Week 2: Globalization and MIS Systems MIS 2101: Management Information Systems Douglas M. Schutz Based on material from Information Systems Today: Managing in the Digital World, Leonard Jessup and Joseph Valacich, Pearson Prentice Hall, 2007 Also includes material from The World Is Flat: A Brief History of the Twenty-first Century, Thomas L. Friedman, Farrar, Straus and Giroux, 2007 Also includes material by David Schuff, Paul Weinberg, Cindy Joy Marselis, Munir Mandviwalla, and Mart Doyle.
Globalization Globalization created a new world characterized by: Worldwide communication Collaboration without barriers
Tom Friedman • Pulitzer Prize-winning New York Times foreign affairs columnist • author of the renowned book on globalization, “The World is Flat” • Factors /drivers that contribute to increased connectedness = “flattening” of the world • MIS systems are playing a key role
Tom Friedman’s “The World is Flat” Video • As you watch the video, take notes and be ready to discuss: • What is the Overall Point of the video/book? • What are the 10 Flatteners and what are their implications according to Friedman? • Based on the video, what does someone need to do to be successful in the 21st Century? • Tom Friedman’s “The World is Flat” Video: http://mitworld.mit.edu/video/266/
Evolution of Globalization Mainly European countries are globalizing What is the primary driver of Globalization 1.0? Industries changed Slow pace of change Globalization 1.0
Evolution of Globalization Companies are globalizing What are the primary drivers of Globalization 2.0? Mainly Europe and America involved Globalization 2.0
Evolution of Globalization Individuals and small groups are globalizing What are the drivers of Globalization 3.0? Fast changes Emergence of new industries Globalization 3.0
The Overall Idea • The global economic playing field has been leveled • Competition is worldwide • Few jobs or markets are constrained by geographic boundaries • There are steps you can take to succeed in this world
Flattener #1: 11/9/1989: The Fall of the Berlin WallWindows 3.1 released The Wall was a physical and symbolic barrier to a flat economy Windows removed a barrier to the creation of digital content Started a major change from large centralized systems to small decentralized systems on a mass scale.
Flattener #2: Netscape went public Triggered New services Dot com boom Overbuild of fibre optics Boston, Bethesda, and Bangalore are now neighbors. Companies no longer control collaborative development of technology products
Flattener #3: Work Flow Software interoperability Easier for applications to work with other applications (with some exceptions) “Smokestacks” like AOL and CompuServe replaced or redesigned
Flattener #4: Outsourcing Outsourcing: Moving Jobs Why do companies outsource?
Flattener #5: Offshoring Offshoring: Moving entire operations How is offshoring different than outsourcing?
Flattener #6: Open Sourcing Open source products: developed collaboratively and free Wikipedia Open office Creation/distribution of material by anyone Potentially threatening to Microsoft, The New York Times, Record Labels, and others (Why?)
Flattener #7: Supply Chaining Integration of retailers, suppliers, and customers Increases efficiency. (Why?)
Flattener #8: In-Sourcing Delegation of company’s key operations to a subcontractor What does UPS do in this area?
Flattener #9: Informing Individuals have access to massive amounts of information What types of information are easily available to you now that weren’t 10 years ago? How has this affected car dealers?
Flattener #10: The Steroids Technologies that support different types of collaboration Greater mobility Convergence of media and technoloigies
Opportunities of Operating in the Digital World Engineering Graduates in the US, Europe and India
Challenges of Operating in the Digital World Globalization also created a set of unprecedented challenges: Governmental challenges Geoeconomical challenges Demographic challenges Cultural challenges
Governmental Challenges Political System Challenges Regulatory Challenges Data-Sharing Challenges Internet Access and Individual Freedom
Cultural Challenges Risk taking Language Work skills/habits Intellectual property concepts
Going Global: International Business Strategy in the Digital World Multidomestic Business Strategy Global Business Strategy Transnational Business Strategy
Multidomestic Business Strategy • Lower degree of global integration • Higher degree of local responsiveness
Global Business Strategy • Higher degree of global integration • Lower degree of local responsiveness
Transnational Business Strategy • Some operations centralized • while others decentralized
Information Systems Strategies Multinational Information Systems Strategy Global Information Systems Strategy Transnational Information Systems Strategy
Niklas Zennström: Cofounder and Chief Executive Officer, Skype “The idea of charging for calls belongs to the last century.” Skype has 28 million subscribers Among the 100 most influential people transforming the world 2-37
The Automobile Industry Feeling the pressure of globalization Failed attempts at making a “world car” (why?) Cultural and economic conditions need to undergo more globalization