BIDGOLI
MIS
6
9
GLOBAL
INFORMATION
SYSTEMS
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accessible website, in whole or in part.
LEARNING OUTCOMES
1 Discuss the reasons for globalization and for
using global information systems, including
e-business and Internet growth
2 Describe global information systems and
their requirements and components
3 Explain the types of organizational structures
used with global information systems
4 Discuss obstacles to using global
information systems
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MIS6
| CH9
2
Why Go Global?
• Customers demand integrated worldwide
services
• Expansion of global markets is a major
factor in developing global information
systems
• Requires understanding customs, laws,
technological issues, and local business needs
and practices
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3
Why Go Global?
• Global products are becoming increasingly
important in international marketing efforts
• Manufacturers regionalize operations to make
use of advantages available in certain regions
• Global organizations reduce costs in
purchasing, manufacturing, and distribution
• Gain access to cheaper labor
• Sell products and services locally and
internationally
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E-Business
• Includes revenue generating transactions
and buying and selling goods and services
• Creates new opportunities for conducting
commercial activities
• Provides new opportunities for
intermediaries
• Small businesses can lower costs by
replacing internal networks with Internet
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Growth of the Internet
• Part of daily life in most parts of the world
• Businesses in the global market create
websites appealing to global customers
• Separate websites are created for each country
they operate in
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6
Global Information Systems (GIS)
• Facilitates communication between
headquarters and subsidiaries in other
countries
• Incorporates technologies and applications
found in a typical information system
• Gathers, stores, manipulates, and transmits
data across cultural and geographic boundaries
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Global Information Systems (GIS)
• Helps international companies:
• Increase control over its subsidiaries
• Better coordinate their activities and access new
global markets
• Core function: Strategic planning
• Includes control and coordination
dimensions
• Organizations may use different combinations of
the dimensions
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8
Global Information Systems (GIS)
Control
Coordination
Centralized architecture for data
Decentralized architecture for
data
Standardized definitions
Standardization within
departments
Standard formats for reports
Ability to communicate standards
to other departments
Defined behaviors for different
processes
Collaboration systems
Performance-tracking system
Technologies that support
informal communication and
socialization
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9
Components of a Global Information System
• Global database
• Challenges
- Designing and implementing global database
- Currency conversion
• Information-sharing technologies
• Companies can outsource or customize
technologies
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Components of a Global Information System
• Information system manager must:
- Determine the best communication media to
meet global performance and traffic needs
- Choose the best transmission technology for
the global network’s needs
- Consider the company’s objectives when
determining the network architecture
- Decide on the type of information-sharing
technology they will be using
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Components of a Global Information System
• Differences in language, business methods, and
transborder data flow complicates the use of
same software in other countries
- Transborder data flow (TDF): Restricts types
of data that can be captured and transmitted
in foreign countries
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12
Multinational Corporations (MNCs)
• Private organization with assets and
operations in at least one country other
than its home country
• Delivers products and services across
national borders
• Centrally managed from its headquarters
• Operating an MNC globally includes
political, foreign exchange, and market risks
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Requirements of Global Information Systems
• Understanding global risks of operating an
MNC is critical in international business
planning
• Classification of GIS based on managerial
support
• Operational
• Tactical
• Strategic
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Requirements of Global Information Systems
• GIS should collect, process, and generate
information in formats suitable for each
type of support
• Operational
- Global data access
- Consolidated global reporting
- Communication between headquarters and
subsidiaries
- Management of short-term foreign exchange
risks
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Requirements of Global Information Systems
• Strategic
- Strategic planning support
- Management of global tax risks
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16
Implementation of Global Information Systems
• Difficult to implement because:
• Countries differ in culture, politics, social and
economic infrastructures, and business methods
• International policies affect communication and
standardization processes
• Issues to be addressed by the organization
• Business opportunities should be identified in
the global marketplace
• Organization’s investment in a GIS should be
justified
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Implementation of Global Information Systems
• Personnel need to be screened for technical and
business expertise
• Migration to GIS needs to be coordinated
carefully
• To design a successful GIS, management has
to:
• Determine the kind of information global
companies need to share
• Take into account possible changes in customers’
needs and preferences and global competition
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18
Organizational Structures and Global Information
Systems
• Types of organizations
•
•
•
•
Multinational
Global
