The Role of Information Technology in Developing Organizational Capability and Effective Customer Relationship
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Table of Contents
TOC \o “1-3″ \h \z \u I. Abstract
II. Introduction
III. Theoretical Background
IV. Methodology
V. Findings and Analysis
A. Results
B. Discussion
VI. Conclusion
VII. References
VIII. Appendices
A. Appendix A: Questionnaire
I. Abstract In order to ensure the success of applying IT inside an organization, it is important to consider the network or the connection between the different important entities that are directly and indirectly connected to the system, therefore, it is important to focus on applying the social network theory. Thus, it is important to focus on maintaining sound and effective communication with the customers, in order to ensure that all of the actions and decisions which will be done by the company is with accordance to their demands and needs, which will help the company to maintain its competitive advantage and position in the market. Questionnaires were sent via e-mail to 25 random selected employees of MIL which focus on analyzing the important of Network Database in their customer relationship or marketing activities. The result showed that majority of the employees was positive about the application of the said system. II. Introduction
Information Technology (IT) plays a crucial and vital role in any organization or business, because it helps to improve the overall performance by using the different information and data which are important in the process of decision-making. In addition, application of IT, particularly the database, enables management of any company to centralized or integrate all of the important information source in the entire system, which enables them to have real time or updated data which can be processed into information, then later use in order to produce decisions and actions which will help to improve the performance of the company or organization.
Thus, IT helps to organizations and companies to focus on the network or a set of relationship which contains a set of objects or nodes, and a mapping or description of relations between objects or nodes (Kadushin, 2004). The said factor is important in analyzing the theories that are connected with the relationship between the different entities who are directly and indirectly involved in the performance of individual company and organization in the world. Thus, in order to support the said notion or idea, it is important to pertain on the theory which is considered as one of the few, if not, the only theory in the field of social science that is not reductionist. As a result, the said theory can be applied to different levels of analysis from small groups to entire global systems (Kadushin, 2004).
The application of centralized IT in a company, can be considered as connected to the social network theory, because it enables to show the different relationship levels of different entities or nodes that are directly or indirectly connected to the system, including the employees and the customers.
In connection, one of the most important issues that are connected to network inside and outside any company or organization is the process of marketing or customer relationship, and the issue of marketing database, which is considered as one of the most considered strategies in advertising. This is important because the perspective and the demands of the customers are important in order to ensure the success of any programme or activities a company will implements in any given time. However, marketing database will not be successful without the help and effort of all the internal entities who are involved in the overall operation of any company or organization. Because, of that, it is important to ensure that all of the entities in the company are properly connected and communication is healthy and continuous, in order to ensure success through consistent and efficient decisions and actions.
III. Theoretical Background
The idea and principles of social networks appeared more than 50 ears ago, when Barnes (1954) coined the social networks, an outflow of his study regarding the Norwegian Island Parish during early 1950s (Universiteit Twente, 2004).
Social network theory can be defined as a branch of social science that applies to a wide range of human organizations, from small groups of people to the entire nations. Network is considered as the set of objects or nodes, together with a mapping or description of the connection between the objects. In the case of social network, the objects pertain to the people or groups of people. For instance, a network can be consisted. For instance, a network can be consisted of a person and a mapping from that person to each of his or her friends and family. The said mapping can be directional or bi-directional (Eithier, n.d.). One of the primary reasons why social network theory is studied is because of the fact that, by analyzing and understanding the mappings that are associated wit one individuals to others, can help to assess the social capital of that individual. Thus, according to Kadushin (2003) social capital is the network position of the object or node and consists of the ability to draw on the different resources contained by members of the entire network (cited in Eithier, n.d.). Fundamentally, the more mappings a person has in the entire social network and the more mappings these people have the more knowledge, influence and power the original people will control. Thus, social capital has a vital influence on the life of a person. As a result, it enables sociologist to recognize primary groups (Eitheir, n.d.).
