The effects of global strategy on local IT manager and IT management: focus on factors affecting conflicts.

Yu, Jongtae ; Guo, Chengqi

INTRODUCTION

Globalization has generated an enormous effect on management disciplines (Ford, Connelly, and Meister, 2003). As the geographical dispersion of company's activities is growing, the work process has not been confined to specific location and the projects have employed the multinational, interdisciplinary, and multi-organizational partnership to overcome the inefficiency due to the dispersion (Horwitz, Bravington, and Silvis, 2006; Chinowsky and Rojas, 2003). As firms activities are expanding to different countries, there is a growing consensus that a central issue is to find strategy which is congruent with the firm's long term goal (Monks, Scullion, and Creaner, 2001). Multi-domestic and globally integrated firms have distinctive practices and policies in terms of corporate strategy. A multi-domestic strategy emphasizes the uniqueness and independence of each subsidiary of a firm and the activities of a subsidiary do not affect those of other subsidiaries. Business functions or subunits have very week connection and interdependence across the multinational enterprises (MNEs) (Porter, 1986; Taylor, Beechler, and Napier, 1996). Global strategy, on the other hand, attempts to develop competitive advantage of one subunit or subsidiary, which can be applied to other subunits or subsidiaries (Ohmae, 1990; Edstrom and Galbraith, 1977). The environments of the subsidiaries are supposed to be similar in terms of technology, political and economic environment, and consumer behaviors such as needs, tastes, and preferences (Ohmae, 1990). Both strategies, however, commonly accentuate that all business disciplines are administered by strategy adapted to achieve the goal on macro level. It is no wonder that implementation of information technology (IT) is strongly affected by such strategy because information systems have become critical functional enablers of business process (Banker and Kauffman, 2004).

Information and communication technology (ICT) has been extensively adopted in organization and presents various benefits to global operations such as effective communication at a reasonable cost, effective collaboration in multicultural workforces, and access to information of business partners (Thomas, 1999; Sivunen and Valo, 2006; Turban et al., 2006). Global information systems, however, has not been given much attention in IS research. Banker and Kauffman (2004) studied IS research published in Management Science over a 50 years span and identified five research streams: decision support and design science, human-computer systems interaction, value of information, IS organization and strategy, and economics of IS and IT. The findings of the research confirmed that global information systems is away from the main stream of IS research despite of its importance. Furthermore, little attention has been given to IT manager who is in charge of IT management and implementation.

IT manager is increasingly important as IT has been extensively adopted in all different levels of business functions and becomes essential in organization. Workforces - they are end users in most cases - of an organization depend on their IT manager or staff in learning how to use IT artifacts or systems or in solving problem when errors are occurred. Such dependency allows local IT managers to confront diverse requirements from workforces. However, the IT managers in foreign branch of multinational operation are unique in the sense that they face dual conflicts: one with headquarters, and the other with local workforces. The local IT managers are expected to intermediate the headquarters and local workers and to properly settle the different strategic goals and requirements. Without mediation of local IT managers, it is difficult for end users in foreign branch to claim their problem to headquarters directly for several reasons.

The primary goal of the study, therefore, is to: identify how firm global strategy affects local IT management; investigate how the global strategy influences local IT manager and pertinent conflict management practices. To achieve these goals, process theories are reviewed because these theories present important insight on the role of managers and media in resolving conflict. Cultural difference is also considered because culture is often cited as essential factor which affect the implementation of information systems (Galliers, Madon, and Rashild, 1998; Leidner and Kayworth, 2006). On the basis of data obtained through in-depth interviews, observation, and content analyses of local IT manager's work process, practical implication on the role of local IT manager is further discussed.

