The impacts of ICT on Modern World Business

TABLE OF CONTENTS

ABSTRACT

LIST OF TABLES

LIST OF FIGURES

LIST OF ABBREVIATIONS AND ACRONYMS

CHAPTER ONE
INTRODUCTION
Background of the Study
Problem Statement
Objectives of the study
Research questions
Significance of the Study
Delimitation of the Study
Limitation of the Study
Definition of Terms
Organization of the rest of the Study

CHAPTER TWO
LITERATURE REVIEW
Introduction
Definition and Concept of ICT
Various ways in which ICT is used in Businesses
Factors that prevents ICT usage in businesses
The effect of the use of the ICT on the performance of businesses

CHAPTER THREE
METHODOLOGY
Introduction
Research Design
Population
Sampling and Sampling Procedure
Instruments
Pre-testing of questions and administration
Data collection methods
Data Analysis
Retention rate

CHAPTER FOUR
RESULTS AND DISCUSSION
Introduction
4.2 Demography
4.3: Various Ways in Which the ICT is used in Businesses
4.4: Factors that Prevents ICT Usage in Businesses
4.5: The effect of the use of ICT on the performance of businesses

CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Introduction
Summary
Conclusions
Recommendations
Suggestions for Further Research

REFERENCES

APPENDIX A- SPECIMEN OF QUESTIONNAIRE

ABSTRACT

There are a lot of studies done in other countries on the impact of ICT on businesses however in Ghana, studies in this field is scarce. This study focused on the impacts of ICT on modern world business in Ghana. The descriptive survey approach was adopted for this study which involved the use of questionnaires to obtain data which was analysed quantitatively. The respondents included the workers of K. Logistics. The study concluded that ICT is used in businesses for communication, record keeping and also to improve productivity. The study also concluded that limited financial resources, limited data management capacity, breaking down and malfunctioning of computer, poor awareness of ICT application and fund to invest more on ICT device and cost of training IT personnel and cost of repairs in terms internet service are factors that prevent ICT usage in businesses. Finally, the study also concluded that the use of ICT helps reduce cost, improve productivity, improves business performance, improves profitability of businesses, reduces corruption by helping keep accurate records and also makes transaction easy. The study thus recommended the use of ICT in all businesses to help improve upon productivity.

LIST OF TABLES

Table 4.1: Agreement or disagreement on the use of ICT to promote communication in the form of mobile phones, faxes, intranet and internet

Table 4.2: Agreement or disagreement on the use of ICT for record keeping

Table 4.3: Agreement or disagreement on the use of ICT to improve production

Table 4.4: Agreement or Disagreement on whether or not limited financial resources prevent the use of ICT

Table 4.5: Agreement or disagreement on whether Limited Data Management Capacity Prevents the Use of ICT

Table 4.6: Agreement or disagreement on whether inadequate power supply prevents the use of ICT or not

Table 4.7: Agreement or disagreement on whether breaking down and malfunctioning of computer prevents the use of ICT or not

Table 4.8: Agreement or disagreement on whether poor awareness of ICT application and fund to invest more on ICT device prevents the use of ICT or not

Table 4.9: Agreement on whether the cost of training IT personnel and cost of repairs in terms of internet service prevents the use of ICT or not

Table 4.10: Agreement or disagreement on whether the use of ICT helps reduce costs in businesses or not

Table 4.11: Agreement or disagreement on whether ICT helps improve productivity in businesses or not

Table 4.12: Agreement or disagreement on whether ICT makes transaction easy in businesses or not

Table 4.13: Agreement or Disagreement on Whether ICT helps Reduce Corruption by helping keep Accurate Records in Businesses

Table 4.14: Agreement or disagreement on whether ICT helps improve profitability of businesses or not

Table 4.15: Agreement or disagreement on whether ICT improves business performance or not

LIST OF FIGURES

Figure 4.1: Age of Employees

Figure 4.2: Gender of employees

Figure 4.3: Marital status of employees

Figure 4.4: Number of Years Employed

LIST OF ABBREVIATIONS AND ACRONYMS

Abbildung in dieser Leseprobe nicht enthalten

CHAPTER ONE

INTRODUCTION

Background of the Study

Information and Communications Technology (ICT) involves the use of computer hardware, software and telecommunication devices to store, manipulate, convert, protect, send and receive data/information (Olifer& Olifer, 2006). ICTis fast developing and is now part of every aspect of ourlivelihood. Businesses cannot survive in this 21st century without ICT since all activities undertaken in the business setup is linked to ICT. Consequently, communication flow is very essential in the growth and development of every business entity. ICT makes it possible to communicate easily with staff and customers of the company. Businesses of this 21st century are advancing at a very fast pace. With the world becoming a global village, business transactions are becoming increasingly dynamic and consequently this has caused an increase in world trade. Thus the increase in the volume of tradein Ghana and other developed countries require fast transfers of monies, payment across continents and many other services that promote growth of business (Al-Mudimigh, 2007).

