ructure and functioning of business organizations, and will fundamentally alter the way such organizations interact with their external environments. The authors postulated that such transformation will occur through a hierarchy of effects resulting from the implementation of computer network technology.
The first order effect in the effects hierarchy is the substitution of information technology for human coordination. An increased use of coordination is the second order effect, while the third order effect is a shift in organizational structure to one that is coordination intensive.
Within the contemporary environment, a firm's success in the global economy is dependent upon the effective use of information technology (King and Sethi, 1993, p. 53). In the 1990s, a widely held view is that an organization's long term interests are best served through global strategies (Doktor and Lie, 1991, pp. 125 133).
The firm that provides the focus for this analysis is the Federal Express Corporation. Federal Express is a multinational corporation headquartered in the United States. The company owns and operates multiple subsidiaries based in countries other than the United States. For transborder data flow, Federal Express established an electronic data interchange system at customer locations on a global basis (King and Sethi, 1993, p. 53).
Bartlett and Ghoshal (1992, pp. 513 529) indicate that the key to effective multinational operations lies in the selection of the appropriate organizational structure. Two primary classifications of organizational structure are mechanistic and organic. The differences between mechanistic and organic organizational structures are expressed in the context of the level of formal structure and control embodied in the two organizational concepts (Daft, 1992, p. 140). The character of an organization's internal structure is often related to the external environment within which it functions. ...