Global Information Systems and Technology •Question: What is Globalization? Globalization is a social process in which the constraints of geography on social and cultural arrangements recede and in which people become increasingly aware that they are receding (Waters, 1995) • What are constitutive parts of globalization? 1) material exchanges localize 2) political exchanges internationalize 3) symbolic exchanges globalize

Global Information Systems and Technology 1) Material exchanges tie social relationships to localities: local concentration of labor capital and raw materials. 2) Political exchanges tie relationships to territories. They are directed towards controlling populations, harnessing its resources, involved in international relations such as diplomacy and war. 3) Symbolic exchanges takes place anywhere at any time, require few resources, and are easily transported.

Global Information Systems and Technology What is transnationalization? 1) Intergovernmental relations at our international level are supplemented by relations between non-governmental groups (Roseneau, 1980) 2) Transnational relations involve extra-societal relationships between governments, governmental and non-governmental entities.

Global Information Systems and Technology Managing Across Borders: New Strategic Requirements • A transnational company seeks a balance between centralization and decentralization • A transnational has to balance production, R&D, and marketing efficiency with local differentiation needs. • A transnational’s strategic posture has to respond to the industry’s characteristics and its multidimensional tasks. • A transnational has to consider and often change its organizational culture • Consider the case studies Philips/Uruilwver?ITT

Global Information Systems and Technology Drivers of Globalization: 1) Micro electronic technologies which reduce distances by making possible rapid transfer of people, ideas, and resources. 2) Planetary problems beyond the scope of states to solve. 3) Emergence of subcollectives within national societies. 4) Expertise, education and impowerment of adult citizens that makes them less susceptible to state authority. Note: The Role of Technology

Global Information Systems and Technology • Capitalism is the vehicle for globalization because it creates - financial markets, commodities, contracts labor, property-based, and exchanges commodity over great distances. (Waters, 1995) • The Internet and Globalization The WWW software enables the user to search for information and order information and commodities without any consideration of space (Waters, 1995).

Global Information Systems and Technology • What are the problems in the chapter? Why are they important? How can they be solved? • Globalization forces new organizational structures new ways of coordination new ways of control new information requirements

• Multinational Decentralized Business Strategy Business Structure • Multinational Decentralized Focus on local markets Great independence HQ & Subsidiaries HQ monitors subsidiaries Philips/Unilever • Global • Centralized Federation Global scale manufacturing Little independence at subsidiaries Focus on standard world wide markets Manufacturing concentrated Information & products flow one-way Consumer electronics Auto industry Japan

• International • Coordinated Federation Business Strategy Business Structure • International • Coordinated Federation Knowledge & Expertise Greater independence transfer to subsidiaries Independent strategies, products, ideas • Transnational • Coordinated Federation Coordination of subsidiaries Respond to local preferences • Interorganizational • Coordinated Federation IOS EDJ Two or more organizations Pulp industry form cooperative agreement Airlines Companies still compete

Global Information Systems and Technology • Interorganizational Equity collaboration - joint venture Non-equity collaboration - licensing agreement • Coordination and Control Strategy The organizational structure seems to be easier to define then control strategy • How to manage these structures? Functional - Multidimensional - Matrix Mechanisms don’t work

Global Information Systems and Technology • Management Strategies From Multinational with decentralized control to Transnational with integrated networks of operations From individual companies to Interorganizational Designs with independent companies • Business Success depends on the proper mix of Strategy and structure and Coordination and control with Business Demands & Products

Global Information Systems and Technology GIS is distributed GIS cross national boundaries GIS composed of different technologies GIS responds to different regulative environments • We need to consider: Infrastructure - Singapore, USA, Europe Regulatory Environment - PTTs versus deregulation Transborder Data flow - impact companies, freedom to centralize/decentralize Standards - ISDN, SWIFT, EDIFACT

• How to match Business Strategy with Information Management Strategy… • Multinational • Decentralized Stand alone - databases & processes • Global • Centralized Centralized databases & processes • International & • Centralized Federation Interorganizational IOS & linked databases and processes • Transnational • Integrated Networks Shared databases & processes

Global Information Systems and Technology • What is an Information Systems Architecture? 1) Systems Development 2) Integrative of data and applications 3) Integrated corporate systems • Management Strategy Structure of the firm’s value chain informs the architecture of the IS • Systems Standards EDIFACT - EDI - SQL

Global Information Systems and Technology Cont’d Data Management Often different data bases cause problems.

Global Information Systems and Technology • Important Conclusions The GIS should be aligned with the business. Includes consideration of value chain Consider the following issues= Various organizational forms