These transactions cannot be carried out effectively without the use of ICT. With the numerous positive impact of ICT in businesses, it is hard to imagine a contemporary business functioning without adoption of ICT. Thus, ICT permeates every aspect of twenty first century businesses (Ansah, Blankson, and Kontoh, 2012). According to Crede& Mansell (1998), ICTis crucially important for sustainable development in developing countries. ICT encompasses the use of Computers, Internet, E-mail, Mobile Phones and Fax machine ( Ansah, Blankson, and Kontoh, 2012) . According to Fapohunda (1999), computers are now commonly used for writing letters, and reports, printing books, newspapers, and magazines, drawing pictures and diagrams, doing statistics, mathematics and handling financial records, controlling traffic lights, flying aeroplanes, making and playing music and video, sending messages anywhere in the world. Also, Eseyin (1997) describes the Internet as a mixture of many services with the two most commonly used being electronic mail (e-mail for short) and the World Wide Web (www). It plays a significant role in education, health, political processes, agriculture, economy, businesses and newsgroups. Woherem (2000) states that with Internet connectivity, one can do business all over the world without physical contact with the buyer or the need for a business intermediary.

ICT enables electronic mail (e-mail) which is the exchange of text messages and computer files transmitted via communications networks such as the Internet (Nwosu, 2004). Email system is basically the equivalent of post mailing services with the biggest difference however being the time and cost involved (Fapohunda, 1999). Email also involves not only written data, but all sorts of information in the form of video, audio, or photographs, can be sent via e-mail. Oketunji (2000) describes e-mail as an increasing popular method of communication, especially in the workplace.

ICT also enables the use of mobile phones in businesses. Bittner (1989) defines mobile phones as a telephone system that can move or be moved easily and quickly from place to place. Mobile phones are now the ICT that is reshaping and revolutionizing the communications globally. Its impact on the economic activities of nations, businesses, and small entrepreneurs is phenomenal. According to Tiemo (2006) the importance of information cannot be overemphasized. Oji-Okoro (2006) supported this view by stating that mobile telephony usage by individuals enables them to communicate with loved ones, clients and business associates. For large businesses, it is a means of providing a service that leads to an increase in profits.

Although ICT comes with numerous benefits, there are however some constraints to their implementation. According to Gichoya (2005), researchers assert that infrastructure, finance, poor data system and lack of compatibility skilled personnel, leadership styles, culture, and bureaucracy and attitudes can be considered as barriers to ICT investment. Also,Sherwood (1997), states that ICT investment may be constrained by a broad range of laws and policies which may influence the overall package of incentives associated with the used ICT. Some of these laws or policies include;

i. Policies that are aimed at curtailing peoples’ capacity to utilize ICTs effectively.
ii. Policies that directly affect negatively ICT innovation and investment.
iii. Policies the affect entrepreneurship, research and development.
iv. Policies that affect telecommunications infrastructure and access.

In view of the above discussions, this study investigates the impacts of ICT on modern world business.

Problem Statement

The contribution of ICT to the growth and development of every business have been stated by many researchers. According to Crede& Mansell (1998), ICT is crucially important for sustainable development in developing countries. Thus investment in ICT in the long run leads to improvement in the economy. However the investment into ICT has associated factors that militate against it. Notable among these factors are inadequate power supply, breaking down and malfunctioning of computer, poor awareness of ICT application and fund to invest more on ICT device, cost of training IT personnel and cost of repairs in terms internet service(Adewoye and Akanbi, 2012). However, studies done by various researchers show that ICT improves the productive capacity of businesses (Ansah, et. al, 2012;Crede& Mansell, 1998). Investment in ICT greatly reduces travel costs for sector workers of various businesses(ITU 1999). There are a lot of studies on the impact of ICT on the performance of businesses in other countries but studies on the impact of ICT on business in Ghana are scarce. Consequently this study focuses on identifying the impact of ICT on the modern business in Ghana to fill the knowledge gap in this field.

Objectives of the study

The research field is on Information and Communication Technology (ICT). The subject area is the impacts of ICT on modern world business using K. Logistics which is located in Accra Ghana as a case study

General Objectives

The general objective of the study is to contribute to the general body of knowledge and to examine the impacts of ICT on modern world business in Ghana.

