Examining the Effects of Information Technology on Control and Coordination Relationships: An Exploratory Study in Subsidiaries of Pan-National Corporations

Abstract

The pan-national corporation, with its inherently complex structure, is the organizational form most severely affected by globalization. It is therefore important for the management of such corporations to improve the control and coordination of the corporations’ spatially dispersed subsidiaries. Information technology (IT) has been hailed as an important tool in changing traditional control and coordination processes in complex environments. This paper presents the results of a study that examined the role of IT in the control and coordination of pan-national corporation subsidiaries in Ireland. The findings indicate that IT is being used for changing the nature of the relationship between headquarters and subsidiaries in a manner that makes the pan-national corporation more global in orientation. This is occurring as operations and decision-making processes in subsidiaries are redesigned in order to improve global management and local responsiveness.