ECIS560: Introduction to IS and E-Commerce

Global IT Management

Categorizing nations

• Advanced Countries – United States– European countries– Australia

• Newly Industrialized Countries– Singapore

• Developing Countries– India

• Lesser Developed Countries– African countries

Advanced countries: USUS top 5 issues

• Aligning IS and corporate goals

• Instituting cross-functional systems

• Organizing and utilizing data

• Reengineering the business processes through the use of technology

• Improving IS human resource

• Instituting cross-functional systems

• Improving IS human resource

• Reengineering the business process through the use of technology (tied for 3rd place)

• Cutting IS costs (tied for 3rd place)

• Creating an information architecture

Advanced countries: EuropeEurope top 5 issues

• Improve IT strategic planning

• Building a responsive IT structure

• Aligning IS and corporate goals

• Effective use of data resources

• IS for competitive advantage

Advanced countries: AustraliaAustralia top 5 issues

• Measuring and improving IS effectiveness

• Managing end-user computing

• Keeping current with new technology

• Integrating data, office automation, and telecommunications

• Training

Newly Industrialized Countries : SingaporeSingapore top 5 issues

• Understanding contribution of IS

• Human resources for IS

• Quality of input data

• Educating senior managers about IS

• Developing user-friendly systems

Developing countries: IndiaIndia top 5 issues

Lesser Developed Countries: AfricanAfrican top 5 issues

• Obsolescence of hardware

• Obsolescence of software

• Proliferation of mixed vendor shops

• Availability of skilled MIS people

• Government interference in computer market

IS Concerns vary by country

Under-Under-developed developed countriescountries

Developing Developing countriescountries

Newly Newly IndustrializedIndustrialized

Advanced Advanced countriescountries

Infrastructure Infrastructure IssuesIssues

OperationalOperational IssuesIssues

Management Management and Control and Control IssuesIssues

Strategic Strategic IssuesIssues

(from Palvia and Palvia, 1996)

Based on the Issues….

• Number of country specific factors influence issues rankings

• The issues themselves are often a reflection of the economic development of a nation

• Global IS managers must be aware of the specific country issues and the factors that influence them

Dimensions Influencing Key IS Issues

National CultureNational Culture

Technological StatusTechnological Status

Political/Legal EnvironmentPolitical/Legal Environment

Economic StructureEconomic Structure

Key IS IssuesKey IS Issues

Technological Status

• Pagers in Angola?

• Telephone lines in South America

• Economic status affects this factor– Gulf countries became economic powers in the

1970s and only recently started investing in infrastructure

Political and Legal environment

• Political transformation in Eastern Europe has impacted businesses, and in turn, IS and IT

• EU laws will require great changes in existing systems and procedures

• Restrictions in Internet use in various countries affects Electronic Commerce

Economic structure

• Level of economic advancement influences the IS issues that are important

• Usually indicated by GDP

IS Concerns vary by countryGDP

Under-Under-developed developed countriescountries

Developing Developing countriescountries

Newly Newly IndustrializedIndustrialized

Advanced Advanced countriescountries

Infrastructure Infrastructure IssuesIssues

Operational Operational IssuesIssues

Management Management and Control and Control IssuesIssues

Strategic Strategic IssuesIssues

(from Palvia and Palvia, 1996)

Culture…isn’t everyone basically the same?

• Japanese prefer fax to email…• Israelis are not big users of word-processing

packages• Indian programmers are too polite…• In Spain, the “OK” symbol is considered

vulgar• Malaysian programmers may be fluent in

English but have no idea of slang terms….

What is Culture?

• “…culture is defined as an integrated system of learned behaviorlearned behavior patterns that are characteristic of the members of any society. It includes everything a group thinks, says, does, and makes – its customscustoms, languagelanguage, materialmaterial artifactsartifacts, and shared systems of attitudesattitudes and feelingsfeelings “- Czinkota, et al (1996), p.298

Researchers agree that…

• Culture is learnedlearned and sharedshared from generation to generation

• Cultural norms may be acquired through parents, schools, religious organizations, and social organizations

• Elements of culture include both verbal and non-verbal language, religion, values and attitudes, perceptions, and protocols

Dimensions of Culture• Hofstede

– Power Distance– Individualism/Collectivism– Masculinity/Femininity– Uncertainty Avoidance– Confucianism/Dynamism