THEORETICAL DEVELOPMENT AND REFINEMENT

Firm's Strategy

A critical issue confronting international firms is the choice of organizational structure strategy, which has two extremes: global strategy vs. multi-domestic strategy. Global strategy emphasizes similarities cross countries in terms of technology, political and economic environment, and consumer behaviors such as needs, tastes, and preferences (Ohmae, 1990). The strategy aims to develop the resources of one subunit or subsidiary to create competitive advantage of other subunits or subsidiaries (Edstrom and Galbraith, 1977). By taking such strategy, firms can obtain: (a) cost advantage from the effect of economies of scale in research and development (R&D), production, and marketing, (b) consistent corporate/brand image recognition across countries due to adopting the same brand and advertisement strategy, and (c) low managerial complexity through coordination and control of international operations (Theodosiou and Leonidou, 2002; Levitt, 1983; Douglas and Craig, 1986). On the other hand, multi-domestic strategy is considered when the demand of local environment is strong and the cultural difference is high. In this case, little interdependence exists between various functions across countries, and connection between subunits is weak (Porter, 1986; Taylor, Beechler, and Napier, 1996). It emphasizes variations existing in consumer needs, use conditions, purchasing power, commercial infrastructure, culture and traditions, laws and regulations, and technological development among the countries. Thus, there is a need for firms to fit their strategy to the idiosyncratic circumstances of each foreign market because the variations are too high to standardize (Terpstra & Sarathy, 2000). The strategy argues that the goal of the strategy is to obtain long-term profit by satisfying the different customers' needs and requirement rather than to pursue the cost minimize through standardization (Onkvisit and Shaw, 1990; Rosen, 1990).

Since each standpoint has its own advantages and disadvantages, contingency perspective is presented to converge these two perspectives. Contingency theory addresses the fit of internal components such as organizational structure, value, and strategy to external environment. Contingency perspective argues that (a) standardization or adaptation strategy is two extreme points of the same continuum and can't be isolated each other, (b) the decision to standardize or adapt strategy depends on the analysis of external factors surrounding the specific firms, and (c) the performance is the best criterion to evaluate the appropriateness of the selected level of strategy standardization/adaptation (Theodosiou and Leonidou, 2002). To be competitive in local markets, firms must rely on the unique knowledge of the subsidiaries, the asset in which local culture is embedded. However, headquarter cannot pass over all decision-right to the subsidiary since the interest of local subsidiary is always congruent the goal of the firm as a whole (Nohria and Ghoshal,. 1994).

Resource-dependence perspective is another key approach. Pfeffer and Salancik (1978) propose that no organization can generate all resources necessary for operating itself. Organizational stakeholders try to control the actors to exchange to make sure that the resources necessary to achieve organizational goals (Taylor, Beechler, and Napier, 1996).

It is certain, thus, that the activity of local IT manager in foreign branch is affected by headquarters' strategy. Under global strategy, the role of IT manager is marginal since all important decisions are determined by headquarters for efficient and fast decision-making and cost minimization. Little authority is given to the local IT manager for implementing headquarters' decisions efficiently. On the other hand, the local IT manager is given resource and authority to implement independent IT strategy to satisfy the local unique requirements.

Process Approaches

It has been a great managerial concern to implement management information systems successfully (Robey and Farrow, 1982). Several theoretical approaches for process of system development are applied to find factors leading to success. In the process of system development, developers are mostly blamed for being unable to response to users, and the outcome of such developer-oriented approach is costly and conspicuous failures of software development projects (Gunian, Cooperide, and Faraj, 1998).

Problem solving approach argues that acting should be directed by object to improve the effectiveness of the acting (Smith, 1998). According to Smith (1998), problem is defined as the difference between the desirable situation and present one. Basically, problem solving approach is considered problem resolution oriented because it aims to resolve the problem by decreasing the difference. On the other hand, control approach emphasizes behavior and outcome feedback in order to achieve team goals. Control is defined as a process to monitor and evaluate employees' behaviors to lead to the attainment of organizational goals (Flamholtz et al., 1985; Ouchi and Maguire, 1975). Constructive conflict model is developed to identify stages of change and analyze the process of user involvement to solve complex problem (Robey and Farrow, 1982). Conflict is defined as the process that the disagreements between people or groups are addressed and resolved by the interference of individual or group to achieve the goal (Robey, Farrow, and Franz, 1989; Schmidt and Kochan, 1972). It is common in the process of information systems development that various departments work together under the resource pressure and time constraints. In most cases, the departments are not homogeneous in formal structure, training, cognitive orientation of members, career paths, and department mission (Robey, et al., 1989). These differences lead to many conflicts between individuals and groups in the development process. Studies indicate that cognitive differences between individuals or groups may increase the potential of conflict (White and Leifer 1986). Figure 1 displays the conflict model which is developed by Robey and Farrow (1982).

