LECTURE 2.

6:

BUSI 1695 International

Business Environment

TECHNOLOGY AND LABOUR 1

 LEARNING OUTCOMES

01 02 03 04
Understand Appreciate the Explore changing Understand the
technology and changing business models implications
the link to technological – the rise of e- technology has
business environment and businesses in the on the labour
strategies its impact on UK market
businesses

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WHAT IS TECHNOLOGY?

application of available knowledge and skills to

create and use materials, processes and products.
(Burns and Needle, 2019)

BASED ON NEEDLE, 2019

TECHNOLOGY – AMAZON EXAMPLE

https://www.youtube.com/watch?v=XDZ91mpEO6w

BASED ON NEEDLE, 2015 4

WHAT IS TECHNOLOGY?

 Broad concept, widely used but least defined.

 Application in all business sectors, affects all forms
and activities (e.g. materials, processes and
products).
 Has shaped strategies, structures, processes and
individual behaviour
 As a result, many (e.g. Woodward, 1965) sees
technology as a determinant.
BUT others argue (Hickson et al., 1969)
 It is also a product of individual behaviour and choice.
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BASED ON NEEDLE, 2019

  Determinant view:
 Tech viewed as an environmental
constraint
 Firms operate within certain

DETERMINANT technological imperatives  tech

shape
products/processes/organization
structure/relations with with ppl

OR CHOICE?
 Activities of firm results from the
interrelationship of external
enviro i.e. tech/competitors/state
 contingency approach i.e. no
choice but to adapt or fail

BASED ON NEEDLE, 2019 6

  Choice view:
 Organization size can be a more influential
factor, as the firm gets larger i.e. market
share increases, technology becomes less
DETERMINANT important
 Technology viewed as a product of the way
businesses respond to environmental
OR CHOICE? factors i.e. business shapes the technology.
 Technology is a strategic choice; it is seen
as a strategic competitive advance i.e. not
everyone can have it

BASED ON NEEDLE, 2019 7

TECHNOLOGY AS A COMPETITIVE ADVANTAGE

 Has helped to shape the strategy of businesses in terms bringing

about a competitive advantage
 Brought about radical change in many levels of the business context

• Created new products, processes and business opportunities.

• Reduced costs in business functions
• Increased flexibility
• Increased speed of operation and delivery.
• Source of core competence – patented product and process.
• Improved operations, customer service, communication (social
media)
• Improved organizational coordination and control.
• Created new industries e.g. ecommerce. 8

BASED ON NEEDLE, 2019

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TECHNOLOGY AS A SOURCE OF
CONTROL
 Links the work of departments and of individuals – e.g.
globally linked production systems i.e. factories/supply
chains. – all made possible by tech linking people
together to work in real time

 Assisted in the standardization of operations

 Managers have greater control of the workforce -- a

source of employee control and surveillance
 https://www.youtube.com/watch?v=7hw4bRFmPgo
BASED ON NEEDLE, 2019
IMPACT OF TECHNOLOGY ON BUSINESS

New forms of Remote controlled

communication - Changes in banking – machines impact on
whatsapp, zoom, cashless society productivity and
email quality

Increased global
Ability to adapt
competition with New forms of
operations to
impact on the need organization
respond changing
for cost reduction structure and flexible
market demands
and increased cross- ways of working.
quickly
border collaboration.

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BASED ON NEEDLE, 2019

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IMPACT ON BUSINESSES –
STAKEHOLDER PERSPECTIVE
 Management – cost reduction and increase
competitiveness as an respond instantly to the
operating environment
 Workforce – Increase job satisfaction and
career development
 Consumer – better quality goods at
competitive prices
 Suppliers – closer long term relationship with
clients
BASED ON NEEDLE, 2019
 “Today’s business interest sit on
a fault line of the greatest
seismic shift since the invention
of the printing press...E-business.
THE RISE OF We are embarking on a journey
E-COMMERCE of such magnitude that it has the
capacity to change the course of
our entire social order.”

(PricewaterhouseCoopers, 1999)

BASED ON NEEDLE, 2019 12

  Connect suppliers and buyers directly through
computer-based systems.
 Relate to trading activity involving information,
goods and services.
KEY FEATURES  The initial point of contact is electronic although,
in the case of goods and services, delivery is often
OF E-COMMERCE made using more conventional systems.
 E-business generally refers to a much broader
range of activities, incorporating all business
& E-BUSINESS activities. It enables the various elements of global
firms to work more closely together and can form
the basis of much business to business activity.

(Burns and Needle, 2019)

BASED ON NEEDLE, 2019 13

E-BUSINESSES

 Made possible because of the INTERNET

 An electronic exchange of information at
any stage in the supply chain. E.g. B2B,
B2C, C2C, M-commerce
 The electronic trading of goods, services
and information.
 Selling goods and services at an
international scale
 E-commerce
 Growth of internet companies e.g.
Amazon – pioneer of electronic retailing
BASED ON NEEDLE, 2015 14
CLAIMED ADVANTAGES OF E-COMMERCE AND E-BUSINESS

• Reduced transaction costs

• Enables small firms to compete
• Access to more information
• Access to global markets and global collaborators
• Consumer access to a wider range of products
• Consumer access to cheaper products via increased competition
• More effective supply chain management
• Facilitates global working
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• Facilitates the virtual organization

