Beyond the Globalization of Information Technology: The Life of an Organization and the Role of Information Technology

Transcription

1 Byond th Globalization of Information Tchnology: Th Lif of an Organization and th Rol of Information Tchnology Yang W. L Y. Richard Wang March 1990 WP # MSA CIS Composit Information Systms Laboratory E53-320, Sloan School of Managmnt Massachustts Institut of Tchnology Cambridg, Mass ATTN: Prof. Richard Wang (617) Bitnt Addrss: rwang@sloan.mit.du 1990 Yang W. L and Y. Richard Wang ACKNOWLEDGEMENTS Work rportd hrin has bn supportd, in part, by MIT's Intrnational Financial Srvic Rsarch Cntr and MITs Cntr for Information Systms Rsarch.

2 Extndd Abstract Byond th Globalization of Information Tchnology: Th Lif of an Organization and th Rol of Information Tchnology Th globalization of an information systm in a major intrnational bank is analyzd in ordr to xplor th rol of information tchnology in trms of organizational ffctivnss. Our study shows that th globalization procss rvald and intnsifid prxisting organizational issus such as th balanc btwn local autonomy and global control in th intrnational bank. A potntial rol is idntifid for information tchnology as a facilitator in formulating and rvaling collctivly-hld organizational thory-in-us -- a thory of action constructd from an organization's actual bhavior. This collctivly-hld organizational thory-inus can thn b usd by mmbrs of th organization to compar with thir privatly-hld organizational thory-in-us in ordr to idntify issus, which, in turn, can lad to discussions for a solution. This procss sts th stag for organizational larning cntrd on rror-dtction and rrorcorrction. Most of th convntional thoris in Information Systms advocat fficint managmnt basd on two primary prspctivs: Th first is a top-down procss moving from stratgy-stting to managmnt planning to oprational control in an organization. Th scond is a static and closd chang-procss with four stags: initiating a chang, crating a climat conduciv to chang, xcuting th chang, and finalizing th chang. Contrary to ths prspctivs, w found that th global information systm was dvlopd initially as a softwar product aimd at procssing a particular local branch's banking opration instad of srving as a tool for globalization. Th dcision for installing th systm globally was an adaptiv procss to find th bst fit btwn th softwar availabl in th local branchs around th world and th top-down globalization stratgy formulatd at th corporat hadquartrs. implmntation procss did not rigidly procd through th static and closd chang-procss. Instad, th implmntation procss actd as th bginning of an itrativ dvlopmnt and r-dvlopmnt procss, whr local modifications occurrd basd on rror-dtction and rror-corrction activitis in th softwar to fit th local nds. Our study suggsts that an adaptiv and flxibl Composit Information Systms approach for th globalization of information tchnology which is conduciv to organizational larning can crat a mdium not only for incrasd connctivity among information systms but also for an improvd organizational dialctic among th mmbrs of an organization, which in turn can incras organizational ffctivnss as wll as fficincy. Th

3 Introduction Information Tchnology and Organization... 2 Rsarch M thod and Stratgy... 5 Th Intrnational Bank... 6 Th Mini-Banks: Local of Dcision-Making... 7 M arching for Growth: Globalization... 7 Sarching for Commonality: th Automatd Banking Systm... 8 Th Implmntation Procss: Striving for Autonomy within Commonality Sarching for Intgration: Exprimnting with th CIS Approach Information Tchnology as Facilitator for Organizational Larning C o n clu sio n R frn cs...19

4 Byond th Globalization of Information Tchnology: Th Lif of an Organization and th Rol of Information Tchnology Ky words and phrass: Information Tchnology, globalization, Composit Information Systms, organizational larning, thory-in-us, spousd thory, rror-dtction and rror-corrction, connctivity, systms dvlopmnt and implmntation. Introduction This papr xamins th rol of information tchnology in th globalization procss of an information systm in a major intrnational bank. W startd with a gnral assumption that w nd to rviw critically th commonly-hld assumption that information tchnology always solvs rathr than dfins problms, and that it producs or lads to nw issus rathr than rvaling old ons. W formulatd our spcific rsarch qustion as follows: What ar th diffrncs btwn th intndd rol and th actual rol of information tchnology in our cas-study organization whr globalization is st as a primary stratgy? To answr this qustion, w nd to trac and xplor th dcision-making procss of th bank and th changs in th information systm which ar rlatd to th globalization procss. W will first rviw rsarch rlatd to this topic. Scond, w will xplain how w conductd this rsarch. Third, w will rconstruct and xplain th bank's xprinc in globalizing information systms, including th implmntation of th Automatic Banking Systm and th xprimnt with th Composit Information Systms approach. Fourth, w will analyz th rol of information tchnology in th globalization procss in light of organizational larning. Finally, w will summariz th findings and idntify nw dirctions for futur rsarch. Th answrs to our spcific rsarch qustion will: (1) contribut to th undrstanding of th dynamics of th globalization procss of information tchnology in th 1990's from an intgratd prspctiv, which includs both information tchnology and organizational larning in a tim sris; (2) provid a comprhnsiv and ralistic dfinition of th rol of information tchnology, which can b utilizd to incras organizational ffctivnss; and (3) intgrat top-down and bottom-up approachs which ncompass th stratgic, managrial, and oprational lvls of th dcision-making procss in an organization.

