Information Technology Usage in Maquila Enterprises

Information Technology Usage in Maquila Enterprises

Purnendu Mandal (Lamar University, USA) and Mohan P. Rao (University of Louisiana, USA)
DOI: 10.4018/978-1-60566-146-9.ch003
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The build-up of export-oriented companies since 1990s on the Mexico-USA boarder, and their recent decline, is no surprise to many policy analysts. The focus on the use of low-wage employees, neglecting skills, and infrastructure creation was doomed to fail. Much of the Mexican maquila operations and jobs have gone to China and other low-wage countries. Are maquiladoras technologically competent to ward-off competitive forces from China and other parts of the world? This chapter presents an exploratory study of IT usage and managerial perceptions of IT-related costs and benefits in maquiladoras. The relevant data was gathered through a survey questionnaire. The results show that IT had a positive impact on maquila business performance. These findings will be useful to managers in assessing their organization and taking corrective actions to become further competitive.
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In response to competitions, multi-nationals have taken advantages of cheaper labor and government incentives in locating production facilities. Especially, US based multinational companies benefited from NAFTA agreement and moved production from USA to Mexico’s maquila region. Mexico’s cheap labor market was the main incentive, but recently these companies realized that the availability of IT skills should also have been considered. One should be aware that, at a global level, IT has changed the business perspectives and practices for ever; the manifestation of which is IT-enabled or web-enabled business, e-supply chain, e-collaboration, etc. From policy makers view point, it is imperative to decipher the overall business environment (economic, technical, social and political) in a foreign country before making long term business decisions. Given the IT focus of this chapter, the authors argue that policy makers must understand the complexity in making judgment regarding the IT infrastructure in a given country, and how IT (and its many facets) plays into the overall business decision.

The Global Information Technology Report (Dutta, Lanvin and Paua, 2003) provided a means to combine various facets of IT and building a framework for comprehensive assessment of IT readiness for a country. The report used both quantitative data and qualitative information in measuring a readiness index for each of 82 major economies of the World. As defined in the report, the Networked Readiness Index (NRI) is an aggregated measure of the potential and degree of preparation of a nation within its encompassing environment to participate in the Networked World. Nations could be ranked on the basis of the numerical value of the index, and compared among each other with a view to developing IT policies for the future. The Index is a composite of three components: the environment for ICT (information and communication technologies) offered by a given country; the networked readiness of stakeholders (individuals, business, and government) to use ICT; and finally, the network usage of ICT by the stakeholders. As expected, the ranking between the US and Mexico differs significantly in all indexes (see Table 1). A wide gap that exists between the two countries in IT environment, readiness and usage, and this might indicate that Mexico might not be a place for US companies to develop business ties. In reality, however, US companies established strong presence in Mexico, particularly in the border region. In the past decade Mexico surpassed Japan to become the US’s second largest trading partner (Sargent and Matthews, 2003).

Table 1.
Network readiness rank (Source: Dutta, Lanvin and Paua, 2003)
NRI RankEnvironment Component IndexReadiness Component IndexUsage Component Index

Complete Chapter List

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Table of Contents
Angappa Gunasekaran
Chapter 1
Emad M. Kamhawi
Responding to the need for a better understanding of the factors that explain ERP systems implementation success, this chapter used a field study to... Sample PDF
Examining the Factors Affecting Project and Business Success of ERP Implementation
Chapter 2
Ronald E. McGaughey, Angappa Gunasekaran
Business needs have driven the design, development, and use of the enterprise-wide information systems we call Enterprise Resource Planning (ERP)... Sample PDF
Evolution of Enterprise Resource Planning
Chapter 3
Purnendu Mandal, Mohan P. Rao
The build-up of export-oriented companies since 1990s on the Mexico-USA boarder, and their recent decline, is no surprise to many policy analysts.... Sample PDF
Information Technology Usage in Maquila Enterprises
Chapter 4
Henk Jonkers, Maria-Eugenia Iacob
In this chapter the authors address the integration of functional models with non-functional models in the context of service-oriented... Sample PDF
Performance and Cost Analysis of Service-Oriented Enterprise Architectures
Chapter 5
S. Parthasarathy
Enterprise Resource Planning (ERP) system is an integrated software system reflecting the business processes of an enterprise. Enterprise Resource... Sample PDF
Significance of Analytical Hierarchy Process (AHP) and Nominal Group Technique (NGT) in ERP Implementation
Chapter 6
Manuel Kolp, Yves Wautelet, Stéphane Faulkner
Organizational Modeling is concerned with analyzing and understanding the organizational context within which a software system will eventually... Sample PDF
Specifying Software Models with Organizational Styles
Chapter 7
Piotr Soja
Enterprise resource planning (ERP) systems have been implemented in various and diverse organizations. The size of companies, their industry, the... Sample PDF
Towards Identifying the Most Important Attributes of ERP Implementations
Chapter 8
Shuchih Ernest Chang
Other than providing Web services through popular Web browser interfaces, pervasive computing may offer new ways of accessing Internet applications... Sample PDF
A Voice-Enabled Pervasive Web System with Self-Optimization Capability for Supporting Enterprise Applications
Chapter 9
Hafid Agourram
Research has showed that social and socio-technical concepts are influenced by culture. The objective of this chapter is to explore how the... Sample PDF
The Impact of Culture on the Perception of Information System Success
Chapter 10
John Krogstie, Csaba Veres, Guttorm Sindre
Much of the early focus in the area of Semantic Web has been on the development of representation languages for static conceptual information; while... Sample PDF
Achieving System and Business Interoperability by Semantic Web Services
Chapter 11
Chen-Yang Cheng
The success of implementing Enterprise Information System (EIS) depends on exploring and improving the EIS software, and EIS software training.... Sample PDF
Integrated Research and Training in Enterprise Information Systems
Chapter 12
Lea Kutvonen
Participation in electronic business networks has become necessary for the success of enterprises. The strategic business needs for participating in... Sample PDF
Service-Oriented Middleware for Managing Inter-Enterprise Collaborations
Chapter 13
Joseph Bradley, C. Christopher Lee
Training is still a neglected part of most ERP implementation projects. This case study investigates the relation between training satisfaction and... Sample PDF
Training and User Acceptance in a University ERP Implementation: Applying the Technology Acceptance Model
Chapter 14
Diego Milano
Data quality is a complex concept defined by various dimensions such as accuracy, currency, completeness, and consistency (Wang & Strong, 1996).... Sample PDF
Measuring and Diffusing Data Quality in a Peer-to-Peer Architecture
Chapter 15
Vipul Jain
The key part of dynamic supply chain management is negotiating with suppliers and with buyers. Designing efficient business processes throughout the... Sample PDF
Modeling Buyer-Supplier Relationships in Dynamic Supply Chains
Chapter 16
Ioannis Ignatiadis, Joe Nandhakumar
Enterprise Systems are widespread in current organizations and seen as integrating organizational procedures across functional divisions. An... Sample PDF
Enterprise Systems, Control and Drift
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