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According to Robey, et al. (1989), participation in the model refers to the extent to which members of an organization are engaged in activities or contribute to the achievement of goals. It implicitly indicates that influence of an individual or group on other members or organization increases as an individual or group of an organization is engaged in activities. The influence and involvement dominated by an individual or group is, however, likely to increase the conflict with other members or groups. However, the active participation is expected to derive the conflict resolution. Influence refers to the extent to which an individual or group exercise power on decision making process and affect decisions relatively and absolutely (Robey and Farrow, 1982). Influence is closely related to the concept of social power, which members can influence each other in relative or absolute way (Robey et al., 1989). The strong influence on other members is expected to increases the conflict between members or groups. Conflict can be resolved by replacing the disagreement with consensus, which can be accepted by all members (conflict resolution) (Robey and Farrow, 1982).

Process approaches emphasizes different dimensions of problem resolution process to attain the goal. Problem solving approach argues that the acting should be led by object to achieve goals whereas conflict theory emphasizes feedback to monitor and correct behaviors of employees. Constructive conflict approach put its focus on conflict process and factors affecting the process to achieve goal, mainly successful administration of management information systems. Primary purpose of the approaches is to give a right direction to the way of success in information systems development process. The information systems development process includes various activities such as system requirement identification, system design and implementation, test, and maintenance. All tasks are closely related to the role of IT manager. Thus, the theories provide useful insight in identifying factors influencing activities of IT manager in conflict situation between headquarters and subsidiary.

Cultural Differences

Doing business in different countries, however, creates new challenge for managers and organization because they can be exposed to different external environments such as infra structure, law, political and economic situation, culture, and so on. Culture is often cited to essential factor which leads to successful implementation of information systems if properly corresponded (Galliers, Madon, and Rashild, 1998; Leidner and Kayworth, 2006). For instance, Straub (1994) has found that Japanese workers prefer facsimile to email because of complexity of typing Japanese characters with keyboard. Helmreich (1994) reported a disastrous case of Avianca flight to show how culture could give birth to critical impact. Due to the culture which do not report bad information to supervisor, pilots did not inform the Air Traffic Control of lack of fuel, resulting that the flight from Columbia to New York crashed upon landing due to the out of fuel. These cases well illustrate why culture must be considered in doing business in foreign countries. Cultural factors are more critical when a company runs its business in developing countries because of significant cultural mismatch (Galliers, Madon, and Rashid, 1998).

Regarding of cultural effect on IT, studies have addressed the difference of IT philosophies, managerial style in IT companies, IS employment structure, and value over different countries. The ICT research has focused on the relationship between culture and information technologies as well as the impact of national and organizational cultures on IT (Leidner and Kayworth, 2006). National level research explores the potential of applying the western-based management theories to nonwestern cultures. Another major research issue is the effect of national culture on the development and use of ICTs (Myers and Tan 2002). The organizational level research has centered on investigating the role of organizational culture to produce different performance among the organizations adopting same ICTs (Robey and Boudreau, 1999). Leidner and Kayworth (2006) reviewed research focusing on relation between culture and information systems, and classified the studies into four groups: culture and information systems development (ISD), culture and information technology adoption and diffusion, culture, information technology use and outcome, and culture, IT management, and strategy.