• Hall– Space– Material Goods– Friendship– Time– Agreement

Hofstede’s Dimensions of Culture

• Conducted between 1967-1978

• Collected over 100,000 surveys from IBM employees around the world

• Single, consistent control group

• National differences emerge despite strong corporate culture

Power distance

• Also referred to as Revering HierarchyRevering Hierarchy

• Extent to which subordinates expect and accept the fact that power is distributed power is distributed unequallyunequally in a firm

• Some cultures see large gaps between hierarchical levels

• Panama scores highest, Israel lowest

Individualism/Collectivism

• Extent to which individual sees themselves as part of a group

• Individualistic Cultures– Expected to have opinions– Stress personal achievements– Independence– Individual rights

• Collectivist Cultures– Harmony– Welfare group

Implications for IS Management?

• Systems Design– Inherently group effort– Process designed for conflict

• Incentive Schemes– Reward individual or group?

Masculinity/Femininity

• Taking care of business– “toughness” in meeting goals– “softness” in taking care of people and quality

of life

• Japan ranks as highly masculine• Scandinavian countries rank low• Implications?

– Work hours

Uncertainty Avoidance

• Attitudes towards risk, ambiguity, predictability, and control

• “High avoidance” cultures place emphasis on stability

• “Low avoidance” countries embrace change and innovation

• Japanese high on Uncertainty Avoidance• Hong Kong low on Uncertainty Avoidance

Confucianism/Dynamism

• Recent addition to cultural dimensions• Here-and-now vs. future• Confucian traits

– Thrift– Persistence– Diligence– Patience– Patriarchal authority

Hall’s Dimensions of Culture

• Space– Close-talker?

– Queues

• Materialism– Danish CEO admired for driving old car

– Americans fight for corner office with biggest desk

– Japanese manager may sit with other employees to downplay role of status and material goods

Hall’s Dimensions

• Friendships– Some western cultures make and lose friends

quickly (due to high mobility)– Other cultures may take longer to develop

relationship but long-lasting– Holds for businesses as well … relationship

first, then business

Hall’s Dimensions

• Time– Monochronic cultures

• See time as linear• Events taken one at a time• Stress on punctulaity and deadlines

– Polychronic cultures• See time as non-linear, simulataneous, unlimited• Plans constantly change• Delays less important

• Germans considered monochronic, French are polychronic

High Vs. Low Context Cultures

High contextHigh context(Implicit details)(Implicit details)

Low contextLow context(Explicit details)(Explicit details)

Japanese, Chinese,Japanese, Chinese,Mediterranean, Latin, IndianMediterranean, Latin, Indian

American, German, English,American, German, English,ScandinavianScandinavian

Opinion 1: Culture Does Not Matter

• Cougar et.al (1990)– Compared motivation and personal growth

needs of systems analysts– Compared US, Austria, Singapore, Israel– Found great similarities between all countries– Suggests overpowering effects of professional

culture

Culture not important….

• 1996 study of software development tool preferences between Europe, Japan, US… no significant differences

• 1989: Danish and Canadian analysts had similar design values– First technical values– Second, economic values– Sociopolitical values (concern for users)

Opinion 2: Culture matters

• Mostly anecdotal evidence…– French better at object-oriented design– Japanese better at metrics– British know about Jackson Methodology…

unknown in US– Belgians more “process-oriented”– Americans code first and design later

Consider Japan

• Quality assurance– Japanese fixed all bugs… regardless of severity

• Meaning of requirements– Americans see the requirements as a contract

negotiation… Japanese do not charge for minor changes

• Designers– Americans tend to take a top down approach… Japan

takes bottom up approach

Global Information Systems

• Information Technology (IT) facilitates the global global transformationtransformation of business

• Crossing border poses challenges to technology managers– geographic– legal– cultural– temporal

• need radical changes to existing technology infrastructures and management

Types of global enterprises

• Devised by Bartlett and Ghoshal (1989)

• International

• Global

• Multinational

• Transnational

The International Strategy

• Subsidiaries leverage parent competencies

• Coordinated federation

Global

• R&D, manufacturing done at HQ

• Strategic decisions are centralized

• Central hub

Multinational

• Multidomestic

• Aims at local responsiveness

• Knowledge developed/retained at subsidiary level

• Decentralized federation

Transnational

• Shared decision-making

• Complex coordination

• Centers of excellence

• Dispersed resources

• Integrated network

Jarvenpaa and Ives (1993)

