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MIS 2000 Globalization and Information Systems Updated 2016

MIS 2000 Globalization and Information Systems Updated 2016. Outline. Globalization (concept, pros & cons) Trans-National Corporation (TNC) Role of information systems and computer networks in TNC Summary. Globalization Concept.

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MIS 2000 Globalization and Information Systems Updated 2016

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  1. MIS 2000Globalization and Information SystemsUpdated 2016

  2. Outline • Globalization (concept, pros & cons) • Trans-National Corporation (TNC) • Role of information systems and computer networks in TNC • Summary Globalization and IS

  3. Globalization Concept • Globalization is the process of reducing economic and other boundaries between countries. • Examples of economic boundaries • closing of markets (consumer, supply) by legislation, high import taxes, or complicated import procedures. • making it impossible or hard for foreign enterprises to run production or sales operations in a given country • preventing entry to foreign labor. • Globalization started with economic changes in China and political/economic changes in Europe, but attempts at global business go back in the far past. Globalization and IS

  4. Globalization Pros & Cons • Pros/Cons depend on the standpoint. • Economies in transition (China, India, East Europe) have experience growth (especially China) – more jobs, purchasing power increase, more tax money. But local business faces tough competition, and there is a sharper differentiation between haves and have-nots. • Parts of the world not included in globalization (Africa). • 50% of world lives on less than $2/day. • Developed economies: Corporations benefit from offshore operations. But labor faces a job loss and reduced wages (absolutely, or pressure to do more work for the same wage); the middle class shrinks. More… Globalization and IS

  5. Globalization Pros & Cons – Digital Divide • Sources of informing and learning are globally accessible via Internet. But there is still a large gap between more and less developed countries in terms of the development level of IT and Internet use* -- digital divide – between continents (below) & within-continent (next slide). Globalization and IS

  6. Digital Divide – within Continent • While having the smallest Internet penetration rate, Africa shows big • differences between countries. Globalization and IS

  7. IS and Computer Networks in Globalization Production (China) Production (US) Suppliers (Ch, Can, Bra)* Sales (Eur, Aus, NAm, LAm) • All these operations belong to one firm. • IS and computer networks are necessary for doing business globally – the key enablers of global production, supply and sales processes. • Global electronic supply chains (document flow, communications, payment) • The key enabler of this highly dispersed organization is IS and computer networks (private, and Internet). Globalization and IS

  8. Trans-National Corporation (TNC) • Definition: TNC is a company that performs the sourcing, R+D, production, and sales processes globally. • The global capabilities of TNC rest on intensive use of advanced information systems and computer networks. • TNC is a key maker of globalization. • TNC is the key player in global economy (presence, revenues, impact). • TNC operates in various industries (manufacturing, finance, drugs, consulting, software, news media, manufacturing)* More… Globalization and IS

  9. Special capabilities characterize TNC: • Global Efficiency: TNC treats world as a single market, works everywhere with the same efficiency. • Local Responsiveness: TNC is responsive to local market needs, although its planning and production is at many locations. • Superior Knowledge: TNC combines centralized and decentralized R+D, shares it across, and adapts to local needs. Of raw materials, product parts, labour, capital Global Sourcing Where row materials & labour are cheaper and taxes lower To other firms Global Producing To consumers Global Selling IS & Computer Networks Research+ Development Where expertise and needs are

  10. Living in TNC-driven Economy • To survive and prosper in the global economy, a company needs to be able to do business or compete with TNC. This provides access to global markets. • To engage with a TNC, a firm must have a proper technological capability (various modern information systems and computer networking capability). Globalization and IS

  11. Summary • Globalization is the process of reducing economic and other barriers between nation-states. • Globalization has been uneven, bringing differing benefits and costs to different players. Digital divide still is significant. • TNC is a company that performs the sourcing, production, and sales processes globally. It depends crucially on advanced IS and computer nets. • TNC is a key globalization maker and player with superior capabilities of global efficiency, local market responsiveness, and knowledge development and sharing. Globalization and IS

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