You are on page 1of 20

Chapter 15

Managing Global Systems


True-False Questions 1. The growth of international trade has radically altered domestic economies around the globe. Answer: True 2. Difficulty: Easy Reference: p !"#

Before you develop a corporate strategy and structure for globalization, a firm should determine the appropriate technology infrastructure. Answer: False Difficulty: Easy Reference: pp !"$%!"&

3.

Global business drivers can be divided into two groups general cultural factors and specific business factors. Answer: True Difficulty: Me'ium Reference: p !"&

The collapse of the !astern bloc" has speeded the growth of a world culture. Answer: True Difficulty: Easy Reference: p !"&

#.

The growth of powerful communications technologies and the emergence of world cultures create the condition for global mar"ets. Answer: True Difficulty: Easy Reference: p !""

$.

%icromar"eting is limited to mar"eting to very small geographic and social units within a domestic mar"et. Answer: False Difficulty: Me'ium Reference: p !""

&.

' powerful strategic advantage for a globalized firm is lowered cost factors in production. Answer: True Difficulty: Easy Reference: p !""

(.

)articularism is a concept based on accepting the concept of a shared global culture and the penetration of domestic mar"ets by foreign goods and services. Answer: False Difficulty: )ar' Reference: p #**

*.

't the cultural level, differences among cultures produce differences in social e+pectations, politics, and legal rules. Answer: True Difficulty: Easy Reference: p #**

+("

1,.

Globalization means that companies can be less concerned with the laws governing the movement of information. Answer: False Difficulty: Easy Reference: p #**

11.

!uropean countries have very strict laws concerning transborder data flows and privacy. Answer: True Difficulty: Easy Reference: p #**

12.

The !uropean -nion .ata )rotection .irective restricts the flow of any information to countries that do not meet strict !uropean laws on personal information. Answer: True Difficulty: Me'ium Reference: p #**

13.

To avoid the cost and uncertainty of moving information across national boundaries, most multinational firms have developed information systems within each !uropean country. Answer: True Difficulty: Me'ium Reference: p #**

1/.

0ith the growth of the 1nternet and reliable phone networ"s, s"illed consultants are readily available to companies operating in global mar"ets. Answer: False Difficulty: Easy Reference: p #**

1#.

The accounting practices of a country are tightly intertwined with that country2s legal system. Answer: True Difficulty: Easy Reference: p #**

1$.

1n international companies, !nglish has become a "ind of standard business language. Answer: True Difficulty: Easy Reference: p #*,

1&.

1n a multinational strategy, products and services on sale in different countries are adapted to serve local mar"et conditions. Answer: True Difficulty: Me'ium Reference: p #*+

1(.

Global systems allow fi+ed costs to be amortized over a much smaller customer base. Answer: False Difficulty: Me'ium Reference: p #,*

1*.

The ma3or telecommunications challenge in an international setting is ma"ing data flow seamlessly across networ"s shaped by disparate national standards. Answer: True Difficulty: Easy Reference: p #,+

2,.

)rivate networ"s may not provide the same level of 4uic" and predictable response as 5)6s. Answer: False Difficulty: )ar' Reference: p #,-

+!*

Multiple-./oice Questions 21. Based on your reading of the chapter case discussing .78, what led .78 to reconsider using a decentralized database system for local data9 a. b. c. d. .ecentralization raised costs :is"s of local information centers would fail and 3eopardize shipments in other countries .ifficult to 4uic"ly change systems globally 'll of the above Difficulty: Easy Reference: pp !"-%!"(

Answer: ' 22.

Today, the combined annual value of imports and e+ports from all nations is appro+imately a. b. c. d. ;$& billion. ;2& billion. ;2, trillion. ;$& trillion. Difficulty: Easy Reference: p !"#

Answer: c 23.

' force in the environment to which businesses must respond and that influences the direction of the business is called a business a. b. c. d. driver. threat. process. matri+. Difficulty: Easy Reference: p !"$

Answer: a 2/.

