Information Management: The Organizational Dimension

By Michael J. Earl | Go to book overview

5 Information Systems in Global Business: Evidence from European Multinationals

MICHAEL J. EARL AND DAVID F. FEENY


Introduction

In the literature of international business a recurring theme is the need for co-ordination of operations and their management in global organizations. Such co-ordination is indeed central to the whole concept of globalization. Co-ordination of activity in order to achieve supra-national efficiencies is argued by many writers to distinguish the global business from the 'multinational' ( Bartlett and Ghoshal 1989) or 'multidomestic' ( Porter 1986). And co-ordination in the strategic planning domain is at the heart of the 'strategic intent' which defines global businesses for Hamel and Prahalad ( 1989).

These authors have expanded on the nature and complexity of global co-ordination required in the successful organizations of the future. Such organizations, it is claimed, exhibit the simultaneous achievement of global scale, responsiveness to markets and governments, world-wide transfer of learning, and innovation ( Prahalad and Doz 1987; Bartlett and Ghoshal 1989). In place of organizational uniformity, each geographical unit will have a distinctive role within the overall business ( Hamel and Prahalad 1985; Bartlett and Ghoshal 1989). In the 'transnational' corporation of Bartlett and Ghoshal the organization is neither centralized nor decentralized; it represents an integrated network in which there are intensive and complex interactions between physically remote but interdependent units.

As Porter ( 1986) recognizes, the ability to co-ordinate globally is seen to be dramatically increased through advances in information technology (IT). The wide-scale use of IT is also implicit in Bartlett and Ghoshal's ( 1987) vision of the transnational as an organization in which there is 'collaborative information sharing and problem solving, co-operative support and resource sharing, collective action and implementation'. So information systems would seem to be an important component of global competitive strategy. Egelhoff ( 1988) has touched on this in his work on the complexity of global organizations. He has applied information processing models of organization, such as the work of Galbraith ( 1973), Huber ( 1989),

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