Chapter 9: Challenges of Global
Information Systems
Management Information Systems, Fifth
Edition
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
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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
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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
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The Web and International Commerce
(continued)
Figure 9.1: Two-thirds of Internet users come from non-English-speaking countries
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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
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The Web and International Commerce
(continued)
Figure 9.2: Imperatives to heed when designing Web sites for an international audience
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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
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Think Globally, Act Locally (continued)
Businesses that cater to international audiences must “glocalize” their Web sites
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Think Globally, Act Locally (continued)
Businesses that cater to international audiences must “glocalize” their Web sites
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Challenges of Global Information
Systems
• Global information systems face challenges
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Technological barriers
Regulations and tariffs
Electronic payment mechanisms
Different language and culture
Economic and political considerations
Different measurement standards
Legal barriers
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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
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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
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Regulations and Tariffs
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Countries have different importing regulations
Executives reluctant because of hassles
Comply with laws of destination countries
NextLinx help importers and exporters for Web
commerce
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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
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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
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Cultural Differences
• Different countries vary
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Tastes
Gestures
Treatment of people
Ethical issues
• Conservative groups against “Americanization”
• Web designers must be sensitive to cultural
differences
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Cultural Differences (continued)
Some nations are afraid that cross-border information flow promotes cultural imperialism
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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
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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
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Conflicting Economic, Scientific, and
Security Interests (continued)
The U.S. government controls the export of encryption software
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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
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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
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Different Standards (continued)
• Different standards
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Communicating dates
Times
Temperatures
Addresses
• United States uses month/day/year format
• Rest of world uses day/month/year
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Different Standards (continued)
Differences in standards pose a challenge to companies that wish to integrate their
information systems across national borders
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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
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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
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Legal Barriers
• Countries have different laws
– Affects global business in general
– Poses challenges
• International transfer of data
• Free speech
• Location of legal proceedings
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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
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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
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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
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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
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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
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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
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Different Time Zones (continued)
Different time zones must be considered by all organizations that do
business in multiple countries
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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)
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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
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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
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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
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Chapter 9: Challenges of Global Information Systems