The ma3or dimensions of international systems architecture include each of the following !<=!)T a. b. c. d. the global environment. corporate global strategy. technology platform. transborder data flows. Difficulty: Easy Reference: p !"$

Answer: '

+!,

2#.

General cultural factors driving global business are a. b. c. d. global communication and transportation technologies, a global "nowledge base, and global social norms. the development of global mar"ets, political stability, and a global wor"force. the rise of the global wor"force, political stability, and a global "nowledge base. the rise of a global wor"force, global economies of scale, and global production and operations. Difficulty: Me'ium Reference: p !"&

Answer: a 2$.

Global coordination of all of the ma3or business functions permits the location of business activity according to a. b. c. d. social norms and values. comparative advantage. competitive threat. "nowledge base. Difficulty: Easy Reference: p !""

Answer: b 2&.

%ar"eting to very small geographic and social units is called a. b. c. d. targeted mar"eting. macromar"eting. mom>and>pop mar"eting. micromar"eting. Difficulty: Easy Reference: p !""

Answer: ' 2(.

%a"ing 3udgments and ta"ing action on the basis of narrow or personal characteristics is referred to as a. b. c. d. micromar"eting. macromar"eting. particularism. pre3udicial. Difficulty: Easy Reference: p #**

Answer: c 2*.

0hich of the following restricts the flow of personal information to countries that do not meet strict !uropean information laws on personal information9 a. b. c. d. ?ree Trade 'greement !uropean -nion .ata )rotection .irective -nited 6ations )rivacy 'ct !uropean Transborder .ata ?low 'ct Difficulty: Easy Reference: p #**

Answer: b

+!+

3,.

General challenges and obstacles to global business systems are typified by a. b. c. d. different technology standards, shortages of s"illed consultants, and social e+pectations. brand>name e+pectations, language differences, and commercial regulations. different wor" hours, transborder data and privacy laws, and different technology standards. different communications standards, language differences, and networ" reliability. Difficulty: )ar' Reference: p #**

Answer: b 31.

To avoid the cost and uncertainty of moving information across national boundaries, most multinational firms a. b. c. d. maintain a master database at their head offices. develop a master system that meets the standards of all the countries concerned. use microwave satellite transmission to move data. develop separate systems within each country. Difficulty: Me'ium Reference: p #**

Answer: ' 32. German companies generally a. b. c. d.

do not recognize the profit until the pro3ect is completely finished and they have been paid. recognize profits before the pro3ect is finished. recognize profits when the pro3ect is initialized. do not recognize the profits until they have been formally audited. Difficulty: )ar' Reference: p #**

Answer: a 33.

%ost large companies with overseas operations have inherited a. b. c. d. recently built technology platforms for international systems. batch>oriented reporting from independent foreign divisions to corporate head4uarters. transaction>oriented reporting based at the home office for overseas business. global mar"eting systems developed domestically. Difficulty: )ar' Reference: p #*,

Answer: b 3/.

1n terms of global business strategy and structure, a domestic e+porter will use a policy of a. b. c. d. some dispersed sales, with centralized production, accounting, human resources, and strategic management. centralized production and accounting with decentralized mar"eting and human resources. centralized production, accounting, mar"eting, and human resources. dispersed production and mar"eting, with centralized accounting, human resources and strategic management. Difficulty: Me'ium Reference: p #*+

Answer: a

+!-

3#.

1n terms of global business strategy, =aterpillar =orporation and other heavy capital e4uipment manufacturers fall into this category of firm. a. b. c. d. .omestic e+porter %ultinational ?ranchiser Transnational Difficulty: Me'ium Reference: p #*+

Answer: a 3$.

' company that controls finances in the home country and decentralizes production, sales, and mar"eting operations to other countries is using a @@@@@@ strategy. a. b. c. d. domestic e+porter franchising transnational multinational Difficulty: Easy Reference: p #*+

Answer: ' 3&.

