelychanged other parts of the organization as well as the organization as awhole, including the relationship and especially communication withthe environment in which the organization operates.2. The impact of IT on the organizationThe introduction of IT in the organization created a radical changeon various issues. There is no doubt that the traditional understandingof the organization is unacceptable today because it was based on thesize (value of assets recognized in assets, location of buildings andwarehouses, etc.) and the economy of scale as the traditional criteriafor assessing the quality of the past. Miniature forms dominate on thebusiness scene in modern conditions evident in the statement ‘big isbad, small is good.’ For example, a large multinational company inthe U.S. that deals with electrical engineering, Asea Brown Boveri, isdivided into 1,300 companies and 5,000 autonomous units. One of themost famous leaders of the business world, president of GE JackWelch says: ‘What we’re trying to do is to get the soul and the speedof a small company within the body of our great company.’ PaulAllaire, chairman of Ziroksa, is doing something similar. Then there’sAT & T, Grand Metropolitan, Coca — Cola, Johnson & Johnson. Thelist goes on. When AT & T announced that it would split into threeseparate companies, the value of stocks increased by $ 10 billion.Therefore, it is evident that in the modern sense, large companies maybe also be internet companies, i.e. companies with a few employees, nooffice, retail, warehouse and other facilities and technical equipment ifthey possess information technology. Accordingly, internet companieswith few employees can generate large turnover and profits and canoperate in a number of countries, even continents. Towards this fact leads11the following statement: ‘I own a company called Megatrends Ltd. andwe have 57 joint ventures in 42 countries, and we have only fouremployees including myself. We get everything done throughsubcontracts. Therefore, we are a multinational company. I am present in42 countries. Still, I am not a large, but a small company.’[3].We should add one more alpha plus to all this. Thanks to IT,smaller companies have become stronger and threaten to underminethe big ones. Now former David has become Goliath, which hascompletely turned around the traditional meaning and understandingof the organization, but also its design. Large companies have beendecomposed into smaller parts so that each part with the results thatcan be expressed may become a ‘profit center’ performing distributionon its own level according to achieved results. Nevertheless,decomposed parts do not act independently. Thanks to IT they can bere-integrated and thus create the so-called ‘integrated decentralization’which operates on the principles of financial concentration anddecentralization of business. In this way, a synergistic effect isachieved, as the quality of the new organization.Given the above, the international business scene has changed.There has been a reduction in the share of the 500 largest companiesranked in the world by the renowned business magazine Fortune twotimes at the end of the second millennium in relation to the sharewhich they had in 1970. The 500 most successful companies in 1970participated in the overall U.S. economy by about 20 % , while thirtyyears later they participate with about 10 % with a tendency offurther reductions.[1] It is estimated that it will continue to decreasewith a tendency that in 2020 it will be reduced to below 3% per cent,which would dramatically change the current global businessinfrastructure.The reason way the internet companies can be so small and at thesame time so great is that the internet as a technology iscompletelydecentralized to the level of an individual. It actually consists ofhundreds of million (the figure is constantly changing) autonomousparts, which in turn can become integrated and create a billionautonomous parts. Therefore, the internet is indeed a network, but it isalso completely decentralized, and then integrated into system again.The above represents a radical shift that has changed the world andwill continue to change it in terms of connecting the continents andnational communities. The point is that the world will not bedominated either by America or China, but by the net. It is not aboutwho will join China, but who will join the Chinese, American, andsoon Indian internet, i.e. who will access the global network.12Internet is an universal but flexible technology that enables thecreation of virtual organizations of a wide range and designs. The ruleis that there are no rules and that any organization can be uniquelydesigned, which means that information technology has created theconditions for the creation of different organizations, on differentbases and criteria. This is perhaps the biggest impact of IT that isignored or insufficiently understood. Basically, various organizationsare flexible, innovative and learn better than the traditional standardand universal organizations that were based on classical Taylor-Faylobasis. ‘In the national industry, where all the organizations are thesame and resemble one another using the same technology, the samebusiness processes and organizational forms of the same , there arefewer opportunities to learn from each other.’