The power of social network theory stems from its difference from the traditional sociological studies that assumes that it is the attributes of individual actors that matter. The social network theory produces an option or another perspective; where in the attributes of individuals are less important than their relationships and ties with other actors within the network. Furthermore, according to Degenne & Forse (1999) the said theory also suggests that at least some properties and outcome of social network are a function of its complete structure and are not reducible to either an individual actor or single link (Camarinha-Matos, Afsarmanesh, Novais & Analide, 2007, p. 358). Therefore, the relationship among individuals in a given setting is important for the people for their development, success, advancement and growth. Most of the network members offer some form of helpful information including emotional, recreational, financial and spiritual support (Mauden, 2001, p. 272).
Social network theory can help the entire organization. First, the shape as well as structure of the fields or networks within which the organizations operate can have significant implications for policy making and implementation (Mullins & Rhodes, 2007, p. 8). Consequently, if the relationship within an organization is warm and welcoming, a relationship that is considered as inclusive and motivate respects towards different opinions, it can help to strengthen diversity as well as change. Therefore, it can be used in positive way inside the organization in order to establish diverse teams that work together in order to promote the needed change initiative. Secondly, social network theory can also help in the process of policy intervention in the process of changing behavior (Mullins & Rhodes, 2007, p. 8). This is because, when networks are formed in order to strengthen diversity and change inside the organization, the mindset of the individuals within the network must be changed in order to accept the changed policy. As a result, diversity is strengthened when the mindset of the individual is changed through policy introduction in order to accept the views and input of other members of the team. Consequently, the organizational change will be impossible when individuals are not made to respects different views and opinions from each others. In addition, the said theory can be used in order to support diversity and help to meet the needs of the organization for change. However, it is important to consider that certain individuals may possess some unique talents as well as skills that could be hard to classify and social network can help to recognize some abstract or hidden features of operations networks within an organization (Rugherford, 2007, p. 27).
In all of environments, business must build reputation-enhancing relationships with the different outside resources providers who are willing to share valuable information, technology and finance. Network relationship pertains to the strategy which focuses on the process of creating and maintaining a lasting relationship between the entrepreneurs and their entire network (Premarte, 2002). In addition, it is important to connect the aspect of marketing in the theory, because strong ties enable to create customer loyalty. It is important to consider the fact that, interaction with the strong ties gives the person a stronger relation to other, thus the said relationship is stronger when they are always connected with each other. Strong ties smooth the progress of richer, detailed and redundant information as well as knowledge between the individuals and their given group (Jaafar, Abdul-Aziz & Sahari, n.d.).
IV. Methodology
The method applied in the paper is case study. Robson (2002) defined case study as a “strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence.” The study focused on the case of MIL in applying its Information Technology and system in order to communicate with the customers.
The method that was used in gathering data is questionnaire which focused on the importance of network database of the company in the perspective of the internal and external customers of the system. The questionnaire was consisted of 5 open questions which asked the employees regarding the impact of the network database in their performance. The result of the study is supported by secondary data from online and offline resources including books, articles and journals.
Population of the study is compromised 50 employees of MIL which are connected to the network database of a referral system. Each of them was randomly selected and received questionnaires via e-mail.
V. Findings and Analysis
A. Results
Table SEQ Table \* ARABIC 1 Importance of Network Database
Statement
Yes
No
Not Sure
N
%
N
%
N
%
1. The Network Database is vital to the operation of the business.
50
100
0
0
0
0
2. The Network Database can speed up our operation, thus lessen our effort towards marketing activities.
36
72
4
8
10
20
3. The Network Database enables us to be connected to the loyal customers every time.
34
68
6
12
10
20
4. The Network Database helps us to be informed regarding the behaviors of the customers.
32
64
2
4
16
32
5. The Network Database is very helpful in individual performance of employees.
32
64
0
0
18
36
Table 1 shows the percentage of the responses of the samples regarding the different statements about the application of Network database in the organization. Like what have mentioned in the methodology part of this paper, the questionnaire enables the respondents to identify the importance of network database in their individual and overall performance, as well as the entire company.
