INFORMATION MANAGEMENT SYSTEMS 8/E Raymond McLeod, Jr. and George Schell
Chapter 4
Computer Use in an International Marketplace
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Copyright 2001 Prentice-Hall, Inc.
The Multinational Corporation (MNC)
Parent company and group of subsidiaries s Operates across Products Markets Nations Cultures
s
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Each Subsidiary Has Its Own
Geography s Goals s Policies s Procedures
s
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Information Processing in an MNC
Influenced by internal and external conditions s Seeks to minimize environmental uncertainty
s
Uncertainty - Difference between information required and information possessed
s
Requires `good' use of information technology to achieve desired performance
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Types of MNC Organizational Structure Classifications
Each structure requires its own information processor s Worldwide functional divisions
s
Organized along functional lines Marketing in subsidiary reports to marketing in parent company Strategic planning done at top executive level Data that integrates operations does not exist at lower levels 4-5
MNC Classifications (cont.)
s
International regions
International division separate from domestic division
s
Geographic regions
Each region responsible for its subsidiaries No communication between regions Communication coordinated by parent company
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MNC Classifications (cont.)
s
Worldwide product divisions
Product division responsible for operations worldwide Helps recognize product specific needs
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Need for Coordination in an MNC
Greater need than domestic companies s Companies unable to gain strategic control of their worldwide operations and manage them in a globally coordinated manner will not succeed in the emerging international economy s Resources are widely distributed
s
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Need for Coordination in an MNC (cont.)
Improvements in information technology and methodology have made global coordination somewhat easier s Still, coordination is big challenge
s
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Advantages of Coordination in an MNC
Flexibility in responding to competitors s Ability to respond in one country to a change in another s Ability to keep abreast of market needs around the world s Ability to transfer knowledge between units in different countries
s
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Advantages of Coordination in an MNC (cont.)
Reduced overall costs of operation s Increased efficiency and effectiveness in meeting customer needs s Ability to achieve and maintain diversity in firm's products, their production, and distribution
s
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Global Business Strategies
Multinational strategy s Global strategy s International strategy s Transnational strategy
s All use global information systems (GISs) in various ways
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strategic decisions
Multinational Strategy
remote
HQ
Financial reporting flows
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Global Strategy
Tight controls; centrally driven strategy
HQ
One-way flows, goods, information, and resources
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International Strategy
Assets, responsibilities decentralized Formal control systems
International mentality
HQ
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Transnational Strategy
Complex controls; high coordination strategic skills,coordinated decision process
Heavy flows; materials, people information, technology
HQ
Distributed capabilities, resources and decision making
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Global Business Drivers (GBD)
Joint resources s Flexible operations s Rationalized operations s Risk reduction s Global products s Scarce supplies s Corporate customers
s
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GBDs Cautions
All GBDs do not apply to all MCNs s Drivers have many influences
s
s
Industry Country Own characteristics Business units within firm
Provide vehicle for mapping out SPIR
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(GISs) Implementation Problems
s
Politically imposed constraints
Hardware purchases and imports Data processing Data communications
Transborder data flows (TDF)
s s s s
Operational data Personal data Electronic funds transfer Technical and scientific data
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Global Information Systems (GISs) Implementation Problems (cont.)
s
Technological problems
Unreliable power Slow telecommunications Software copyrights and blackmarket products
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Lack of support from subsidiary managers
View corporate office as an `outsider' Drag heels to improve local profitability
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GIS Implementation Strategies
s
Multinational strategy
Development teams derived from subsidiaries
s
Global strategy
Development teams derived from parent location
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GIC Implementation Strategies (cont.)
s
International
Development teams can travel from parent to subsidiaries
s
Transnational strategy
Development team includes members from both parent and subsidiaries
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Transnational Strategy
Link the GIS to business strategy s Define the information resources s Provide for data sharing s Consider the cultural environment
s
Caution: the tasks and issues listed above are issues to be
addressed, not steps to always be followed in strict sequence
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Comp...