5 Information Tchnology and Organization Th us of information systms in an organization has bn gnrally viwd as "problmatic" dspit th initial hops for a smooth and succssful opration. Rsarch findings on information tchnology and organizational changs ar dichotomous largly du to th rsarchrs' disciplinary and mthodological bass. Tchnology-orintd rsarch viws organizational issus ithr as marginal or ls as obstacls to th dploymnt of information tchnology. Its diagnosis of ths difficultis is ithr "organizational constraints" or "organizational rsistanc." Thrfor, its prscriptions focus dn ducation, training, and prsuasion so that advancd information tchnology can b dployd succssfully in an organization. On th othr hand, organization-orintd rsarch viws tchnology ithr as an intrudr or as an unschduld visitor to an organization, whrby th problmatic "parachuting" or uninformd changs gnrat conflicts among organizational mmbrs or groups. Consquntly, thir rmdy cntrs on usr participation or involvmnt so that th usrs' nds will coincid with th choic and dsign of th tchnology. Both schools aim thir rsarch fforts at smooth opration and succssful dploymnt of information tchnology. Th diffrnc btwn ths two schools is th following: Th tchnologyorintd school is primarily concrnd with training usrs aftr tchnology has bn slctd and put in plac; whras th organization-orintd school is primarily concrnd that usrs' nds b satisfid and, thrfor, finds it most important that usrs b involvd in slcting and dvloping information systms. Yt anothr school of rsarch, th matching school, has attmptd to solv th waknsss of both th tchnology-orintd and th organization-orintd schools. Th ssnc of th rsarch of th matching school is to dsign information systms which will corrspond with th structur of an organization. Howvr, vn if a prcis matching can b achivd, th dploymnt of information tchnology may not b a "succss." Th rason is that th rsarch of th matching school assums that

6 organizational structur is a faithful indicator of th way an organization works. Howvr, organizational structur oftn dos not fully rprsnt how an organization actually works. 1 Morovr, an organization may driv itslf to dvlop not only nds-basd ractiv tchnology but also innovativ and proactiv tchnology which could stimulat nwly-dfind nds in th marktplac. A stratgy-orintd school focuss on how managrs ought to tak advantag of information tchnology for corporat stratgy (Rockart and Scot-Morton, 1984); as th vanguard of stratgy (Mason, 1984); as a ncssity (Kn, 1986); and as an nablr for proactiv and ractiv stratgis (Wang and Madnick, 1988). Its rsarch mphasizs a stram-lind top-down stratgy to st th dirction of an organization, with oprational control as insuranc for faithful implmntation. As a rsult, organizational intrvntion which can corrct rrors can not b asily introducd. In th ral stting of an organization, most knowldg about rrors tnds to volv aftr stratgis hav bn st. A procss-orintd school looks into th innr workings of an organization in ordr to find out how it achivs its organizational goals. In an ffort to com to trms with th complxity of th innr workings of an organization, som authors hav dscribd how dcisions ar mad and implmntd. For Lindblom (1963), dcision-making in an organization is sn as a "muddling through" procss. For Allison (1971), an organization is sn as having a group of actors who hav conflicting objctivs, valus, and prioritis. For Bardach (1977), a "fixr" is sn as ndd to ovrcom all ths implmntation gams in an organization. For Wildavsky (1979), implmntation is sn as a transformation procss of dcision-making. Ths prspctivs dscrib diffrnt facts of what an organization is; how its dcision-making procss works; how its dcisions ar carrid out; how th implmntation of a dcidd cours of action is transformd; and how a fixr could r-str th cours of implmntation toward an originally plannd cours. Thy tnd to viw th dcision-making procss as if it starts and nds through various static stps. Howvr, th actual bhavior of an organization rsmbls a complx dynamic systm, which includs loop-lik fdback procsss. L (Institutional Larning, 1988) distinguishd and xmplifid th diffrncs btwn organizational workings and organizational structur.