Specific Objectives

To achieve the general objectives, the research will be aimed at addressing the following three (3) specific objectives:

i. To identify the various ways in which the ICT is used in businesses
ii. To determine factors that prevents ICT usage in businesses
iii. To determine the effect of the use of the ICT on the performance of businesses

Research questions

To address the objectives of the study, the following research questions will be made use of:

i. What are the various ways in which ICT is used in the businesses?
ii. What are the factors that prevent the use of ICT usage in businesses?
iii. What is the effect of the use of the ICT on the performance of businesses?

Significance of the Study

The findings of the study will enumerate the enormous benefits that ICT adds to the modern world business so as to encourage massive investment in ICT. The findings of the study will also help the management of the various businesses to know the effect ICT on the growth and development of businesses and also help them to know the factors that inhibit the implementation of ICT so as to provide remedies to those hindrances. The study will also add up to the stock of knowledge in the field of ICT in the modern world business for researchers and student who will like to embark on further studies in this field.

Delimitation of the Study

The study confines itself to businesses in the greater Accra region of Ghana. Also out of all the numerous business in greater Accra, the study confines itself to only Kosel Logistic which is a supply company located in the Greater Accra.

Limitation of the Study

The study makes use of descriptive survey design which just like other research designs have inherent limitations. Some of the limitations of the research design include,

i. Difficulty in developing accurate survey instruments.
ii. Lack of control over timeliness and, potentially, low response rates.
iii. Difficulties in determining whether respondents are responding truthfully.
iv. Misinterpretations of data results and inappropriate use of data analysis procedures.

Definition of Terms

ICT: Informationcommunication Technology

ICT is an umbrella term that includes any communication device or application, encompassing: radio, television, cellular phones, computer and network hardware and software, satellite systems and so on, as well as the various services and applications associated with them, such as videoconferencing.(Margaret Rouse, 2005)

Modern world business: A business entity operating in the 21st century

Organization of the rest of the Study

The study is divided into five chapters. Chapter one introduces the research study, providing the background to the study, statement of the problem, objectives and research questions, and significance of the study, delimitations and limitations of the study.

Chapter two presents a review of literature on the topic. An overall review of the existing literature in journal and articles on ICT are examined and discussed.

Chapter three presents the methodology that will be used for the research. This includes, a description of the study design, the target population, sampling criteria, the data collection procedure and the statistical tools used for analysing the study.

A detailed discussion of the research findings is presented in Chapter four. The discussions are done in line with the objectives of the study and the literature reviewed in chapter two.

Finally, chapter five presents the summary, conclusion, and general recommendations of the study.

CHAPTER TWO

LITERATURE REVIEW

Introduction

This chapter reviews literature and highlights the concepts and theories relevant to the impact of ICT (Information and Communication Technology) on modern world business. It introduces important laid down literature of the topic and relates it to the project problem.

Definition and Concept of ICT

ICT (Information and Communication Technology) is defined as the study, design, development, implementation, support or management of computer based information systems, particularly software applications and computer hardware (Sobhani, 2008).

According to Laudon and Laudon (2007) , ICT comprises all the technology that simplifies the processing, transfer and exchange of information and communication services. It is considered as a subject of expertise that links information technology (computers and applications) and telecommunication networks (intranet and internet), that lets people and computers co-exist and inter relate regardless of physical location.

Werthner and Klein (2005) also concluded that the term ICT includes hardware, software, networks and people that should be united by inter-linking each one to the other in a systematic process to create the necessary information that helps the decision makers, producing products, offering services, promotion, controlling and for achieving business aims and goals.

ICT is clearly considered a key factor of business growth in the 21st century, specifically, in the current vibrant business and highly competitive environment which requires utilizing ICT to improve productivity and cost efficiency, and to present high quality products and services to customers (Allen and Morton, 2004). Recently, the term, ICT has expanded to include the role of ICT tools not just inside the company but outside the company, for example, a UNDP report, 2001, concluded that ICT is considered as a tool of marketing and contacting customers and looking for potential customers and stakeholders, as well as offering ICT services is distinguished as a potential service for customers (Werthner, and Klein, 2005).

According to Kabanda (2011), notwithstanding the rapid expansion, adoption and easy access of internet, its services are highly unequal across and within countries. Emerging countries face considerable challenges in internet utilization for their growth and development on account of inadequate fixed-line infrastructure, and lack of supporting infrastructure, including electricity and steep prices of ICT technologies. An approximate 75% of the world population, live in emerging markets, unsurprisingly have limited or no access to the Internet. The study further revealed that the rate of ICT adoption by businesses on a continent to continent analysis show that Africa has the lowest penetration ratio for fixed teledensity and mobile cellular subscriptions, respectively. Europe leads all other continents whilst Africa remains the least, with at most 2%.

