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Internet of Things

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Contemporary Issues in Business and Management
6BUS1101

Assignment One –
The Internet of Things
Contents Page

| Page Number | | | 2.0 Introduction | 1 | | | 3.0 Internet of Things | | 3.1 What is Internet of Things | 1 | 3.2 Why is this a contemporary issue? | 1 | | | 4.0 Managing in an increasingly global world | 2 | | | 5.0 Environment and Culture | 2-3 | | | 6.0 Issues in managing change and innovation | 3-4 | | | 7.0 Conclusion | 5 | | | 8.0 References | 6 | | |

1.0 Introduction

The following report will be all about Internet of Things. Namely, what it is, when and why it came about and what the “Things” are. Following that, why it is a contemporary issue. Finally, using theory from three topics, the opportunities and threats associated with the implementation of Internet of Things on these will be discussed. These topics are as follows; managing in an increasingly global world, environment and culture (constraints and challenges for the global manager) and issues in managing change and innovation.

2.0 Internet of Things

2.1 What is Internet of Things?

So just what actually is meant by the phrase “Internet of Things”? Chaochi (2013) suggests that there are two ways in which IoT can be defined, from an economical point of view and a technical point of view. She states that economically, its about “designing new services and generating new revenue streams in the communication value chain.” This is compared to the technical point of view, where its to do with “connecting new devices” and “investigating the issues related to connecting these objects with the network in order to develop exploitable applications”.

Internet of Things can also be described as when these objects are given “unique identifiers, which allows them to transfer data over a network without being controlled by a person or computer. Typical examples of such things would include things like a person with a heart monitor implant, a car that has built in sensors to detect problems with itself, or pretty much any other “natural or man-made object that can be assigned an IP address” (WhatIs, 2014)

The origins of Internet of Things can be traced back to the middle of the 19th century, when an electromagnetic telegraph was created by Baron Schilling in Russia, and in 1833 Carl Friedrich Gauss and Wilhelm Weber invented their own code to communicate over a distance of 1200 m within Göttingen, Germany. Other important discoveries in the modern era that impacted IoT are such as when Time Berners-Lee created the first web page in 1991, or when the phrase itself was coined by Kevin Ashton in 1999. (Postscapes, 2014)

2.2 Why is this a contemporary issue?

What is a contemporary issue? A Contemporary issue is an issue something which is happening at the present time, for example the world is dealing with contemporary issues such as terrorism, global warming or the Ebola crisis. These issues can also be described as a “messy problem”. A messy problem is something which is very complex. These Problems are often related to other problems in interconnected problem situations. From a businesses perspective, they have to respond to change and the shifts in the environment to stay contemporary. Reacting to the Internet of Things is no different. The change may come from customer preference change, the competition they may face from other competitors, technology, new regulations and changes in society.
3.0 Managing in an increasingly global world

Globalisation can be described as the “Process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.”

This process has effects on “the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.” (Globalisation101, 2014)

As an example, take Malaysian Airlines. The airline is a multinational business which flies thousands of people across 60 countries in the world. However they are widely known for the two tragedies which took of the lives of 537 people this year, which has generated an understandably large amount of bad publicity for the business, which has resulted in the business suffering a loss of profits, causing the organisations to be bought out by state funded firm Khazanah Nasional (BBC, 2014) The buyout means that they will now be fully government owned, so they will be off the stock exchange. Which is then allowing Khazanah to be the main shareholder, allowing them to make decisions without worrying about share prices fluctuating which may cause a loss of even more money.

Before the disasters, the carrier's financial performance was among the worst in the industry, putting a question mark over its future even before its brand was tied to two almost unfathomable tragedies. It has lost money for the past three years and been through several episodes of restructuring, instigated by Khazanah, over the past decade. Because of the loss in profits, the airline have had to cut around a quarter of their 19,500 employees. However The disasters give the airline a chance to rebrand itself. If the takeover is successful, the airline will have the backing to reinvent itself and recuperate some of its brand image, but even with all the investment in which Khazanah are proposing, people may still avoid the airline due to its bad history, and stained brand image.

Globalisation is one of the driving factors as to why Internet of Things has become so prevalent. The interconnectivity which comes with globalisation has allowed people from all four corners of the world to have the ability to interact with one another at the click of a button, which has transformed the way things such as news is broadcasted due to the introduction of social media outlets such as Twitter and Facebook. It has also changed the way people shop, travel, research and bank.