How culture affects IT management and strategy has been the interesting issue of IT research. The leading issues have been the influence of national culture on IT management and the effect of organizational culture on IT strategy (Leidner and Kayworth, 2006). Kettinger, Lee, and Lee (1995) found that IT organizations in Asia and North America have different philosophies and vary in IS functions. Slaughter and Ang (1995) presented that value differences led to the variation in IS employment structure between the U.S. and Singapore. Shore et al. (2001) found that students from individualistic countries showed more ethical attitude on the software piracy than students from collectivistic countries. Focusing on strategy, some research presented important results. For example, Kanungo, Sadavarti, and Srinivas (2001) provide that innovative type cultures are closely associated with firms having a delineable IT strategy. Tomlin (1991) found that strong internal information culture is strongly correlated with strategic IT use. Local IT managers in foreign branch are required to work with IT staffs or technicians in headquarters and experience cultural difference. The conflict in IT management can be more serious when multinational enterprises treat their subsidiaries as independent affiliates and activities of a subsidiary do not affect on the activities of other subsidiaries.

DUAL CONFLICTS MANAGEMENT IN GLOBAL STRATEGY

Although the constructive conflict approach provides critical insight to understand the conflict resolution process, to obtain comprehensive view on role of local IT manager in IT management, we must consider characteristics of the local IT manager, which are different from those of IT managers in domestic firms. Thus we develop the conflict model by applying the features of local IT manager into the existing model. Participation, in our model, refers to the extent to which local IT manager of foreign branch is authorized to independently engage in business activities. As local IT managers have authority to make decision and actively engage in problem-solving process, they can respond promptly and properly to local IT requirements and satisfy local IT end users. However, such independence is likely to increase conflict with headquarters because of discord with overall strategy across subunits and lack of time to discuss with headquarters peers. On the other hands, low participation and authority of local IT managers are likely to fail to respond local requirements promptly whereas it decreases conflict with headquarters by according its goal with overall strategy. We thus argue that active participation of local IT managers increases conflict with headquarters and, on the other hand, decreases conflict with local workforces.

The participation of local IT manager is expected to be affected by communication media and strategy of headquarters. Communication media refers to the device that IT managers in foreign branch adopt to communicate with staffs or IT managers in headquarters. The spectrum of communication media varies from simple media such as phone or email to rich media such as visual conference (Chinowsky and Rojas, 2003). Frequent communication with rich media between subsidiary and headquarters allows both parties to come to mutual consent, and makes headquarters more directly control its subsidiaries because the headquarters can obtain necessary information fast and efficiently. The increased control for subsidiaries finally reduces the authority of local units, resulting in discourage of local IT manger participation.

Strategy is another critical factor affecting the participation. Under the standardized control, headquarters employ same IT strategy to all foreign branches without considering cultural difference or local requirements. The participation of local IT manager in foreign branch is restricted because such strategy allows very limited autonomy to the local IT manager. Such standard strategy often raises troubles because unique environment or requirement of local branch is ignored and the responding of such requirements is late under the strategy. On the other hand, the participation of local IT manager is likely to increase under the multi-domestic strategy because the strategy emphasizes characteristics of local requirements and environment. Headquarters heavily relies on local IT manager's knowledge and experience in solving the local-contexture problems. 2.

[FIGURE 2 OMITTED]

Culture is a unique dimension of source of conflict in multinational enterprise. It is defined as "a complex representational system constituting identities and symbols and also as a feature, which binds individuals or groups of individuals to a certain set of values, beliefs, understandings and ways of sense-making" (Scheytt et al, 2003, p. 519). In other words, culture is a point of reference in establishing identity, value, and norm of individual (Scheytt, Soin, and Metz, 2003). Different cultures have different value, norm, and identity and these differences cause to make it hard to understand people in other culture. Cultural conflict represents disagreement caused by cultural difference between headquarters and subsidiary in context of multinational enterprise. Cultural difference, however, can be diminished by communication through rich media. Rich media can transmit complex information including non-verbal cues as well as multimedia data such as video, audio, and text data. It is pointed that silent behavior such as body orientation, facial expression, and eye movement are critical factors in effective and interactive communication (Ucok, 2006). For example, when virtual team members work together, many miscommunications occur because technology cannot communicate non-verbal cues such as body language and emotional expressions (Rosen et al, 2006). Therefore, rich media decreases the cultural difference and encourages the involvement of employees in subsidiaries. The model proposed is presented in figure