The table shows that 100% of the respondents (N = 100) believe that network database is vital to the entire operation of the business. As a support, the results of the proceeding statements show positive reaction from the majority of the respondents. Majority of the sampling population or 36 respondents (72%) believe that the Network Database can help to speed up the operation of the company, while 8% disagree and 20% were not sure. In addition, 34 respondents (68%) believe that the network database enables them to be connected to the loyal customers any time, while 12% opposed, and 20% were undecided. To support the said notion, 64% of the entire sampling population believe that the network database help them to be informed regarding the behaviors of the customers, while minority or 4% disagree, and 32% were not sure. Consequently, 64% of the entire population believed that the network database is very helpful towards their individual performance, while 36% were unsure.
Table SEQ Table \* ARABIC 2 Descriptive Analysis
Statement
Mean
Standard Deviation
1. The Network Database is vital to the operation of the business.
1.00
.00
2. The Network Database can speed up our operation, thus lessen our effort towards marketing activities.
1.48
.81
3. The Network Database enables us to be connected to the loyal customers every time.
1.52
.81
4. The Network Database helps us to be informed regarding the behaviors of the customers.
1.68
.94
5. The Network Database is very helpful in individual performance of employees.
1.72
.97
Table 2 shows the descriptive analysis of the data that have been gathered from the respondents. It shows the mean and standard deviation for all the statements in the questionnaire. Mean is considered as the most common type of average that is computed, or the sum of all the values in a group, and divided by the number of values in the said group (Salkind, 2006). It can be observed that the average response of the entire population was Yes, in statement 1 to 2, between Yes and No, in statement 3, and No, in statement 4 and 5. The standard deviation is considered as the most common statistical indicator, it tells what proportion of scores fall within any given limits (Miller, 1984). Thus, it helps to measure the spread (Slater, 2007). The larger the standard deviation, the more spread the values are, and the more different they are from one another (Salkind, 2007, p. 75).
B. Discussion
Based on the results, it is showed that majority of the respondents were positive about the application of Network Database inside the organization. In that case, it is vital to focus on the reasons of the respondents regarding the statements.
For most of the respondents who considered Network database as vital to the organization, they believe that the said system “enables them to have a centralized communication, not only for the employees, but also towards the customers”. Therefore, the said system enables the employees to have a good communication from the upper and lower management, which is important in the decision-making process. In addition, some of the respondents believe that the system “serves as the basis for the communication process with the customers”, therefore, “support the marketing activities of the company.” Thus, this is connected to the social network theory, which pertains on the strong ties or the relationship between the individual and kinship, close friends as well as family (Granovetter, 1982). Interaction with strong ties enables the person to have a stronger relationship to others, and when the linkage is strong, they tend to be connected with each other always (White & Houseman, 2002). The company had been able to focus on the said strong connection, because the entire network database provides support and referral commission to the existing customers who prefer MIL to others in their network including their family, friends, colleagues etc, which enables the company to make a massive savings in terms of advertising and marketing expenses.
In connection, employees were satisfied with the system, because it enables to lessen their effort and speed up their actions because the system itself provides them the information that they needed in order to start a given action. Aside from that, it also a great help in the marketing process because “It enables them to focus to those people or customers who are considered as loyal to the company, which help them to save money in the process of targeting new market, at the same time, it also enables them to increase the turnover of the company in retaining loyal customers.” Aside from that, both of the customers and the employees will be more confident, because the trust develops dependability in a network of personal relationship because of the repeated transactions that have occurred (Welter & Kautonen, 2005). Because of the trust and the strong relationship between the employees and the customers, the employees believe that the system produces data that from the reliable sources.
On the other hand, most of the respondents believe that the system enables them to have a strong, direct and continuous relationship with the customers, because it also incorporate feedback from the customers which helps to improve the customer relationship. Furthermore, the feedback gathered from the customers, including positive and negative helps and motivates the employees to strive and maintain to be the best, in order to improve their individual and organizational performance.