4.0 Environment and Culture
In today’s ever increasing globalised environment, business culture has made a large shift over the last few years, not least the way in which managers operate. How much do these managers have control in on how they manage? It comes largely down to what industry that they work in. For example, in Retail, there a set number of rules and regulations which the managers must make sure are enforced by the rest of the employees, there isn’t much movement or flexibility for change. Compared to a job where you are self-employed, like a tradesman, where you have a lot of control over when, how and where you work. There are two main opposing views; omnipotent and symbolic. People with an omnipotent view of management believe that managers should be completely responsible for the organisations success or failure, that the buck starts with them when things go downhill. This would mean that managers are responsible for internal factors such as the businesses culture, performance and their employees. People who work in this environment would have a certain degree of fear of failure as their job would be lost if they made a mistake which has a detrimental effect on the business. People with a symbolic view of management consider the opposite, that the manager isn’t directly involved in the businesses successes, but external forces are, including such things as a business’s competitors, uncertainty for the future, customers and dynamic and complex environments.

Internet of Things can definitely impact a businesses culture and the way that they run, resulting in how successful the business can be in the short and long term period. For example, if a business completely remodels their operational strategy from top to bottom, it can give them a competitive advantage by always being one step ahead of its competitors by implementing new technology. A logical place to start would be its supply chain, as it would help improve efficiency if an organisation had a coherent strategy. An example of business that has done this and become increasingly successful would be Ama zon. Due to the industry in which they operate, and the type of business they are, Internet of Things has caused the organisation to “have updated product information, support and transparency into all parts of the supply chain” (WorkIntelligent, 2014) by using “last mile logistics”.

5.0 Issues in managing change and innovation

An organisation can make changes through innovation through a number of varying avenues. When a change is made, it is typically because they want to change their weaknesses into strengths, their threats into opportunities. Again, there is two polarizing views in which this can achieved, Evolutionary and Revolutionary these can be simply defined as that if a business uses an evolutionary change process, they will have some degree of control over the drivers which cause change. Revolutionary is the opposite. If this type of process was adopted, the business wouldnt have much control over the drivers which cause change.

There are many different drivers which can be the cause for change, which can be divided into external and internal. External drivers are things that an organisation would have no control over, things such as the consumers needs, alteration in laws or regulation which may affect their industry, or not taking into account economic conditions. If a business were not to take these into account quickly enough, they would risk losing customers, which would affect their profitability and market share in the long term, which could in the worst case scenario cause them to go bust.

Internal drivers are things that the business can control. Altering the workforce they have is something that could be done. A business may do this because it would allow them to benefit from any new ideas which they may have, which can freshen up a business at the lowest level, for example in a department store or supermarket. At the same the business would cut some of their costs, saving them money in the long term which can be reinvested into the business. Internet of Things can have a big say on the way that businesses apply changes and innovation. A way in which they can do this is by changing the way in which a product is designed. Using the example which was mentioned previously in 2.1., the car industry has the ability to utilise Internet of Things to their advantage, by altering their production lines to make it fully machine based. This strategy would have initial substantial costs to apply, but if done correctly it would save them in the long run. The strategy would be bad news for the businesses employees however, as it would mean that there wouldn't be a high demand for a lot of manpower apart from specialist jobs and managers, so some low-skilled people would lose their jobs. From an organisational perspective, this would help lower costs however and make their production line more efficient.

Conclusion

So in conclusion, Internet of Things is a current, contemporary issue which not only businesses but also consumers are dealing with. Internet of Things can have a very beneficial impact on the way a business is run, and how successful they can be if they implement it in the correct way, as it can give them an advantage over other businesses in their industry if they bring it into their business structure before their competitors. Internet of Things is something which will increasingly become more relevant in the coming years as technology progresses, and will soon become the norm for businesses due to its affect on Globalisation, business culture managing change and innovation.

References

M2M World News (2014) Expert Discusses Monumental Impact of the Internet of Things (IoT) Trend at International CES 2014. Available at: http://m2mworldnews.com/WordPress/wp-content/uploads/2014/01/internet-of-things1.jpg [Accessed 11/11/2014]
WhatIs (2014) Internet of Things (IoT). Available at: http://whatis.techtarget.com /definition/Internet-of-Things [Accessed: 11/11/2014]
Chaouchi, H. (2013) Internet of Things: Connecting Objects. ISTE Ltd.; 1 edition [Accessed: 11/11/2014]
Postscapes (2014) History of the Internet of Things. Available at: http://postscapes .com/internet-of-things-history [Accessed: 11/11/2014]
Globalisation101 (2014) What is Globalisation. Available at: www.globalization101.org/what-is-globalization [Accessed: 14/11/2014]

BBC (2014) Malaysia Airlines: State fund proposes takeover Available at: http://www.bbc.co.uk/news/business-28700926 [Accessed: 14/11/2014]

WorkIntelligent (2014) How Will The Internet of Things Impact Your Business?
Available at: https://www.workintelligent.ly/information/transformation/2014-5-9-internet-of-things/ [18/11/2014]

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