7 In th contxt of our study, all of th abov prspctivs indicat th difficultis of linking th utilization of information tchnology and th improvmnt of organizational ffctivnss. Ths difficultis call for organizational intrvntion focusd on an organizational-capacity-for-larning which can nabl an organization itslf to larn from th xprinc of rror, to build collctiv capacity whr littl or non occurrd prviously, and to play nw nabling rols in a varid and rapidly changing information systms nvironmnt. Cas studis of organizational larning at on tim can b usd as input at a latr tim and lssons from on plac can b usd as input to othr placs -- not only th rsults but also th procsss. Although th vnts may not b an xact rptition, thrads of th undrlying causs in on cas can b larnd and adaptd to anothr cas, and th xplanatory powr of ths kinds of rsarch can b conduciv to gnralization. This is th lvr that prmits us to introduc th organizational larning prspctiv (Dutsch, 1963; Batson, 1972; Argyris and Sch6n, 1978; and L, 1988). From th organizational larning prspctiv, w analyz th fdback procsss which includ th lap btwn individual and organizational lvl larning, th spousd thory, and th changs in thory-in-us. By spousd thory w man a thory of action that can b constructd basd on publicly and formally announcd or writtn ruls and procdurs of an organization. By thory-in-us w man a thory of action that can b constructd from obsrvations of an organization's actual bhavior. Th lap from individual to organizational lvl larning xplains th distortion btwn ths two lvls. Th changs in th thory-in-us xhibit th quality of an organizational inquiry. In addition to distinguishing th spousd thory from th thory-in-us, Argyris and Sch6n (1978) xamind ths laps and changs to xplain how organizations larn or fail to larn, and furthr distinguishd two kinds of organizational larning as follows: "Organizational larning involvs th dtction and corrction of rror. Whn th rror dtctd and corrctd prmits th organization to carry on its prsnt policis or achiv its prsnt objctivs, thn that rror-dtction-and-corrction procss is singl-loop larning. Singl-loop larning is lik a thrmostat that larns whn it is too hot or too cold and turns th hat on or off. Th thrmostat can prform this task bcaus it can rciv information (th tmpratur of th room) and tak corrctiv action. Doubl-loop larning occurs whn rror is dtctd and corrctd in ways that involv th modification of an organization's undrlying norms, policis, and objctivs." (Argyris and Sch6n, 1978: 2-3)

8 Rsarch Mthod and Stratgy Our study of th rol of information tchnology in a major intrnational bank, for which w will us th psudonym Elit Bank, mployd a rsarch mthod that could allowd us to gain a historical and dvlopmntal prspctiv on th globalization procss as wll as to obsrv its dynamics. W tracd th dvlopmnt and implmntation procss of a global information systm, which w will call th Automatd Banking Systm (ABS). In studying th ABS, w collctd storis as wll as dirctly obsrvabl data bcaus storis link and xplain th procsss that occurrd in which th data wr prsntd. Without knowing how th data wr producd and what th contxt of idas that gav maning to th data was, on may los hold of th complt pictur of what occurrd. In collcting storis on how th bank works, w intntionally includd subjctiv opinions and conflicting data that most convntional rsarchrs hav hithrto ovrlookd. Th critical clus as to how th bank actually works li in th complxity of incongruitis btwn diffrnt storis on th sam subjct from diffrnt individuals (or groups) involvd in th globalization procss. Th firstordr incongruity rsults from th diffrnc btwn an individual's spousd thory and his thoryin-us. Th scond-ordr incongruity rsults from th fact that on individual's spousd thory and thory-in-us ar likly to b diffrnt from anothr individual's. Thus, a multiplicity of spousd thoris and thoris-in-us may xist. This is why rconstructing a story through chcking intractions among its parts of th story and its whol can b th sourc of corroboration, thrby srving as a chcking mthod for objctivity in th story. W startd with two primary propositions which guidd our story-collcting and ways of infrring thory-in-us from dirctly obsrvd data and collctd storis: (1) A story contains spousd thory and thory-in-us, and thr may b an incongruity btwn th two (Argyris and Sch6n, 1978). (2) Any problm is not a problm until it is st or framd (Rin, 1986). Th first proposition was usful in collcting and intrprting storis and dirctly obsrvabl data bcaus it xplicitly distinguishs th actual organizational rality from th publicly-hld