Various ways in which ICT is used in Businesses

The use of ICT in the business environment is diverse in nature. It is usually based on the type of business involved regardless of its size or type. ICTs can help cut cost, create better opportunities and offer competitive advantage in today’s business environment.Based on a study by Sobhani (2008), ICT has the potential to accelerate economic development by: Promoting economic growth through facilitating the generation of new income sources, new job creation as well as the expansion of existing jobs to accommodate new employees and promoting work efficiency.

Abwao (2007) observed that initiatives for the dissemination of agricultural technologies and the relay of weather information to farmers to help them in decision-making are one of the vital uses of ICTs.

A study by Faha and Nana (2011) on the effects of ICT on Cameroonian firms, revealed that ICTs do not have a direct positive impact on firms’ productivity in Cameroon. However, the impact of ICTs on firm performance is mainly indirect, depending on how firms decide to use the technologies, and to what extent they take advantage of these technologies to introduce innovation in their business operations. According to the Zambia Agricultural Research Institute (Simumba& Koopman,2011), the range of ICT has led several pundits to contend that these technologies are creating a new information based economy in which information is the critical resource and basis for competition in all sectors, manufacturing and probably even more in services.

Simumba&Koopman (2011) further observed that from the performance viewpoint, the competitiveness effect of ICTs derives from the impact that ICTs have upon the output of the factor inputs. In this regard, ICTs can improve efficiency and increase productivity by different ways including, improving efficiency in resource allocation, reducing transaction costs, and technical improvement, leading to the outward shifting of the production function. ICTs can improve access to the knowledge generated by agricultural researchers and transmitted to farmers by extension workers. Small scale farmers in Zambia have a low productivity partly due to lack of access to agricultural information. They have to travel long distances to reach researchers. ICTs can bring research information closer to the farmer in a way that is relevant for them through an improved information flow between the research institutes to the rural research

Factors that prevents ICT usage in businesses

Kundishora (2006) states that 21st businesses are now aware of the benefits derived through adoption and use of ICTs but there are many grave challenges which must be addressed and paramount among them are:

i. Inadequate communications and power infrastructure
ii. Shortage of ICTs facilities and ICTs skills
iii. Inadequate institutional arrangements
iv. Limited financial resources
v. Inadequate public private partnership
vi. Limited data management capacity
vii. Inadequate horizontal and vertical communication

The effect of the use of the ICT on the performance of businesses

The World Bank (2006) observed that ICTs are adopted and used by most businesses as productive input factors which can increase labour productivity. ICTs can help businesses to keep up with competition , increase staff satisfaction, increase operational efficiency, improve communication with suppliers and customers, and enhance joint working in collaborative venture.

Citing Dzidonu (2010) , although not a solution for all development problems, ICT serves as a powerful tool, when used appropriately as part of an overall development strategy to play a key role in the development process.

Lucchetti and Sterlacchini (2004 ) carried out a study on factors affecting the adoption of ICTs among businesses in Italy and their study revealed that general ICT use and adoption rates are very high and do not depend on size (i.e. number of employees) and industry. The study also revealed that when the rate of effective use was measured by the share of total employees with access to these ICT, the percentages of educated workers exerted a positive effect and, in the case of the Internet, a negative impact of size emerged. The study further revealed that the use of market oriented ICT did not depend on a firm’s size or its productive or technological features, but rose when the firm was an exporter and present in foreign markets with commercial branches and employed a relevant share of workers with university education.

According to Mwenechanya (2007) the dilemma is that entrepreneurial and productive capacities are being severely under-exploited in the informal sector while the capability of the formal economy to generate jobs through the expansion of formal enterprises is limited. It is therefore important that businesses takeadvantage of ICT to improve the ability of the informal sector to help contribute to national development.

This is evident when small and medium sized businesses (SME’s) adopt and use ICTs which has proven positive outcomes related to operational efficiencies, increased revenues, and increased market competitiveness.

Dholakia and Kshetri (2003) observed through their study that businesses that utilized e-mail to communicate with their customers experienced sales growth of 3.4 % greater than those which did not and that there is a positive impact of IT use within businesses. A 4% increase in sales as well as 5% increase in export performance was obtained when e-business practices were adopted by businesses in the manufacturing sector in Canada.

European Commission (2008 A), Carried out a study on e-Business Systems of ALSA in Spain which revealed that the use of the technology is more important than just adoption to obtain positive impacts on the company. Due to new e-business technologies ALSA has an increased labour productivity, some systems, like the resource planning system have led to a big

resource utilization efficiency and clear positive impacts on work organisation, with remarkable productivity increases, in some cases of 300% (one employee can make the work of three previous employees). This productivity also translates into an increase in competitiveness in cost and resource management versus other competitors. The reduction in the number of operation errors is also a very positive impact of this system as it improves the production process making it more reliable and effective.

