Some of the major factors that drive the internationalization of business are the growth of inexpensive international communication and transportation. They have developed a world of cultured world with stable expectations or norms. Political stability and a growing global knowledge base that is widely shared also contribute to the world culture. Global markets, global production, coordination, distribution, and global economies of scale are the general factors that create the conditions.
The alternative factors for developing global business are multinational, franchiser, domestic exporter and transnational. Multinationals typically rely on decentralized independence among foreign units with some movement toward development of networks. Franchisers typically duplicate systems across many countries and use centralized financial controls. Usually domestic exporters are centralized in domestic headquarters with some decentralized operations permitted. Transnational firms have to permit considerable decentralization of development and develop networked system configurations.
Global information systems create challenges because political, cultural and language diversity greatly increases the differences in business processes and organizational culture and encourages growth of disparate local information systems that are hard to implement. The solution to the problem is to define a small subset of core business processes and concentrate on creating systems to support these processes. Managers will have to intentionally cooperate widely dispersed foreign units to act in the development and operation of these systems, being cautious to maintain total control.
Integrating a global system mandates an implementation strategy that considers both technology platforms and business design. The biggest telecommunications and hardware problems are connectivity and systems integration. Going with either a proprietary architecture or with open systems technology are the choices for integration. Global networks can be very complicated to operate and build. A company has a choice of either building their own global network or developing global networks based on the Internet. Building interfaces to existing systems and finding applications that work with various organizational frameworks, cultural and language are the main issues concerning building interfaces.
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