Management Information Systems By Effy Oz & Andy Jones Chapter 8: Challenges of Global Information Systems www. cengage. co. uk/oz Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Multinational organisations • Increasing number of corporations becoming multinational • Global information system: serves organisations in multiple countries – Used by multinational corporations • Overseas operations must abide by local laws Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
The Web and International Commerce • Web became important vehicle for B 2 B and B 2 C 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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
The Web and International Commerce (continued) Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 • Mc. Donalds menu changes to appeal to local palates Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
The Web and International Commerce (continued) Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 flavour Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Think Globally, Act Locally (continued) Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Think Globally, Act Locally (continued) Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Regulations and Tariffs • • Countries have different importing regulations Executives reluctant because of hassles Comply with laws of destination countries Next. Linx help importers and exporters for Web commerce Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Cultural Differences • Different countries vary – Tastes – Gestures – Treatment of people – Ethical issues • Conservative groups against “Americanization” • Web designers must be sensitive to cultural differences Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Conflicting Economic, Scientific, and Security Interests • Goal of corporate management – Seize large market share – Maximize organisation profits • Scientific information important national resource • Occasionally interests conflict Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 (Pretty Good Privacy) encryption application was opposed by government – Thought to compromise national security Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Different Standards (continued) • Different standards – Communicating dates – Times – Temperatures – Addresses • United States uses month/day/year format • Rest of world uses day/month/year Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Legal Barriers • Countries have different laws – Affects global business in general – Poses challenges • International transfer of data • Free speech • Location of legal proceedings Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 organisations must identify themselves – People have right to object to processing of personal data Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 centres may work shifts Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
Different Time Zones (continued) Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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) Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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 Use with Management Information Systems 1 e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning
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