Growth Crisis Mitigation through ICT

MA-Thesis / Master von Stephan Jacob

Abstract:

A small set of companies were examined in detail to examine whether or not evidence could be found that ICT mitigates company growth inhibiting factors. The set of growth inhibiting factors that were examined were first classified and structured within the Threshold to Growth Model (TGM) by the „Rationalisierungs Kurratorium der Deutschen Wirtschaft” (RKW). This model and its implications have been used throughout this research to base the analysis on a well-researched basis.

The complexity of the research subject has necessitated the discussion of the underlying theories in great detail. These discussions nonetheless were far too extensive to be included in this dissertation but are presented to the interested reader within the appendices of the research study. The author will reference appropriate sections when necessary and only present the essence of the theories and models involved within the text itself.

The empirical analysis of the study showed a significant correlation between the application of ICT and ability of companies to identify and react to threats to their continuous growths. The analysis also uncovered that in many aspects of company management ICT is not yet sufficiently implemented. It is also striking that in the areas where ICT is not sufficiently implemented the threats to growth are more severe. The analysis of the secondary resources has shown that the main benefit of ITC to businesses is information.

Information and Communication Technology (ICT) has become an integral part of our society. Many, if not all aspects of our daily lives have been affected. Whether one looks at business or leisure activities - everywhere ICT plays a role to a larger or smaller extent. No other aspect of our lives however has become so dependent on ICT as the business world. There are examples ranging from cash flow forecasting systems that integrate not only planning processes (as e.g. headcounts) but also operative tasks like information interchange between different plants and headquarters around the globe. As the use of ICT is required for multiple daily operations, companies could not operate without it nowadays. Even if a production process does not necessarily require ICT, most companies will still use ICT to accomplish their administrative tasks and make data available. If businesses depend on fast information exchange (like investment banks), it would not be possible to distribute all the information needed without ICT.

Company growth is of special interest for businesses. The term seems almost ‘magical’, for it promises lucrative profits for many individuals. Stock markets evaluate the growth of companies all over the world. It is not only a benchmark in branches but also a necessary requirement for survival. It seems that everything within the business world has the obligation to grow. Many scientists view company growth as the primary goal of companies.(Berens, 2005) With regard to entrepreneurship, growth even becomes the essential factor. First, an idea has to grow into a company. Then, as a company the newly found venture has to grow not only by numbers to fulfil the promise of lucrative profits but also to survive in very turbulent markets. Especially in the beginning while they still have the first mover’s advantage, this is a crucial success factor.

As ICT has such an important influence on daily business activities, it is possible that ICT also influences the growth of businesses to a certain degree. To analyse this hypothesis will be the basis for the present study. As the topic is too general to be adequately reviewed within the setting of one dissertation, focal points have to be set. Therefore the focus of the study has to be narrowed. Within the following two sections the areas of interest will be deduced in more detail. Their importance will be shown in general and in specific contexts with regard to the present study.

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