1. Chapter 9: Challenges of Global Information Systems
Management Information Systems, Fifth Edition

2. Objectives
Explain why multinational corporations must use global information systems
Provide elementary advice for designing Web sites for an international audience
Cite the cultural, legal, and other challenges to implementing international information systems
Management Information Systems, Fifth Edition

3. Multinational Organizations
Increasing number of corporations becoming multinational
Global information system: serves organizations in multiple countries
Used by multinational corporations
Overseas operations must abide by local laws
Management Information Systems, Fifth Edition

4. The Web and International Commerce
Web became important vehicle for B2B and B2C commerce
Ratio of non-English speakers to English speakers growing
Internet opens enormous global opportunities
Chinese market expected to be largest in future
Web offers opportunities to save on costs
Management Information Systems, Fifth Edition

5. The Web and International Commerce (continued)
Figure 9.1: Two-thirds of Internet users come from non-English-speaking countries
Management Information Systems, Fifth Edition

6. The Web and International Commerce (continued)
Manuals prepared with animation
Presented in many languages
Global businesses must be sensitive to audiences
Glocalization: design global sites to cater to local needs
McDonalds menu changes to appeal to local palates
Management Information Systems, Fifth Edition

7. The Web and International Commerce (continued)
Figure 9.2: Imperatives to heed when designing Web sites for an international audience
Management Information Systems, Fifth Edition

8. Think Globally, Act Locally
International companies “think globally, act locally”
Be sensitive to regional customs
Control must be decentralized
Strategic planning should be global
Can be followed with local flavor
Management Information Systems, Fifth Edition

9. Think Globally, Act Locally (continued)
Businesses that cater to international audiences must “glocalize” their Web sites
Management Information Systems, Fifth Edition

10. Think Globally, Act Locally (continued)
Businesses that cater to international audiences must “glocalize” their Web sites
Management Information Systems, Fifth Edition

11. Challenges of Global Information Systems
Global information systems face challenges
Technological barriers
Regulations and tariffs
Electronic payment mechanisms
Different language and culture
Economic and political considerations
Different measurement standards
Legal barriers
Management Information Systems, Fifth Edition

12. Technological Challenges
Not all countries have adequate information technology infrastructures
Unable to build international IS
Broadband communication lines needed
Can offer two versions of Websites to compensate for slower bandwidth
Management Information Systems, Fifth Edition

13. Technological Challenges (continued)
Language is technological challenge
Eight-bit bytes not sufficient for languages with large character sets
Unicode allows for 65,536 characters
Must coordinate with databases and applications
Telephone numbers different in different countries
Management Information Systems, Fifth Edition

14. Regulations and Tariffs
Countries have different importing regulations
Executives reluctant because of hassles
Comply with laws of destination countries
NextLinx help importers and exporters for Web commerce
Management Information Systems, Fifth Edition

15. Differences in Payment Mechanisms
E-commerce allows easy payment for online purchases
Credit cards preferred payment method in North America
Not all countries adopt this preference
Japanese avoid using credit cards
Management Information Systems, Fifth Edition

16. Language Differences
International parties must agree on common language
Data not transmittable internationally because information must be translated
English considered de facto international language
Largest companies translate Web sites into local languages
Management Information Systems, Fifth Edition

17. Cultural Differences Different countries vary
Tastes
Gestures
Treatment of people
Ethical issues
Conservative groups against “Americanization”
Web designers must be sensitive to cultural differences
Management Information Systems, Fifth Edition

18. Cultural Differences (continued)
Some nations are afraid that cross-border information flow promotes cultural imperialism
Management Information Systems, Fifth Edition

19. Conflicting Economic, Scientific, and Security Interests
Goal of corporate management
Seize large market share
Maximize organization profits
Scientific information important national resource
Occasionally interests conflict
Management Information Systems, Fifth Edition

20. Conflicting Economic, Scientific, and Security Interests (continued)
Weapons manufacturers have technical drawings
Valuable to both company and security of country
Governments may not allow exchange of weapon designs
PGP encryption application was opposed by government
Thought to compromise national security
Management Information Systems, Fifth Edition

