The Relationship between Internet Usage and Decision Making: The Case of Information Technology (IT) Managers in China

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Executive Summary

This study investigates the relationship between Internet usage and the effectiveness of decision-making for information technology (IT) managers in the People's Republic of China. Based on the feedback of 123 managers from eight multinational IT companies in China, it was found that the Internet is effective in facilitating managerial decision-making. With China's entry to the WTO, the rate of Internet adoption will continue to accelerate. The ability to fully utilize the Internet's capability will increase the effectiveness of managerial decision-making, a key factor for enterprise competitiveness. This study is valuable for three key reasons: (1) China's Internet population is growing explosively and will rank among the largest in the world in the next several years; (2) Few studies in this area are found using data samples from China; and (3) IT managers are faced with critical decision-making everyday during volatile economic conditions.

Introduction

During the past four decades, information technology (IT) has developed at a very rapid pace. During the 1960s, the focus was in data processing, providing automation to large-scale clerical functions that involved repetitive, high-volume transactions. During the 1970s, the focus switched to management information systems, providing essential information to meet the needs of the managers. In the 1980s, the focus shifted to innovation and service to users. The 1990s saw the rise of the enterprise-wide information utility, where information technology became a strategic vehicle to develop and gain competitiveness for enterprises. It enables enterprises to connect to their customers and suppliers externally, and link to their employees closely internally.

With information technology, accurate and timely information becomes available for executives to support their managerial role, including decision-making, which is a key focus of this study. Many computer-assisted decision-aiding technologies have evolved in the 1980s. These include spreadsheets, expert systems, decision-support systems, executive information systems, on-line management information systems and external information retrieval systems. These technologies help users to readily access key information and become more knowledgeable in decision-making processes. The use of statistical tools and modeling techniques enables business to calculate risks and generate alternatives. Examination of the alternatives available and selection of the best one is a key part in the decision-making process.

Key theories about decision-making started to emerge in the 1960s. Simon (1960) stated that decision-making includes three major phases, (a) intelligence, (b) design, and (c) choice. A fourth phase, review, was added in 1977. Anthony (1965) classifies decision-making into three levels, (a) strategic, (b) management, and (c) operational control. Drucker (1967) stated that an effective executive makes decisions using a systematic process with clearly defined elements and a distinct sequencing of steps. Additionally, a variety of other authors have offered significant contributions and insightful perspectives about decision-making as a key function of management (Janis, 1968; Schrenk, 1969; Koontz, 1969; Witte, 1972; Mintzberg, 1976; Hambrick, 1977; Zeleny, 1981; Harrison, 1995). However, upon the review of the applicable literature, information technology is rarely mentioned as a component of the decision-making processes in their studies.

Huber (1990) is a pioneer linking information technology to decision-making. He theorizes that advanced information technology affects organizational intelligence and decision-making. Molloy and Schwenk (1995) validate Huber's propositions. Teng and Calhoun (1996) further extend Huber's research and confirm that information technology facilitates both operational and strategic decision-making. Teng et al. (1999) examine the effect of culture and conclude that culture has a limited effect on the use of information technology for decision-making. …