Patterns in the organization of transnational information systems

Access to new markets for products, services, raw materials, and skills has always been a powerful incentive for organizations to expand internationally. Recently, the establishment of global alliances to leverage core competencies has led organizations to seek new ways of conducting business; these have demanded a rethinking of organizational structures, processes, and culture. One of the fundamental tasks has been the establishment of appropriate information technology (IT) platforms to co-ordinate business processes and provide coalition mechanisms for global business. This paper proposes five important dimensions of transnational strategy: the configuration of value chain activities, the co-ordination of such activities, centralization, strategic alliances, and market integration. These dimensions define the manner in which the value-added activities of the firm are dispersed and co-ordinated 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 can be used to define a taxonomy of transnational strategy. A basic proposition is that a firm’s transnational strategy will be reflected in the design of its information systems (IS). 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 has implications for practitioners when 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 IS.