Page 633 - Introduction to Business

CHAPTER 17 Management Information Systems 607

unit at a foreign location develops and operates its own information systems. In the duplicated configuration strategy The
networked configuration strategy, the development and operation of information strategy where the development of all
information systems is done at a home
systems is done in an integrated and coordinated way across all business units. base, but the operation of these
A domestic exporter is an organizational structure where there is a heavy cen- systems is handed over to autonomous
tralization of corporate activities in the home country. International sales are business units at foreign locations
(p. 605)
achieved by using agency agreements and subsidiaries. Examples of companies
decentralized configuration strategy
with this organizational structure are Texas Instruments, Caterpillar, and Otis Ele- The strategy where each autonomous
vators. In a multinational company, financial management and control are con- business unit at a foreign location
centrated at a home base, but other business functions such as production, sales, develops and operates its own
information systems (p. 605)
and marketing are decentralized in business units in other countries. Examples of
networked configuration strategy The
multinational firms are General Motors, Intel, and DaimlerChrysler. A franchiser is
strategy where the development and
an organizational structure where a product is created, designed, financed, and ini- operation of information systems is
tially produced in the home country, but for product-specific reasons, typically cost done in an integrated and coordinated
or product perishability, relies heavily on foreign personnel for further production, way across all business units
marketing, and human resources. Examples of franchising companies are McDon- domestic exporter An organizational
structure where there is heavy
ald’s, Coca-Cola, and Mrs. Fields Cookies. Key activities in a transnational com- centralization of corporate activities in
pany are neither centralized in the parent company nor decentralized so that each the home country of origin
subsidiary can carry out its own tasks on a local basis. Instead, the resources and multinational company An
activities are dispersed but specialized, so as to be both efficient and flexible in an organizational structure where financial
management and control are
interdependent network. Examples of transnational companies are Nestlé, Citi-
concentrated at a home base, but other
corp, and Sony. business functions such as production,
Domestic exporters tend to adopt a centralized configuration strategy for their sales, and marketing are decentralized
to business units in other countries
information systems. Multinational companies rely on decentralized configuration
franchiser An organizational structure
strategies. Franchisers typically develop information systems at the home base, and
where a product is created, designed,
then replicate them around the world; thus they use the duplicated configuration financed, and initially produced in the
strategy. Transnational firms, given the interdependence of their units, prefer the home country, but for product-specific
networked configuration strategy. 7 reasons, relies heavily on foreign
personnel for further production,
marketing, and human resources
reality Why would it make sense for a company like McDonald’s to develop
CH ECK its information systems at its home base and then replicate them transnational company An
organizational structure where the
around the world? resources are dispersed in various
countries, but each business unit in
each country is specialized, so as to
form an efficient, flexible, and
independent network

“Ronald McDonald” greets a
Ukranian woman shortly after
McDonald’s opened its first restau-
rant in Kiev. McDonald’s is a fran-
chiser that uses the duplicated
configuration strategy for its global
information systems.

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