CHAPTER 15 REVIEW: MANAGING GLOBAL SYSTEMS
The new world
order is
sweeping away many national corporations, national industries, and national economies controlled by domestic
politicians. Many
localized firms
will be replaced by fast-moving networked corporations that transcend national boundaries.
The growth of international trade has radically altered domestic economies around the globe. Now, the production and design
of many electronic products are parceled
out to a number of different countries.
An international information systems architecture consists of the
basic information systems required by organizations to coordinate worldwide
trade and
other activities. A business driver is a force in the environment to which businesses must respond and
that
influences the direction of the business.
The global business drivers can
be divided into two groups: general cultural
factors and
specific business factors.
The development
of global communications has created a global
village in a second sense: A
global culture created by television, the Internet, and other globally shared media such
as movies now
permits different cultures and peoples to develop common expectations about
right and wrong, desirable and
undesirable, heroic and cowardly.
The growth of inexpensive international communication and transportation has
created a
world culture with stable expectations or
norms. Political stability
and a growing global
knowledge base that is widely shared also contribute to the
world culture. These general factors create the
conditions for global markets, global production, coordination, distribution, and
global economies of scale.
There are four basic
international strategies: domestic exporter, multinational, franchiser, and transnational. In a transnational strategy, all factors of production are coordinated on a global scale. However, the choice of strategy is a function of the type of business and product.
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Domestic exporter : characterized by heavy centralization of corporate activities in the
home country of origin.
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Multinational : concentrates financial management and con- trol out of a central home base
while decentralizing production, sales, and marketing operations to units in
other countries.
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Franchiser : an interesting mix of old and new.
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Transnational : nearly all the value-adding activities are managed from
a global perspective without reference to national borders, optimizing sources of supply and demand wherever they appear, and taking advantage of any local competitive advantages.
There is a connection between firm strategy and information systems design. Transnational firms must develop networked system configurations and permit considerable decentralization of
development and operations. Franchisers almost
always duplicate systems across
many countries and
use centralized financial controls. Multinationals typically
rely on decentralized independence among
foreign units with
some
movement toward development of
networks. Domestic exporters typically are centralized in domestic headquarters with some
decentralized operations permitted.
Global information systems pose challenges because cultural, political, and
language diversity magnifies differences in organizational culture and business processes and encourages proliferation of disparate local information systems
that are difficult
to integrate. Typically, international systems have evolved without a
conscious plan. The
remedy is to define a small
subset of core
business processes and focus on building systems to support these processes. Tactically, managers will have to coopt widely dispersed foreign
units to participate in the development and operation of these systems, being careful to maintain overall control.
Implementing a global
system requires an implementation strategy
that considers both
business design and technology platforms. The main hardware and telecommunications issues are systems integration and connectivity. Global networks are extremely difficult to build and operate.
Firms can build their own global
networks or
they can create global networks based on the Internet
(intranets or virtual private networks). The
main software issues concern building
interfaces to existing systems and
selecting applications that can
work with
multiple cultural, language,
and organizational frameworks.
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