International
Transnational
• Organization’s structure determines the
architecture of its GIS
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Multinational Structure
• Production, sales, and marketing are
decentralized
• Financial management remains the parent
company’s responsibility
• Advantage
• Reduces the need for communication between
subsidiaries and headquarters
- Subsidiaries make decisions on their own
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Exhibit 9.1
A Multinational Structure
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Global Structure (Franchiser)
• Uses highly centralized information system
• Subsidiaries have less autonomy
• Rely on headquarters for all process, control
decisions and system design and
implementation
• Requires extensive communication network
• Integration needed to manage production,
marketing, and human resources is difficult
• Duplicate information systems have to be
developed
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Exhibit 9.2
A Global Structure
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International Structure
• Organization operates like a multinational
corporation
• Subsidiaries depend on headquarters for process
and production decisions
• Information systems personnel are regularly
exchanged among locations
• Encourages cooperative culture
• Centralization of subsidiaries’ GISs depend
on the extent to which they cooperate
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Exhibit 9.3
An International Structure
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Transnational Structure
• Parent company and subsidiaries work
together
• Design policies, procedures, and logistics for
delivering products and services to the right
market
• Headquarters is not set up in a particular
country
• Regional divisions share authority and
responsibility
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Transnational Structure
• Focuses on optimizing supply sources using
advantages available in subsidiary locations
• GIS requires high standardization and
uniformity for global efficiency
• Local responsiveness should be maintained
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Exhibit 9.4
Transnational structure
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Offshore Outsourcing
• Organization chooses an outsourcing firm in
another country that can provide services
and products
• Used for information technology tasks
• Attractive for all organizations due to:
•
•
•
•
Widespread availability of the Internet
Improved telecommunication systems
Reduced cost of communication
Increased bandwidth
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Offshore Outsourcing
• Supported by GIS by providing a global
network
• Used by all participants for coordinating
development activities
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Obstacles to Using Global Information Systems
Lack of standardization
Cultural differences
Diverse regulatory practices
Poor telecommunication infrastructures
Lack of skilled analysts and programmers
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Lack of Standardization
• Impedes the development of a cohesive GIS
that is capable of sharing information
resources across borders
• Too much standardization decreases an
organization’s flexibility in responding to
local preferences
• Time zones can pose difficulties
• Coordination and planning for variations in
local needs are critical for using a GIS
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32
Cultural Differences
• Differences in values, attitudes, and
behaviors
• Organizations need to look at changing content
or images on their websites suiting a particular
country
• Best addressed with education and training
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Diverse Regulatory Practices
• Applies to policies on business practices and
technological use
• Problem can be eliminated partly by
adopting open-source systems
• Involves jurisdiction issues regarding the
contents of a GIS
• Nature of intellectual property laws and
way of enforcement in different countries
varies
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Poor Telecommunication Infrastructures
• Companies must consider
telecommunication infrastructures of
subsidiary countries
• Differences in telecommunication systems
make consolidation difficult
• Web page content with many graphics and
animation should be avoided in countries with
slow or costly internet access
- Differences in standards can cause problems
as well
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35
Lack of Skilled Analysts and Programmers
• Nature of culture and differences in skills in
other countries must be considered when
forming teams
• Cultural and political differences affect
cooperative environment needed for global
integration
• Training and certification programs offered
through the Internet can reduce skills gap in
developing nations
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KEY TERMS
•
•
•
•
•
•
•
•
Global information system (GIS)
Global structure
International structure
Multinational corporations (MNCs)
Multinational structure
Offshore outsourcing
Transborder data flow (TDF)
Transnational structure
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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37
SUMMARY
• Expansion of global markets is a major
factor in developing global information
systems to handle integrated services
• GIS helps an international company
increase its control over its subsidiaries and
better coordinate activities, gains access to
new global markets
• Global database and information-sharing
technologies form the components of GIS
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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38
SUMMARY
• Types of organizations which do business
across national borders
•
•
•
•
Multinational organizations
Global organizations
International organizations
Transnational organizations
• Obstacles to GIS include:
• Lack of standardization, and skilled workforce
• Differences in culture, and regulatory practices
• Poor telecommunication infrastructures
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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39
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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