1n terms of global business strategy and structure, a multinational company will use a policy of a. b. c. d. mi+ed sales and mar"eting, with centralized production, accounting, human resources, and strategic management. centralized production, accounting, mar"eting, human resources, with strategic management. dispersed production, accounting, human resources, with centralized strategic management, and mar"eting. 'isperse' pro'uction an' mar0eting1 wit/ centrali2e' accounting an' strategic management Difficulty: Me'ium Reference: p #*+

Answer: ' 3(.

1n terms of global business strategy, General %otors, .aimler=hrysler, and 1ntel fall into this category of firm. a. b. c. d. .omestic e+porter %ultinational ?ranchiser Transnational Difficulty: Me'ium Reference: p #*+

Answer: b

+!(

3*.

1n terms of global business strategy and structure, a franc/ise company will use a policy of a. b. c. d. centralized production, accounting, mar"eting, human resources, with strategic management. dispersed production, accounting, human resources, with centralized strategic management, and mar"eting. dispersed production and mar"eting, with centralized accounting, human resources and strategic management. 'isperse' pro'uction1 mar0eting1 an' /uman resources1 wit/ centrali2e' strategic management an' finance3accounting Difficulty: Me'ium Reference: p #*+

Answer: ' /,.

1n terms of global business strategy, A?= falls into this category of firm. a. b. c. d. .omestic e+porter %ultinational ?ranchiser Transnational Difficulty: Me'ium Reference: p #*+

Answer: c /1.

1n terms of global business strategy, the governance of these firms has been li"ened to a federal structureBstrong central management core of decision ma"ing, but considerable dispersal of power and financial resources. a. b. c. ' .omestic e+porter %ultinational ?ranchiser Transnational Difficulty: Me'ium Reference: p #*-

Answer: ' /2.

=iticorp, Cony, and ?ord are attempting to ma"e a transition to this type of business organizational structure. a. b. c d. .omestic e+porter %ultinational Transnational ?ranchiser Difficulty: Me'ium Reference: p #*-

Answer: c

+!!

/3.

=entralized systems are those in which a. b. c. d. development occurs at the home base and operations are handed over to autonomous units in foreign locations. each foreign unit designs its own uni4ue solutions and systems. systems development and operations occur in an integrated and coordinated fashion across all units. systems development and operations occur totally at the domestic home base. Difficulty: Easy Reference: p #*(

Answer: ' //.

.uplicated systems are those in which a. b. c. d. development occurs at the home base and operations are handed over to autonomous units in foreign locations. each foreign unit designs its own uni4ue solutions and systems. systems development and operations occur in an integrated and coordinated fashion across all units. foreign units design the solutions and systems used at the domestic home base. Difficulty: Easy Reference: p #*(

Answer: a /#.

6etwor"ed systems are those in which a. b. c. d. development occurs at the home base and operations are handed over to autonomous units in foreign locations. each foreign unit designs its own uni4ue solutions and systems. systems development and operations occur in an integrated and coordinated fashion across all units. foreign units design the solutions and systems used at the domestic home base. Difficulty: Easy Reference: p #*(

Answer: c /$.

.omestic e+porters have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systems configuration, and seem now to be moving toward @@@@@@@@@@@@@@@ systems. a. b. c. d. duplicatedD decentralized centralizedD decentralized networ"edD decentralized decentralizedD networ"ed Difficulty: Me'ium Reference: p #*-

Answer: b

+!#

/&.

%ultinational companies have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systems configuration, and seem now to be switching to @@@@@@@@@@@@@@@ systems. a. b. c. d. duplicatedD decentralized decentralizedD duplicated networ"edD duplicated decentralizedD networ"ed Difficulty: Me'ium Reference: p #*-

Answer: ' /(.

?ranchise companies have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systems configuration, and seem now to be moving toward @@@@@@@@@@@@@@@ systems. a. b. c. d. duplicatedD decentralized centralizedD decentralized decentralizedD duplicated decentralizedD networ"ed Difficulty: Me'ium Reference: p #*-

Answer: a /*.

