Business enterprises a n d prevailing m a n a g e m e n t practices have been praised a n d blamed--by varying constituencies--as both t h e cause of, a n d t h e c u r e for, m a n y of t h e "problems" and "benefits" associated with t h e new information technology. Millions of jobs a n d billions in e q u i p m e n t have been or will be rendered obsolete a n d uncompetitive by 4 t h e new technology, a t a r a t e and on a scale never before encountered.
A t t h e s a m e t i m e , technical breakthroughs and marketing successes in t h e information technology s p h e r e have c r e a t e d millions of new jobs a n d hope for increasing levels of societal wealth in t h e f u t u r e (Masuda 1980, S t r a s s m a n 1982).
Traditional m a n a g e m e n t practices have themselves come under s c r u t i n y and a r e changing a s new "info-technical" possibilities become m o r e widely available. Thus, a s a cause, a c u r e , and a case i n point, t h e issues surrounding t h e impacts of new information technologies on t h e
"business community" a r e pervasive--as numerable as t h e variables which c a n be used t o describe business institutions a n d managerial actions a n d a s varied as existing views about t h e roles of businesses, e n t r e p r e n e u r s , a n d managers in a n economy.
Growth o f informatics us an industry. One question which m u s t be raised a t t h e o u t s e t is whether t h e development of t h e informatics indus- t r y is following p a t t e r n s s e t earlier by other industries. If this seems t o be t h e case, retrospective study of t h e behavior of emerging industries could provide insights about strategies for supporting and guiding t h e information technology industry. If t h e development of t h i s industry is a n u n p r e c e d e n t e d phenomenon, however, policy formulation becomes t h e m o r e u n c e r t a i n .
One may identify a n u m b e r of intriguing features characterizing t h e evolution of t h e informatics industry. First, t h e r e is t h e dramatic shift
t
in t h e i m p o r t a n c e a n d value of hardware relative to software, with some software products costing nearly as m u c h as t h e computers on which they a r e r u n . Secondly. a t r e m e n d o u s range of labor a n d capital intensi- ties a r e found in subsectors of t h e informatics industry; the capital
i n v e s t m e n t s n e e d e d t o develop microchips m a y be c o n t r a s t e d with t h e d e m a n d for labor to e x e c u t e s u c h tasks a s d a t a input. This range is r e f l e c t e d in t h e varied composion of t h e labor force working in t h e infor- m a t i c s industry: highly skilled persons a r e r e q u i r e d for software pro- g r a m m i n g , while minimally t r a i n e d persons c a n handle d a t a e n t r y tasks.
One m u s t also t a k e note of t h e r a n g e in t h e scale of activities under- t a k e n in t h e informatics branch. The capital i n t e n s i t y of hardware tech- nology h a s produced t h e "bigger is better" approach taken by mainframe p r o d u c e r s . In t h e case of production of communications equipment, aggregation i n t o large industrial u n i t s has been a national practice for m a n y y e a r s , due in p a r t to t h e preference of national telecorn adminis- t r a t o r s for single s o u r c e equipment supply a r r a n g e m e n t s . However, a n a l y s t s have n o t e d t h a t a "bigger is better" philosophy a c t s t o c u r b innovation in t h e communications equipment sector. In r e c e n t y e a r s , new p r o d u c t s in t h e a r e a s of peripherals, personal c o m p u t e r s , games, a n d o t h e r devices have shown t h e m a r k e t potential for innovative small- s c a l e v e n t u r e s . Mitterand (1982) h a s concluded t h a t "technical innova- tion essentially r e m a i n s t h e a c h i e v e m e n t of small a n d medium-sized firms".
Attention m u s t also be focused on increasing t r e n d s toward techni- cal c o n v e r g e n c e of hardware products. The e m e r g e n c e of "telematics"
h a s begun t o blur t h e distinction between t h e communications equip- m e n t i n d u s t r y a n d t h e c o m p u t e r industry. It will also become i n c r e a s - ingly difficult t o draw t h e line between t h e production of m a c h i n e tools a n d robotics. In s o m e cases s u c h s t r u c t u r a l changes a r e spurring com- p e t i t i o n between subsectors; for i n s t a n c e , following t h e break-up of AT&T, t h e residual company is joining forces with Olivetti in an a t t e m p t t o c o m p e t e with IBM a n d t h e Japanese.
