MDX BIS4225.

Reading Materials
Laudon & Laudon (2002)
Chapter 16
BIS4225.6
Globalisation

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What is Globalisation? What is Globalisation?

Giddens (1999): Globalisation is also about
Worldwide social relationships; how technology can be
Local and distant events used to change society:
influence each other; Example: a product or service
Reduction of geographical, created in one part of the world
spatial, and temporal factors as that changes the entire
constraints to society manufacturing industry.
development.
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Weightless Economy Weightless Economy

Used by Quah () and Coyle Why Weightless?
() to describe new and The principal units of trade
increasingly, global economic
structures. Four elements: is information, not only
ICT and Internet; tangible goods (where
Intellectual Property; physical weight introduces
Electronic Libraries and Databases; transportation costs).
Biotechnology.
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Weightless Economy
Decisions are made on a
global scale.
As economies become
more mature, they are
increasingly dependent on
services instead of
manufacturing.
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Weightless Economy
Globalisation is an intensification
of the processes of interaction
involving:
travel
trade
migration
dissemination of knowledge
that have shaped the progress of
the world
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Weightless Economy
Traditional measures of
productivity have shown
few benefits technology.
Look at the transformation
effects of technology not
only incremental changes.
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Weightless Economy
Fundamental characteristic of
information:
Infinite Expansibility
(Knowledge can be made available in an
infinite number of places around the world)
Weightless Economy
How can globalisation be
managed?
How does it apply at the
level of individuals or
businesses?
Management Styles
Seven Ss in Management:
Strategy (plan of action)
Hard
Structure (organisation)
Issues
Systems (information flow)
Style (values and beliefs)
Staff (people)
Soft
Issues
Skills (doing work well)
Super-ordinate Goals (purpose)
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Management Styles Management Styles

Japanese:
Supreme production engineers
Not really original research or new
products
But good at developing and making
effective products with numerous
variants
Japanese:
Interdependence: Staff works as an
integral part of a wider whole.
Effective communications
Effective sharing of knowledge

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Management Styles Management Styles

Japanese: Japanese:
However, the Japanese model Conglomerates (Keiretsu)
(which was successful in 1970s- Paternalistic
80s) now looks flawed. Same employer for life
They are unable to adapt to the
changing business environment!
Globalisation
Global Communications
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Globalisation & Knowledge Globalisation & Knowledge

Negroponte (1995):
Previously businesses deal in
tangible goods.
Today, IT and networks allow
businesses to easily deal with
information.
Leonard (1998):
Each country has something
to offer.
Different countries have
different requirements.
Learn from the market.

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Globalisation & Knowledge Globalisation & Knowledge

Knowledge is: Knowledge:
hard to identify, Most valuable when it is tacit
difficult to value, document, and and unstructured.
deploy, Can be generated or acquired
continuously evolving. when shared.
New connections might
appear.
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Globalisation & Knowledge Globalisation & Knowledge

Tacit Knowledge:
The personal knowledge of an
individual that is usually not clearly
expressed.
Based on taught skills and
experience, and covers personal
belief, perspective, and values.
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Learning Organization:
One that creates and supports
learning among its employees:
Needs a corporate learning culture.
Needs acquiring, codifying,
developing, storing, and
disseminating knowledge.
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Globalisation & Knowledge Globalisation & Knowledge

Sharing of Knowledge
Know-How (Practical)
Understand existing Processes
Know-Why (Theoretical)
Develop new Products/Services
Know-What (Strategic)
Identify/Define new Products/Services
Example: Samsung
Korean Conglomerate (Chaebol)
Diverse interests/businesses
Vertical integration
Sets up own supply chain

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Globalisation & Knowledge International Info Systems

Example: Nokia Management Challenges
To decide whether some or all of
Paper (1865) their lines of business should be
Rubber (~1900)
managed on a global basis.
Cables (1912)
Electronics (1960) To handle the difficulties of
Telecommunications (1987) managing change in a
multicultural firm.
25 L&L (2002, 500) 26

International Info Systems International Info Systems

Global Business Strategies
Domestic Exporter: centralization at home
country
Multinational: central financial management
and control at home country
Franchiser: produce products in home
country but rely on foreign personnel for
further production, marketing, and human
resources
L&L (2002, 505-6) 27
Global Business Strategies
Trans-national: all factors of production are
coordinated on a global scale without
reference to national borders, optimizing
sources of supply and demand
L&L (2002, 505-6) 28

International Info Systems International Info Systems

Global Business Strategies
Firms should organize their
production, sales, and other
value-adding activities along
lines of comparative
advantage in the location
where they can be most
efficiently performed.

L&L (2002, 505-6) 29 L&L (2002, 506-7) 30

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Managing Intl Info Systems Managing Intl Info Systems

Senior management would
need to clearly understand
the benefits of core
systems designated to be
transnational systems.

L&L (2002, 508-9) 31 L&L (2002, 508-9) 32

Technology Issues
Hardware and Systems
Integration
Connectivity (incl Standards)
Software (compatibility)

L&L (2002, 511-5) 33