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Transborder Information Flow Problem

401). The information environment in which organizations must function is changing. In turn, these changes demand changes in organizational structure and relationships. Thomas Malone and John Rockart (1991, pp. 128-136) argued that the advent of intensive computer networking in the corporate business setting will transform the internal structure 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).


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