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The Impact of Information Technology on Manufacturing Strategies and Financial Performance

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Author(s): Fakhraddin-Maroofi | Babak Jamshid Inavid | Maryam Azimi

Journal: Research Journal of Information Technology
ISSN 2041-3106

Volume: 4;
Issue: 3;
Start page: 98;
Date: 2012;
Original page

Keywords: Cost benefit analysis | flexible manufacturing | information systems | Iran

ABSTRACT
In this study, the impact of IT on financial performance for the different types and levels of business strategy is examined. According to their strategic advantages, after the clustering of firms the effect of IT on financial performance is estimated. To do this a cross-sectional study was held in the field of share market firms, in order to explore which, how and in what level manufacturing advantages have been adopted. For that purpose, cluster analysis and VACOR algorithm were used, to distinguish clusters of firms and estimate the effect of IT on financial performance, for each type and level of strategic choice. Return on Invested Capital (ROIC) has been used as a measure of performance in order to absorb the effect of cost, revenues and profits. It was found that the effect of IT on performance was observed to be greater for firms which emphasize a lower level of quality and innovation strategy. On the contrary, the effect of IT on financial performance was observed to be greater for firms which emphasize the higher level of flexibility strategy and the middle level of cost strategy.
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