International Finance and Accounting Handbook

(avery) #1

  • Read information posted by others on their Web page.

  • Download/upload documents, data, or programs from an online FTP server.

  • Search for information on the Web using a search engine, such as Google.

  • Highlighted text (or a button) on a Web page or another Internet document, writ-
    ten in HTML (Hypertext Mark Up Language), may be linked to data stored on
    a computer located anywhere on the Internet. Thus, a company can create a de-
    scription of a product on its Web page composed of segments, such as text, a
    picture, a drawing, or even a video with sound, that is stored on another com-
    puter connected anywhere on the Internet (see, for example, http://www.bmw.com,
    where you can get the feel of driving a Z3 roadster). This simplifies greatly the
    creation of attractive visual displays.


There are search engines on the Internet for locating information of all sorts. This
makes the Internet a powerful research tool.
The Internet has already changed the way that many firms present themselves to
the public. It has created new opportunities for electronic commerce, in, for example,
online auctions, the ability to purchase airline and related travel services online, and
as an alternate channel for communicating with suppliers. An industry has sprung up
for creating Web pages and in managing their content. And with increased attention
to security, the Internet has become an alternative to private data networks.


((b) Changing Internal Information Flows. Although there are many ways of organ-
izing workers, a hierarchical structure is most common in the United States. A hier-
archy is described by the (average) number of workers reporting to a supervisor
(manager) at the next higher level—called “span of control,” and number of levels in
the organization. Normally, spans of control vary from four to eight workers report-
ing to one manager, and large organizations may have three to ten levels.
In hierarchies, which have been called “command and control” organizations, di-
rectives (or commands) flow from the top to the bottom, where they are executed, and
information flows from the bottom, where it is gathered or generated, to the top. As
commands and information move from level to level they become distorted.
Drucker^23 notes that the primary function of middle management is communica-
tion—to pass commands down the hierarchy to workers who will act on them and to
transmit information up the hierarchy to top management where, presumably, deci-
sions will be made. By substituting IT for middle management, accuracy and timeli-
ness of information can be improved, responsiveness increased, and labor costs re-
duced. The use of IT in this manner has been one of the drivers of organizational
downsizing.


(i) Knowledge-Based Organizations. Drucker’s^24 vision for the structure of organi-
zations that deal with knowledge intensive tasks, such as those in consulting, finance,
and publishing, is that the work will be accomplished by small, self-organizing
groups of professionals. These groups will be highly interconnected by data commu-
nications and augmented by various technology based tools which will allow their
members independence in when and where they work, and will permit them to lever-


28 • 16 INTERNATIONAL INFORMATION SYSTEMS

(^23) Drucker, 1988.
(^24) Id.

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