MIS 2000 Globalization and Information Systems Updated Nov. 2012.
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Transcript of MIS 2000 Globalization and Information Systems Updated Nov. 2012.
MIS 2000
Globalization and Information Systems
Updated Nov. 2012
MIS 2000
Globalization and Information Systems
Updated Nov. 2012
OutlineOutline
• Globalization (concept, pros & cons)
• Trans-National Corporation (TNC)
• Role of information systems and computer networks in TNC
• Summary
• NOTE: This topic relates to previous topics, such as supply chain,
e-commerce, and all IS types studied.
Dr. Bob Travica Globalization and IS
Globalization ConceptGlobalization Concept
• Globalization is the process of reducing economic and other boundaries between countries.*
• Examples of economic boundaries
– closing of markets (consumer, supply) by legislation, high import taxes, or complicated import procedures.
– making it impossible or hard for foreign enterprises to run production or sales operations in a given country
– preventing entry to foreign labor.
• Globalization started with economic changes in China and political/economic changes in Europe, but attempts at global business go back in the far past.**
Dr. Bob Travica Globalization and IS
Globalization Pros & ConsGlobalization Pros & Cons
• Pros/Cons depend on the standpoint.
• Economies in transition (China, India, East Europe) have experience growth (especially China) – more jobs, purchasing power increase, more tax money. But local business faces tough competition, and there is a sharper differentiation between haves and have-nots.
• Parts of the world not included in globalization (Africa).
• 50% of world lives on less than $2/day.
• Developed economies: Corporations benefit from offshore operations. But labor faces a job loss and reduced wages (absolutely, or pressure to do more work for the same wage); the middle class shrinks.
Dr. Bob Travica Globalization and IS
More…
• Sources of informing and learning are globally accessible via Internet. But there is still a large gap between more and less developed countries in terms of the development level of information technologies and systems. This gap is called digital divide.
http://globaladvances.com/blog/wp-content/uploads/2009/02/africa2008top.jpg
Dr. Bob Travica Globalization and IS
Globalization Pros & Cons – Digital DivideGlobalization Pros & Cons – Digital Divide
IS and Computer Networks in GlobalizationIS and Computer Networks in Globalization
Dr. Bob Travica Globalization and IS
Production (US)
Sales(Eur, Aus, NAm, LAm)
Production (China)
Suppliers(Ch, Can, Bra)*
• All these operations belong to one firm.
• IS and computer networks are necessary for doing business globally – the key enablers of global production, supply and sales processes.
• The key enabler of this highly dispersed organization is IS and computer networks (private, Internet).
Transnational Corporation (TNC)Transnational Corporation (TNC)
• Definition: TNC is a company that performs the sourcing, production, and sales processes globally.
• The global capabilities of TNC rest on intensive use of advanced information systems and computer networks.*
• TNC is a key maker of globalization.
• TNC is the key player in global economy (presence, revenues, impact).
• TNC operates in various industries (manufacturing, finance, drugs, consulting, software, news media, manufacturing)*
Dr. Bob Travica Globalization and IS
More…
Dr. Bob Travica Globalization and IS
Global Producing
Global Sourcing
Glo
bal
Sellin
g IS & Computer Networks
To other firms
To consumers
Of raw materials, product parts, labour, capital
Where row materials,labour is cheaper, taxes lower
Special capabilities characterize TNC:
•Global Efficiency: TNC treats world as a single market, works everywhere with the same efficiency.
•Local Responsiveness: TNC is responsive to local markets needs, although its planning and production is at many locations.
•Superior Knowledge: TNC combines centralized and decentralized development of knowledge, shares it across locations, and adapts it to local needs.
Living in TNC-driven Economy Living in TNC-driven Economy
• To survive and prosper in the global economy, a company needs to be able to do business or compete with TNC. This provides access to global markets.
• To engage with a TNC, a firm must have a proper technological capability (various modern information systems and computer networking capability).
Dr. Bob Travica Globalization and IS
SummarySummary
Dr. Bob Travica Globalization and IS
• Globalization is the process of reducing economic and other barriers between nation-states.
• Globalization has been uneven, bringing differing benefits and costs to different players. Digital divide still is significant.
• TNC is a company that performs the sourcing, production, and sales processes globally. It depends crucially on advanced IS and computer nets.
• TNC is a key globalization maker and player with superior capabilities of global efficiency, local market responsiveness, and knowledge development and sharing.