RESEARCH SETTING AND CASE ANALYSIS

Research Setting

Case study methodology should be employed when a study attempts to explore how a thing is done (Yin, 1994). It can be used to reach meaningful insights when a phenomenon is little known, or research for the phenomenon is early stage (Hovav and Schuff, 2005). Case studies adopt interpretivism, assuming that knowledge is the product of social construction by human actors and social phenomenon should be studied from the perspective of the actors in the context in which the phenomenon occurs (Shoib and Nandhakumar, 2003). Such an approach provides in-depth understanding of decision making in IS adoption and implementation in organizations in different contexts (Shoib and Nandhakumar, 2003; Walsham, 1993). We carefully decided criteria for choosing case study subject. First, local IT manager in foreign branch should have heterogeneous cultural background with staffs or IT manager in headquarters. Second, IT should be employed and used extensively in foreign branch. Third, the company should be multinational enterprise, which has subsidiaries in several countries. Fourth, the subsidiary should be strategically meaningful to the company.

Company X is an organization that works to enhance safety and to approve assets and systems in sea, on land and in air space. The key functionality of the company is to inspect shipbuilding. The business principally involves classification of ships, which sets standards of quality and reliability during their design, construction and operation. The headquarter of the company is located in UK and subsidiaries of the company are spread across Asian countries such as Hong Kong, Japan, China, South Korea, Singapore, Malaysia, and India. The research on Company X was carried out in the subsidiary in South Korea that occupies 50.7% of world shipbuilding order between Jan. to Apr. in 2008 (6.8 million CGT out of 13.4 million CGT) (Korea Economic Daily, 2008). Since the two countries (UK and South Korea) have totally different cultural background, the case will present clear and concrete base to identify the effect of cultural difference on IT management. Further, the case study is very extensive given that it is conducted in non-Western country context (Shoib and Nandhakumar, 2003).

We employed qualitative data gathering methods such as participant observation and unstructured interviews over period of time. The study at Company X involved one of the authors as a participant observer. In year 2006 and 2007, the author visited main office in South Korea to observe and interview the IT manager. The focus has been put on the role of IT manager and the interaction with headquarters and local workforces related to IT management.

Case Description and Analysis

1) Asian branches

[FIGURE 3 OMITTED]

The Hong Kong subsidiary is the intellectual hub in the meaning that the headquarters supports and administers Asian subsidiaries through the Hong Kong office. Interesting point is that the function of the Hong Kong subsidiary is very marginal even it is the hub office in Asia. The subsidiary has no authority to make decision about its business or other subsidiaries' businesses. The subsidiary collects financial information from Asian subsidiaries and reports it to the headquarters. Based on the information, the headquarters determines how to operate those subsidiaries and conveys decided policies to the subsidiaries through the Hong Kong office. The authority of other subsidiaries is more restrictive. For instance, a wage increase of the subsidiaries is based on a fixed rate regardless of their performance, the rate which is determined by the headquarters. Overall, the headquarters and subsidiaries are integrated vertically and all powers are concentrated on headquarters and the flexibility of subsidiaries is very limited. The relationship between the headquarters and subsidiaries are fairly asymmetric and the subsidiaries are subordinated to the headquarters, especially IT functions.

2) Managerial organization

The management structure is composed of four levels: country manager, marine/financial manager, area manager, and site manager. The highest manager is country manager who supervises the country main office and administers area managers. Financial works are carried out by finance manager under the direction of the country manager. The major task of marine manager is to provide technical support to area manager and issue approval of specification and design of ship. The local IT manager is supervised under the direction of the area manager who administers a couple of site offices which are in shipbuilding yards.

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The main office is composed of two sections: administration and finance. Administration part supports inspectors including IT management. Site offices are independent from main office and inspectors belong to site offices and report their works to headquarters in UK without direction of main office. Data are directly transmitted to the headquarters' server and reported to departments that are in charge. The main office has no authority to control and involve in the work process and access the server.

