The relationship between investment in information technology and the financial performance of companies listed on the Tehran Stock Exchange

Number of pages: 157 File Format: word File Code: 30813
Year: 2014 University Degree: Master's degree Category: Management
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  • Summary of The relationship between investment in information technology and the financial performance of companies listed on the Tehran Stock Exchange

    Academic thesis for obtaining a master's degree in the field: business management, financial orientation

    Abstract:

    Information technology by bringing electronic commerce[1] has caused a fundamental change in the quantitative exchange of commercial information and required products and services. Among the goals that information technology pursues are cost reduction, competitive intelligence[2], quick response to the environment and competitors, and the ability to connect jobs specific to one job. Recently, information technology has been placed as one of the production resources in the function of productivity and its role in the financial performance of companies and industries is investigated. Today, companies have shown many efforts to provide better performance in the market and try to achieve this by using various techniques and tools. In this research, an attempt has been made to show the relationship between investment in information technology and the financial performance of companies. The population under investigation in this research is all the companies that were members of the Tehran Stock Exchange and whose financial year ends in March of each year. The sampling method in this research is simple random, so that 135 companies were selected as a sample. In the current research, the field method (questionnaire) and the study of documents available in the library of the Tehran Stock Exchange were used to collect information. The structural equation method was also used to test the hypotheses. After conducting the tests, among the twelve hypotheses, only the relationships between the management reporting system with the company's profitability growth and the supporting human resources with the company's sales growth were not confirmed. After applying the size of the company in the research model, the studied companies were divided into two categories of large and small companies, and finally, in small companies, the relationships between office automation with sales growth, office automation with profitability growth, management reporting systems with sales growth, supporting human resources with sales growth, sales growth with stock returns and profitability growth with company stock returns were confirmed, but in large companies, the relationships between infrastructure and sales growth, infrastructure and profitability growth, sales automation, network with sales growth, network with profitability growth, and human resources were confirmed. With sales growth, sales growth with stock returns as well as profitability growth with stock returns were accepted.                                                                 

    Key words: information technology, infrastructure, network, administrative automation, human resources, financial performance

    [1]. E-Commerce

    [2]. Competitive Inteligece

    Introduction

    Today, the world is witnessing changes in the global economy [1] and it is moving forward at a high speed. These changes are caused by the change of economy based on production to economy based on information [2]. On the other hand, the globalization of trade between countries is expanding rapidly. The national markets of the countries have been influenced by foreign and international companies (multinationals) [3]. Business companies that are trying to survive and compete with other countries and companies must globalize their thinking and business tools. One of these areas of competition is the use of information technology[4]. Undoubtedly, managers play an essential role in the fate of organizations and companies, in this regard, information has a significant impact on the success of managers' affairs and the performance of organizations[5]. Information that is accurate, timely and up-to-date, the global development of the Internet [6] has made this information available, and uses technology to collect and disseminate information. Technology includes all the advanced tools for improvement and optimization [7], transformation of business performance. Technology should be considered as an important part of organizations to update managers' thinking in order to improve the performance of organizations. In today's world, information is considered the main factor and foundation of economic and social development[8] of countries, and human life and relationships between them have undergone a fundamental transformation. Technology is one of the key factors affecting productivity [9] and information technology as one of the new technologies has a decisive effect in this regard. The life of information technology in the world may not be more than three decades, and the more people become familiar with this phenomenon, the more its importance becomes evident. Information technology is also in the field of technology, but its difference with the technologies of the industrial age is its speed of change and flexibility.Countries without paying attention to this feature, not only cannot use the advantages of the information age, but day by day, under the pressure of technological changes and the rapid flow of information, they will have to accept the demands that they may have spent years paying exorbitant fees to achieve. Therefore, before this phenomenon becomes a negative tool, by valuing human capital and proper planning, it can be used in line with national interests, economicization of affairs, increasing competitive advantage[10], reforming systems, speeding up work processes, reducing bureaucracy[11], controlling costs, etc. However, what seems clear is that information technology, by creating a wide information network that will record the smallest events and information, helps decision-making managers to make decisions and make plans that will provide a bright future for them and their organization by analyzing the updated data available in this network. Information technology provides the possibility for managers to control and coordinate between the organization's performance and management with quick information processing with coherence and quick feedback.

