Public Organiz Rev (2007) 7:181–189
DOI 10.1007/s11115-007-0029-0
Public Organizations in the Age of Globalization
and Technology
Meena Chary
Published online: 17 April 2007
# Springer Science + Business Media, LLC 2007
Abstract Both globalization and information and communications technologies
(ICT) have been shown to be important factors in defining organizational
environment. However, the cumulative effects of these two factors together on
decision-making and the exercise of power within large organizations are currently
not well explored. This paper attempts to fill that gap by conceptually analyzing the
combined effect on globalization and communications technology. ICT has had the
cumulative effect of shrinking an organization’s effective size. Globalization
contributes to this effect of removing geographic boundaries by centralizing control
over certain functions. In other words, globalization and ICT, in conjunction with
each other, have considerably heightened the concentration of power and decisionmaking authority within the organization.
Keywords Globalization . Technology . Decision-making . Organizational power .
Public administration . ICT
This paper discusses the impact of globalization and information and communications technologies (ICT) on large public and private organizations, especially as it
relates to how power is exercised and decisions are made, and the resulting impacts
on public administration. Historically, ICT has been shown to be an important factor
in defining organizational environment. There is considerable academic literature
that describes precisely how either globalization or ICT is rapidly changing
organizational environments within global firms and public agencies (Farazmand
1999a, b; James 2001, 2002; Baliga and Jaeger 1984 and many others). However,
the cumulative effects of globalization and ICT together on decision-making and
This paper was first presented at the International Conference on Politics and Information Systems:
Technologies and Applications (PISTA ‘05) in Orlando, Florida.
M. Chary (*)
School of Public Administration, Florida Atlantic University, P.O. Box 824661, Pembroke Pines
FL 33082, USA
e-mail: [email protected]
182
M. Chary
exercise of power within large organizations are currently not well explored. This
paper attempts to fill that gap by conceptually analyzing those combined effects.
ICT has had the effect of shrinking an organization’s effective size. Because of
effective communication mechanisms—e-mail, dedicated lines, voice over IP,
broadband video conferencing, for example—that make irrelevant geographic
boundaries, employees in large organizations that employ this type of technology
are more reachable (Allen and Hauptman 1987). The time to communicate with
people has lessened considerably, thereby reducing the effective distance between
key decision-makers and the subordinates or implementers with whom they
communicate. Further, the number of such implementers or other significant people
to whom key decision-makers have access is also increased, owing to the use of
communications technology.
Globalization contributes to this effect of removing geographic boundaries by
centralizing control over certain functions (Farazmand 1999a, b; Finnegan and Ni
Longaigh 2002). In addition, while control is more centralized, the actual physical
numbers of peoples (employees or civil servants) being included or affected is
increasing. The cumulative effect of this is that the effective span of control of key
decision-makers in both private and public organizations is growing.
In other words, where some concentration of decision-making and exercise of
power already exists, globalization and ICT together have considerably heightened
the concentration of such power and decision-making authority within organizations. Following the conceptual framework that Farazmand uses in his 1999 work on
globalization, this paper qualitatively and conceptually analyzes the above-described
impact of ICT and globalization on organizational decision-making, with special
emphasis on the impact on public administration.
The importance of globalization to public administration
In his comprehensive 1999 work on “Globalization and Public Administration,”
Farazmand discusses the causes, consequences and impacts of globalization on
public administration. Farazmand writes, “Globalization is the result of several
factors, including surplus accumulation capital, the state, domestic constraints,
information technology, international institutions, and ideology” (Farazmand 1999a,
b, p 510). He posits that, while surplus accumulation has always been a key, defining
characteristic of capitalism, the difference in globalization is the rapidity with which
the accumulation is possible—and occurring.