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The managers in high level such as finance manager are all appointed by and sent from the headquarters in UK. In the vertically integrated organization, it is critical to control sub-units and their goals and strategy must be congruent with those of the headquarters. Thus, the headquarters intentionally appoints host managers to the high managerial positions of the local subsidiaries to guarantee the congruence.

3) Responsibility of local IT manager and relation with headquarter

The responsibilities of local IT manager are to support inspectors (end-users)' IT usage and manage IT infrastructures such as bandwidth of network so they are ready for the inspectors' works without problem. Specific tasks of local IT manager include network maintenance, data backup, programs installation and distribution, hardware and software maintenance, and technical support to end-users. It shows that the global strategy restricts the role of the local IT manager to the maintenance of organizational level IT infrastructure.

4) Program development and distribute process

Program development or existing program update are conducted through either in-house development or outsourcing. Since the Company X pushes global strategy, the company has no need to consider unique requirements of subsidiaries. Standardizing programs used in all subsidiaries allows the company to save a lot of expenses by realizing effect of scale economy. The company has no need to develop different versions of original program to reflect different specification of IT equipments. Outsourcing development is preferred when the development cost is heavy or when the program requires high quality, which means that the company has a lack of resource to develop with its own ability. In-house development is, on the other hand, adopted when the demand for program quality is not high, and development period is short. Thus, in most case, programs developed through in-house method are add-ons to some major critical programs, especially Microsoft Words. For maintenance, the Company X uses Windows XP as operating software for client computer in almost all subsidiaries so they have a little demand for technicians to operate UNIX or other operating software.

For distribution of developed program or update, the company purchased special tool, Radia, from Hewlett Packard. The tool is used to distribute programs to servers and clients. Each client computer is assigned to an account and registered in one of the domains. The program distribution tool has a list of computers registered on the domains. When end users email help desk in headquarters to ask for necessary programs, managers in help desk add the end user's computer and requested program to the distribution list in the tool. Once the list is updated in distribute tool, it automatically distribute requested programs to the client computer as soon as the computer logs in its network.

Critical resources and functions of IT management, such as program development and distribution are conducted by the headquarters rather than the local manager. The headquarters is convenient to prepare manuals of newly developed program and establish program development process. However, such process has no flexibility to reflect the unique requirements or environments of local subsidiaries. Those unique requirements cannot be reflected on the standardized program development process.

5) Maintenance of hardware and software

The Company X has different hardware/software maintenance policies. For programs developed in house, application support teams under IT Help Desk handle problems or errors. Programs outsourced by third parties are, however, maintained and managed by the companies that developed the programs. Usually, the Company X enacts maintenance provisions when it makes outsourcing development contract with developing companies.

Hardware such as server, laptop, and printer are maintained by hardware providers. To be economic in purchasing hardware, the Company X has single provider who supplies hardware to the company, both to headquarter and all foreign branches. Since hardware providers give three year warranty in most cases, the company X changes its hardware in every three years. Current hardware provider is Hewlett Packard.

Since the Company X adopts global strategy in IT management, most critical resources are centered in UK headquarter. All functions such as program development, hardware/software maintenance, and network access and maintenance are converged to IT department in headquarter and very marginal functions such as data backup are handled by local office. For instance, when having a problem in application, end users report it to Help Desk in headquarters directly, not to local IT manager. Then, Help Desk analyzes the problem and gives proper remedy to the end user, or local IT manager when necessary. When an end user reports problems to local IT manager, instead, local IT manager creates 'call' and delivers the 'call' to Help Desk of UK with his/her comments on the problems. In such way, created calls are recorded in server in headquarters and used as criterion to evaluate performance of local IT manager. Thus local IT manager is not available to end users in problem solving process even though the manager can react quickly on the problem with proper remedy. The process can be seen in Figure 6.