VI. Conclusion
It had been acknowledged by different researchers that the connection of a company towards their customers is an important aspect of network which must be established in order to maintain continuous operation of any business. The said theory is supported by the author who believes that establishing a communication channel or medium with the customers enables the company to have a strong social network. This is because the information which will be gathered from the customers will be helpful in the process of decision-making including the innovation or R&D process, marketing and Human Resource. The said processes are all interconnected, thus wrong decisions in one aspect will affect the entire operation of the business.
In the case of MIL, it can be said that the company enables to focus on applying or considering the theory of social network in applying IT inside the company, particularly the Network Database, which enables the company to have a system which gather data from the customers via the process of feedback. As a result, the company enables to save money and effort in the marketing process, as well as in Human Resource.
Aside from that because of the said system, feedback enables the customers to have strong ties with the company, which motivates them to become loyal to the company. In connection to the theory of social network, MIL had been able to connect not only towards their current customers, but also enables to apply the said theory, and targeted other nodes or entities that are connected to the network of their current customers including their family, friends, work mates and other relations. Thus, it gives the company the idea that a network will not be created without a particular similarity in the interests, characteristics and attitudes of the members.
In the end, this study enables to show that MIL had been able to apply social theory towards successful application of IT in their entire network which is connected to its employees and customers.
VII. References
Camarinha-Matos, L., Afsarmanesh, H., Novais, P. & Analide, C. 2007. Establishing the Foundation of Collaborative Networks: IFIP TC 5 Working Group 5.5 Eight IFIP Working Conference on Virtual Enterprises, September 10 – 12, 2007, Guimaraes, Portugal. Springer
Ethier, J. Current Research in Social Network Theory, http://www.ccs.neu.edu/home/perrolle/archive/Ethier-SocialNetworks.html, June 2009
Granovetter, M.S. 1985. Economic Action and Social Structure, A problem of Embeddedness. American Journal of Sociology, vol. 91, no. 3, pp. 481-510.
Jaafar, M., Abdul-Aziz, A. R. & Sahari, Md. H. The Use of Social Network Theory on Entrepreneur’s Linkages Development. http://um.ase.ro/No1S/9.pdf, June 2009
Kadushin, C. 2004. Introduction to Social Network Theory. http://home.earthlink.net/~ckadushin/Texts/Basic%20Network%20Concepts.pdf, June 2009, Basic Network Concepts
Miller, S. H. 1984. Experimental Design and Statistics. Routledge
Mullins D., & Rhodes M.L. 2007. Special issues on network theory and social housing. Journal of Housing, Theory and Society Vol. 24 No. 1
Rutherford, I. (2007). Network theory and theoric networks. Mediterranean Historical Review Vol. 22 No. 1
Robson, C. 2002. Real world research. 2nd edn, Blackwell. Oxford.
Salkind, N. 2006. Statistics for People who (Think They) Hate Statistics. SAGE
Slater, C. 2007. Quantitative Methods: Short Course. Cengage Learning EMEA
Universiteit Twente 2004. Network Theory and Analysis. http://www.cw.utwente.nl/theorieenoverzicht/Theory%20clusters/Communication%20and%20Information%20Technology/Network%20Theory%20and%20analysis_also_within_organizations.doc/, June 2009, TCW
Welter, F. and Kautonen, T. 2005. Trust, social networks and enterprise development: Exploring
evidence from East and West Germany. International Entrepreneurship & Management Journal.vol. 1, no. 3,pp. 367-379.
White, D.R. and Houseman, M. 2002. The navigability of strong ties: Small worlds, tie strength and network typology: For complexity, special issue on networks and complexity, vol. 8, no. 1, pp. 72-81.
VIII. Appendices A. Appendix A: Questionnaire
Yes
No
Not Sure
1. The Network Database is vital to the operation of the business.
Why? _____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
2. The Network Database can speed up our operation, thus lessen our effort towards marketing activities.
Why? _____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
3. The Network Database enables us to be connected to the loyal customers every time.
Why? _____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
4. The Network Database helps us to be informed regarding the behaviors of the customers.
Why? _____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
5. The Network Database is very helpful in individual performance of employees.
Why? _____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
Credit:ivythesis.typepad.com
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