Final answer:
Information technology has transformed manufacturing and service companies by enabling large firms to operate globally and small firms to reach wider markets, shifting the nature of goods from physical to digital, and facilitating smoother and more efficient inter-company interactions through online platforms and telecommunications.
Step-by-step explanation:
Impact of Information Technology on Business Organizations
Information technology (IT) has significantly altered the landscape of modern industries, affecting the organization, product creation, and inter-company interactions. Multinational corporations like Amazon and Microsoft have exploited IT to expand their reach and command larger market shares, creating 'winner-take-all' markets. IT facilitates remote management of operations, contributing to the trend towards larger firms. Meanwhile, small businesses also benefit from the ability to access wider markets beyond local boundaries thanks to IT.
In product creation, industries such as music and film have transitioned from manufacturing physical goods like CDs and DVDs to offering digital streaming services, thereby significantly reducing costs and changing the nature of product distribution. The digitization of products has led to increased efficiency and a shift to an information economy where the very nature of commodities has transformed.
IT has also changed the way companies interact with each other. Telecommunications have made long-distance collaborations more feasible, and the Internet has fostered swift international commerce through online transactions. Companies are able to communicate and trade more efficiently, thanks in part to international agreements and advancing technology.