Strategic Control in the Extended Enterprise

The author examines the strategic role of information systems in "extending" the enterprise. These issues emerge as essential considerations in the strategic alignment of the investment in information technology and business strategy. Information technologies transform organizational boundaries, interorganizational relations and marketplace competitive, and cooperative, practice. The paper presents a framework of strategic control that informs the planning and execution of these investments in information technology for business transformation, seeking increased understanding and influence. Emerging information technologies change the limits of what is possible in the leverage of strategic control through transformation of boundaries, relations and markets. Strategic Control in The Extended Enterprise Benn Konsynski Emory Business School Extending the Enterprise....................................................................................................1 Systems that Transcend Organizational Boundaries..........................................2 IT Role: Boundary Spanning and Enterprise Extension....................................3 Transforming Boundaries, Relations and Markets.............................................4 Information, Organization, and Control..............................................................6 Control: Understanding and Influence.............................................................................8 What is Strategic Control?.....................................................................................8 Controls and the Market.........................................................................................10 Information Intensity: IT Changing the Limits of the Possible........................11 BOUNDARIES: Enhancing Understanding and Influence...........................................13 Information Technology Role in Organization Transformation.......................16 Forms of Organizational Support Systems..........................................................17 Spanning the Boundary: Understanding the Competitive Marketplace..........19 IT Transforming Environmental Monitoring..........................................21 Environmental Monitoring and Distributed Problem Solving.............23 RELATIONS AND PARTNERSHIP................................................................................24 Information Technology ACROSS Boundaries LINKAGE.............................24 What is EDI?................................................................................................25 EDI as an Extension of Internal Transaction Processing Systems.........26 EDI as a Partnership Arrangement...........................................................27 Alliances and Information Partnerships..............................................................29 IT Role in Building and Sustaining Partnerships..............................................30 Forms of Partnership...............................................................................................32 Intra-industry Coalitions...........................................................................32 Customer-Vendor Relationship.................................................................32 Customer-Supplier Linkages.....................................................................32 What is Shared in Partnership?................................................................33 Partnership: Control Over Key Integration Factors................................33 Bringing Something to the Technological Table.....................................34 MARKETS and INDUSTRY PLATFORMS: Public and Private.................................35 Rationalizing Fragmented Markets......................................................................35 Linkage and Industrial Policy...............................................................................37 Example: Participants and the Process of Alignment.........................................39 Singapore TradeNet.....................................................................................41 Hong Kong: Hotline and Tradelink..........................................................42 Norway: The TVINN System......................................................................43 Public Policy and Strategic Control......................................................................43 Conclusion............................................................................................................................45 References.............................................................................................................................47