Several mechanisms have made this possible, along with the “transworld mobility
of corporations in a spaceless and timeless global pace facilitated by the state”
(Farazmand 1999a, b, p 512). Some of these mechanisms include global production,
commodification, reorganization, money and financialization. The transworld
mobility he refers to above is not restricted to simply corporations of course. It is
also applicable to government operations and agencies. Ideology and the export
thereof are rather frightening aspects of globalization. And, of course, key among
these factors is technological innovation. As Farazmand points out, “Innovations in
information technology, communications and transportation systems, and the
Internet have contributed significantly to the globalization phenomenon” (p 514).
Public Organizations in the Age of Globalization and Technology
183
The consequences of globalization range from one extreme of innovation and
equalization to the other of exploitation and human misery. Farazmand also suggests that
globalization has resulted in some major changes in the nature of the state. World
organizations whose decisions, especially fiscal ones, are binding over nations create a
relationship that compromises national sovereignty. States are more interdependent
among one another—a process facilitated by ease of communication and information
sharing through the use of ICT. Another change that Farazmand highlights is that “all
states have gained the information-age advantages to process information for almost all
functions of governance and administration...” (p 515). States are also being forced by
globalization to become partners (sometimes unwilling ones) with multinational private
industry giants in search of the cheapest labor and the most efficient production
mechanism. Finally, states themselves are shifting their own paradigms to absorb
characteristics of those corporations with which they are partnering.
But above all of these consequences is a more disturbing one: it is that ICT and
globalization have conspired together to make the exploitation and degradation of
human beings easier, and with minimal constraints or limits. Farazmand points out
that in developing nations, “People in these nations do not and cannot exercise their
human and civil rights to determine their own policy preferences; their national and
human interests are sacrificed to the interests of the dominant powers” and “[l]ocal
people have lost control of their communities” (p 516).
Globalization is leading to a cultural and organizational structure whereby the
elites are clearly distinguished from the non-elites. The former hold the power over
the environment, the governments, and the institutions of the latter. “Globalization
empowers elite dominance under the new world order in which hegemonic theory
prevails along with the globalization of capital” (p 517).
Globalization and organizational power
Multinational corporations are defined to be “geographically dispersed and goaldisparate organizations that include their headquarters and the different national
subsidiaries” (Ghoshal and Bartlett 1990, 603). In analyzing how to extend this
definition of multinational corporations to include private and public organizations,
this paper uses Warren’s 1967 typology of inter-organizational relationships, which
define four ways in which members of an organizational field could relate: unitary,
federative, coalitional and social choice.
Two of the dimensions analyzed in this typology are the locus of authority and the
locus of inclusive decision-making. In a unitary organization, both the locus of authority
and the locus of inclusive decision-making lie at the top of the hierarchy. In the
federative organization, the locus of decision-making is still at the top of the hierarchy,
though subject to unit ratification. The locus of authority, however, moves toward the
unit level. In the coalitional and social-choice organizations, the loci of authority lie
exclusively in the units. In the coalitional organization, the locus of decision-making lie
in the interaction of units, while in social-choice organizations, it lies within units.
In Warren’s pre-globalization times, he wrote his typology to refer to private
industry firms exclusively. However, in this age of globalization, the definition of
multinational organization as a geographically dispersed organization can refer
184
M. Chary
equally to either public or private organizations. Of the Warren typology, the most
relevant type of the four to public administration is the federative organization. The
characteristics of this organization are that units might have disparate goals, but
strong formal structures exist for the purpose of fostering inclusive goals. In
addition, units might be structured more autonomously or through some division of
labor, but there is a moderately high level of collectivity and institutional identity. A
unitary interaction is characterized by a more homogeneous look and feel, while
coalitional and social-choice interactions are characterized by much more heterogeneous units. For these reasons, a federative structure of interaction is most applicable
to the public sector.
Following Warren’s typology, then, leads us to the conclusions that both the loci
of decision-making and that of authority—two of the critical pillars that define
power in an organization—become much more concentrated at the top of the
hierarchy. In other words, organizations that are affected by globalization, especially
public ones, see an increase in power at the top of the organizational hierarchy.