9 organizational thory of action. Th scond proposition guidd us to rais th following critical qustions: Who framd it? How did it com to b a problm? Why was it a problm to som and not to othrs? How did thy solv it? Th intrviws wr of two kinds: structurd and unstructurd. Th structurd intrviws wr dsignd to licit information that could b usd for th comparison of th information systms of th local banks. Thy includd qustions on tchnical changs in th ABS's implmntation procss. Th unstructurd intrviws wr dsignd to collct information on th bank's working procss and th organizational issus rlatd to th ABS. To avoid intrviwrs' bias, for ach intrviw multipl mmbrs of our rsarch tam wr prsnt. As a furthr chck on th validity of th intrprtation of th intrviw rsponss, post-intrviw mtings wr hld to rviw th diffrnt vrsions of th intrprtation of th intrviw rsponss. W also showd a writtn copy of th rsults to a group of intrviws so that thy could chck th accuracy of thir rsponss. Fac-to-fac intrviws wr conductd in Nw York, London, Vnzula, and Purto Rico, and tlphon calls wr mad for followup qustions. Th Intrnational Bank Th Elit Bank was stablishd in 1812; it has ovr 80,000 mploys in 90 countris, and ovr $9 billion in sharholdrs' quity and ovr $200 billion in assts as of Thr ar thr primary sctors in th bank: th institutional banking sctor, th individual banking sctor, and th invstmnt banking sctor. Bing highly dcntralizd, th hads of th thr sctors ssntially run thir own businss and rviw thir oprations with thir chairman onc a quartr. Th Elit Bank has bn rcognizd as on of th world's lading financial institutions, and has a rputation as a "tchnical whiz" with high-tch front- and back-offic oprations. To undrstand how th Bank and its information systms hav volvd ovr th yars, w shall dscrib th workings of th Bank, including its dcision-making bhavior throughout its rcnt history, and w shall focus on th globalization procss of on of th bank's information systms, th ABS.

10 Th Mini-Banks: Local of Dcision-Making Throughout th Bank's history, ach local branch has ssntially bhavd as an indpndnt mini-bank for its own local opration undr th umbrlla of th Elit Bank. Th bank is a dcntralizd intrnational bank whos local branchs practic autonomous dcision-making and oprations basd on th ovrall corporat objctivs. Th dcntralizd structur of th Elit Bank's oprations providd th stting to which th architctur of th information systms nds to accommodat. Information systms at th local banks wr dvlopd and implmntd primarily within th local bank's control, basd on thir own nds. Marching for Growth: Globalization To xplain in gratr dtail how th bank and its information systms grw, w shall dscrib th volutionary procss of th information systms at both th global and local lvls in th past. In this study, "global" mans th intrnational bank lvl and "local" mans th country bank lvl. Th bank undrwnt svral stags in th procss of its global xpansion. During th th war and th post-war ra, th Bank functiond as a "mony hous," tailord mainly to th army and corporations for mobilizing rsourcs and rbuilding infrastructurs and corporat bass. In th 1960's, th Bank's main focus shiftd to th dvlopmnt of franchiss in ordr to broadn th customr bass in various rgions. In th 1980's, th focus was on gaining stratgic advantags globally; it broadnd th functions of th bank in ach country branch in North Amrica, Europ, Africa, Latin Amrica, Asia, and Australia. In th globalization procss, th hadquartrs' major concrns hav bn issus such as its comptitiv stratgy within th financial industry. At th local lvl, managrs bliv that advancd information tchnology can attract mor global customrs. As on of thm put it, "W don't want to los th oil princs to othr banks just bcaus w don't hav bttr tchnology." Information tchnology not only nabls global customrs to connct and mobiliz thir rsourcs, but it also maks th Elit Bank mor comptitiv in transaction-basd and f-gnrating oprations.

11 Yt, intra-organizational comptition has also intnsifid as th distinctions among institutional banking, individual banking, and invstmnt banking bcam blurrd. This was particularly vidnt btwn th invstmnt and th institutional banking sctors which nd information and data from ach othr and hav similar groups of customrs. Exampls for ndd data rang from macro lvl information on th ovrall conomy to th xact xchang rat at a crtain tim. Ths incrasd nds for intrdpndncy contradict thr long-hld cultural assumptions of th bank: Each local bank runs its own businss - "mind your own businss"; Mmbrs of th Bank compt against on anothr - "m first"; and Rsults and products ar th only vidnc for valuation -- "th bottom lin". For xampl, th phras "m first" was usd privatly by both managrs and tchnicians in a U.S. branch of th Elit Bank to xprss and idntify th root of th prcivd problm. "Lt's globaliz our businss" and "Exploit information tchnology" bcam common stratgis in th Elit Bank as wll as in th gnral businss world. Most oftn, globalization as a stratgy mans "xtrnal globalization," which focuss on th xpansion of th scop of a markt to a world-wid on, at last on byond th North-Amrican trritory. Information tchnology was sn as a comptitiv advantag in making this globalization stratgy work mor fficintly. Sarching for Commonality: th Automatd Banking Systm How did th Elit Bank's global stratgy of using fficint information tchnology unfold? How was th intra- and intr-organizational comptition rlatd to this unfolding procss? In th lat 1960's, a "stand alon" systm, which w will call th Automatd Banking Systm (ABS), was dvlopd in a Grman branch for providing an fficint and all-ncompassing information procssing capability for th branch. Th rational givn by th Grman branch was th lack of an information systm that could procss local banking oprations. Th ABS was originally dsignd as a batch systm that had componnts for chcking account transaction procssing, lttr-of-crdit procssing, and accounting rports. As th Grman branch continud to us th ABS, othr functions such as managrial

