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The nature of Globalization, Business and IT

The nature of Globalization, Business and IT.

nadine-brown
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The nature of Globalization, Business and IT

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  1. The nature of Globalization, Business and IT Technology and globalization go hand-in-hand. Globalization unleashes technology, which in turn drives firms to plan production and sales on a global basis. Technology changes the work we do and in nearly all cases, the jobs created by it demand more education and training. It also changes the way business operates by transforming relationships between suppliers, producers, retailers and customers. (Ross, 1993, p. xii) Dr. Paolo R. Cerotti ISYS 2394 Session 2 – Semester 2 2014

  2. Reasons Why You Might Like this class 1. Multi-culture ((Technology/Strategy/Business/Organisations) 2. Some readings more than a year old (sometimes really good ideas last more than a year) • Course is continually evolving • Considerable work load (But consistent with credits) • High expectations • Pictures of staff with famous people • Collaborative learning environment • No Exam

  3. Paul’s Teaching Assignments: RMIT University - Melbourne Bentley University – Boston University of Maryland – Washington DC Old Dominion University – Norfolk, Virginia KAIST – Korea Seoul National University - Korea Fudan University – China Shanghai Institute of Foreign Trade - China Trisakti University – Indonesia SIM – Singapore HK Polytechnic – Hong Kong Universita’ D’Urbino - Italy

  4. Paul’s Research • Globalization • Globalization and IT • International Business • Social Value Creation • Social Technologies • Luxury Business

  5. Paul’s Awards • 2013 – Pro-Vice Chancellor’s Award for Teaching Excellence in ISYS 2394 andBUSM 2112/ • 2013 – Dean Teaching and Learning Award – Peer Partnership • 2012 – Dean Teaching and Learning Award – Peer Partnership Excellence • 2012 – Pro- Vice Chancellor’s Award for Teaching Excellence • 2011 – Pro- Vice Chancellor’s Award for Teaching Excellence • 2010 – Vice Chancellor’s Award for Teaching Excellence – Internationalisation – For Leveraging professional expertise and networks to integrate intercultural and international contexts in curriculum and learning opportunities to produce globally competent graduates. • 2007 – Australian Learning and Teaching National Citation Award - for Outstanding Contributions to Student Learning in area of internationalisation of the curriculum. • 2007 – RMIT University Teaching Award - for outstanding contribution to Teaching in the category of Team Teaching. • 2007 – RMIT University Vice Chancellor’s Award – 2007 Australian Learning and Teaching Award Winner – RMIT University Award Winner – ALT Award for Australian University Teaching in the category of Outstanding Contribution to Student Learning

  6. Paul’s Experiences • Grants – In excess of $275,00.00 • Hospitality\Fashion industry – Italy and Australia • Education industry – Asia, North America and Europe • Travelling since 6 years of age and still learning and still doing homework.

  7. Where are we now? • Global activity strengthened during the second half of 2013, as anticipated in the October 2013 World Economic Outlook (WEO). Activity is expected to improve further in 2014–15, largely on account of recovery in the advanced economies. Global growth is now projected to be slightly higher in 2014, at around 3.7 percent, rising to 3.9 percent in 2015, a broadly unchanged outlook from the October 2013 WEO. • United States is expected to be 2.8 percent in 2014, up from 1.9 percent in 2013. Following upward surprises to inventories in the second half of 2013, the pickup in 2014 will be carried by final domestic demand. • The euro area is turning the corner from recession to recovery. Growth is projected to strengthen to 1 percent in 2014 and 1.4 percent in 2015, but the recovery will be uneven. • United Kingdom has been buoyed by easier credit conditions and increased confidence. Growth is expected to average 2¼ percent in 2014–15, but economic slack will remain high. • In Japan, growth is now expected to slow more gradually compared with October 2013 WEOprojections.

