IT Management from 1960 to 2000

"Today¹s managers are grappling with the turbulent dynamics of the Information Age," says Richard L. Nolan, the School's William Barclay Harding Professor of Management of Technology. The author of a new working paper that takes the reader on a tour of information technology over the past forty years, Nolan offers managers who are seeking a competitive advantage the opportunity to gain insights from leaders in the IT industry who have adapted in remarkably innovative ways during their fierce struggles for industry dominance.

In "Information Technology Management from 1960 to 2000," Nolan highlights the critical shifts in the four eras in the evolution of IT. The Industrial Era, he writes, created an automation mindset, while the Data Processing Era led to organizational transformations. He analyzes the dawning of the Micro and Network Eras, which have revolutionized the ways in which managers have yoked IT to their organizations' needs. Successful navigation in today's Network Era relies, writes Nolan, on the development of new management practices. Winning strategies take advantage of IT's myriad capabilities, using its strengths to hone a competitive edge.

As one example of a winning strategy, Nolan cites Cisco Systems, a twelve-year-old company that makes routers for networks. In 1998, Cisco reached a market value exceeding $100 billion in record-breaking time. It did so, in part, writes Nolan, by integrating its external Web site with its internal intranet, "thereby allowing customers to serve themselves through their own computers within their own organizations." Nolan also points to Microsoft founder Bill Gates's strategy of holding computer prices relatively constant and exploiting the computer's capability to serve customers in diverse and unique ways as an effective strategy for achieving industry dominance.

"In the IT industry, we can observe a fundamental change in management principles from constrained innovation to unconstrained innovation," Nolan notes. "The IT industry has shown the way here - and continues to act as a pioneer - in the process of capturing customer information, mining that information for value, and converting the information into shareable knowledge, which is then communicated among workers through robust electronic networks. For managers across all industries," he concludes, "computers remain the 'best game in town' for using information resources to realize strategic advantage in serving customers."

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The Spotlight and the Bottom Line

Do multinational corporations concern themselves with improving human rights in the countries in which they operate? Increasingly, they do, and in so doing contribute to their own commercial interests, says HBS associate professor Debora L. Spar in her article "The Spotlight and the Bottom Line," which appeared last spring in Foreign Affairs.

Citing high-profile cases in which large U.S. corporations have pulled their operations from countries that tolerate human rights abuses, Spar advocates that multinationals and human rights are not such strange bedfellows as once thought. Reebok, for instance, created a new production facility in Pakistan and established a system of independent monitors when it learned that the company had been purchasing soccer balls stitched by twelve-year-old Pakistani workers. Levi Strauss, Macy's, Liz Claiborne, and Eddie Bauer all removed their operations from Burma amid frequent citations of human rights violations on the part of Burma's repressive State Peace and Development Council.

This responsiveness is a recent development for multinationals, notes Spar, who is an authority on business-government relations and foreign direct investment. The traditional corporate reaction toward distant countries' and subcontractors' labor violations has, she writes, "been predictable, if unfortunate. U.S. firms have argued that they cannot realistically or financially be held responsible for the labor practices of their foreign suppliers." This hands-off stance has been changing, Spar observes, "as a direct result of heightened human rights activism, sharper media scrutiny, and the increased communication facilitated by the Internet."

In addition to the evolving corporate conscience, many companies are seeing human rights as an issue that affects their bottom line. They see consumers balk when news hits the street that a product is made at the expense of the exploited. Spar calls this "the spotlight phenomenon." "When U.S. corporations go abroad, they take more than their capital and technology with them," she writes. "They also take their brand names, their reputations, and their international images.

"In a world marked by international media and transnational activism," she concludes, "U.S. multinationals could and may already be a powerful instrument in the pursuit of human rights."

Alumni may request copies of HBS working papers by calling 617-495-6852.

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