12 rports wr addd. As som othr Europan branchs usd th ABS, it bcam known as a "standard" systm. Th fact that th ABS was working favorably to mt ths particular local nds was rcognizd by a non-systm snior businss managr at th corporat hadquartrs. Th nw problm h spousd at that tim was th lack of a common information systm that could intgrat th banking oprations at th global lvl. H formd an allianc with a tchnical managr who was involvd in th dvlopmnt of th ABS, and proposd th implmntation of th ABS globally to th top managmnt basing his proposal on th following rationals: Why rinvnt th whl ninty tims? Th application from on country to anothr is vry similar. Th ABS is th bst systm w hav at hand. Th ABS can sav payrolls. With th ABS, th Elit Bank will b mor comptitiv. Consquntly, th dcision was mad by th top managmnt in 1976 to implmnt th ABS around th world in ordr to achiv fficint globalization. This dcision was sn as a stratgy for cost saving and information tchnology globalization. Th local banks in various countris wlcomd th dcision bcaus thy had prssing nds for procssing th vr-incrasing volums and typs of transactions du to th succssful xpansion of thir banking businss. In ordr to xport th ABS to ovrsas branchs, a cntral support group was stablishd in Blgium. Th cntral support group was also rsponsibl for ovrsing its installation around th world. Rgional support groups wr stablishd, among othrs, in Hong Kong and in Latin Amrica. Undr th rgional support groups, thr wr projct coordinators in ach country for th implmntation of th ABS. Ironically, th ABS, originally dvlopd as a "stand alon" systm by th autonomy-sking local bank, bcam a cor systm blivd by th top managmnt to b an intgrating vhicl which would facilitat commonality among th local banks and contribut to th globalization of th ntir

13 banking systm around th world. Th managmnt tam at th corporat hadquartrs intrprtd th claim that th ABS "workd" in Europan branchs as a fasibility tst for implmnting th ABS byond th Europan banking boundaris. Thy viwd th ABS as a way of stablishing global conformity across th local banks, whil th local banks saw it as a problm-solvr that would nabl fficint transaction procssing. Th Implmntation Procss: Striving for Autonomy within Commonality What happnd onc th th ABS was implmntd at th global lvl? Som fifty nations hav installd th ABS sinc In trms of th nhancmnt of th ABS, it volvd to includ onlin capability in th lat 70's. By all mans, th ABS was not assumd to b a turn-ky systm. Instad, it was adoptd as a common systm which has a cor and priphry componnts that local banks can modify and add to. Th local branch managrs initially thought that thy could pick and choos part of th ABS to fit thir local nds. In trms of its implmntation, th local banks whos working procdurs wr similar to thos in Grmany, for which th systm was originally dsignd, xprincd rlativly smooth implmntation. Othr branchs facd difficultis ranging from finding maintnanc nginrs to sarching for ways to adapt th ABS appropriatly to local conditions. Th ABS was programmd in COBOL, which is wll suitd for th batch procssing that was ndd for th Grman systm at that particular tim. It was not initially mad for global procssing which rquirs htrognous databas managmnt capability. Th cor of th ABS, which was assumd to addrss th common nds of th local banks, automatd crtain banking procdurs such as chcking account transactions. Howvr, th procdurs wr hard-codd; a dp undrstanding of th cod is rquird in ordr to mak modifications. Givn th fact that diffrnt local banks had diffrnt procdurs for chcking accounts, th chcking account modul ndd to b tailord to ach local bank. In som local banks, th ABS providd by th cntral support group could not procss vn a chcking account. As a rsult, th ABS was modifid and bcam th butt of a jok as th "Hinz systm" bcaus thr wr about sixty

14 vrsions of th ABS in th various local branchs. Th rvision which took plac ovr a priod of fiftn yars was not rcordd cohrntly. In most cass, th nw vrsions wr kpt and th old vrsions wr pild up somwhr or ovrwrittn. As on softwar maintnanc nginr put it, "Fixing anything bcam a hair-splitting job without knowing which hair to split." Evn if th changs wr rcordd, thy wr kpt in rls of taps and pils of printouts that could asily b junkd simply bcaus thy occupid so much spac. Rcords of problms and cods that did not work wr not considrd important nough to kp. If it workd for a crtain task at a crtain tim, that was nough to go on. Making th ABS work with minimum systm-down-tim was ssntial for vryday banking oprations, so this took priority ovr documnting rrors dtctd. Th difficultis th local banks xprssd in implmnting th ABS wr as follows: National rgulatory agncis hav diffrnt rquirmnts for rporting banking oprations. - Diffrncs in computr' languags usd for diffrnt databass mak it difficult to fit th ABS into othr systms. Diffrnt ways of calculating intrst rats mak it ncssary to crat spcial adaptations to us th ABS. Som local banks hav uniqu products which ar not providd for in th ABS. * Som local Banks nd to intrfac with Nw York in thir banking businss, but th ABS was dsignd to intrfac with London and is a Europan-styl systm. Both th hadquartrs and th local banks undrstimatd th scop of th modification and th guidanc ndd at th local lvl from th bginning. Th hadquartrs had assumd that th cor part of th ABS would rquir only minor modifications to b ffctiv in all local banks. As a rsult, th hadquartrs nglctd both to st policy guidlins for chang and modification, and to provid dtaild and accurat systm documntation to th local banks. Th local banks saw that thy could pick and choos parts of th ABS basd on what thy ndd. Consquntly, thos that ndd to chang vry littl in ordr to accommodat thir oprations implmntd th ABS without facing modification problms. On th othr hand, banks that had compltly diffrnt nds from thos

