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Challenges of Information
Systems
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Multinational Organizations
Increasing number of corporations becomingmultinational
Global information system : servesorganizations in multiple countries Used by multinational corporations
Overseas operations must abide by local laws
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The Web and International Commerce
Web became important vehicle for B2B andB2C commerce
Ratio of non-English speakers to Englishspeakers growing
Internet opens enormous global opportunities
Chinese market expected to be largest infuture Web offers opportunities to save on costs
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The Web and International Commerce(continued)
Manuals prepared with animation/ Videos Presented in many languages
Global businesses must be sensitive toaudiences Glocalization : design global sites to cater to
local needs McDonalds menu changes to appeal to localpalates
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The Web and International Commerce(continued)
Plan Plan the site before you develop it Learn the preferences
Translate appropriately Be democratic Avoid cultural Imperialism
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Think Globally, Act Locally
Businesses that cater to internationalaudiences must glocalize their Web sites
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Think Globally, Act Locally
International companies think globally, actlocally
Be sensitive to regional customs Control must be decentralized Strategic planning should be global
Can be followed with local flavor
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What are the challenges for IS in theglobal arena?
Global information systems face challenges Technological barriers Regulations and tariffs Electronic payment mechanisms Different language and culture Economic and political considerations
Different measurement standards Legal barriers Different time zones
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Technological Challenges
Challenges Not all countries have adequate information
technology infrastructures Unable to build international IS Broadband communication lines needed
Solutions Can offer two versions of Websites to
compensate for slower bandwidth
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Technological Challenges Challenges
Language is technological challenge because eight-bitbytes not sufficient for languages with large character sets(e.g., Chinese, Korean, Japanese)
Fields such as telephone numbers present problems fordatabases in MNFs
Solutions Use double-byte characters (e.g., unicode allows for
65,536 characters) Fields for telephone numbers must be variable length toallow flexibility
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Regulations and Tariffs Challenges
Countries have different importing regulations Executives reluctant because of hassles Even with research there are fears that employees will not know how
to comply with laws of destination countries Solutions
There are programs such as NextLinx to help importers and exportersfor Web commerce
NextLinx is integrated within the firm s systems When an international order is placed the software determines
tariffs, cost of delivery, provides forms, and logistics It builds its applications around a comprehensive database of
international trade regulations that helps determine the mostefficient way of getting shipments from one country to another. Itssoftware also calculates tariffs and automates licensing andcompliance paperwork.
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Differences in Payment Mechanisms
Challenges E-commerce allows easy payment for online purchases Credit cards preferred payment method in North America
Not all countries adopt this preference Japanese avoid using credit cards
Solutions Web sites for international firms must have multiple
payment mechanisms Konbini example in Japan
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Language DifferencesChallenges
International parties must agree on common language Data not transmittable internationally because information must be
translated computers still cannot accurately translate on the fly English considered de facto international language
Solutions Largest companies translate Web sites into local languages
Web site design and translation should be done in overseasoffices although the server may be located in another country;lack of uniformity in languages
Multiple accounting systems in different languages
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Cultural DifferencesChallenges Different countries vary
Tastes Gestures Treatment of people
Ethical issues Conservative groups against Americanization
Solutions MNFs should employ local personnel to design their Web sites
or version of a Web site that will appeal to a particular country
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Cultural Differences (continued)
Some nations are afraid that cross-border information flow promotes cultural imperialism
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Conflicting Economic, Scientific, andSecurity Interests
Challenges Goal of corporate management
Seize large market share and maximize organization profits Goal of governments is to protect economic, scientific, and security
interests of its people
Occasionally interests conflict Drawings related to the design and manufacture of weapons Software packages Encryption software
Differences in treatment of trade secrets, patents, and copyright law
Solutions No easy ones Pressure from America for stronger copyright laws International trade groups
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Conflicting Economic, Scientific, andSecurity Interests (continued)
Weapons manufacturers have technicaldrawings Valuable to both company and security of country Governments may not allow exchange of weapon
designs PGP encryption application was opposed by
government Thought to compromise national security
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Conflicting Economic, Scientific, andSecurity Interests (continued)
The U.S. government controls the export of encryption software
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Political Challenges Challenge
