The-Impact-of-Mergers-&-Acquisitions-on-It-Governance-Structures

958 The Impact of Mergers & Acquisitions on IT G overnance Structures A Case Study Pauline O. Chin Florida Atlantic University, USA George A. Brown Technologies Consultant, Jamaica Qing Hu Florida Atlantic University, USA Chapter 2. 32 ABSTRACT Developing information technology (IT) institution structures at heart an governing has always been challenging. This is particularly the case in organizations that be spend a penny achieved growth through with(predicate) mergers and acquisitions.When the acquired organizations are geographically located in different regions than the host enterprise, the incidentors touching this integration and the plectrum of IT government structures are quite different than when this emplacement does not exist. This study performs an exploratory examination of the factors that affect the choice of IT government structures in organizations that grow through mergers and acquisitions in developing countries using the results of a case study of an in ternational telecommunications company.We find that in addition to the ordinarily recognized factors such as government regulation, competition and securities industry stability, organisational culture, and IT repugnnce, top managements predisposition toward a specific stock strategy and governance structure can profoundly influence the choice of IT governance in organizations. Managerial implications are discussed. Copyright 2008, IGI Global, distributing in stigma or electronic forms without written permission of IGI Global is prohibited. The Impact of Mergers & Acquisitions on IT governing body StructuresInTRoduCTIon The business purlieu has become increasingly complex and belligerent imputable to the rapid advances in technology and globalization of the world economic system over the last two decades. In order to survive and to compete on a global scale, organizations have sought to increase their market share through mergers and acquisitions (M&A) both local anestheti cly and internationally. In a number by the Bureau of Census (2002) on mergers and acquisitions in over 41 industries for the year 1998, it was reported that there were 3,882 cases of U.S. companies acquiring other U. S. companies. These data as well as indicated that there were 483 cases of foreign companies acquisitions of U. S. companies at an estimated value of US $233 billion, and 746 cases of U. S. companies acquiring foreign companies at an estimated value of US $128 billion. The trend toward mergers and acquisitions has been clearly demonstrated deep down the telecommunications industry worldwide (Oh, 1996 Ramamurti, 2000 Trillas, 2002 Wilcox et al. , 2001).Over the last several years, telecommunications companies in North the States, Europe, and Asia have looked toward acquisitions and mergers for their survival and growth. During the last decade there has been an increasing number of local and foreign investments in the industry (Oh, 1996 Ramamurti, 2000), due primaril y to the deregulation of the telecommunications markets as well as the move toward total or partial privatization of telecommunications companies within developing regions (Gutierrez & Berg, 2000 Melody, 1999).Foreign investments in developing countries within Latin America and the Caribbean have change magnitude tremendously over the last 20 years due largely to changes in the regulatory policies within these regions. Historically, companies in Latin America and the Caribbean were owned primarily by the local states. This changed dramatically in the mid-1980s to mid-nineties as the increasing economic and financial demands on the industry force companies in the region to look toward foreign investments in order to hold up competitive.Gutierrez and Berg (2000) reported that between the mid-1980s to mid-1990s, 14 out of the 24 telecommunications firms in the region privatized their companies. This strategy is also credited with setting into motion the authorized trend in a majori ty of the regions telecommunications companies toward increased partial or total privatization (Gutierrez & Berg, 2000 Ramamurti, 2000). As a consequence of this huge privatization and merger-and-acquisition movement in the telecommunications industry, the role f IT in these organizations has changed significantly over the last decade. The traditional relationship of IT providing nutrition services to individual departments within an organization has evolved into one where IT now plays a broader role in achieving the general strategic goals of the organization via a focus on global enterprise-wide support that encompasses not only six-fold departments, but often different countries and cultures as well.As a result, IT governance in the dynamic and complex business environment has been pushed to the forefront of critical issues facing the management of these organizations, in spite of the fact that little research exists on IT governance that attempts to identify and explain the multiple factors that may affect the choice of IT governance structures in the context of mergers and acquisitions in developing regions.In order to address these issues, this article examines the evolution of a governance structure within a global telecommunications network organization, based on a framework developed from the extant literature on incorporate and IT governance theories and practices. The article addresses the general research question In the go of integrating foreign subsidiaries into the host company, what are the factors that influence the choice of IT governance structure? The primary purpose of the article is to contribute to a broader apprehension 959 2 more pages are available in the full adaption of this document, which may be purchased using the Add to Cart button on the publishers webpage www. igi-global. com/chapter/impact-mergers-acquisitions-governancestructures/9761 Related Content Information and Communication Technology and Good Governance in Afr ica G. Onu (2007). 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