Transnational companies have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systems configuration. a. b. c. d. duplicated centralized networ"ed decentralized Difficulty: Me'ium Reference: p #*-

Answer: c #,.

The networ" systems structure is the most visible in @@@@@@@@@@@@@@@@@@@@@@ services. a. b. c. d. production financial services mar"eting software design Difficulty: Easy Reference: p #*(

Answer: b #1.

!ffective networ"ed systems must have a. b. c. d. a powerful telecommunications bac"bone. a culture of shared applications development. a shared management culture that crosses cultural barriers. all of the above. Difficulty: Easy Reference: p #*(

Answer: '

+!$

#2.

Based on your reading of the chapter case discussing 'vnet 1nc., 'vnet mitigates the technical challenges posed by mergers and ac4uisitions by a. b. c. d. using a E)layboo"F of best practices to integrate a new company into the corporate global system. using 0eb services to allow for communication between the ac4uired company and 'vnet2s global system. using a combination of regional best practices and using the best systems from each company. pursuing a standardized implementation process as per the 'vnet E=oo"boo".F Difficulty: Me'ium Reference: p #*!

Answer: c #3.

Two of the management challenges in developing global systems are listed in your te+t as a. b. c. d. managing the privacy concerns of different countries and coordinating applications development. creating a financial structure that will operate internationally and managing the privacy concerns of different countries. agreeing on common user re4uirements and managing the privacy concerns of different countries. coordinating of software releases and introducing of changes in business processes. Difficulty: )ar' Reference: p #*$

Answer: ' #/.

8ogically related tas"s to produce specific business results best defines a. b. c. d. information systems. business processes. CG)s. core competencies. Difficulty: Easy Reference: p #*&

Answer: b ##.

The way to identify core business processes is to conduct aHnI a. b. c. d. cost>benefit analysis. wor">flow analysis. business process analysis. feasibility analysis. Difficulty: Me'ium Reference: p #*&

Answer: c

+!&

#$.

0hich systems are worth sharing on a transnational basis, from a cost and feasibility point of view9 a. b. c. d. Gnly systems that support functions that are absolutely critical to the organization =ore systems and worthwhile provincial systems =ore systems and any financial systems that can be easily integrated with each other ?inancial and accounting systems Difficulty: Me'ium Reference: p #*&

Answer: a #&.

Based on your reading of the chapter, why should companies avoid implanting an all> encompassing, new global system when moving towards global operations9 a. b. c. d. These may fail due to lac" of visibility 8ac" of power to convince senior management that transnational systems are worthwhile EGrand designF approaches typically fail to identify centers of e+cellence Gpposition is strengthened because of re4uirements for huge resources Difficulty: )ar' Reference: p #*"

Answer: ' #(.

The ability of global systems to optimize the use of corporate funds over a much larger capital base means that a. b. c. d. capital in a surplus region can be moved efficiently to e+pand production of capital> starved regions. capital costs can be accounted or spread over a larger base of constituents. costs can be amortized over a larger customer base. value chains can be synchronized more effectively. Difficulty: Me'ium Reference: p #,*

Answer: c #*.

0hen developing a global system, bringing the opposition of local groups into the process of designing and implementing the solution without giving up control over the direction and nature of the change is called a. b. c. d. cooptation. change management. implementation. advocacy. Difficulty: Easy Reference: p #,,

Answer: a

+!"

$,.

1n relation to global systems building, the 1nternet a. b. c. d. allows the seamless flow of information through the enterprise. affords local groups stable broadband access. has reduced some networ"ing problems. all of the above. Difficulty: Easy Reference: p #,+

Answer: c $1.

' critical necessity for ensuring the integration of local systems into a global system is a. b. c. d. adherence to data and technical standards. use of standard hardware at the local level. use of standard user software at the local level. all of the above. Difficulty: Me'ium Reference: p #,+

Answer: a $2. 5)6s a. b. c. d.

use the public 1nternet for communications. may not be able to support large numbers of remote users, due to the variable traffic on the 1nternet. provide many of the same services as private networ"s. all of the above. Difficulty: Me'ium Reference: p #,-

Answer: ' $3.

