Global Information Systems: Bidgoli

BIDGOLI
MIS 6
9
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
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part. MIS6 | CH9 2
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
Global Information Systems (GIS)
• 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
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
Components of a Global Information System
• 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
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
Exhibit 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 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 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 9.4 Transnational structure
Obstacles to Using Global Information Systems
Lack of standardization
Cultural differences
Diverse regulatory practices
Poor telecommunication infrastructures
Lack of skilled analysts and programmers
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

Global Information Systems: Bidgoli

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BIDGOLI

• Customers demand integrated worldwide

• Global products are becoming increasingly

• Includes revenue generating transactions

• Part of daily life in most parts of the world

• Facilitates communication between

• Helps international companies:

• Information system manager must:

• Production, sales, and marketing are

• Uses highly centralized information system

• Organization operates like a multinational

• Parent company and subsidiaries work

• Focuses on optimizing supply sources using

Diverse regulatory practices

Poor telecommunication infrastructures

Lack of skilled analysts and programmers

• Impedes the development of a cohesive GIS

• Differences in values, attitudes, and

• Applies to policies on business practices and

• Companies must consider

• Nature of culture and differences in skills in

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