Chapter 15: Managing Global Systems

The world just keeps getting smaller and smaller. We must adapt to changing faces, literally, of our competition and devise a plan to bring our organizations into its view. Globalization is possible even with very small businesses because of the technological advances in computer networks and telecommunications.

Perhaps the most important challenge facing corporations and companies wanting to open foreign markets is that of the global culture. We’re beginning to share more culture because of increased telecommunications and the Internet. However, when you are merging two entities, one domestic and one foreign, into one business, the culture of that merged organization can be an important influence on how well the company does.

Advanced telecommunications systems now allow companies to work around the clock and around the world. Companies may choose to locate parts of their corporate offices in other countries because they fit better with the corporation’s overall global strategy in that location.

Global businesses must devote their time and attention to understanding the cultures of countries in which they want to do business. Not only must they merge their business units, they must also merge their people into a cohesive team.

If you thought building an information system for an organization doing business only in the U.S. was tough, then think about how difficult it is to mesh a system built on 1990’s technology with one that was built in the 1980’s and one built in 2012.

First you decide what you’re going to do; choose a strategy. Then you have to organize your business around this strategy. The last step is to build the system that will incorporate the first two. There are four main global strategies that businesses can use to organize their global efforts:  domestic exporter, multinational, franchiser, and transnational. The global strategy will help determine the information system structure.

A company must decide how its business processes are divided among global, regional, and local units. Which location does each process better than the other? Carefully analyze each task and all available resources to support the process in each location. It may be surprising to learn that it’s cheaper and more efficient to store manufactured goods separately from where they are produced.

As technology continues to make our world smaller, companies must continually adapt both domestically and around the world.  Creating and manufacturing goods and services around the world and selling those same products and services anywhere in the world is a huge draw for many companies that see their domestic markets stagnate or shrink.

Management’s biggest task is to manage the changes that must take place in a global company. The changes are more difficult and complex because of the added characteristics of politics, culture, and language.

So…….why do companies even attempt to build themselves into global merchants? Because the potential payoff can be enormous!