15 supplid by th ABS had mor difficultis, dspit training concrning what th systm was about and th propr procdurs for going about changing th ABS to accommodat to thir spcific conditions. In th arly 80's, both th strong snior businss managr in th corporat hadquartrs and th tchnical managr in Europ rsignd. Th ABS was in disarray, not bcaus it was not working but bcaus addd modifications mad it hard to kp th original nam of th systm. In a U.S. branch, for instanc, th systm was not calld th ABS, and thy told our rsarch tam that thy did not us th ABS. In rality, thir softwar nginrs took th ABS's scurity application and modifid it for thir own nds. In som othr branchs, on procssing modul of th ABS had diffrnt functions from othr branchs. Howvr, vrsions of th ABS wr th ncompassing softwar systm supporting th largr portion of banking srvics. Th Elit Bank was lockd into th ABS. Aftr th two managrs' rsignations, th obstacls to implmnting th Europan-vrsion of ABS in th Caribban and th Far East branchs also bcam vidnt, and th cntral support group was movd from Blgium to th U.S. Th nw group in th U.S. had mostly old mmbrs yt had a nw ladr and a rvisd chartr, which includd not only supporting th ABS but also working on nw moduls of it. Th nw moduls includd a dirct customr intrfac with th original ABS. Som of ths moduls wr usd and xportd whil othrs wr not usd. In an English branch, both individual and invstmnt bank divisions liminatd th ABS, and only th institutional banking division is using it. As on of th businss managrs in England put it, "If you ar going to hold m rsponsibl for my bottom lin, giv m th flxibility to manag, control, and mak dcisions on vrything including my systms popl and th systms." In on U.S. branch, a businss managr claimd that "th ABS dos not work, w nd to r-start with a clan slat." What h larnd from th implmntation of th ABS was that whn th layrs of rporting from local branch to th hadquartrs xcds two lvls, conflicting and ovrlapping rports wr gnratd du to turf battl. In his claim, "You'v got to mak your own systm only for your managmnt turf. It's asir to standardiz." Th nw ida from th U.S. branch was similar to th original ABS xcpt for its claim that this would not b for globalization purpos. Th ida was to dsign data bas systms with a structurd

16 modular systm for local databass. On of th managrs in th U.S. branch put it, "Nobody has vr card about aggrgat. What popl car about is whthr thir dpartmnt has a projct." In fact, th ida did not surviv th indpndnt consultant's valuation, and th consultants could not surviv th Bank's businss managr's hiring list ithr. As a rsult, "Evrybody was making his own toys." Sarching for Intgration: Exprimnting with th CIS Approach Mting of th markt trnd of globalization and local oprational mishaps in implmnting th ABS providd a nw platform for undrstanding that th ralitis of local opration and th global stratgis ndd to b incorporatd. Both hadquartrs and th local banks ralizd that th ABS could not standardiz th ntir banking opration across managmnt turf; it only incrasd cost for modifying th ABS to fit th local nds. Instad of asking what was common, thy startd asking how thy could connct with ach othr givn th autonomous working rlationships. In answring ths qustions, th Composit Information Systms (CIS) approach, that th hadquartrs' managmnt tam had rviwd but not takn any action on yt, bcam th altrnativ approach to b adoptd. Sinc 1985, fiv systms hav bn implmntd at th Bank following th CIS approach. 2 Th systms for th bank's transaction invstigations and managmnt information systm rporting ar xampls among othrs. Th diffrnc btwn th prvious attmpts and th CIS approach lis in th assumptions bhind th dsign of th systm. Th CIS modl givs systm autonomy yt allows for intgration and systm volution. Th concpts of adaptability and flxibility ar xplicitly rprsntd in th systms connctivity it provids. Th tchnical diffrnc from th ABS is that th CIS approach standardizs accssibility to th systm, yt lavs applications to local turf; whras th ABS was dsignd as a common systm that was assumd to b usd univrsally. Th tchnical structur of th xampl of th CIS modl consistd of svn major componnts: xtrnal intrfac, massag control, transaction procssing, information procssing, administrativ support, data control, and a shard data 2 S Wang and Madnick (1988) for dtails on dsign and implmntation of Composit Information Systms.