Come domestic firms are outsourcing systems development wor" or maintenance of e+isting systems to e+ternal vendors in another country, a process "nown as a. b. c. d. domestic outsourcing. offshore software outsourcing. foreign franchising. global development. Difficulty: Easy Reference: p #,(

Answer: b $/.

0hich types of systems are widely used by manufacturing and distribution firms to connect to suppliers on a global basis9 a. b. c. d. T)C systems !.1 systems =:% systems 6one of the above Difficulty: Easy Reference: p #,(

Answer: b

+#*

$#.

Gne cost of offshore software outsourcing is "nowledge transfer costs. This refers to a. b. c. d. the time it ta"es to transfer wor" to an outsourcer. the loss of "nowledge that accompanies layoffs when 3obs are lost to outsourcers as well as retention bonuses to "eep staff wor"ing long enough to share their "nowledge. the time, documentation, travel costs, and other costs it ta"es to ensure the outsourcer understands your business and pro3ect re4uirements. the time it ta"es to transfer core data for a system to an outsourcer. Difficulty: Me'ium Reference: p #,!

Answer: c $$.

?or their software development methodology, software outsourcing companies in 1ndia typically use a. b. c. d. the same development models as -.C. companies. the -nified %odeling 8anguage. the =apability %aturity %odel. rational -nified )rocess. Difficulty: )ar' Reference: p #,#

Answer: c $&.

The potentially most e+pensive EhiddenF cost component of offshore software outsourcing is the cost of a. b. c. d. selecting a vendor. transferring wor" to the offshore outsourcer. laying off domestic employees. ad3usting to cultural differences. Difficulty: )ar' Reference: pp #,#%#,$

Answer: ' $(.

The potentially least e+pensive EhiddenF cost component of offshore software outsourcing is the cost of a. b. c. d. selecting a vendor. transferring wor" to the offshore outsourcer. laying off domestic employees. ad3usting to cultural differences. Difficulty: )ar' Reference: pp #,#%#,$

Answer: a $*.

's per your reading of the chapter case discussing overseas outsourcing, the outsourcing support the -nited Ctates receives from 1ndia will lead to a. b. c. d. tremendous loss of 3obs in the 1T sector. a severe 1T labor shortage in the -nited Ctates. rise in systems cost. reduction of spending on systems costs. Difficulty: Me'ium Reference: p #,"

Answer: '

+#,

&,.

'ccording to the chapter case discussing 6estlJ2s new information systems, what was the chief implementation challenge9 a. b. c. d. 1ncompatible legacy systems :esistance from managers :esistance from ran">and>file employees 8ac" of standard business processes Difficulty: Easy Reference: p #+#

Answer: b

Fill in t/e 4lan0s


&1.

'HnI business driver is a force in the environment to which businesses must respond and that influences the direction of business. Difficulty: Easy Reference: p !$+

&2.

'HnI global market is formed by consumers around the world who are interested in consuming similar products that are culturally approved. Difficulty: Me'ium Reference: p !""

&3.

Kapanese consumers who only want to purchase products made in Kapan are an e+ample of cultural particularism. Difficulty: Me'ium Reference: p #**

&/.

The movement of information across international boundaries is called transborder data flow. Difficulty: Easy Reference: p #**

&#.

'HnI franchiser is a firm where a product is created and initially produced in the home country, but must rely heavily on foreign personnel for further production, mar"eting, and human resources. Difficulty: Easy Reference: p #*+

&$.

1n a global system configuration, a networked system is one in which systems development and operations occur in an integrated and coordinated fashion across all units. Difficulty: Easy Reference: p #*(

&&.

Core systems support functions that are absolutely critical to the organization. Difficulty: Easy Reference: p #*&

+#+

&(.

Cooptation is defined as bringing the opposing local organization groups into the process of designing and implementing an information systems solution without giving up control over the direction and nature of the change. Difficulty: )ar' Reference: p #,,

&*.