    In this chapter, first, the research problem is briefly stated, then the necessity and importance, goals and theoretical framework of the research, the conceptual and operational definition of the variables are discussed, and finally the subject, spatial and temporal scope of the research is introduced.

    1-2) Statement of the problem

    Financial performance [12] of the company One of the important issues of shareholders and managers of profit-making institutions. Managers try to provide good performance in this field by using new methods. Several factors affect the financial performance of companies, and every company tries to choose a set of efficient and effective methods to improve business processes. (Lee & Kim, 2006, p 44). It should be noted that part of organizational performance indicators are financial indicators. In general, financial performance is the degree or extent to which the company achieves the financial goals of shareholders in order to increase their wealth. The operational goals that the CEO of the company pursues in order to achieve the main goal of increasing the shareholders' wealth include indicators and criteria based on which the financial performance of a for-profit company can be measured (Khodadad Hosseini et al., 1385, p. 68).

    Today, Iranian companies have shown many efforts to provide better performance in the market and try to achieve this by using various techniques and tools. By examining the performance of Iranian companies, one can witness the fluctuating and controversial trend of growth and investment returns over the past ten years, and at the same time, experts know the potential of companies in the Iranian capital market in terms of performance to be better and more than that (Rajbzadeh, Malek Ekhlaq, 2013, p. 17). For better performance, companies usually invest in various aspects, one of which is information technology. The growing trend of information technology development requires accurate and scientific planning for use. It is economic. Due to the weak economic conditions in many developing countries, the need to pay attention to its economic applications is a special issue that is of interest to experts and implementers of development programs. On the other hand, considering the role of the investment return index [13] in financial decisions, the financial effectiveness of information technology is an important issue that can play an effective role in the attitude and willingness of economic enterprises to develop it (Khodadad Hosseini et al., 2015, p. 62). Studies show that there is a positive two-way relationship between information technology investment and companies' returns. Information technology leads to increasing the ability of organizations and as a result, increasing the variety of products and improving quality and customer satisfaction. (Turban, 2004, p42) Therefore, it can be expected that the company's performance in today's electronic economy[14] will increasingly depend on information technology and be affected by it (Floyd, 1999, p53). With the help of information technology, it is possible to provide appropriate information in the fastest time at the lowest cost about the existence of customers in foreign markets, the products of competing companies, the price of raw materials around the world for making decisions. Therefore, companies can improve their decision-making procedures on a daily basis (Kurdestani and Hadilo, 1390, p. 166).

  • Contents & References of The relationship between investment in information technology and the financial performance of companies listed on the Tehran Stock Exchange

    List:

    Title                          . 3

    1-2) statement of the problem. 4

    1-3) Necessity and importance of the research topic. 6

    1-4) research objectives. 7

    1-5) Research theoretical framework. 7

    1-6) Hypotheses 8

    1-7) Conceptual and operational definition of research variables. 9

    1-8) the scope of research.. 12

    Chapter two: review of thematic research literature (review of texts)

    Part one: information technology. 14

    2-1-1) Introduction. 15

    2-1-2) History of information technology. 16

    2-1-3) Explain the concept of information technology. 17

    2-1-4) Characteristics of information. 22

    2-1-5) types of information. 23

    2-1-6) Information systems. 24

    2-1-6-1) Human factors affecting the establishment of management information systems. 25

    2-1-7) types of information systems. 26

    2-1-8) Electronic communication information systems. 28

    2-1-8-1) Getting to know the Internet. 28

    2-1-9) communication networks. 30

    2-1-9-1) network applications. 31

    2-1-9-2) network topology. 31

    2-1-9-3) Networks in terms of geography. 32

    2-1-10) Application of information technology. 35

    2-1-11) The importance of information technology. 36

    2-1-12) Advantages of information technology. 37

    2-1-13) Effects of using information technology in the organization. 39

    2-1-14) Implementation of information technology in organizations 40

    2-1-14-1) Basic views on the implementation of information technology. 40

    2-1-15) comprehensive information technology development program. 42

    2-1-15-1) Steps required for the development of information technology applications in organizations 43