17 rsourc. Th advantags of th CIS approach can b summarizd as a systms dsign mthodology quippd with th flxibility and th adaptability that th ABS lacks. Information Tchnology as Facilitator for Organizational Larning What has bn th actual rol of information tchnology in th Bank during th globalization procss of th ABS and th xprimntation procss of th CIS approach? W shall answr this qustion by idntifying organizational thoris-in-us hld by diffrnt groups of th Bank and xplain how th mmbrs of th Bank discovrd and compard thm with thir privatly-hld organizational thory-in-us. Th hadquartrs' organizational spousd thory was to ncourag managrs to dmonstrat innovativ ladrship. Th hadquartrs' organizational thory-in-us was to find nw opportunitis unilatrally. Stratgis wr formulatd basd on this thory-in-us. Th hadquartrs managrs' stratgy was to find a nw projct bfor anybody put his stamp on it. Th stratgy of th managr who initiatd th adoption of th ABS to scout a local projct. H formd an allianc with th Europan managr who had a local product at hand. "Having a bad projct undr your blt is much bttr than no projct hr - no projct splls you'r on th way out" Th hadquartrs' thoy-in-us actd as th platform for formulating th stratgy of adopting th ABS, whil th local branchs' organizational thory-in-us was convnintly ignord. Th local managrs' organizational thory-in-us was to show incrasd productivity and profit without crating problms for thmslvs. Thir stratgy was to protct thir local managmnt turfs by all mans. Th local branch managrs qustiond th lack of considration of local implmntation particularly bcaus thy discovrd that th hadquartrs' dcision on th ABS violatd local branch managrs' undrstanding of th Bank's organizational thory-in-us. Th local managrs undrstood that th traditionally kpt balanc btwn local autonomy and global control could b shiftd only whn basd on profit/loss accounting rsults, not whn basd on kinds of information systms local banks oprat. This organizational thory-in-us hld by th local managr was contradictory to th hadquartrs' spousd policy of kping th imag of bing a "tchnical

18 whiz" among th financial srvic institutions in th World. Th complaints from th local managrs to hadquartrs can b xmplifid by th statmnt a South Amrican managr mad: "If you want m to b rsponsibl for making a profit, lt m tak car of it. W don't hav tim for tinkring about nw toys for nothing in rturn now." Th local information systms group had yt anothr thory-in-us: It was to kp thir tchnical xprtis critical to th succss for banking opration. During th initial priod of introducing th ABS, thir gat-kping powr soard, but it was rducd as th tchnical difficultis of implmntation incrasd. Diffrnt groups hld diffrnt undrstandings of organizational thory-in-us, which srvd as th basis for dvloping thir stratgis. Th gnral rubric of th organizational thory-in-us of th bank could b distilld as promoting onslf first. Onc th mmbrs had th opportunity to discovr th diffrncs in organizational thory-inus hld by diffrnt groups in th bank, which thy had privatly hypothsizd, it bcam asir to discuss rrors thy mad. Th mmbrs of th bank idntifid th following issus through thir discussions on rrors: * Hadquartrs considrd globalization of information tchnology as a tchnical agnda bcaus hadquartrs convnintly assumd that tchnical and organizational issus wr sparat. For xampl, th ABS was implmntd to intgrat workings of th Bank and incras productivity by incrasing tchnical connctivity. Howvr, whn th ABS was implmntd, th local banks did not chang th intrnal workings of th bank to fit th ABS. Instad, th ABS was changd to fit th local banks' procdurs and ruls. Both th hadquartrs and th local banks, and lin and information systms managrs cam to trms with th fact that dvloping and implmnting a common systm was an organizational as wll as a tchnical ndavor that both lin and information systms managrs nd to participat in. Communication among th local banks was almost non-xistnt du to th lack of a rwarding systm for horizontal communication, which could hav spdd up rror-dtction and rrorcorrction procss Howvr, aftr th initial priod of discussion, th attmpt to corrct th rrors was put asid and bank mmbrs maintaind th prvious thory-in-us: "Minding thir own businss." Th Bank was