Another lens through which we can examine the exercise of power in global
organizations lies in organizational control. And “[a]t the heart of control is the
monitoring process,” as Baliga and Jaeger point out (1984, p 26). They go on to
summarize three types or organizational control: personal or direct, bureaucratic, or
control by socialization. Personal control systems become less feasible in a
globalized environment because of sheer volume. Control by socialization is an
important alternative, but it is primarily “characterized by a significant proportion of
expatriates in upper and middle management positions” (p 26). The purpose of that
type of placement is, of course, to use socialization with the central headquarterstype entity to ensure control. However, while this is clearly still an important effect
to be studied and understood, the existence of ICT in global organizations makes it
less necessary for control. That is to say, socialization is not necessarily a
precondition for control to occur when communications can achieve at least some
similar results in the realm of control.
Bureaucratic control “utilizes extensive sets of rules, regulations and procedures
that clearly limit subsidiary management’s role and authority” (p 26). Bureaucratic
control is, of course, designed to limit diffusion of power and to concentrate that power
centrally. This paper also argues that by its very reliance on rules and procedures,
rather than on the physical presence of managers, bureaucratic control is most easily
enforced in global organizations through the use of ICT. The combination of ICT and
the process of globalization, then, lends itself to aiding the concentration of power, as
also viewed through control and delegation mechanisms.
Information and communication technologies (ICT) and organizational power
Technology in general can, of course, be put to several uses within organizations,
whether public or private. Certainly, technology can be used in the actual delivery of
services or products or in constructing and implementing processes in-house that
simplify or enhance the delivery of those products and services. For the purposes of
understanding organizational power and decision-making, ease and accessibility of
communication is, of course, critical. Therefore, this particular paper focuses on the
Public Organizations in the Age of Globalization and Technology
185
subset of technology that is information and communications technology. This paper
extends Rosenberg’s definition of technology to mean ICT as those tools, devices or
knowledge that mediate between inputs and outputs of communication (Rosenberg
1972). This refers to the technology-based tools by which communication processes
are enhanced and made easier—e-mail, fax, videoconferencing, Internet Protocol
technologies (such as voice over IP or video over IP) and telecommunications (wired
and wireless).
Clearly, technological change has been a major driver in global change. James
notes that “technical change in general and information technology in particular are
now widely accepted as being important determinants of productivity and growth...”
(James 2001, 147). Technological change, especially in ICT, has not been static or
easy to describe. Sahal points out that technological change can be a result of variety
and chance as well as structure and patterns (1981). Tushman and Anderson adopt
more of a punctuated equilibrium approach to technology.They suggest that
“technology evolves through periods of incremental change punctuated by technological breakthroughs that either enhance or destroy the competence of firms in an industry.
These breakthroughs, or discontinuities, significantly increase both environmental
uncertainty and munificence” (1986, 439). Whether one subscribes to an infrastructure,
chaotic, structured or environmental theory of technological change, that technological
change and development has a serious impact on surrounding institutions, both formal
and informal, is an expected fact.
Finnegan and Ni Longaigh attack the problem of trying to understand how ICT
has affected organizational decision-making and exercise of power in the age of
globalization. They point out that “the forces of globalization are shaking the world’s
economies” and go on to write that “global survival is constrained by the ability of
the pan-national corporations for setting up an effective information-processing
network as well as leveraging new information technologies (ITs) for integrating
their highly complex activities” (2002, p 149). Their use of pan-national is directly
analogous to the “multinational” terminology described above.
What they point out that is that using ICT effectively is no longer optional. It is
now a matter of survival. Globalization has forced a complexity of environment that
can no longer be navigated without effective ICT. But, more than that, as we
discussed in the previous section, globalization has created the need for far-reaching
control and coordination. And ICT is providing the means for centrally exercising
those controls and coordination that might have existed on a local level before. “IT
has been hailed as the mechanism that will enable pan-national corporations to
rethink their traditional control and coordination mechanisms” (Finnegan and Ni
Longaigh 2002, 149).
