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Exam Review (Course Summary)

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Carleton University
BUSI 1402
Vedmani Sharan

The World is Flat: Review Chapter 1: While I Was Sleeping Globalization 1.0 • When Columbus set sail, opening trade between the Old World and New World • About power of countries and muscle • Horse power, steam power, wind power and who could deploy it better Globalization 2.0 • 1800 - 2000 • Industrial Revolution • Power of multinational companies • Fibre Optics, Early WWW, telecommunications, falling transportation costs Globalization 3.0 • Power of individuals • Flat world platform • More diverse, anyone from anywhere can participate Chapter 2: The T en Forces That Flattened the World Flattener # 1: The Fall of the Wall-11/9/89 • The Berlin Wall was breached on November 9, 1989 • Ultimately liberated people of the Soviet Empire "Tipped the balance of power towards those advocating democratic, consensual, free-market oriented governance and away from those advocating authoritarian rule and centrally planned economies" • End of Capitalism and communism, Rise of democracy Communism: • A great system for making people equally poor • Burden of state ownership almost bankrupted countries • Trade controls The Fall of the Wall: • Helped flatten the alternatives to free- market capitalism • Out break of freedom stimulated other outbreaks (i.e.: Women's Freedom) • Adoption of common global standards (accounting, writing, etc) • Opened the way for emergence of the EU • Euro as common currency What it Lead To • Release of Apple II home computer in 1977 • Popularized personal computing • Eliminated the limit on information that people could have access to • Digitalizing things made everything more productive "The computer, fax machines, Windows, and dial up modems, the global telephone network all came together in the late 80's early 90's created a platform that started the Global information revolution" But… • The initial platform was constrained by certain limits, missing infrastructure • Data was accumulating in computers, but there was no way to share it The Downside… • Osama Bin Laden realized that after the USA had huge presence in his native land • He did not like it • The seeds of 9/11 were being sown Flattener # 2: When the Web Went Around and Netscape Went Public- 8/9/95 • The PC- Windows era had reached a plateau by the mid 90's • Breakthrough in connectivity was a major flattener - Emergence of Internet - WWW - Comercial Web browser The Internet and the WWW Internet- Made from computer and cables (connections = cables) WWW- An abstract space of information (connections= hypertext links) • First website ever: Marc Andressen 1991 • The WWW brought the internet alive - anyone could use it not just geeks • "Berner-Lee's World Wide Web" - Nonproprietary and free - Emergence of HTML, URL, HTTP , - Growth of users was exponential Netscape and the First Commercial Browser • Created by Netscape (small startup company) • First commercial browser: December 1994 • Went public on Aug 9, 1995 • Made internet accessible to anyone • Originally named Mosaic, renamed Netscape Communications • "If you can afford to pay for it please do so. If not, use it anyways." Windows 95 • 15 days after Netscape • Unlike previous versions, came equipped with built-in internet support • Sparked the internet boom • Introduction of Windows Explorer - eventually led to the fall of Netscape Open Protocols • Scientists developed series of mathematical based protocols (Html, FTP , SMTP , SSL, etc) • Idea was to create a standard • Microsoft began to do the same with Windows 95 by building it with Windows Explorer: it's own browser The Dot Com Bubble • The boom of the internet created crazy demand for web services and fibre optic cable • Huge over investment in fibre optic cable companies that laid massive amounts of F.O. cable • But people over estimated the growth thinking it would be infinitely growing- a lot of companies invested themselves out of business Now.. • Over investment in fibre optic cable is to our advantage now • As the switches at the ends keep being improved by scientists, the capacity of already installed cable keeps growing • Like a global highway that first had a speed limit of 50 km/h and now is at 150 km/h Flattener # 3: Work Flow Software • Mid to late 90's • The quiet revolution of the rise and integration of Work Flow Software • Work started to flow within and between companies and countries faster than ever • Enabled people to collaborate, design and display data previously managed manually, from different places • Departments of big firms were now integrated Before • In the 80's and 90's companies did not all have the same software and hardware • The accounting department had one that worked well for them, and the sales department had another one • Within departments companies became more efficient, but departments there was an issue Mid 90's • The standardization of HTML, SMTP etc allowed for the sharing of information regardless of one's computer system • Once applications started to connect to everyone else's work could not only flow, but be sent to all four corners of the world • With a standard created, companies began to focus on value added (Ex: E-bay and Paypal) "Software companies stopped competing over who got to control the fire hydrants nozzles and focused on who could make better hoses and fire trucks" Moving Forward • To continue moving forward more standards need to be established • The more there are the more productive our whole digital ecosystems become by allowing people to focus on value added • Standards in software end up creating standards for business practices, e- commerce, etc. • Creates a global platform for collaboration "Standards don't stop innovation, they clear away the extraneous stuff so you can focus on what really matters" FLATTENER # 1- 3 The first three flatteners were the emergence of a standardized global platform that allowed the following 6 flatteners to happen Flattener # 4: Uploading Three Kinds: - Community developed software - Blogging / podcasting - Wikis • New found power of individuals and communities to send out their products and ideas for free world wide • One of the most revolutionary forms of collaboration Community Developed Software • Notion that companies should make available the source code that makes a piece of software online • This is so that anyone that has something to contribute to its amelioration, can • Engineers and programmers must conform to licence rules of the particular open source community • Two sides to the uses of community developed software: Intellectual Commons Community- Anyone can use the source code as a foundation to future commercial products as long as they acknowledge the original producer Free Software Community- Some argue that if you are building off other people's ideas you should make your contribution on it free • Ex: Apache • Many of the people involved don't care about monetary compensation "..They want to get as many people as possible writing, improving and distributing