Telecommunications and the structure of economic organisations : an investigation of the impact of telephony on economic activity within a Nigerian fabric weaving micro-industry

• Main Author: Jagun, Abiodun
• Published: University of Strathclyde 2006
• Subjects: 338.4767702824209669
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.426359

Do telecommunications (telecoms) technologies contribute to the economic growth of organisations and the individuals that make up these organisations? This is the question this research sets out to answer. The study was motivated by the numerous macro-level and predominantly economic studies that suggest the existence of a causal relationship between the telecommunication infrastructure available within a country and its level of economic growth and/or development. If telecoms indeed have this causal effect why is this not being reported by studies on the everyday business lives of ordinary citizens? This research adds to the body of literature that investigates the impact of telecoms at the micro-level. It examines the way in which telephones are used by participants in a developing country micro-industry. Furthermore, this examination is conducted in 'context - it studies the application of telephones in fulfilling a specific need; the need to obtain and distribute information. The research therefore begins with an assessment of the impact, lack or uneven distribution of information, has on the behaviour of organisations and individuals in a specified case industry. The research documents these impacts and investigates what the industry's response has been in overcoming the limitations they have on trade. It is in investigating the response of the industry that the contribution of telephones is examined - does the use of the telephone add noticeably to the improvement of trade in the industry? The research found that, as stated in literature, telephones do improve the ability of industry participants to acquire and distribute information. In some instances this improved ability has generated benefits. For example, telephones have improved the efficiency with which participants choose who to trade with. Telephones also contribute to cost savings in the industry by helping participants to economise on communication and transportation costs. Distance between production and consumption is also better managed through telecom use, and is in some cases more efficient than physical movement between places. However, the use of telephones in certain circumstances is not always effective. For example, selecting the most appropriate trade partner requires access to private information about the alternatives. However, private information (i. e. information only known to one party to a trade) is mainly acquired through personal observation. When it is transmitted through a third-party it is within the context of an already established relationship based on trust or mechanism for sanctions. In an industry with low levels of trust between participants - as in the case study; acquisition, verification and distribution of private information is critical to success. Under such circumstances the mere use of telephone adds little value. However, when telephone use occurs within the context of established organisational forms in the industry, its benefits are reinforced.