  8. Where are we now? • Overall, growth in emerging market and developing economies is expected to increase to 5.1 percentin 2014 and to 5.4 percent in 2015. Growth in China rebounded strongly in the second half of 2013, due largely to an acceleration in investment. • Growth in India picked up after a favorable monsoon season and higher export growth and is expected to firm further on stronger structural policies supporting investment.

  9. What has changed in business since we went Global? • Let’s develop a list • Are these changes universal? • What/Who is driving these changes?

  10. The Internet – the panacea for all of the troubles in the world? • Is the internet the great revolutionary tool of the 2ist century? • Or …is it just a reformation of business process using IT? • A diagram showing the degree to which different management functions must assume a global or local role. •  (Diagram by Prof. Eleanor Westney. Maps courtesy of www.theodora.com/maps used with permission.)

  11. Let’s talk about the triumvirateBusiness/Globalization/I.T. • Health • Education • Tourism • Banking • Government • Logistics • Food • Manufacturing • Entertainment • Services

  12. Trends • What are the new business trends in 2014? • Does I.T. give value to business? • Value chain model. (Diagram by Prof. Stuart Madnick.)

  13. Who is calling for changes?Who is calling for trends? • Global Business • World Economic Forum • World Trade Organization • World Bank • United Nations • International Monetary Fund • Universities • Global Customers • Are YOU???

  14. Definitions • Globalization (or globalization[1]), is an umbrella term for a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence and interaction between people, communities, countries and companies in disparate locations all over the world. • “There are 152,921 books in English in print on the subject of globalization. Add to these hundreds in French, German, Russian, Arabic, Hindi, Chinese, Spanish and other languages. (Amazon.com Search April 2013)

  15. Definitions • The term "globalization" is used to refer to these collective changes as a process, or else as the cause of (typically) negative and turbulent change. The distinct uses include: • * Economically and socially positive: As an engine of commerce; one which brings an increased standard of living — prosperity to developing countries and further wealth to First World and Third World countries. This view claims that economic prosperity brings about social prosperity. • * Economically and socially negative: As an engine of "corporate imperialism"; one which tramples over the human rights of developing societies, claims to bring prosperity, yet often simply amounts to plundering and profiteering. Negative effects include cultural assimilation via cultural imperialism, the export of artificial wants, and the destruction of local society and culture.

  16. Definitions • A typical definition can be taken from the International Monetary Fund, which defines globalization as the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology. • Globalize means to make worldwide in scope or application, and the globalization of trade means freer and more intense worldwide trade across national borders. Technology helps to make globalization possible. Because computers can be interlinked across companies, countries and continents, information is no longer weighed down by geography or time. • All definitions appear to agree that globalization has economic, political, cultural, and technological aspects that may be closely intertwined.

  17. Economic Globalization Economic globalization, (i.e. the aggregate change we observe in our factories, storefronts, indeed generally across our economies and lifestyles) is caused by four fundamental forms of capital movement throughout the global economy. The four important capital flows are: • Human Capital (i.e. Immigration, Migration, Emigration, Deportation, etc.) • Financial Capital (i.e. Aid, Equity, Debt, Credit & Lending, etc.) • Resource Capital (i.e. Energy, Metals, Minerals, Lumber, etc.) • Power Capital (i.e. Security Forces, Alliances, Armed Forces, etc.)

  18. Views about Globalization • Stiglitz argues that globalization has opened up world trade and created more economic development….is this the case? • Has globalization improved the competitiveness landscape?

  19. Globalization • Nearly every world leader and leading academic and Nobel peace prize winner has defined globalization during the past 20 years, for former President Clinton it was the ‘world without walls’, for Joseph Stiglitz it is ‘the removal of barriers to free trade and the closer integration of national economies’, for Prime Minister Blair ‘it is inevitable and irresistable’, for analysts Marshall McLuhan it is a global village, for President Bush it is ‘ties and of trade and trust’. • “Globalization is neither new or a folly’, saidAmartya Sen, but a globalmovement of ideas, people, technology and goods from one region to others, benefiting the people at large”(Sen, 2001, n.p.)

