Managing information technology in the transnational organization: the potential of multifactor productivity

The paper considers increased decision interdependencies in the transnational organization due to autonomous IT deployment in national subsidiaries. It proceeds by proposing multifactor productivity as a controlling instrument for managing the increased level of decision interdependence in the area of IT deployment. It is demonstrated how multifactor productivity supports the twofold task of: capturing IT-induced decision interdependencies; and deriving IT policies to cope with them. Possible ways of using multifactor productivity are discussed as well as potential pitfalls in applying this concept. Finally, a proposal is made as to how this instrument could be implemented by IT management in companies considering the transition to the transnational organization