Chapter 11 – Managing Global Systems.docx

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Information Technology Management
ITM 102
Sam Lampropoulos

Chapter 11 – Managing Global Systems 11.1 The growth of International Information System Developing an International Information System Architecture  International Information systems architecture consists of the basic information systems required by organizations to coordinate worldwide trade and other activities  Business Driver is a force in the environment to which businesses must respond and that influence the direction of the business o Negative factors create management challenges – factors that could scuttle the development of a global business The Global Environment: Business Drivers and Challenges  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  Specific Business Factors: Global Markets, Global production and operations, Global coordination, Global workforce, Global economies of scale  General Cultural factors: Global communication and transportation technologies, development of global culture, emergence of global social norms, political stability, global knowledge base  These general cultural factors leading toward internationalization result in specific business globalization factors that affect most industries  Growth creates global markets o Global consumers interested in consuming similar products that are culturally approved o Pressure toward global production and operation have called forth whole new capabilities for global coordination  Brazil, Russia, India and china account for more than a quarter of the world’s land area and more than 40% of the world’s population Business Challenges  Particularism is making judgment and taking action on the basis of narrow or personal characteristics in all forms (religious, nationalistic, ethnic etc.) o Reject the very concept of a shared global culture and rejects the penetration of domestic markets by foreign goods and services  Social expectations: Brand-name expectations, work hours  Political Laws: Transborder data and privacy laws, commercial regulations  Standards: Different Electronic Data Interchange (EDI), telecommunications standards  Reliability: Phone networks not uniformly reliable  Speed: Different data transfer speeds, many slower than Canada  Personnel: shortage of skilled consultants  Transborder data flow is defined as the movement of information across international boundaries in any form o European Union Data Protection Directive went into effect 1998 restricts the flow of any information to countries that do not meet strict European information laws of personal info State of the Art  Most companies have inherited patchwork international systems from the distant past, based on concepts of information processing developed in the 60s  Corporations in this situation increasingly face powerful competitive challenges in the marketplace from firms that have rationally designed truly international systems o Planning a system appropriate to firm’s global strategy o Structuring organization of systems and business units o Solving implementation issues o Choosing right technical platform 11.2 Organizing International Information Systems pg. 349 Global Strategies and Business Organization  Centralized: In the home country  Decentralized/Dispersed: To local foreign units  Coordinated: All units participate as equals  Domestic Exporter strategy is characterized by heavy centralization of corporate activities in the home country of origin o International sales are sometimes dispersed using agency agreements of subsidiaries  Multinational Strategy concentrates financial management and control out of a central home base while decentralizing production, sales and marketing operations o The products and services on sale in different countries are adapted to suit local market conditions  Franchisers interesting mix of old and now o Product is created, designed, financed and initially produced in their home country o Product-specific reasons, must rely heavily on foreign personnel o Simplest system structure: single system usually at the home base and then replicate it around the world  Transnational strategy all the value-adding activities are managed from global perspective without reference to national borders. Make advancements wherever they can  Giving international firms more flexibility
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