  20. Globalization in Practice • “In 2003, some 25,000 US tax returns were done in India. In 2004, the number was 100,000. In 2005, it was roughly 400,00. In a decade you will assume that your accountant has outsourced the basic preparation of your tax returns-if not more” Thomas L. Friedman, 2005, page 13

  21. Globalization in Practice • Dalian in China has become to the Japanese what Bangalore is to America. • The Japanese are outsourcing their call centers to the Chinese. • The Chinese are in Dalian are taking Japanese as a second language. • The Chinese are so focused on leading the world in the next century that they are ready to brush up on their Japanese and take all the work Japan can outsource. (Thomas L. Friedman 2005)

  22. Mayor Xia’s ideas on Globalization • Chinese youngsters are more ambitious than Japanese or American youngsters in recent years. (Thomas L. Friedman, 2005) • Eat your dinner because there are millions of Chinese students starving to death. • Eat your rice there are millions of Capitalist children starving to death. • Education

  23. Mayor Xia’s ideas on Globalization • “It is like building a building. Today the USA is the designer, the architect and the developing countries are the bricklayers for the buildings. • But one day I hope we will be the architects.” (Thomas L. Friedman, 2005) Will this happen ?

  24. Friedman’s conversation with Jaithirth Rao in India • “We can predict our future. But we are behind you. You are defining the future. America is always on the edge of the next creative wave…..” • (Thomas L. Friedman, 2005, page 15)

  25. Globalization of Innovation – A Change • Satyam Cherukuri at Sarnoff speaks of the end of the old model of a single American or European multinational handling all the elements of the product development cycle from its own resources. • More and more American and European companies are outsourcing significant research and development tasks to India, Russia, China, South America and Eastern Europe and at times to Cambodia, Vietnam and Laos. This is what we mean when we speak of the “globalization of innovation”. (Thomas L. Friedman, 2005)

  26. Guarded Globalization (Bremmer 2012) • Pre 2008 – Coca Cola - - 200 countries, Lockheed Martin – 805 revenue from US government and 95% workforce in the US • Post 2008 – Slow moving, selective, nationalism and regionalism mix. • Strategic importance of industries at home and in countries they wish to enter

  27. State Capitalism • Russia, India and Brazil • Control the wealth that markets generate – governmetns play a dominant public sector companies and politically loyaly corporations. • EG. 73 Chinese companies listed in 2012 Fortune Global 500, 65 are state owned. • Russia – 50% are state owned • UAE – oil companies and wealth fund dominate

  28. State Capitalism • Google, Facebook and Yahoo which may, and has been used by the US government to read emails around the world can be seen as a form of State Capitalims. • Gathering Data – Is this valuable? • Greater scrutiny for US IT companies • Will this inhibit Globalization?

  29. Ten Forces that Flattened the World • Berlin Wall 11/9/89 • Amatya Sen (Indian Nobel Prize Economist), said “ The Berlin Wall was not only a symbol of keeping people inside East Germany, it was a way of preventing a kind of global view of our time… • If I celebrate the fall of the wall it is because I am convinced of how much we can learn from each other. Most knowledge is learning from others across the border.” Discuss

  30. Ten Forces that Flattened the World • The New Age of Connectivity: when the web went around and Netscape went public – 8/9/95. • Work Flow Software- Read and Discuss pages 91-92 • Harnessing the Power of Communities • Outsourcing Y2K – Read and discuss pages 131-132.

  31. Off-shoring “Every morning in Africa, a gazelle wakes up • It knows it must run faster than the fastest lion it will be killed • Every morning a lion wakes up • It knows it must outrun the slowest gazelle or it will starve to death. • It doesn’t matter whether you are a lion or a gazelle. • When the sun comes up, you better start running” • Why are we all running? . • China has become an unparalleled country for off-shoring, it has 160 cities with a population of one million or more. • Can India beat China in off-shoring or will it be the Middle East or South America that will win this race or a trading block of Chinese culture nations? • CHINDIA ?????????

