2-1 “the idea of charging for calls belongs to the last century” niklas zennström, skype...
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2-1
“The idea of charging for calls belongs to the last century”
Niklas Zennström, Skype
Fueling Globalization through Information Systems
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Learning Objectives
• Define globalization, describe how it evolved over time, and describe the key drivers of globalization.
• Describe the emerging opportunities for companies operating in the digital world.
• Explain the factors companies have to consider when operating in the digital world.
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Learning Objectives
• Define globalization, describe how it evolved over time, and describe the key drivers of globalization.
• Describe the emerging opportunities for companies operating in the digital world.
• Explain the factors companies have to consider when operating in the digital world.
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World is Flat Video
• www.cb.wsu.edu/~pclay/CSPAN Friedman-1.wmv
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Globalization
• Globalization created a new world characterized by:o Worldwide
communication
o Collaboration without barriers
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Evolution of Globalization
• Mainly European countries are globalizing
• Power is the primary driver
• Industries changed
• Slow pace of change
Globalization 1.0
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Evolution of GlobalizationGlobalization 2.0
• Companies are globalizing
• Reduction in transportation and telecom-munications costs
• Mainly Europe and America involved
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Evolution of Globalization
• Individuals and small groups are globalizing
• Fast changes
• Emergence of new
industries
Globalization 3.0
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Evolution of Globalization: Summary
• The World is Flat (Thomas Friedman)o “10 Flatteners”o Key factors enabling globalization 3.0
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Flattener #1: The Fall of the Berlin Wall
• November 11, 1989
• Fall of communism
• People from the former communist countries gained more freedom
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Flattener #2: Netscape Browser
• November 9, 1995
• First mainstream browser
• Gave individuals access to Internet
THEN
NOW
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Flattener #3: Work Flow Software
• Applications that allow people worldwide to communicate
• XML allows applications to “talk” to each other
• New possibilities for information sharing
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Flattener #4: Supply Chaining
• Integration of retailers, suppliers, and customers
• RFID tags used
• Wal-Mart became an early leader
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Flattener #5: Open Sourcing
• Software and source code freely available to everyone
• Wikipedia a huge success
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Flattener #6: Outsourcing
• Outsourcing companies profited from the drop in telecommuni-cations costs
• Companies can now use talented engineers from anywhere
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Flattener #7: Offshoring
• Companies set up entire factories in countries such as Chinao Mass production
o Low Costs
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Flattener #8: In-Sourcing
• Delegation of company’s key operations to a subcontractoro E.g.: UPS
provides complete supply chain solutions to companies
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Flattener #9: In-Forming
• In-Forming is to individuals what outsourcing, offshoring, and in-sourcing is to companies
• Individuals have access to massive amounts of information
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Flattener #10: The Steroids
• Technologies that support different types of collaborationo Greater mobility
o Convergence
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Learning Objectives
• Define globalization, describe how it evolved over time, and describe the key drivers of globalization.
• Describe the emerging opportunities for companies operating in the digital world.
• Explain the factors companies have to consider when operating in the digital world.
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Opportunities of Operating in the Digital World
• Opportunities of Reaching New Marketso Former Eastern
Block countries provide new opportunities for international companies to reach new customers
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Opportunities of Operating in the Digital World
• Opportunities of a Global Workforceo Low
communications costs
o Highly-skilled labor pool
Engineering Graduates in the US, Europe and India
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We are at the beginning of the IT Revolution!• All products that can be digitized can be
broken apart and reassembled
• Work (and jobs) will flow to where it can be done cheapest (e.g., China)
• NO career or industry is immune!
• New technologies and improving infrastructure will fuel great change
• Learn to be “horizontal” for success – who / how you collaborate
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Learning Objectives
• Define globalization, describe how it evolved over time, and describe the key drivers of globalization.
• Describe the emerging opportunities for companies operating in the digital world.
• Explain the factors companies have to consider when operating in the digital world.
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Challenges of Operating in the Digital World
• Globalization also created a set of unprecedented challenges:o Governmental challenges
o Geoeconomical challenges
o Demographic challenges
o Cultural challenges
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Governmental Challenges
• Political System Challengeso Political stability
• Regulatory Challengeso Tariffso Embargoeso Export regulationso Quotas
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Governmental Challenges II.
• Data-Sharing Challengeso Transborder data flow regulations
• Internet Access and Individual Freedomo Content blocking by governments/censorship
• China – Use of VoIP restricted
• Germany – Sites with fascist symbols prohibited
o Internet access blocking
• Cuba, North Korea
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Worldwide Internet Usage• In 2006 about 20% of active Internet users located in
the US• The Internet usage
o Highest - North America: 70% of populationo Lowest – Africa: 2.6% penetration of use
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Geoeconomic Challenges• Time Zone Challenges
o Real time meetings across continents difficult
o Working around the clock possible
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Geoeconomic Challenges II.
• Infrastructure-Related Challengeso Traditional infrastructure – roads, electricity
o Connectivity – reliable Internet connections
• Challenges Related to Economic Welfareo GDP growth not distributed evenly
throughout the world
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Demographic Challenges
• Differing rates of population growth
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Demographic Challenges II.
• Expertise related challengeso Different
concentration of skilled workers
o Different costs of workers
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Shift Happens
• http://www.youtube.com/watch?v=ljbI-363A2Q
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Cultural Challenges
•National Cultureso Power Distance – differences in how societies
handle the issues of human inequalityo Uncertainty Avoidance – risk taking nature
Individualism/Collectivism – value placed on an individual vs. a group
o Masculinity/Femininity – degree to which a society is characterized as masculine/feminine
o Concept of Time – long term vs. short termo Life Focus –quantity vs. quality of life
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Cultural Challenges II.
• Cultural Barrierso Language – communication language and norms
o Work Culture – work skills, habits and attitudes
o Aesthetics – art, music and culture
o Education – attitudes towards education and literacy
o Religion, Beliefs and Attitudes – spiritual institutions and values
o Social Organizations – family and social cohesiveness
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Cultural Challenges III.
• Other Challengeso Differences in what is regarded as
appropriate
o Standards of dealing with intellectual property
o Different standards
•E.g., writing paper, pillowcases
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The Face of Globalization
• http://www.youtube.com/watch?v=8Bhodyt4fmU&mode=related&search=