=ompanies now outsource some of their new systems development wor" to e+ternal vendors in another country. This practice is called offshore software outsourcing. Difficulty: Me'ium Reference: p #,(

(,.

Legitimacy is defined as the e+tent to which your authority is accepted on grounds of competence, the vision, or other 4ualities. Difficulty: Me'ium Reference: p #,*

Essay Questions
(1.

5/at steps 'o t/e aut/ors recommen' be ta0en to 'e6elop an international information systems arc/itecture7 Begin by developing an understanding of the overall mar"et forces, or business drivers, that are pushing your industry toward global competition, i.e., the global environment. 'lso e+amine the inhibitors or negative factors that could scuttle the development of a global business. .evelop a corporate strategy for competing in the global environment. )lan how to structure your organization so that it can pursue the strategy you have developed. =onsider the management issues in implementing your strategy and ma"ing the organization design a reality. The "ey here will be the design of business procedures. =onsider the technology platform. Lou must have a corporate strategy instructor before you can choose the right technology. Difficulty: Me'ium Reference: pp !"$%!"&

+#-

(2..

8ist at least four general cultural factors an' four specific business factors 'ri6ing global business 5/ic/ two factors 9one of eac/: 'o you feel are most problematic at t/e current moment7 5/y7 General .ultural Factors: Global communication and transportation technologies, development of the global culture, emergency global social norms, political stability, and a global "nowledge base Specific 4usiness Factors: Global mar"ets, global production operations, global coordination, global wor"force, and global economies of scale

Gne answer might be that two general cultural factors most in danger at the current moment are political stability and development of a global culture Heither would be a good answerI. Two business factors most problematic at the moment are global coordination and global wor"force. =oordinating wor" on a truly global scale re4uires a fairly high level of corporation sophistication that only a small number of large firms are truly capable of on a real>time basisD and there is significant opposition in both developed and underdeveloped countries to changes in local labor mar"ets which are threatened by global trade. Difficulty: Me'ium (3. Reference: p !"&

5/at are t/e four specific types of business c/allenges to global business systems7 5/ic/ one 'o you t/in0 will be easiest to sol6e7 5/y7 speeds. ;ersonnel: Chortages of s"illed consultants. 'nswers will vary, but an e+ample answer is The easiest challenge to solve is that of standards, because of the growth of universal, 1nternet>based standards, 0eb services, and component>based programming. Difficulty: Me'ium Reference: pp !""%#*, Stan'ar's: .ifferent !.1, e>mail, telecommunications standards. Reliability: )hone networ"s are not uniformly reliable. Spee': .ifferent data transfer speedsD many are slower than -nited Ctates

+#(

(/.

)ow 'o cultural1 legal1 political1 an' social e<pectations affect global business7 't a cultural level, particularism in all its forms re3ects the very concept of a shared global culture and re3ects the penetration of domestic mar"ets by foreign goods and services. .ifferences among cultures produce differences in social e+pectations, politics, and ultimately in legal rules. .ifferent cultures produce different political regimes, with different laws governing the movement of information, information privacy of their citizens, origins of software and hardware in systems, and radio and satellite telecommunications. !ven the hours of business and terms of business trade vary greatly across political cultures. =ultural and political differences profoundly affect organizations2 standard operating procedures. !verything from the different reliability of telephone systems to the shortage of s"illed consultants creates barriers. 6ational laws and traditions have created different accounting practices in various countries, which impact the way profits and losses are analyzed. These accounting practices are tightly intertwined with each country2s legal system, business philosophy, and ta+ code. =ultural differences can also affect the way organizations use information technology. Kapanese firms, for e+ample, use fa+ technologies intensively but are not comfortable with e> mail. 8anguage is a significant barrier. Coftware may have to be built with local language interfaces before a new information system can be successfully implemented. =urrency fluctuations can play havoc with planning models and pro3ections. Come of these problems will diminish in parts of the world when the euro becomes more widely used. 'lthough the te+t does not mention this, differences in religious practice Hespecially if the state promotes a specific religionI can create almost insurmountable problems. Difficulty: Difficult Reference: pp !"&%#*,

(#.

