A Comparative Analysis of Japanese, U.S., and Korean Firms on IT and Management

In this paper, the contribution of information technology (IT) use to management performance is compared between Japanese, U.S., and Korean firms, based on an analysis using data from the “International Comparative Survey of Firms’ IT Strategies” (RIETI). The results reveal that Japanese firms have received positive effects from “mission critical systems,” which include routine business activities such as personnel management, accounting information systems, and ordering, whereas U.S. firms are effectively using “informational systems;” systems that perform intricate analyses of a firm’s data, such as supporting management strategies or developing new customers. The results also show that Korean firms trail Japanese firms in deploying IT systems, with the exception of enterprise resource planning (ERP) systems. The section on the internal IT organization of the firm, which reveals the importance placed by firms on using IT as a tool to accomplish corporate strategy, indicates that U.S. firms place the highest importance, followed by Japanese firms, and finally by Korean firms. With regard to the relation with outsourcing firms of IT systems, U.S. firms are treating outsourcing firms as partners for consulting on technology trends whereas a large number of Japanese firms perceive them as a means of cost reduction. JEL Classification: L21, L15