[FIGURE 6 OMITTED]

The maintenance function of hardware/software belongs to the headquarters. Inspectors are required to report IT problems to the Help Desk directly or ask the local IT manager when they have no knowledge of explaining the problem to the Help Desk correctly. The role of the local IT manager is very limited in the process: add comments and explanation of the problems. This policy causes slow problem-solving process. Even though the local IT manager has enough skills or abilities to solve problems, all things the local IT manager can do are to create the error report, 'call', in the server of headquarters. Thus, end users have to stop working, waiting the remedy from the Help Desk.

6) Training

IT training is critical to improve the IT performance. The Company X provides training course for end users to learn and handle the newly developed programs in three ways. First, the company makes contract with Thomson Corp. and provides online training courses. Thus end users access to the training web sites which are constructed by Thomson Corp and learn how to handle the program. Another is a manual. When it is necessary, the company distributes manuals of developed program to the end users for reference. However, these two ways are restricted in terms of effect of training because those training courses have no interaction between trainer and trainee, thus rarely used by end users. For instance, newly distributed program (it was add-ons of Microsoft Word for entering information which is not supported by previous version) had serious error in entering data, which was not on manual and online training course. Developers argued that the error was stemmed from that end users did not follow the steps in manual. However, it was found that the error was occurred by program coding error not by misuse of end users. This instance shows how critical the interaction is in training process. Hence, the company provides face-to-face training courses. Developer of the program gives training about the program to site or area managers, then area or site managers teach inspectors how to use the program. The company heavily relies on the online training, whereas manuals and face-to-face training are used as supplementary of the online training. But it is obvious that the end users couldn't get direct help from the local manager.

7) Communication media

Communication media is very important to long distance collaboration among team members. In a local office, the most frequently preferred media is email due to its convenience in usage and function to keep evidence by recording all transactions as history. Phone is preferred because of its synchronous characteristics. It allows local IT manager to talk with staffs in headquarters in real time and make it possible to quicker response than using email. Thus phone is most used when emergency and real time communication is required. Video conferencing is third preferred communication media. It has various advantages over other media, such as transmission of multimedia data and nonverbal cues. The media is used in most for interview. Instant messenger (IM) is considered promising media because of its multiple functions such as chatting, file transfer, multimedia data transmission, and login-identification. IM is used in rare, however, because of security problem. Traditionally, peer-to-peer (P2P) communication is easy to be compromised.

8) Cultural difference

Cultural difference is found to impede effective communication and IT management. South Korea can be classified into high-contexture culture whereas most western countries are belongs to low-contexture culture. People in high-contexture culture emphasize background or context in which conversation occurs. Without specific expressions, people could catch a nuance, shaded meaning of exposed conversation from the context. People in low-contexture culture, however, require that the speaker specifically express his/her intention. When local IT manager reports a problem or explains a situation, such cultural difference disturbs effective communication. For instance, the comments added to error report by local IT manager sometimes seem to be ambiguous to the sight of staffs in headquarters. The local IT manager unreasonably expects that Help Desk could read 'between the lines' of report and identify requirements of end users without specific description. The local IT manager, thus, sometimes receives preposterous remedies from headquarters on reported problem because of miscommunication stemmed from the cultural difference. The effect of cultural difference also can be verified from the fact that level of adoption of Help Desk call system is different among nations. Workforces of Japan easily adopted the new system and policy. However, end users of China strongly prefer to solve a problem through informal path with local IT manager. Instead of making a call to Help Desk in headquarter, they ask local IT manager to give a remedy quickly, taking advantage of their private relation with the IT manager. Employees of South Korea locate on some place between the two countries.

9) Conflicts

Conflicts occurs between headquarter and local IT manager, and between the manager and local end users on a regular basis. Local IT manager conflicts with headquarters when local IT manager has: a) a late response on request, b) unreasonable remedies on reported problem due to lack of understanding of local situation, c) change or alteration on local server or equipment without consultation with local IT manager. Local IT manager also has conflicts with local end users when: a) they think the response is too late, b) they ignore suggestion and assistance of IT manager, c) they install unauthorized programs and raise trouble, and d) they have wrong information on source of problem.