software for free out of the conviction that it will empower everyone…" • Has become a challenge for big global software developers like Microsoft that typically charged for new products • Despite this you need "capitalism to drive innovation" and the open source community has its limitations due to the fact that they lack capital to invest in real R&D So… in conclusion Uploading has allowed for individuals to compete with the big software producers and now multiple business models will be available, providing consumers with the traditional software for sale and free software Community Developed Answers • Many other businesses besides software developers are now using the innovative powers of their communities • They can tap into the minds of people all over the world to solve their problems - Ie: Goldcorp used the web to create a contest for geologists world wide to help the exploration company find new sites - Its sped up exploration process by almost 3 years - Furthermore the winners received great exposure for their company • Media companies are using people's pictures and videos taken during events to broadcast to the world - Ex: a person who takes a video at the Boston Marathon bombing is uploaded on CBC so that CBC users can see the real life action • Reviews and Recommendation Blogs created by communities are having huge impact on consumers buying habits - Urban spoon - Rate my prof • Podcasts and Blogs allow people to become authors and share their views and interests with the world Wikipedia: Community- Uploaded Content • Started by Jimmy Whales • Has expanded into: "Wikiquote", 'Wikispecies", "Wikinews" • Editorial policy of maintaining neutral point of view The Downside: - People without expertise or misinformed people can post info - People with malicious intentions can affect the validity of content making it biased How Far Can Uploading Go? • People want interaction and participation • Companies that incorporate this into their software, their systems, and their encyclopedias will be the most successful Flattener # 5: Outsourcing India • The competition within Indian is INSANE - Harder to get into IIT than MIT - Has mined the brains of its people in science, computer science, engineering and medicine • India unfortunately has no resources or infrastructure - So many qualified people rot away their potential as scientists driving a cab to survive Advantages of Outsourcing • Companies are saving money by sending their "back room" work abroad to places like India • Cost abroad is exponentially lower • The time differences between two countries on opposite hemispheres allows for 24/7 work "Companies found that they could go to MIT and found four incredibly smart Chinese engineers who were ready to go back to Chin and work for them from there for the same amount that it would cost to hire one in America" The American- Indian Relationship • The Y2K bug started the relationship "Any service, call centre, business support operation or knowledge work that could be digitized, could be sourced globally to the cheapest, smartest most efficient provider" The Dot-Com Bubble Burst and Indian and Globalization • India benefited not only from the dot- com boom but from the dot come burts • The boom laid the cable that connected India to the world • This made it virtually free for America and the rest of the world to outsource knowledge work through fibre optic cable to India after the burst "When the dot-com bubble imploded , rather than implode globalization, it turbocharged it" Flattener # 6: Offshoring Offshoring- when a company takes one of its factories and move it entirely abroad (Outsourcing = taking some specific but limited function abroad) China and the WTO • In 1977 when China opened its tightly closed economy, companies saw it as an incredible market for exports • China didn't have trade rules which posed a lot of trade/ investment barriers for Westerners trying to penetrate its market • The bureaucratic and cultural differences didn't help new venturers either • BUT once china joined the WTO companies felt protected by international law and business standards which greatly enhanced China's attractiveness when it came to manufacturing • Offshoring has saved the USA MILLIONS of dollars China and The Flat World • "China is a threat, a customer, and an opportunity" • The more attractive China makes itself to foreign investors, the more other underdeveloped and developing countries have to compete to get attention • This has promoted them to offer similar incentives to foreigners and now countries like Thailand, mexico , Malaysia are competing with China. • Countries are trying to offer companies the best tax breaks, education incentives, subsidies, and top notch cheap labour to encourage offshoring within their borders • Businesses now need a completely new business model China's Future • China's long term strategy is to outrace the USA and EU countries • They are putting ALOT of focus on training their young people • The surge of new engineers, scientists, mathematicians, etc. will ensure that China no longer thrives only through manufacturing but through design and innovation • Over time adherence to WTO standards will make China flatter and flatter - to do this though it will need to get over a lot of political bumps and establish a more codified rule of law "If you are in the US and don't figure out how to get into China, in 10-15 yrs you will not be a global leader" Counter Arguments Shut Down • Those against offshoring say that its is a lose-lose situation for American workers • Offshoring actually promotes exports to the home country • ALSO little attention is given to all the offshoring coming INTO america every year (which creates new jobs) • Reducing costs within companies for manufacturing allows these companies to focus on innovation and grow more "Foreigners want access to American markets just like we want access to theirs" Flattener # 7: Supply-Chaining Supply Chain- Method of collaborating horizontally among suppliers, retailers and customers to create value. "delivery, sorting , packing, distribution, buying, manufacturing, reordering, delivery, sorting, packing…." Walmart • Biggest retail company in the world and it doesn't produce a single thing Supply Chains • Two basic challenges to supply chains 1- Global Optimization - It doesn't matter if you can get a part for cheaper in one place - The total cost of delivering all of your parts on time from all over the world to your factories or stores has to be lower than your competitors 2 -Coordinating Disruption-Prone Supply With Hard-to-Predict Demand - You don't want to buy too much of a good and end up with it sitting on a shelf - You may also lose a customer for life if they go to you and don't find what they want, in the colour they want and the size they need - Forecasting demand becomes more and more difficult as innovation happens so much faster How Companies Face These Challenges • Replacing inventory with Information- advance info tech • When an item is bought, manufacturer is informed that its replace
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