The Evolution of a Global Cash Management System

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Global competition is a general trend, and new types of organizations are emerging to service international markets.1 Companies are coordinating manufacturing, distribution, and marketing strategies on a global scale. Information systems are a key part of these globalization strategies because computer networks move large volumes of data across great distances almost instantaneously, thereby negating the importance of geographic location.2 Therefore managers on different continents can share data and applications easily and quickly. European manufacturing and sales data can be easily collated with data from Japan. Similarly, a manager using a terminal in Europe can access a mainframe computer in the United States. These trends present new opportunities for managers to redesign their organizations and also their relationships with trading partners.

In this paper, we trace the changing role of treasury management at Motorola over a period of sixteen years. We present the organizational, strategic, and information technology shifts. In the context of manufacturing and marketing trends such as increased integration between organizations and just-in-time product flows, cash management is an important business process because of the potential benefits and inevitable outcome of cash flows moving to align with product flows.3 Our research methodology is based on Eisenhardt’s framework and focuses on the importance of theory development from case research.4 This case study of Motorola is part of a larger study on competition and IOSs in business markets.

Treasury Management at Motorola

Motorola is one of the world’s leading providers of wireless communications, semiconductors, and advanced electronic systems and services. Separate Motorola companies act autonomously and trade with each other, often across national boundaries. An internal information systems infrastructure that enables data to be shared easily between Motorola companies has been in place since 1976. It is used in logistics and manufacturing management to reduce costs and improve the quality of manufacturing operations in a continuous improvement program.

In parallel with these developments, the treasury management function has evolved to manage nearly $5 billion of intracompany payments. The company has implemented an internal “currency netting” system and reorganized the treasury function to take control from local management and centralize all foreign currency payments. The company now uses the system, once primarily for worldwide inter-Motorola payments, as a vehicle to pay suppliers across borders.

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