Posted on Leave a comment

Why Will Global IT Strategies Not Work Everywhere?

Information technology sometimes refers to the information systems (IS) organization that combines the technologies, processes, people, and promotion mechanisms to improve the performance and effectiveness of the organization. IT affects nearly all aspects of human endeavor and assists in the management and operations of various types of organizations.

Since the 1960s, managing and operating IT to improve organizational performance and effectiveness has been a field of practice. First, it was known as business data processing and later as management information systems, and the field is currently refers to as information technology. Ongoing innovations in IT and the growing worldwide competition add difficulties and uncertainties to corporate environments. Information systems in multinational corporations (MNCs) attract attention from both practitioners and scholars as a critical enabler for competitive advantage of these organizations.

In 1989, Bartlett and Ghoshal proposed the global integration-local responsiveness model that was an influential framework dealing with international business strategy, management relationships, and control within MNCs. Bartlett and Ghoshal drew upon the global integration-local responsiveness model to propose four forms of MNCs: global corporations (GCs), international corporations (INCs), multi-domestic corporations (MDCs), and transnational corporations (TNCs).

Global corporations (GCs) prefer to market a standardized product worldwide for economic reasons while concentrating the production, marketing, research, and development activities in a few favorable locations. In contrast, international corporations (INCs) centralize product development functions at their headquarters or a few favorable locations, and localize their customization product offering. Multi-domestic corporations (MDCs) achieve maximum local responsiveness with the customization of their products and marketing strategies to fit local conditions. Finally, in transnational corporations (TNCs), the flow of skills and product offerings was between the head office and foreign subsidiary, and between foreign subsidiaries themselves. TNCs should develop core competencies and valuable skills in the head office as well as in foreign subsidiaries.

The nature and function of information systems in an MNC should tally with the form of the organization. In order words, IT strategies depend on the nature of an MNC and can be categorized into global information strategies (GS), international information strategies (INS), multi-domestic information strategies (MDS), and transnational information strategies (TNS). The criterion of this categorization was the need for multinational integration and local responsiveness. The assumption is that the various forms of multinational information strategic planning corresponds to the different multinational IS organizational strategies.

Leave a Reply

Your email address will not be published. Required fields are marked *