21. Conflicting Economic, Scientific, and Security Interests (continued)
The U.S. government controls the export of encryption software
Management Information Systems, Fifth Edition

22. Political Challenges Information is power
Some countries oppose policy of free access to information
Gives other nations opportunity to control indigenous resources
Government may require software to be purchased within borders
Government may limit Internet use
Management Information Systems, Fifth Edition

23. Different Standards
Standards considered when integrating ISs internationally
Records may be incompatible
United States uses English system of weights and measures
Rest of world uses metric system
Management Information Systems, Fifth Edition

24. Different Standards (continued)
Communicating dates
Times
Temperatures
Addresses
United States uses month/day/year format
Rest of world uses day/month/year
Management Information Systems, Fifth Edition

25. Different Standards (continued)
Differences in standards pose a challenge to companies that wish to integrate their
information systems across national borders
Management Information Systems, Fifth Edition

26. Different Standards (continued)
Different standards very costly
NASA lost spacecraft because of measurement unit discrepancy
European Article Number (EAN): barcode that includes an extra number to identify country
Universal Product Code (UPC): American standard without last extra number
Uniform Code Council (UCC): promoted use of European standard
Management Information Systems, Fifth Edition

27. Different Standards (continued)
Companies must adapt ISs to de facto (formal) standards
Global Trade Item Numbers (GTINs): large enough to identify much larger set of items
Support global supply chains
Major push for using RFID tags
Management Information Systems, Fifth Edition

28. Legal Barriers Countries have different laws
Affects global business in general
Poses challenges
International transfer of data
Free speech
Location of legal proceedings
Management Information Systems, Fifth Edition

29. Legal Barriers (continued)
Privacy laws
Respect for privacy in international business is unresolved challenge
Majority of democratic nations protect individual privacy
Laws reflect difference in approach to issue of privacy
Management Information Systems, Fifth Edition

30. Legal Barriers (continued)
Data protection laws described by three criteria
Apply to private or public sector
Manual or automated data
Concern human beings or legal entities
US privacy laws
Both public and private
Mostly encompass manual and computerized systems
Management Information Systems, Fifth Edition

31. Legal Barriers (continued)
European Union practices may conflict with U.S. practices
Personal data collected only for specified purposes
Personal data must be given consent to be processed
Collecting organizations must identify themselves
People have right to object to processing of personal data
Management Information Systems, Fifth Edition

32. Legal Barriers (continued)
American companies busy collecting data for marketing
Discrepancy between European and American approaches prevents unrestricted flow of information
EU directive just a framework
Safe Harbor: arrangement for U.S. companies complying with EU directive to trade
Management Information Systems, Fifth Edition

33. Legal Barriers (continued)
Applicable law
Free speech laws different in other countries
Impacts what can or cannot be displayed online
Other laws
Gambling
Auctioning
Sale of alcohol and drugs
Management Information Systems, Fifth Edition

34. Different Time Zones
Different global regions require policies for work and information systems
Teleconferencing available most of day
Sometimes 24 hours per day
Allow employees from different time zones to discuss problems
Teams in support centers may work shifts
Management Information Systems, Fifth Edition

35. Different Time Zones (continued)
Different time zones must be considered by all organizations that do
business in multiple countries
Management Information Systems, Fifth Edition

36. Different Time Zones (continued)
Managers must be aware of incorrect time stamping
Systems at both locations can be designed to record local times of both locations
Or record single time (company headquarters)
Management Information Systems, Fifth Edition

37. Summary
Companies using Web for business must accommodate non-English speaking audiences
Companies must tailor to local preferences
Must be aware of cultural differences and payment preferences
Tariff and legal issues
Linguistic, cultural, economic, and political challenges must be addressed
Management Information Systems, Fifth Edition

38. Summary (continued)
Laws governing collection of data in United States and European Union are different
Incompatible data privacy laws
Restricted flow of personal data between United States and EU
Safe Harbor arrangement enables EU to do business with US
Management Information Systems, Fifth Edition

39. Summary (continued)
Old legal approach of territorial jurisdiction inadequate
Too much information communicated and business conducted on Internet
Free speech and consumer litigation of e-tailers brought need for legal reform for cyberspace
Management Information Systems, Fifth Edition