Information systems

Most international reporting systems require information feedback at one level or another for financial, personnel, production and marketing variables; though specific types of functional reports, their frequency, and the amount of detail required from subsidiaries by headquarters will vary depending on organizational culture. Thus managers in cultures high in collectivism and in tacit forms of communication (as in Japanese companies) are likely to require fewer formal functional reports than others, who, by and large, develop more individualistic organizational cultures with more need to ‘spell things out’.

Unfortunately, the accuracy and timeliness of information systems are often imperfect, especially in less developed countries where managers typically operate under conditions of extreme uncertainty. Government information, for example, is often filtered or fabricated and other sources of data for decision making are usually limited. Employees are not used to the kinds of sophisticated information generation, analysis and reporting systems common in developed countries. Their different work norms and comparative lack of sense of necessity and urgency may also confound the problem. In addition, the hardware technology and the ability to manipulate and transmit data are usually limited.

These conditions in some foreign affiliates cause problems for headquarters' managers. They make it difficult for them to coordinate activites and consolidate results.

Evaluation across countries

A related problem when evaluating the performance of foreign affiliates is the tendency to assume that all evaluation data are comparable across countries. Unfortunately, many variables can make evaluation from one country look very different from that of another, owing to circumstances beyond the control of subsidiary' managers.

For example, one country may experience considerable inflation, significant fluctuations in the price of raw materials, political uprisings or governmental actions. These factors are beyond local managers’ control and are likely to have a downward effect on profitability. Yet they may have performed better than managers of subsidiaries not faced with such adverse conditions.

Other variables influencing profitability include transfer pricing currency devaluation exchange-rate fluctuations, taxes, and expectations of contributions to local economies. One way to ensure more accurate performance measures is to adjust the financial statements to reflect uncontrollable variables peculiar to the subsidiary environment . Another way is to take into account other non-financial measures such as market share productivity, sales relations with the host-country government, public image, employee morale, union relations and community involvement.

Finally, the Internet provides management information systems with a world of information not only attainable but instantaneously available.

Conclusion

As firms progress from domestic to international their managers adapt the organizational structure to accommodate their relative strategic focus on globalization versus localization, choosing a global product structure, a geographic area structure, a matrix form or a hybrid with elements of all o£ them. As the company becomes larger, more complex and more sophisticated, it may evolve into 2 transnational with alliances, networks and horizontal designs.

The command to 'think global, act local' is a warning to international managers not to lose their ability to respond to local market structures and individual consumer preferences. The term 'glocalization' indicates the relationship between local and global corporate strategies. It is essential to get the balance right. Interorganizational networks, global e-corporations and transnational corporation network structures for knowledge sharing are some of the means to do so.

Organizational cultures – and awareness of local cultures – affect decisions on how much to decentralize, how to organize work flow, and the various relationships of authority and responsibility. The best structure is flexible and appropriate and fits with the firm's goals.

Feedback from control methods and information systems – direct and indirect – should signal need for charges strategy, structure or operations. Direct methods include the design of appropriate structures and the use of effective staffing practices. Indirect mechanisms include sales quotas, budgets and other financial tools, as well as feedback reports. Emphasis on quantitative versus qualitative data differs considerably across nationalities.

Performance measurements should include assessment of the kinds of value the company is providing to all stakeholders. A problem is the non-comparability of performance data across countries. Factors that will affect such data include management practices, local constraints and expectations regarding authority, time and communication.

1 International Business edn 13 chapter 1

2Deresky, H&Christopher, E International management chapter 1