19 going through zro-ordr larning (Sch6n, 1983): Local branchs wnt back to xrcis th old notion of making thir own information systms. Cooprating with th cntral ABS group in Blgium cratd dlays in systms dlivry and burdnsom communications for th local banks. Although th local banks applaudd rror-fr and fast transactions in public, thy xprssd mixd flings about implmnting th ABS in privat. Th rasons ar, first, that th local managmnt tam flt that th local banks could not afford th transitional tim lag btwn th old and th nw systm. Scond, th local information systms tam bgan to raliz that thy had significantly rducd control ovr th ABS. As th tchnical difficultis incrasd th cost for th modification of th ABS, th local branchs' managrs bgan to viw th ABS as a systm for falsly intndd conformity and a hindranc for traditionally xrcisd local autonomy. As modification wag addd to th original vrsion of th ABS for local nds, th information systms group and th managmnt group bgan to fl at as that thy did hav a systm that workd. This condition was achivd whn th original architcts of th ABS rsignd from th bank. Rgardlss of th fact that th ABS was working aftr tims of modification and addition, most local banks did not call th systm ABS anymor. Howvr, th bank bcam abl to ngag in singl-loop larning by dtcting and corrcting rrors within th its convntional valus. Th CIS approach was usd to corrct th rrors that th ABS had mad. This approach guidd dvlopmnt and implmntation of information systms toward th framwork that could facilitat a procss of matching information systms with th organizational rality. In fact, th local managrs qustiond th balanc btwn local autonomy and global control, but follow-up discussions wr avoidd. As a rsult, th Bank maintaind th status quo. Th basic assumptions, goals, and policis wr kpt unchangd; whil th cost of tchnical modification was rducd by allowing local dsign of systms application. In actual dsign of th systm, th basic architctur of th global information systms was framd, yt th local applications wr lft to th local bank.

20 Th scop of th problm idntifid by th mmbrs from xprimnting with th CIS approach was limitd to an immdiat tchnical domain. Broadr issus rlatd to a balanc btwn th local autonomy and global control wr rvald, but th discussions in th bank avoidd conflicts among th mmbrs. In summary, th globalization procss rvald th prxisting issus in th bank. In this procss, information tchnology srvd as a facilitator for undrstanding thory-in-us, thrby rvaling prxisting issus as follows: Th implmntation procss of th ABS rvald that th managrs dvlopd thir tactics faithful to th organizational thory-in-us thy hld: Th Bank's managrs thmslvs translatd th "innovativ ladrship" to a " rac for unilatral survival." Th balanc btwn local autonomy and global control was not discussibl du to th turf gam btwn th local banks and hadquartrs of th Bank. Conclusion Th xprinc of globalizing th Automatd Banking Systm (ABS) at th Elit Bank has bn analyzd in ordr to xplor th rol of information tchnology in a financial srvic institution in trms of organizational ffctivnss. Most of th convntional thoris in Information Systms advocat fficint managmnt basd on two primary prspctivs: Th first is a top-down procss starting from stratgy-stting to managmnt planning to oprational control in an organization. Th scond is a static and closd chang-procss with four stags: initiating a chang, crating a climat conduciv to chang, xcuting th chang, and finalizing th chang. Contrary to ths prspctivs, w found that th global information systm was dvlopd initially as a softwar product aimd at procssing a particular local branch's banking opration instad of a tool for globalization. Th dcision for installing th systm globally was an adaptiv procss to find th bst fit btwn th softwar availabl in th local branchs around th world and th top-down globalization stratgy formulatd at th corporat hadquartrs. Th implmntation

21 procss did not rigidly procd through th static and closd chang-procss. Instad, th implmntation procss was th bginning of an itrativ dvlopmnt and r-dvlopmnt procss, whr local modifications occurrd basd on tchnical rror-dtction and rror-corrction activitis in th softwar systm to fit local nds. Th globalization procss of information tchnology in th bank rvald and intnsifid prxisting organizational issus, such as th shifts in a balanc btwn local autonomy and global control. Information tchnology playd a rol as a facilitator for th organizational larning procss by nabling th participants to discovr organizational thoris-in-us hld by diffrnt groups and compar thm with thir privatly-hld thory-in-us. This procss providd a stting for discussions on issus rvald and rformulatd, which, in turn,st th stag for rror-dtction and corrction. Our study suggsts that an adaptiv and flxibl procss for th globalization of information tchnology which is conduciv to organizational larning can crat a mdium not only for incrasd connctivity among information systms but also for improvd organizational dialctic among mmbrs of an organization. Bcaus th Elit Bank was oprating in a dcntralizd fashion, th bank's organizational larning systm may hav had an assumption that local banks' goals diffrd from hadquartrs' goals. Thrfor, mor cntralizd organizations may rval somwhat diffrnt issus from th on w found. Yt, globalization procss includs issus rlatd to intgration which rsult from th lap from a local opration to a global on, that is, from on st of managmnt turf to anothr st of managmnt turf. Thrfor, our findings might b applicabl to cntralizd organizations as wll. Discovring th rol of information tchnology as a potntial facilitator for organizational larning fostrs discussions on ralistic undrstanding of rlationships btwn information tchnology and an organization. Such discussions will contribut to idntifying ways to improv stratgis for a chang which ar conduciv to improving organizational capacity for larning.

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