ICT allows organizations, and especially organizational elites (whether public or
private) new avenues for expanding their own decision-making controls. Consider
the following factors: Through technologies such as e-mail or telecommunications or
IP networks, ICT enables rapid, reliable and concise data and information transfer
from any location or level to the organizational elites. ICT reduces, if not eliminates,
times and spatial dependence concerns. ICT reduces the need for people to travel for
joint decision-making. ICT controls information as a single pool, allowing certain
decision-makers to act as gatekeepers. ICT automates and synchronizes coordination
activities, especially across disparate locations. Finally, ICT enables the decisions of
186
M. Chary
a few key people to reach the entire organization quickly and effectively (Finnegan
and Ni Longaigh 2002).
The end result is that ICT allows a smaller group of powerful people more and
quicker access to multiple locations across the entire organization. They are able to
reach key people, gather information, and make, communicate and implement farreaching decisions. Information and communications technology solidifies decisionmaking power in the hands of those who already have it. Like globalization, ICT
also empowers elite dominance. What happens, then, to organizational power when
ICT combines with globalization?
The combined effects of globalization and ICT on organizational power
There is a considerable body of work on the effects of technology on globalization
(Madon 1997; James 2001, 2002; Pieterse 2002). The consensus is that information
and communications technology promotes globalization. This is beautifully summed
up by Madon, who notes, “Information technology is at the core of the current
process of economic globalization” (1997, p 227). While Madon is only referring to
economic globalization, an argument can certainly be made that technology in
general, and information technology in particular, is also at the core of political and
military globalization. There are a number of ways in which such an analysis of the
combined effects of ICT and globalization can be approached. Below is a summary
of two of them and a more detailed discussion of a third.
One is a transaction cost approach (James 2002). James explains this as follows:
“Though there are a number of mechanisms through which information technology
promotes globalization, what is common to these mechanisms is that they can all be
interpreted as a reduction in transaction costs between the trading partners” (James
2002, p 507). In other words, in James’s neo-institutional approach, transaction cost
efficiency drives this interaction between ICT and globalization where one promotes,
enables and enhances the other.
A second approach is one Pieterse adopts (2002). Although his particular piece
focuses on technology and globalization in conflicts, his approach is still generalizable.
He remarks, “Focusing on technology serves to shift the attention from globalization
events to the infrastructure of globalization, which is shaped by parallel changes in
technologies of work, war and politics” (Pieterse 2002, p 1). In Pieterse’s approach,
technology is the infrastructure upon which, or through which, globalization occurs.
As with any infrastructure, fast technology can then accelerate certain aspects of
globalization while slow or nonexistent technology can hinder it considerably.
A third way to view ICT is as a controlled instrument used by organizational and
sociopolitical elites in the process of globalization. For example, Parayil writes, “The
far-reaching advances in information and communications technologies (ICTs) in
tandem with the globalization of trade, investment, business regulation, production,
and consumption have signaled the rise of ‘informational capitalism’” (Parayil 2005,
p 41). Parayil defines informational capitalism as the portion of global economic
development that is led by ICTs—and he argues that this kind of capitalism leads to,
among other things, the paradox of a skewed wealth distribution. He writes that
“contrary to expectations that rising income per capita will tend to reduce wealth and
Public Organizations in the Age of Globalization and Technology
187
wage disparities, the distribution of income and wealth both between countries and
individuals has sharply skewed in the information age” (Parayil 2005, p 41). In other
words, where technology is an enabling instrument for globalization, the disparity
and inequity of wealth distribution has become even more pronounced. The “haves”
become the “have mores” and the “have-nots” have, if anything, even less.
A second characteristic, if not consequence, of informational capitalism is the
digital divide. For the purposes of this paper, the definition of digital divide that
Genus and Nor provide will be used: “The digital divide is a phenomenon associated
with disparities between groups and societies in the adoption and diffusion of
electronic information and communications technologies (ICTs) and e-business
practice” (2005, p 82). There is a clear difference in the adoption rate of information
technology between developing and developed countries (Genus and Nor 2005).
