Title

Patterns in the organization of transnational information systems

Abstract

The objective of this study is to understand the organization of information systems and technology in organizations whose activities cross national boundaries.1 Access to new markets for products, services, raw materials, and skills has always been a powerful incentive for organizations to expand internationally. The establishment of global alliances to leverage core competencies has led organizations to seek new ways of conducting business which have demanded a rethinking of organizational structures, processes, and culture. One of the fundamental tasks has been the establishment of appropriate information technology platforms to coordinate business processes for global business. The study uses a previously-developed taxonomy that is based on five dimensions of transnational strategy: the configuration of value chain activities, the coordination of value chain activities, centralization, strategic alliances, and market integration. These dimensions define the manner in which the value-added activities of the firm are dispersed and coordinated across nations, the hierarchical structures responsible for decision making, the strength of the external alliances of the firm and the managerial philosophy of global business conduct. These dimensions have been shown to be a valid basis to identify a comprehensive taxonomy of transnational strategy. A basic proposition of this study is that a firm's transnational strategy will be reflected in the design of its information systems. In order to address this proposition, a two-stage questionnaire study was conducted. Respondents included 150 multinational corporations from 20 countries and 25 industries. The study proposes hypotheses to examine the alignment of information technology in the various types of firms that are identified by the transnational strategy taxonomy. The study empirically determined the existence of three types of transnational information systems strategies. These are: 1. A low dispersal-high centralization strategy which is adopted by export-oriented and portfolio firms, 2. A high dispersal-low centralization strategy which is primarily used by parent-child firms, and 3. A high dispersal-high centralization strategy which is most suitable for global firms. The study has implications for practitioners in critically evaluating existing transnational business strategies and designing effective transnational information systems. It should also help researchers in determining factors that impact on the design of transnational information systems.

Department(s)

Information Technology and Cybersecurity

Document Type

Conference Proceeding

Publication Date

12-13-1998

Journal Title

Proceedings of the International Conference on Information Systems, ICIS 1998

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