DISCUSSION

From the interview and observation, we found that the global strategy affects the local IT manager's participation and restricts the role of the local manager in IT maintenance significantly. Thus end users have very weak relationship and reliance with the local IT manager. Such resource and functional concentration become a cause of conflict between the local IT manager and end users as well as between the local IT manager and the headquarters. The participation of local IT manager is strongly affected by the headquarters' strategy. The local IT manager of the Company X has very marginal authority in IT management and the tasks of the manager are heavily concentrated on reporting and IT infrastructure maintenance. Such restrictive participation of the local IT manager provides different cause of conflict with end users. As we expected, the global strategy inhibits participation of the local IT manager in the problem solving process. It increases conflicts with local end users as well because a remedy from headquarters often is not available quickly. Furthermore, there is no guarantee that the remedy will work at the first try. Thus it is common that end users ask help from the local IT manager directly instead of making an official 'call' to headquarters because that is more efficient and faster.

IT managers, however, consider such requests as social influence because of his/her private and social relationship with the end users. When local IT managers are forced to accept the requests, the conflict with end-users decreases because end users can get a prompt remedy and save a lot of time and effort required by making a 'call.' But the conflict with headquarters increases because officially 'calls' are not created and the local IT manager has no records to work. On the other hand, the conflict with end users increases when local IT manager does not accept their requests and attempts to make a 'call' whereas the conflict with headquarters decreases because his work performance is recorded in the headquarter server. The conflict between headquarters and local managers is low because the local IT manager is asked to convey decisions made by headquarters and consult about all things with headquarters staff in all IT management processes.

Global strategy is hard to absorb cultural difference. Through the interview, we found that cultural differences combined with headquarters' strategy affects the level of adoption of the strategy. The three countries, Japan, South Korea, and China, show differences in terms of adoption level an even though they have similar cultural backgrounds. In Japan, the global strategy works well. In most cases, end users report problems to headquarters directly even though they often have to wait a long time to be given a remedy. Little conflict occurs between headquarters and the local office. On the other hand, China is generally late, which means that most end users prefer to approach local IT manager directly, instead of taking the official route to get assistance. Specifically, end users in China often attempt to visit the main office or make a call to the IT manager to solve their problems. This increases conflicts between headquarters and the local IT manager as well as local end users. Workers in South Korea locate between Japan and China. The conflict between headquarters and the local office is lower than that of China but higher than that of Japan. We, thus, argue that the level of adoption of a global strategy is affected by cultural difference. It strongly implies that the success of the global strategy is affected by culture. We thus argue that the success of the global strategy depends on the proper consideration of local culture.

CONCLUSION

The role of the local IT manager is increasingly important as activities of firms are expanding geographically. The local IT manager is unique in that he has to handle two different conflicts: one with headquarters, and the other with local end users. In this context, it is very important to understand the characteristics of conflicts and to identify the effects of the firm's strategy with its influence on conflict.

Under the global strategy, active participation of local IT managers would increase the conflict with headquarters whereas it decreases the conflicts with local end users. Cultural difference increases the conflict with headquarters and affects the level of adoption of a proposed strategy. However, media richness has its effect on decreasing both conflict with headquarters and cultural differences. The major limitation of this study stems from the sample. We only provide one case and it is very limited in providing generalizability of the discussed phenomenon. The findings cannot be applied other companies or be generalized because each company has a unique environment affecting its conflicts. Also, neither IT staff/ managers in headquarters nor local end users are surveyed and thus the result can be biased because it relies on the local IT manager's perspective only. Future research is needed to investigate a wider range of subjects and assess the perspectives of both headquarters staff and local end users to provide a comprehensive view about conflict management in global business.

ACKNOWLEDGMENT

The authors are grateful to Mr. Doyle Kwon, the IT manager of Lloyd Korea branch, who provided valuable opportunities for this research.

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Jongtae Yu, Mississippi State University

Chengqi Guo, The University of West Alabama