Another f e a t u r e or t h e informatics industry is t h e variation in indus- t r i a l n o r m s a t t h e e n t e r p r i s e , national, a n d international levels. Rada (1980) s t r e s s e s t h e multi-national, even global, effort needed t o e n s u r e c o h e r e n t guiding principles for ttie e m e r g e n t global information society, b o t h i n t e r m s of i n f r a s t r u c t u r e and operations. Development of a joint i n d u s t r i a l policy among Western European countries--to p e r m i t
successful competition with Japanese an d American electronics/communications industries and to reverse t h e i r position as n e t importers of technology--is t h e r a i s o n d ' e n t r e of s u c h efforts a s t h e FAST program. Yet, some authorities believe t h a t achievement of indus- trial convergence on a continental scale will prove insufficient in the future; i n t h e i r opinion, even l a r g e r units will have to cooperate t o c a r r y out t h e research a n d development necessary to operationalize t h e fifth generation computer concept. A salient issue in this context is t o iden- tify t h e level of aggregation a t which policies should be formulated (glo- bal, regional, international) a n d t o determine how high-level policy m e a s u r e s c a n be implemented while ensuring fair corporate behavior by the participants in a global industrial effort, as well a s to provide a n ade- q u a t e level of public control.
The friction between the perceived need for international coopera- tion and t h e desire for national self-sufficiency also emerges from the c u r r e n t discussion about t h e informatics industry. Many g o v e r n m e n t s consider i t essential t o maintain a national capability in every s e c t o r of t h e economy, and t h u s support domestic informatiori technology indus- t r i e s t o assure t h a t t h e y r e m a i n competitive in t h e international market. In this context, self-sufficiency i n information products is t r e a t e d as a m a t t e r of national security. Some decision m a k e r s , how- ever, consider t h a t isolationist approaches c r e a t e a wasteful duplication of effort. They strive to develop workable international a g r e e m e n t s t o reduce international confrontation in the sphere of informatics systems.
E f f e c t s of the p e n e t r a t i o n of informu,tion technology a t t h e e n t e r - p r i s e l e v e l . Investigators such a s
R.M.
Lee (1983) and Wynne a n d Otway (1982) have examined new forms for and limits of applying information technology in bureaucracies and o t h e r managerial set-tings. One argu- m e n t is t h a t t h e r e will be m o r e "power" for middle m a n a g e m e n t in a decentralized, y e t electronically interconnected mode of operation. A countervailing view is t h a t use of new informatiori technologies will s t r e n g t h e n t h e posilion of managers a t t h e center.Clearly, employees' access t o a central source of information will change the corporate environment, in t e r m s of power and hierarchy. It is possible t h a t a g r e a t e r a m o u n t of teamwork will emerge, with a hor- izontal ( r a t h e r t h a n hierarchical) s t r u c t u r e organized a r o u n d the access t o a common source of information.
Strassman foresees significant improvements in administrative pro- ductivity through t a s k simplification (or elimination) in a quantitative sense a n d e n h a n c e m e n t of value added of enterprise activities in a quali- tative sense. If new office technology is used t o transform organizational processes r a t h e r t h a n just to mechanize existing office procedures, employees' work will t a k e on new significance; d e p a r t m e n t s ' missions will change, with m o r e value being placed on c u s t o m e r service a n d g r e a t e r responsiveness being introduced into smaller units of service delivery. In S t r a s s m a n ' s view, introduction of information technology could permit t h e lagging service sector of t h e economy to achieve new levels of productivity a n d wealth creation.
According t o Strassman, however, new conventions on cost account- ing and investment evaluation will be required for s u c h redirection of managerial priorities. Increased attention will also have to be given to individual learning a n d t o adaptation to changes in power and t h e organi- zation of information. The receptivity of management a n d workers t o new information technologies and t h e creation of m a n a g e m e n t s t r u c - t u r e s responsive t o t h e new technologies t h u s become major issues a t t h e enterprise level.