There is a considerable body of literature on the causes, consequences and potential
“bridges” for the digital divide. It is no longer a matter of dispute that the digital
divide exists. Developing countries demonstrate less access to and use of information
technology than developed countries.
The United Nations, among other bodies, has clearly articulated its view of the
importance of ICT as an instrument of globalization. Consider this statement by
Mark Malloch Brown, UNDP Administrator, in Tokyo in 2000:
[T]here really is no more critical question facing the developing world today
than how to face up to the new challenges and opportunities offered by the
Information Revolution, and particularly the phenomenon of the Internet. It is
now the two edged sword that is leading the process of globalization: wounding
those who don’t quickly enough grasp how to use it by leaving them ever
further behind, but providing unprecedented benefits for those with the courage
and willingness to grasp its potential to drive change. (Brown 2000, 3)
In other words, not only is ICT leading the process of globalization, it is also a
sharp instrument that can help those who use it or hinder those who do not—to the
point where they would be “even further behind.” That is, those on the wrong side of
the digital divide are not only not better off—they are actually worse off. Three years
later, in Geneva, Brown elaborated on how ICT would make people better (or worse)
globally:
ICT has a vital role to play in development, not just in accelerating economic
growth in local economies, but also in achieving the universally agreed Millennium
Development Goals, from halving extreme poverty, to halting the spread of HIV/
AIDS, to health and education. Already we are seeing how ICT can be harnessed to
improve access and expand basic services, cut transaction costs, improve
government efficiency and make development possible (Brown 2003, 2).
Brown goes on to suggest that one critical component to achieve this vision of
ICT use is the presence of good policy. Certainly, he is not the only one to suggest
that public policy and the digital divide are inextricably linked. Wallsten, for
example, explores whether policy has any bearing on the adoption of ICT or whether
it is purely a lack of physical equipment and training. Wallsten discovered that,
among other things, “Countries that regulate entry by Internet service providers have
fewer Internet hosts and users, while countries that regulate Internet pricing have
188
M. Chary
higher prices for Internet access” (Wallsten 2005, 501). If this is indeed so, then
public policy-makers—the sociopolitical elites—potentially have a great deal of
control over the use and diffusion of ICT, at least in developing countries.
In the context of the exercise of power, then, whether one views it from a political
economic perspective (Farazmand 1999a, b), a transaction cost perspective (James
2002), an infrastructure perspective (Pieterse 2002) or an instrumental perspective
(Parayil 2005; Genus and Nor 2005; Wallsten 2005), information and communications technology can exponentially enhance the concentration effects of globalization. Where power is concentrated in globalization through narrowly constricting the
loci of authority and decision-making or through the use of bureaucratic controls,
ICT facilitates and promotes those very processes.
By leveraging far-reaching control mechanisms, instant communication and rapid
and concise data gathering, organizational elites no longer have the need to delegate
truly powerful decisions. They can gather the information needed from any corner of
the globe easily and quickly, make their decisions themselves and communicate and
implement those decisions across the board. Their reach is now across borders,
whether geographic or technological. However, this paper does not mean to support
any sort of technological determinism or to imply that technology is the only
influence in this concentration effect of globalization. The paper argues that
technology is a major factor—and an important one—that accentuates the power
concentration effects inherent in globalization.
Conclusions
As globalization and information and communications technology force the pace of
economic change, especially upon developing countries, the need for public
technological infrastructure correspondingly rises. As Hee and Soo point out, such
growth of indigenous infrastructure “is only possible through changes in the role of
government” (Hee and Soo 1997, p 833). Governments must assume roles as
investors—either active or enabling ones—in building such technological infrastructure. And to do so, they have to understand, manipulate and perhaps integrate
with the decision-making elites.
In discussing the inexplicable coyness with which theorists have treated the study
of power as exercised by organizational elites, Farazmand dryly remarks, “People do not
downsize themselves; organizational elites do. Common people do not privatize
government functions; public organizational elites do” (Farazmand 1999a, b, p 322).
