Deck 15: Managing Global Systems

Question 1

The growth of powerful communications technologies and the emergence of world cultures create the condition for global markets.

Answer 1

True

Question 2

In international companies, English has become a kind of standard business language.

Answer 2

True

Question 3

How do cultural, legal, political, and social expectations affect global business?

Answer 3

At a cultural level, particularism in all its forms rejects the very concept of a shared global culture and rejects the penetration of domestic markets by foreign goods and services. Differences among cultures produce differences in social expectations, politics, and ultimately in legal rules. Different 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. Even the hours of business and terms of business trade vary greatly across political cultures.
Cultural and political differences profoundly affect organizations' standard operating procedures. Everything from the different reliability of telephone systems to the shortage of skilled consultants creates barriers. National 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 country's legal system, business philosophy, and tax code. Cultural differences can also affect the way organizations use information technology. Japanese firms, for example, use fax technologies intensively but are not comfortable with e-mail. Language is a significant barrier. Software may have to be built with local language interfaces before a new information system can be successfully implemented. Currency fluctuations can play havoc with planning models and projections. Some of these problems will diminish in parts of the world when the Euro becomes more widely used.

Question 4

What are the four specific types of business challenges to global business systems?
Which one do you think will be easiest to solve?
Why?

Question 5

International information systems refer to

A) systems that talk to one another using the global Internet.
B) systems used by international businesses.
C) business processes that span the globe.
D) the basic information systems required by organizations to coordinate worldwide trade and other activities.
E) systems that are developed by global firms.

Question 6

Transborder data flow refers to

A) the flow of information in international systems.
B) the ways in which a countries laws change the flow of data from one country to another.
C) the business of moving information from one country to another.
D) the movement of information across international boundaries.
E) the business process of coordinating information from many different countries.

Question 7

Global coordination of all of the major business functions permits the location of business activity according to

A) comparative advantage.
B) social norms and values.
C) competitive threat.
D) knowledge base.
E) labor costs.

Question 8

A powerful strategic advantage for a globalized firm is lowered cost factors in production.

Question 9

List at least four general cultural factors and four specific business factors driving global business. Which two factors (one of each) do you feel are most problematic at the current moment?
Why?

Question 10

What steps do the authors recommend be taken to develop an international information systems architecture?

Question 11

In a multinational business strategy, the ________ business function is decentralized, dispersed to foreign units.

A) finance/accounting
B) production
C) human resources
D) strategic management
E) sales/marketing

Question 12

The collapse of the Eastern block has retarded the growth of a world culture.

Question 13

General cultural factors driving global business are

A) global communication and transportation technologies, a global knowledge base, and global social norms.
B) the development of global markets, political stability, and a global workforce.
C) the rise of the global workforce, political stability, and a global knowledge base.
D) the rise of a global workforce, global economies of scale, and global production and operations.
E) growth of a global village spurred by television, the Internet, and computerization.

Question 14

A force in the environment to which businesses must respond and that influences the direction of the business is called a business

A) driver.
B) threat.
C) process.
D) matrix.
E) strategy.

Question 15

What is the first thing you should consider when thinking about building an international information system?

A) the state of world politics
B) look for new technologies that will help you achieve your goals
C) consider the global environment where your business will operate, and identify the business drivers for your firm and industry
D) the business challenges you face in the global environment
E) the different computing and communication standards in the world

Question 16

Particularism is a concept based on accepting a shared global culture and the penetration of domestic markets by foreign goods and services.

Question 17

The major dimensions of international systems architecture include each of the following except

A) the global environment.
B) corporate global strategy.
C) technology platform.
D) transborder data flows.
E) management and business processes.

Question 18

Micromarketing describes the direct marketing of products to individuals rather than groups.

Question 19

Global markets, production, and administration create the conditions for:

A) global systems
B) global economies of scale
C) a truly global labor force
D) domestic exporter kinds of businesses
E) localized software

Question 20

Global business drivers can be divided into two groups:
general cultural factors and specific business factors.

Question 21

In terms of global business strategy, the governance of ________ firms has been likened to a federal structure-strong central management core of decision making, but considerable dispersal of power and financial resources.

A) domestic exporter
B) multinational
C) franchiser
D) transnational
E) domestic importer

Question 22

In a multinational strategy, financial management is centralized while production and sales are decentralized.

Question 23

There are two primary global organization types:
management centralized in the home country or distributed to foreign centers.

Question 24

In a franchiser business strategy, each foreign unit designs its own solutions and systems.

Question 25

A company that controls finances in the home country and decentralizes production, sales, and marketing operations to other countries is using a ________ strategy.

A) domestic exporter
B) franchising
C) transnational
D) multinational
E) conglomerate

Question 26

Most companies pursuing a global strategy begin as

A) domestic exporters.
B) multinationals.
C) franchisers.
D) transnationals.
E) conglomerate corporations.

Question 27

Describe the four main global strategies that form the basis for global firms' organizational structure.

Question 28

In terms of global business strategy and structure, a franchise company will use a policy of

A) centralized production, accounting, marketing, human resources, with strategic management.
B) dispersed production, accounting, human resources, with centralized strategic management, and marketing.
C) dispersed production and marketing, with centralized accounting, human resources and strategic management.
D) dispersed production, marketing, and human resources, with centralized strategic management and finance/accounting.
E) decentralized production, accounting, human resources, with a decentralized management.

Question 29

Transnational firms have

A) no single national headquarters but many regional headquarters and perhaps a world headquarters.
B) headquarters in each country where they do business.
C) headquarters in the home country with smaller headquarters around the world.
D) no single headquarters.
E) a centralized headquarters but not in the home country.