(In an innovativecontext, diversity should be seen as a potential source of innovation,not as obstacle)Information technology, especially the internet has reduced the lifespan of the organization, while at the same time resulted in theincreased life expectancy of people. Other types of technology did thesame thing, but here we face a radical reduction or decrease of thelifetime of the organization never previously seen in the past.However, any organization can find itself in the ‘flower of eternalyouth’ if they timely introduce technological and organizationalinnovations. On the other hand, IT has a positive impact on theextension of the life span of people. It turns out that today a highlydeveloped countries have the highest level of IT development and thatthey have the longest life expectancy, which is over 80 years of age.Their life span is about twice longer than in the developing countries.This statement is logical, since IT has improved all the elements of thestandard of living which had a positive effect on quality of life, or thelife-span.Therefore, it can be concluded that information technology had animportant impact on the organization as an element of themanagement process, because it changed the classical design of theorganization. Technology has reduced the classical hierarchy oftraditional organizations making it faster and more flexible, and moredemocratic. Fans of the internet and critics of bureaucracy byintroducing information technology did try to promote the idea of theend of the hierarchy, changing, therefore, someone’s rights to giveorders and obligation on the part of others to execute orders.However, it should be noted that the hierarchy will never beabolished, as it exists in nature and is embodied in Darwinism, where‘the big swallow the small;’ in modern times to ‘ the fast swallow the13slow.’ Accordingly, with the introduction of information technologyin corporate systems the hierarchy will remain, perhaps in an evenmore severe form, but instead of a hierarchy that is based on thepower and the right of one to issue orders and other commitments tofulfill orders, this hierarchy shall be based on knowledge, skills andabilities. As information technology is used for teaching and learningas the most valuable resource, at the global level at the top of thehierarchical pyramid will be the countries that have the knowledge,and regarding corporate organizations scholars will be privileged andwill be located at the upper levels of the hierarchy, while the peoplewith scarce knowledge shall occupy lower positions, with ignorantpeople at the very bottom of organizations, if at all.3. ResumeIt is evident from the above text shows that the introduction ofinformation technology in corporate organizations has radicallychanged their design. This is only natural, because it shows that theintroduction of information technology is a strategic change that mustaccompany the re-engineering of both the organization andmanagement processes. The most important quality that is obtained byintroducing information technology in corporations is to createconditions for an ‘integrated decentralization’ in which to decentralizebusiness functions, and to concentrate on high-level personnel,manage money and company development. Therefore, developmentof information technology has led to a new corporate philosophy onwhich modern business is based, and that is the phenomenon ofintegrated decentralization, through which one can achieve asignificant competitive advantage. Regarding the above, we shouldkeep in mind the statement by Andrew Grove: I am absolutelyconfident that in the future, all companies will be internet companies.References1. Fortuna, Februar, 2001. p. 172. John Naisbitt explains this in detail in his paper entitled: «FromNational States to Networks», published in the book: «Rethinking thefuture», Nicholas Brealey, London, in 1997. pp. 212-2283. John Naisbitt: From nation states to networks» in books: Bethinkingthe future, Nicholas Brealey Publishing, London, 1997. p. 213.4. L. Jessup and J. Valacich: «Information Systems Todey, Prentice Hall,London5. P. Drucker: «Moj pogled na menadžment», Adižes Institut, Novi Sad,2001.146. R. Goffee and G. Jones: Creating the Best Workplace on Earth, HBR,maj 2013.7. S. Hagg, M. Cummings, A. Phillips: Management InformationSystems, McGraw_Hill, Boson, 2007.8. T. Bateman and S. Snell: «Management — The New competetiveLandscape, McGraw-Hill, Irwin, Boston, 2004. six edition,9. T. Wheelen and D. Hunger: Strategic Management and BusinessPolicy, Prentice Hall, New Jersey, 2004.10. V. Vučenović: Menadžment-tehnologija i filozofija, Želnid,Beograd, 1998.11. Ž. Radosavljević: «Menadžment u modernom biznisu», PA, NoviSad, 2007.УДК 336.71Баріда Н. П., к.е.н.,доцент кафедри банківської справи,ДВНЗ «Київський національний економічний університетімені Вадима Гетьмана»Nbarida@ukr.netМОНЕТАРНА ПОЛІТИКАЯК ІНСТРУМЕНТ ДЕРЖАВНОГО УПРАВЛІННЯ ЕКОНОМІКОЮАНОТАЦІЯ. Розглянуто роль монетарної політики в системі заходівдержавного управління економікою. Обґрунтовано особливості та за-вдання монетарної політики в період посткризового відновлення сві-тової на національної економіки.КЛЮЧОВІ СЛОВА: монетарна політика, державне управління еконо-мікою,стійкість грошової системи, інструменти та завдання монетар-ної політикАННОТАЦИЯ. Рассмотрена роль монетарной политики в системемер государственного управления экономикой. Обоснованы особен-ности и задачи монетарной политики в период посткризисного восс-тановления мировой на национальной экономики.КЛЮЧЕВЫЕ СЛОВА: монетарная политика, государственное управ-ление экономикой, устойчивость денежной системы, инструменты изадачи монетарной политики.ABSTRACT. The role of monetary policy in the system of state control ofthe economy. Grounded features and objectives of monetary policyduring the post-crisis recovery of the world on the national economy.

http://ir.kneu.edu.ua:8080/bitstream/2010/6404/1/Andelkovic.pdf

Impact of IT on organizations in modern conditions

Abstract

Similar works

Full text

Available Versions

Institutional Repository of Vadym Hetman Kyiv National Economic University

Name not available