Development through internationalization is, at least logically, a rational response to the threat posed by foreign competitors. However, undertaking development through internationalization is not sufficient to achieve success. Profound changes are needed in leadership style, patterns of management process, organisational structure, the reporting system and the ERP systems used for management control. If this is not done, even the best internationalization strategy will fail. In this paper we consider only those changes regarding the reporting system which must be adopted so as to supply reporting by geographical segment. In international entities, reporting by geographical area is essential, both for management control and for the improved quality of external financial reporting. We know that creditors, investors and financial analysts evaluate information on the individual geographical segments, as well as that of the entity as a whole. Disclosing segment reporting by geographical area increases the confidence of the financial markets and, thus, should reduce the cost of equity and credit capital. In thispaper, after having discussed the concept of geographical segment, we discuss the advantages of space-time segmentation, highlighting the superiority of the managementapproach compared to the risk/reward approach, for the definition of operating segment by geographical areas (and by LOB).
Internationalising business and space-time segmentation in reporting by geographical area / Nicolò, D.. - (2009), pp. 1-8. (Intervento presentato al convegno VI Conference of the Italian Chapter of Association for Information Systems ITAIS 2009 tenutosi a Olbia nel Ottobre 2-3, 2009).
Internationalising business and space-time segmentation in reporting by geographical area
Nicolò D.
2009-01-01
Abstract
Development through internationalization is, at least logically, a rational response to the threat posed by foreign competitors. However, undertaking development through internationalization is not sufficient to achieve success. Profound changes are needed in leadership style, patterns of management process, organisational structure, the reporting system and the ERP systems used for management control. If this is not done, even the best internationalization strategy will fail. In this paper we consider only those changes regarding the reporting system which must be adopted so as to supply reporting by geographical segment. In international entities, reporting by geographical area is essential, both for management control and for the improved quality of external financial reporting. We know that creditors, investors and financial analysts evaluate information on the individual geographical segments, as well as that of the entity as a whole. Disclosing segment reporting by geographical area increases the confidence of the financial markets and, thus, should reduce the cost of equity and credit capital. In thispaper, after having discussed the concept of geographical segment, we discuss the advantages of space-time segmentation, highlighting the superiority of the managementapproach compared to the risk/reward approach, for the definition of operating segment by geographical areas (and by LOB).I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
