MIS 5 GLOBAL INFORMATION SYSTEMS 9 BIDGOLI Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to.

MIS 5

GLOBAL INFORMATION SYSTEMS

9

BIDGOLI

Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

LEARNING OUTCOMES

2Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS5 | CH9

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


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


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


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


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


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



• 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



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


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



• 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



• 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


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


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



• 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



• Strategic- Strategic planning support- Management of global tax risks


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


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


Organizational Structures and Global Information Systems

• Types of organizations • Multinational• Global• International• Transnational

• Organization’s structure determines the architecture of its GIS


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

21Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Exhibit

MIS5 | CH9

9.1 A Multinational Structure


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


Exhibit

MIS5 | CH9

9.2 A Global Structure


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


Exhibit

MIS5 | CH9

9.3 An International Structure


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


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


Exhibit

MIS5 | CH9

9.4 Transnational structure


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


Offshore Outsourcing

• Supported by GIS by providing a global network • Used by all participants for coordinating

development activities


Obstacles to Using Global Information Systems


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


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


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


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


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

KEY TERMS


• Global information system (GIS)• Global structure• International structure• Multinational corporations (MNCs)• Multinational structure• Offshore outsourcing• Transborder data flow (TDF)• Transnational structure

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

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


MIS 5 GLOBAL INFORMATION SYSTEMS 9 BIDGOLI Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to.

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