Business operations are being revolutionized by technology

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The digital age has revolutionized the way businesses operate, especially in the manufacturing sector. A new study from the Cornell SC Johnson College of Business explores the impact of information technology (IT) on the evolution of production chains in the U.S. manufacturing industry.

The study, published in Management Science, delves into how advances in IT have reshaped the way companies design their production processes and organize their production chains. Researchers analyzed data from over 5,600 manufacturing plants to understand the implications of IT investments on vertical integration – the decision of how much of the production process is handled in-house versus outsourced.

The findings suggest that the internet revolution has led to a shift in production flows, with companies relying more on external partners for certain aspects of their production process. This increased connectivity and communication facilitated by the internet have made it easier for companies to work together more efficiently.

Interestingly, the study also found that companies that were already using a plural governance approach before the internet age were more adaptable to these changes. It highlights the importance of staying ahead of the curve in technology and embracing digital technologies to thrive in the future.

Overall, the research underscores the growing importance of technology in shaping business operations and organizational design. The relationship between technology and business is becoming increasingly intertwined, and companies that embrace these changes are likely to succeed in the long run.

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