Information and Communication Technology (ICT) connectivity is very extensive in modern businesses regardless of its size. With respect to all forms of technologies usage in today’s business environment,small businesses are slower than larger ones to adopt new ICTs.

According to Skoko and Ceric (2007) the use of ICTs represents the fundamental source of competitiveness and the basis for survival in today’sglobal market. In many countries, ICT has played a crucial role in creating jobs and providing economic stability. Despite this recognition, there is evidence that most businesses have not been quick to respond to changes in ICTs and that their acceptance of such technologies has not been widespread (Pavic, et al., 2007).

Jose, Marcel and Batista (2007) carried out a study on the effects of internet use on the performance of businesses in Brazil. The study revealed that SMEs could act proactively in relation to ICT use. The study also found that SMEs continue to deploy ICTs in a reactive, cost reducing manner.

A study by Greenberg (2008) has proven that ICTs were dynamic input factors and that their use improved labour productivity for informal as well as formal businesses. Globally the rapid spread of information and communication technologies (ICTs) and ever decreasing prices for communicationhave made market places in different parts of the world become more cohesive and accessible. Despite this state of affairs a number of studies show a slow rate of ICTs adoption and use by modern businesses.

CHAPTER THREE

METHODOLOGY

Introduction

The methodology presents the various procedures that were used in conducting the research. These procedures include, the research design, the population and the sampling techniques used, data collection procedures, research instruments used and the data analysis used.

Research Design

The study adopted a descriptive survey approach to answer the research questions. According to Zikmund (2006) surveys require asking people who are called respondents, for information, using either verbal or written questions. This encompasses the use of questionnaire as an instrument to help achieve the objectives of the study. A self-administered structured questionnaire with a combination of open and close-ended questions will be used to obtain the data. Consequently, the study useda quantitative approach in addressing the objective of this research.

Population

Neuman (2000) defines a research population as the specific pool of cases, individuals or groups of the individuals which the researcher wishes to investigate. The target population for this study comprised of the staff of K. Logistics. K. Logistics has staff strength of 60 workers.

Sampling and Sampling Procedure

The sample size for a given study is derived by considering the population size of that study. A simple random sampling method was used to select 50 respondents from the company. According to Monga (2009), simple random sampling method affords each member of the population to have an equal chance of being selected. Thus the names of the members of staff of K. Logistics were written on pieces of papers, wrapped nicely and placed in a bowl. The papers were picked one after the other without replacement until the sample size of fifty was obtained.

Instruments

The main instrument that was used in the data collected was a questionnaire. The questionnaire comprised of both open and closed ended questions. This was to ensure that the respondents were not only presented with questions that do not allow them to express their opinions. The questionnaire was divided into sections. Section A comprised of the demography of the respondents whiles the subsequent sections comprised of questions aimed at answering the research questions.

Pre-testing of questions and administration

Pre-testing is done to better refine the questions in the questionnaires to eliminate ambiguity in the questions and make the question easy and comfortable to answer. The researcher visited the K. Logistics to interact with the staff to familiarize themselves with the respondents and also to build a relationship with them.

A draft version of the questionnaire was pre-tested during this period using fifteen (15) workers to check for possible problems statement clarity and respondents understanding of the questions. Some of the respondents answered the questionnaire and indicated any ambiguous and difficult to understand question. Consequently, some minor changes were made to the questions as a result.

The questionnaires were self-administered by the researcher. The purpose for the study was described to the respondents before the questionnaires were administered to them. The respondents were also assured of anonymity and confidentiality.

Data collection methods

The questionnaire was self-administered by the researcher. A formal letter was written to the management of the company requesting permission to undertake the study at the office premises. After permission was granted, the questionnaire was self-administered to the workers of K. Logistics. An estimated 4 weeks was used to collect the data. The researcher visited the respondents at their place of work. The questionnaires obtained were checked daily to eliminate the incidence of questionnaires not being responded to.

Data Analysis

The questionnaires collected were coded and keyed into the data base of the statistical package for social sciences. Thus, the data collected were processed using the statistical package for social sciences (SPSS) version 16. A qualitative approach to analyzing the data was adopted. The processed data was presented in graphs and tables.

Retention rate

The questionnaires used for this study were administered solely to the staff of K. Logistics. A total of 50 questionnaires were administered to the respondents and all the questionnaires were responded to, thus, meeting a 100% response rate.

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