    2-1-15-2) Important topics of the comprehensive information technology development program. 43

    2-1-16) Information technology planning. 44

    2-1-16-1) Information technology planning levels. 45

    2-1-17) information technology measurement models. 46

    2-1-17-1) Nolan's growth stages 46

    2-1-17-2) Parsons' communication strategy 46

    2-1-18) Limitations of information technology. 50

    2-1-18-1) Obstacles to the use of information technology in organizations 50

    2-1-18-2) Information technology planning problems. 51

    2-1-19) Managers and information technology. 53

    2-1-20) Making decisions about information technology. 55

    2-1-20-1) Types of decisions according to Simon. 56

    2-1-20-2) Decision making and management levels. 56

    2-1-21) The state of information technology in Iran and the world. 57

    2-1-22) Information technology policies and programs in Iran. 58

    The second part: financial performance. 61

    2-2-1) Introduction. 62

    2-2-2) Explanation of the concept of financial performance. 62

    2-2-3) performance measurement. 63

    2-2-4) Performance evaluation process. 65

    2-2-5) Company performance from the point of view of factor markets. 68

    2-2-6) financial performance. 71

    2-2-7) financial performance explanation models. 72

    The third part: Research background. 75

    2-3-1) Introduction. 76

    2-3-1-1) Foreign research. 76

    2-3-1-2) Internal investigations. 81

    Chapter Three: Research Method

    3-1) Introduction. 86

    3-2) research method. 86

    3-3) Society and statistical sample. 87

    3-4) Data collection methods and tools 88

    3-4-1) Library. 88

    3-4-2) Questionnaire. 89

    3-5) validity and reliability of the questionnaire. 90

    3-5-1) Validity 90

    3-5-2) Reliability. 91

    3-6) Data analysis methods and tools 92

    Chapter four: analysis and statement of research results

    4-1) Introduction. 95

    4-2) Description of research variables. 95

    4-3) Examining the research model and testing hypotheses. 104

    Chapter Five: discussion of conclusions and suggestions

    5-1) Introduction. 111

    5 2) Conclusion. 111

    521) Descriptive statistics results. 111

    522) Results of inferential statistics. 115

    5-3) research proposals. 119

    5 4) suggestions for future research 122

    5-5) research limitations. 122

    Resources. 123

    Appendix A) Questionnaire. 129

    Appendix B) Reliability of questions related to variables 134

    Appendix C) Description of variables 138

    Appendix D) Description129

    Appendix B) Reliability of questions related to variables 134

    Appendix C) Description of variables 138

    Appendix D) Description of variable definition space 141

    List of tables

    Title

    Page 141

    Table (2-1) general information technology strategies. 49

    Table (2-2) managers' perception of information technology. 55

    Table (2-3) financial performance measurement indicators. 74

    Table (1-3) questionnaire response spectrum. 90

    Table 2-3) Cronbach's alpha coefficient related to the reliability of questionnaire questions. 92

    Table (1-4) description of infrastructure variables. 96

    Table (2-4) description of administrative automation variable. 97

    Table (43) description of network variables and communication facilities. 98

    Table (44) variable description of management reporting system. 99

    Table (4-5) variable description of supporting human resources. 100

    Table (4-6) description of sales growth variable. 101

    Table (4-7) description of profitability growth variable. 102

    Table (4-8) description of stock returns variable. 103

    Table (4-9) review of the research model without considering the size of the company. 106

    Table (4-10) examining the research model considering the size of the company. 109

    Table (1-5) description of the measurement system related to the infrastructure variable. 111

    Table (2-5) description of the measurement system related to the administrative automation variable. 112

    Table (3-5) description of the measurement system related to network variables and communication facilities. 113

    Table (4-5) description of the measurement system related to the variables of the management reporting system. 113

    Table (5-5) description of the measurement system related to the supporting human resources variable. 114

    Table (5-6) annual sales growth rate. 114

    Table (5-7) annual profit growth rate. 115

    Table (5-8) annual stock return growth rate 115

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The relationship between investment in information technology and the financial performance of companies listed on the Tehran Stock Exchange