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- 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 2
- 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 3
- 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 4
- 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 5
- 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 6
- 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 7
- 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 8
- 9. Think Globally, Act Locally (continued) Businesses that cater to international audiences must “glocalize” their Web sites Management Information Systems, Fifth Edition 9
- 10. Think Globally, Act Locally (continued) Businesses that cater to international audiences must “glocalize” their Web sites Management Information Systems, Fifth Edition 10
- 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 11
- 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 12
- 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 13
- 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 14
- 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 15
- 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 16
- 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 17
- 18. Cultural Differences (continued) Some nations are afraid that cross-border information flow promotes cultural imperialism Management Information Systems, Fifth Edition 18
- 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 19
- 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 20
- 21. Conflicting Economic, Scientific, and Security Interests (continued) The U.S. government controls the export of encryption software Management Information Systems, Fifth Edition 21
- 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 22
- 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 23
- 24. Different Standards (continued) • Different standards – – – – Communicating dates Times Temperatures Addresses • United States uses month/day/year format • Rest of world uses day/month/year Management Information Systems, Fifth Edition 24
- 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 25
- 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 26
- 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 27
- 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 28
- 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 29
- 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 30
- 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 31
- 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 32
- 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 33
- 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 34
- 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 35
- 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 36
- 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 37
- 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 38
- 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 39