5/at are t/e organi2ational principles a company s/oul' follow to 'e6elop a global company an' its information systems support structure7 Do you agree7 5oul' you c/ange t/ese principles1 or a'' ot/ers7 Support your answer Grganize value>adding activities along lines of comparative advantage. .evelop and operate systems units at each level of corporate activityB regional, national, an international. !stablish, at world head4uarters, a single office responsible for development of international systems, a global chief information officer position. Difficulty: Easy Reference: p #*(

+#!

($.

='entify at least fi6e problems associate' wit/ international networ0s =osts and tariffs 6etwor" management 1nstallation delays )oor 4uality of international services :egulatory constraints =hanging user re4uirements .isparate standards 6etwor" capacity Difficulty: Easy Reference: pp #,+%#,-

(&.

8ist at least four 'ifficult problems for management in t/e 'e6elopment of t/e international information system 'greeing on user re4uirements 1ntroducing changes in business processes =oordinating applications development =oordinating software releases !ncouraging local users to support global systems Difficulty: Me'ium Reference: pp #*#%#*$

+##

((.

Evaluation >ou are wor0ing for a global electronic parts manufacturing company wit/ 'i6isions in Taiwan1 Malaysia1 Australia1 an' Germany1 t/at /as embar0e' on 'e6eloping a global enterprise system To ensure t/at o6erseas 'i6isions comply wit/ t/e new system1 t/ey are consi'ering a cooptation strategy in w/ic/ t/ey will permit eac/ country unit t/e opportunity to 'e6elop one transnational application first in its /ome territory1 an' t/en t/roug/out t/e worl' 5/at are t/e benefits an' 'rawbac0s to t/is approac/7 Are t/ere any ot/er solutions for t/e company?s cooptation strategy7 0ith this strategy, local units will feel a sense of ownership in the transnational effort. Gn the downside, this assumes the ability to develop high>4uality systems is widely distributed, and that, a German team can successfully implement systems in Taiwan or %alaysia. This will not always be the case. 'nother cooptation strategy would be to develop new transnational centers of e+cellence, or a single center of e+cellence. 1n this, you would identify a regional location with e+cellent implementation of specific business processes. These centers draw heavily from local national units, are based on multinational teams, and must report to worldwide management. The centers of e+cellence would perform the initial identification and specification of business processes, define the information re4uirements, perform the business and systems analysis, and accomplish all design and testing. 1mplementation, however, and pilot testing are rolled out to other parts of the globe. :ecruiting a wide range of local groups to transnational centers of e+cellence helps send the message that all significant groups are involved in the design and will have an influence. Difficulty: Difficult Reference: p #,,

(*.

5/at options 'oes a company /a6e for pro6i'ing international connecti6ity7 They can build their own international private networ", rely on a networ" service based on the public switched networ"s throughout the world, or use the 1nternet and intranets. Difficulty: Easy Reference: pp #,+%#,-

+#$

*,.

Synthesis )ow 'oes t/e =nternet benefit t/e 'e6elopment of a global information system7 S/oul' all global systems be base' on t/e =nternet7 The 1nternet allows anyone connected to it to communicate and compute at any time, or anywhere. Catellite systems, digital cell phones, and personal communications services will ma"e it even easier to coordinate wor" and information in many parts of the globe that cannot be reached by e+isting ground>based systems. =ompanies can use 1nternet technology to construct virtual private networ"s to reduce wide area networ"ing costs and staffing re4uirements. 1f it wishes, the company can outsource the virtual private networ" to an 1nternet service provider. 'll global systems can2t be based primarily on the 1nternet, because currently not all countries have the same access to the 1nternet. 'dditionally, high>traffic volumes at certain times of the day in various regions may impede responsiveness. Difficulty: Me'ium Synthesis in terms of formulate Reference: p #,-

+#&