• Built on work by Karimi and Konsysnki

• Based their work on Information Processing Theory (Galbraith 1973)– Good fit when information processing

capacities of firm match requirements of environment and technology

• Jarvenpaa and Ives develop typology of 4 global IT management configurations

The Global IT Strategies

• Intellectual Synergy

• Headquarters Driven

• Independent IT Operations

• Global Integrated IT

• IS managers strive for best fit between above strategy and perceived global strategy

Intellectual Synergy

• Includes several global systems• Each likely to be tailored for individual use• Each run independently by the subsidiary• Subsidiary-HQ IS relationship characterized

by – Personal contacts– Cooperation– Shared learning

Headquarters Driven

• All IT-related decisions made by headquarters

• Goal is– To achieve efficiency– To avoid duplication of development effort

Independent IT Operations

• Independent systems initiatives in each subsidiary

• Focus on local responsibility

• Few, if any, common systems through the firm

• Fosters sense of systems ownership

Global Integrated IT

• Strives for worldwide integration of IT that supports core competencies of firm

• Dispersed resources

• Numerous common systems

• Applications for non-core areas run locally

Empirical Findings

• Data collected from 109 global companies• Moderate level of fit… number of misfits• Misfits explained by problems with

– Hardware/software vendor support quality– Telecommunications support– Senior management support for IT– Pressure for cost savings– Subsidiary resistance

Definition

• A global virtual teamglobal virtual team is defined as – A team in which individual members are

separated by a national boundary while actively collaborating on a common systems project

Factors Affecting Global Software Teams

• Catalyst factors

• Sustaining factors

• Size factors

• Vision factors

Catalyst factors

• Specialized talent– “programming talent” … the Watts study

showed fastest programmer was 30 times quicker than slowest

– Global labor shortage … in 1999, 40% of IS shops are hiring immigrants… 16% are outsourcing

Catalyst Factors…

• Acquisitions– Increasing global mergers and acquisitions– Baan (based in Netherlands) acquired

Canadian, US, Spanish, and British companies and merged them with existing sites in India and Brazil

– Acquisitions have led to project teams suddenly having to collaborate

Catalyst factors…

• Reduction in development costs– Looking for low cost labor– India is acknowledged giant of offshore

programming… earn 25-30% of US counterparts

– Others include Philippines, Russia, China– US workers drawn to more glamorous systems

jobs… someone still has to do the dirty work

Catalyst factors…

• Globalized presence– Global businesses must establish themselves as

global players– Transnational strategies suggest centers of

excellence– Often takes the form of software development

centers around the world

Catalyst factors…

• Reduction in time-to-market– Follow-the-sun development– Exploit time zone differences to create a 24

work schedule on a given project– Turns a disadvantage into an advantage

Catalyst factors

• Proximity to customer– Systems development is a interaction-intensive

process– Needs face-to-face communication– Needs constant communication– Best to have a part of the development team

local

Sustaining factors

• Once the initial desire to set up dispersed virtual teams spurs their use, what sustains them

• Dispersed projects usually first on chopping block

• Natural need to “simplify” … get rid of these complex teams

Sustaining factors

• Development rigor– Smaller, co-located teams use informal

mechanisms for development– Dispersion often leads to greater formalism of

coordination and control… • Specific standards

• Specific methodologies

• Specific quality control issues

Sustaining factors

• Internal freshness– Diversity brings innovation– Global teams have cultural synergies– E.g. global software manager called

architectural review meeting with systems managers from 6 countries… their views profoundly changed the specs of the system

Sustaining factors

• Distance from distractions– Away from the maddening crowd.. No

distractions of a world headquarters– European site called “Santa’s little helpers”– Foreign team members live near their homes,

with their families…. High loyalty and work ethic

Sustaining factors

• Experience– Remotes sites have climbed the learning curve– Experience at distant sites can be leveraged into

centers of excellence

Size Factors

• Scale– Single location IS shops can soon become too

large and unwieldy– Baan’s expansion to other countries was based

on size issues– Microsoft moved away from its single center

ethos for same reason…

Vision factors

• Two visions of the future– Location transparency– Virtual organization

• “Virtualness” already exists• Gartner group predicts 140 million people will be

telecommuting by 2003• Virtual organizations are team-based• Less hierarchical…more network-like structure

Managerial Techniques

• Select global software manager with mix of technical and managerial skills

• MERITMERIT qualities– Multi-culturalist (switch between cultural styles)

– EE-facilitator

– RRecognition promoter (promotes team within organization)

– IInternationalist

– TTraveler