LIMITATIONS OF E-COMMERCE AND E-BUSINESS

 Access to the internet is highly variable across the world

 Many are reluctant to do business using the internet
 Many prefer personalized shopping
 Technology failings
 Set-up costs are high
 Privacy and security issues
 Difficulties with legal regulation
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 E-COMMERCE SHARE OF RETAIL SALES REVENUE IN
THE UNITED KINGDOM (UK) FROM 2015 TO 2018

Source:
https://www.statista.com/st 17
atistics/285978/e-commerc
e-share-of-retail-sales-in-the
-united-kingdom-uk
/
 RETAIL E-COMMERCE SALES AS SHARE OF RETAIL TRADE IN
SELECTED COUNTRIES FROM 2014 TO 2017

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SOURCE:
HTTPS://WWW.STATISTA.CO
M/STATISTICS/281241/ONLI
NE-SHARE-OF-RETAIL-TRAD
TECHNOLOGICAL
IMPACT ON LABOUR

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 IMPACT ON JOB CONTENT

To understand the impact of technology of labour need to appreciate

the 3 different perspectives:

1. Pessimistic Braverman (1974) – views technology as a deskilling

agent, reduces the amount of control a person has over their job.
Increase management control over the work processes and the
employee. Job cuts, increase unemployment. No more manual jobs.

2. Optimistic view I – tech creates new opportunities, new types of

jobs, existing workers learn new skills. Boost productivity, creates
wealth, increase spending power. More money = more demand =
more jobs.

3. Optimistic view II – Upskilling, New jobs with greater

BASED ON NEEDLE, 201 9 20
opportunities for satisfaction. Unpleasant, monotonous and
dangerous work can be eliminated.
  Structural change – eradication of middle
management

 Centralization of service industries – one global

regions focuses on one task e.g. re-routing calls to a
central centre

IMPACT OF  Changing power and politics – google, facebook,

amazon
TECHNOLOGY ON
THE LABOUR  Location less important - WFH

MARKET WITHIN  The virtual organization? – no customer service

ORGANIZATIONS centre?

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EMPLOYMENT TRENDS
 Pessimistic view:
• Job losses are result of technological change – replaced with part
time work
• Manufacturing (automation) and service sectors experienced job
losses e.g. ATM online banking

 Optimistic view:
• Growth in job involved in computing, losses in manual work
(upskilling)
• Rise in jobs as a result of demographic changes (aging population 
care workers
• Rise in jobs as a result of economic changes i.e. territory sector
job/high skilled  education, hospitals
• Reduction in manufacturing jobs also due to overseas competition i.e 22

outsourcing to EEs
CHANGING
JOB MARKET

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 GLOBALIZATION EMPLOYMENT TRENDS
• Economic structure changes - movement of workers from primary (agriculture and
mining) /manufacturing sectors/ to the service sector.
• Developed economies focus on high skill manufacturing and services (secondary and
tertiary sector) gains
• Movement of low skilled jobs (primary sector) to developing economies
Globalisation of labour:
• Manufacturing shift to developing countries (cheap labour)
• Poor working conditions are accepted.
• Lower cost

• What if no upskill?
• Reduced dependence on human resources and replacement by technology.
• Migration of labour but labour itself is relatively immobile -- unemployment
• Temporary contracts, relatively low paid and often lower working conditions. 24

• Polarisation of the labour market. The growth of ‘graduate calibre’ and skilled jobs
and the decline of unskilled or semi-skilled work.
AUTOMATION
 Technological change in manufacturing and service
industry
 High investment but automated systems can
reduce costs – lower prices – increase demand
 Job losses in firms not employing tech and losing
competitive edge and market share
 Automation can create jobs but do not currently
match the skills of the current workforce
 Largest decline will be in roles with low
productivity e.g basic admin, cashiers, low level
construction
 Job creation will be high end skilled professions e.g
digital technology, data scientist, finance

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UNEMPLOYMENT IN SELECTED COUNTRIES

BASED ON NEEDLE, 2019 26

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THE GIG ECONOMY

 McKinsey categorized as: Free agents (prefer over FT), Casual

earners (supplement earnings), Reluctants (no FT job atm),
Financially strapped (no alternative)
 Flexibility on working hours – people agree to be available to
work as and when is required
 Zero-hours contract – employer not obligated to provide
minimum hours of work
 Estimated 20-30% of labour force in EU and USA are gig
workers
 Key characteristic – self-employed, paid by the task, not linked
to contracted hours, short-term relationship with client
 Uber drivers, Amazon, Deliveroo, Airbnb, free-lance workers
bloggers
BASED ON NEEDLE, 2015
THE RESULT OF ALL
THESE CHANGES

 Greater employee flexibility.

Increase in part-time work,
fixed term contracts,
second and third careers
etc. – gig economy
 High hidden unemployment.
In the UK around 5 to 6
million people of working
age are not in employment
and draw State benefits.
Likely to increase.
 Regional differences in
employment levels. High
unemployment in former
manufacturing areas.

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VIDEO ON AUTOMATION

https://www.youtube.com/watch?v=WSKi8HfcxEk

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  Reading: Needle, Chapter 4

 Extra reading: World Without Mind

READINGS
by Franklin Foer, 2017

 Case study for next week’s

tutorial: Autonomous cars

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