And indeed, the study of how power is exercised in large organizations, whether
public or private, is of critical importance. In the age of globalization and ICT,
however, this study becomes not only critical but also imperative. If globalization and
technology work together to concentrate power in the hands of a few elites, then these
elites have an enormous, disproportionate amount of control over the lives of many.
Globalization and technology have combined to help a relatively small group of
powerful elites become even more powerful. Further, where the decisions of these elites
are affecting millions of people, their governments and their access to basic human
needs, understanding how these organizational elites function becomes critical to any
attempt at effectiveness on the part of public administrators.
Public Organizations in the Age of Globalization and Technology
189
References
Allen, T. J., & Hauptman, O. 1987. The influences of communications technologies on organizational
structure. Communications Research, 14(5): 575–587.
Baliga, B. R., & Jaeger, A. 1984. Multinational corporations: Control systems and delegation issues.
Journal of International Business Studies, 15(2): 25–40.
Brown, M. M. 2000. The challenge of information and communications technology for development.
Retrieved May 2005 from: http://www.undp.org/dpa/statements/administ/2000/july/3july00.html.
Brown, M. M. 2003. Statement to world summit on the information society, Geneva, 11 December. Retrieved
May, 2005 from: http://www.undp.org/dpa/statements/administ/2003/december/11dec03.html.
Child, J. 1972. Strategies of control and organizational behavior. Administrative Science Quarterly, 18(1):
1–17 (March 1973).
Farazmand, A. 1999a. Globalization and public administration. Public Administration Review, 59(6): 509–522.
Farazmand, A. 1999b. The elite question: Toward a normative elite theory of organization. Administration
& Society, 31(3): 321–360.
Finnegan, P., & Ni Longaigh, S. 2002. Examining the effects of information technology on control and
coordination relationships: An exploratory study in subsidiaries of pan-national corporations. Journal
of Information Technology, 17: 149–163.
Genus, A., & Nor, M. A. M. 2005. Socialising the digital divide: Implications for ICTs and E-business
development. Journal of Electronic Commerce in Organizations, 3(2): 82–95.
Ghoshal, S., & Bartlett, C. 1990. The multinational corporation as an interorganizational network.
Academy of Management Review, 15(4): 603–625.
Hee, C. H., & Soo, K. J. 1997. Transition of the government role in research and development in
developing countries: R&D and human capital. International Journal of Technology Management, 13
(7–8): 833–852.
James, J. 2001. Information technology, cumulative causation and patterns of globalization in the third
world. Review of International Political Economy, 8(1): 147–162.
James, J. 2002. Informational technology, transaction costs and patterns of globalization in developing
countries. Review of Social Economy, 60(4): 507–519.
Madon, S. 1997. Information-based global economy and socioeconomic development: The case of
Bangalore. The Information Society, 13: 227–243.
Parayil, G. 2005. The digital divide and increasing returns: Contradictions of informational capitalism.
Information Society, 21(1): 41–51.
Pieterse, J. N. 2002. Globalization, kitsch and conflict: technologies of work, war and politics. Review of
International Political Economy, 9(1): 1–36.
Rosenberg, N. 1972. Technology and American economic growth. Armonk, NY: M.E. Sharpe.
Sahal, D. 1981. Patterns of technological innovations. Reading, MA: Addison-Wesley.
Tushman, M. L., & Anderson, P. 1986. Technological discontinutities and organizational environments.
Administrative Science Quarterly, 31: 439–465.
Wallsten, S. 2005. Regulation and internet use in developing countries. Economic Development and
Cultural Change, 53(2): 501–524.
Warren, R. L. 1967. The inter-organizational field as a focus for investigation. Administrative Science
Quarterly, 12: 396–419.
Meena Chary is a Ph. D. candidate in Public Administration at Florida Atlantic Universty in Boca Raton,
FL. Her research spans Organizational Theory and Public Policy subjects.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.