  32. Ten Forces that Flattened the World • Supply-Chaining – eg HP will sell 400,00 computers in one day during the Christmas season, throughout 4000 Wal-Mart stores. • Insourcing – Read and discuss pages 167-8. • Informing – Google, Yahoo, MSN Web Search • The Steroids – Digital, Mobile, Personal and Virtual

  33. Views about Globalization/Innovation Thinking • Garelli has mapped the world competitiveness landscape. • 1.      Competitiveness is not the accumulation of certainties • 2.      Competitiveness is developed through ‘trial and error’ • 3.      Strong competitiveness models accept internal criticism • 4.      Competitiveness also thrives on thinking the unthinkable • 5.      The future is not what it used to be • Who wins? • Who loses? • Why?

  34. Views about globalization • Legrain argues that globalization is blurring the borders between nation states….is all the world one? • Do you feel at home anywhere in the world? • Is it globalization or Americanization or Californiazation?

  35. Views about globalization • Giddens argues that globalization creates new economic and cultural zones e.g. around HK, Nth Italy. Silicon Valley, Middle East and South America.

  36. Views about globalization • Singer argues that since globalization the gap between the rich and the poor countries has increased….why? • However, on another measure life expectancy has increased in developing countries from 55 to 66 yrs!

  37. An emerging problem! • The new business conflict: IT consolidation vs. globalization by Alan Saldich (2006) www.snwonline.com/behind/conflict_03-27-06.asp?article_id=675 • The world is getting smaller, companies have operations all over the place, and IT is getting more powerful by the month. You would think that connecting a global enterprise seamlessly would be easier than ever, but in fact it's getting more difficult in some ways. Why?

  38. USA and President Obama • No. 1 Economic Superpower • Image, politics, wars, attitude, finance • Stimulus package • Austerity measures • Rescue of major industries • Automobile, Banks, Sub-prime issue • Some degree of recovery

  39. USA – Home of Globalization ? • Home of H and H • The American Century • The Barbie Case study

  40. Globalization Where is it? • Globalization is happening everywhere and it is not only in the world of IT!!!

  41. Globalization of Gambling • USA • Las Vegas • Atlantic City • Reno • Macau • Australia Virtual gambling • Why is gambling a global phenomenon? • Does IT support this global business?

  42. http://www.cbsnews.com/video/watch/?id=4423723n Where do we find Sushi? Why is it a global phenomenon Global Supply Chain Role of IT for Sushi The Sushi Economy: Globalization and the Making of a Modern Delicacy by Sasha Issenberg The Globalization of Sushi

  43. Globalization of Icons • http://www.youtube.com/watch?v=HsdYPKGYxrI • Why is this Icon a global phenomenon? • Why are business icons more recognisable that ever before?

  44. Globalization of Sport • ‘The United States of America is truly the only melting pot in the world. It is the only country the blends so many different ethnic and culturally diverse individuals from all parts of the world, from all walks of life. One of the things I cherish most about sports is that no matter who you are, what you look like, what you believe in, all of that is put to the side if we are cheering for the same team…the only colors that matter are the home team. You will see the rich next to the poor, black, white, and Asians all cheering together. This is what makes sports truly remarkable’. • American Football and the Superbowl • Soccer Basketball • Cricket Rugby • Tennis Karate • Golf • Swimming • The Summer and Winter Olympics

  45. Globalization of Lingua Franca • English is the language of business, computing and aviation • Mandarin • Spanish • Arabic • English • Hindi

  46. Globalization of Education • Thousands of students travel each year around the globe for education • Boston – the new Athens • Magic names: Harvard, Yale, UCLA, Georgetown, Oxford, Cambridge, Trinity College, St. Andrews, Chulalangkorn, Beijing and Beijing Uni, Fudan University, KAIST, La Bocconi, Sorbonne etc.

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