Information is power and some countries oppose policy of free accessto information and limit use of Internet
Governments recognize that software is an economic resource and
require firms to purchase local software to build local industry;problems for firms trying to standardize
Solutions MNFs may have to cut some content from their sites to limit risks of
offending local government Limit use of employee blogs International human rights pressure may help in the long run
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Different Standards
Standards considered when integrating ISsinternationally
Records may be incompatible United States uses English system of weights
and measures Rest of world uses metric system
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Different Standards (continued)
Different standards Communicating dates
Times Temperatures Addresses
United States uses month/day/year format Rest of world uses day/month/year
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Different Standards (continued)
Differences in standards pose a challenge to companies that wish to integrate theirinformation systems across national borders
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Different Standards (continued)
Different standards very costly NASA lost spacecraft because of measurement unit
discrepancy European Article Number (EAN): barcode that
includes an extra number to identify country Universal Product Code (UPC): American standard
without last extra number
Uniform Code Council (UCC): promoted use of European standard
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Different Standards (continued)
Companies must adapt ISs to de facto (formal)standards Support global supply chains
Major push for using RFID tags
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Legal Barriers
Countries have different laws Affects global business in general Poses challenges
International transfer of data Free speech Location of legal proceedings
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Legal Barriers (continued)
Privacy laws Respect for privacy in international business is
unresolved challenge Majority of democratic nations protect individual
privacy Laws reflect difference in approach to issue of
privacy
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Legal Barriers (continued) Data protection laws described by three
criteria Apply to private or public sector
Manual or automated data Concern human beings or legal entities US privacy laws
Both public and private Mostly encompass manual and computerized
systems
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Legal Barriers (continued)
European Union practices may conflict withU.S. practices Personal data collected only for specified
purposes Personal data must be given consent to be
processed
Collecting organizations must identify themselves People have right to object to processing of
personal data
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Legal Barriers (continued) Challenge
American companies collect data for marketing purposes on alltheir customers, but differences between European andAmerican approaches prevent unrestricted flow of information
with respect to data collection on EU customers For example, EU agents monitor US companies that collect data
on EU citizens Solution
The EU has worked with the US Dept of Commerce to enable UScompanies who comply with EUs Directive on Data Privacy tocarry on trade without fear of violating the directive (SafeHarbor arrangement)
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Legal Barriers (continued) Challenge
Suppose you purchased an item from a site located inanother country, and the item has a defect or arrived afterthe time promised. Because your request forcompensation or other remedies has not been answered,you decide to sue. Where do you file the lawsuit?
Solution Country- of-origin principle whereby all legal matters are
confined to the country where the site operates Country-of-destination principle whereby the laws of the
country to which the site caters apply regarding dealingswith the site, regardless of the sites country (EUsapproach)
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Legal Barriers (continued)
Applicable law Free speech laws different in other countries Impacts what can or cannot be displayed online
Other laws Gambling Auctioning Sale of alcohol and drugs
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Different Time Zones
Different global regions require policies forwork and information systems
Teleconferencing available most of day Sometimes 24 hours per day Allow employees from different time zones to
discuss problems Teams in support centers may work shifts
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Different Time Zones (continued)
Different time zones must be considered by all organizations that dobusiness in multiple countries
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Different Time Zones (continued Challenge
MNFs must craft policies that work for employees, customers,and IS for all time zones
Time stamping Solutions
Teleconferencing systems can help; but huge time differencesrequire accommodations for employees in other time zones
Chat rooms and bulletin boards for asynchronouscommunication
Opportunity to work on projects 24 hours a day Enable customer support personnel to be available 24/7 without
requiring night shift work Standard policy for time stamping documents
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Different Time Zones (continued)
Managers must be aware of incorrect timestamping
Systems at both locations can be designed torecord local times of both locations
Or record single time (company headquarters)
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Summary
Companies using Web for business mustaccommodate non-English speaking audiences
Companies must tailor to local preferences Must be aware of cultural differences and
payment preferences Tariff and legal issues Linguistic, cultural, economic, and political
challenges must be addressed
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Summary (continued)
Laws governing collection of data in UnitedStates and European Union are different
Incompatible data privacy laws Restricted flow of personal data between
United States and EU Safe Harbor arrangement enables EU to do
business with US