Question 30

All of the following present challenges to developing global business systems except

A) foreign accounting practices.
B) production costs.
C) language differences.
D) exchange rates.
E) shortages of skilled consultants.

Question 31

What are the organizational principles a company should follow to develop a global company and its information systems support structure?
Do you agree?
Would you change these principles, or add others?
Support your answer.

Question 32

Which of the following is not one of the system configurations used by global firms?

A) centralized
B) duplicated
C) decentralized coordinated
D) networked
E) localized

Question 33

Which of the following is not a business driver of global business?

A) global communication and transportation technologies
B) development of global culture
C) emergence of global social norms
D) political stability
E) growth of international systems

Question 34

To avoid the cost and uncertainty of moving information across national boundaries, most multinational firms

A) maintain a master database at their head offices.
B) develop a master system that meets the standards of all the countries concerned.
C) use microwave satellite transmission to move data.
D) develop separate systems within each country.
E) use a cloud-based service.

Question 35

Making judgments and taking action on the basis of narrow or personal characteristics is referred to as

A) localization.
B) cooptation.
C) particularism.
D) prejudicial.
E) globalization.

Question 36

In a transnational business strategy, all of the regional units participate and coordinate over all activities, from production to sales.

Question 37

Which of the following is not a specific challenge to global business systems?

A) shortages of skilled consultants
B) cultural expectations
C) different telecommunication standards
D) different data transfer speeds
E) unreliable phone networks

Question 38

In terms of global business strategy and structure, a multinational company will use a policy of

A) mixed sales and marketing, with centralized production, accounting, human resources, and strategic management.
B) centralized production, accounting, marketing, human resources, with strategic management.
C) dispersed production, accounting, human resources, with centralized strategic management, and marketing.
D) dispersed production and marketing, with centralized accounting and strategic management.
E) making local units that are clones of the mother country units.

Question 39

Which of the following is not one of the primary types of firm strategy discussed in the chapter?

A) domestic exporter
B) multinational
C) franchiser
D) transnational
E) international exporter

Question 40

In terms of global business strategy and structure, a multinational strategy

A) centralizes production and accounting and decentralizes marketing and human resources.
B) concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries.
C) centralizes production, accounting, marketing, and human resources.
D) disperses production and marketing, with centralized accounting, human resources and strategic management.
E) concentrates production and marketing in each country, and decentralizes accounting and human resources.

Question 41

The network systems structure is the most visible in ________ services.

A) production
B) financial
C) marketing
D) software design
E) administrative

Question 42

In decentralized systems

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.
B) each foreign unit designs its own unique solutions and systems.
C) systems development and operations occur in an integrated and coordinated fashion across all units.
D) foreign units design the solutions and systems used at the domestic home base.
E) all systems are designed in domestic headquarters and then distributed to foreign units.

Question 43

Of the following, which is one of the central principles recommended in this chapter for a firm organizing itself for international business?

A) Organize value-adding activities along lines of comparative advantage.
B) Establish multiple offices for international systems and a global CIO position.
C) Disperse production and marketing to regional centers and establish a single center for world headquarters and strategic management.
D) Develop and operate systems units at the international level first.
E) Centralize production, but decentralize marketing and sales to be close to the customer.

Question 44

Which of the following is not one of the main benefits to implementing global systems?

A) superior management and coordination
B) vast improvements in operation
C) new economies of scale at production facilities
D) reduced hardware costs
E) optimize use of corporate funds

Question 45

As a firm moves from local option systems to regional and global systems

A) agency costs increase.
B) coordination costs decrease.
C) transaction costs increase.
D) both transaction and agency costs increase.
E) all costs increase.

Question 46

Which of the following is not one of the main organizational issues facing firms who are seeking to globalize?

A) choosing a global strategy
B) organizing the global business structure
C) organizing the systems management
D) defining the global environment
E) organizing the business

Question 47

German companies

A) do not recognize the profit until the project is completely finished and they have been paid.
B) recognize profits before the project is finished.
C) recognize profits when the project is initialized.
D) do not recognize the profits until they have been formally audited.
E) do not have profits, but instead report dividends.

Question 48

Domestic exporters typically have highly ________ systems.

A) duplicated
B) centralized
C) networked
D) decentralized
E) autonomous

Question 49

In centralized systems

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.
B) each foreign unit designs its own unique solutions and systems.
C) systems development and operations occur in an integrated and coordinated fashion across all units.
D) systems development and operations occur totally at the domestic home base.
E) systems development is a combined effort of domestic and international units.

Question 50

Which of the following is not one of the principal management challenges in developing global systems?

A) encouraging local users to support global systems
B) coordinating applications development
C) defining an acceptable test plan
D) agreeing on common user requirements
E) introducing changes in business processes

Question 51

Franchise companies have typically had ________ systems.

A) duplicated
B) centralized
C) networked
D) decentralized
E) autonomous

Question 52

In networked systems

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.
B) each foreign unit designs its own unique solutions and systems.
C) systems development and operations occur in an integrated and coordinated fashion across all units.
D) foreign units design the solutions and systems used at the domestic home base.
E) development occurs at the home base but operations are handed over to autonomous units in foreign locations.

Question 53

Multinational companies tend to dominantly have ________ systems.

A) duplicated
B) centralized
C) networked
D) decentralized
E) autonomous

Question 54

In cooptation

A) the new global system replaces all unit systems, including systems in the home territory.
B) the systems used on the company's home country are modified to communicate with the systems of foreign units so that each unit can retain their unique business processes.
C) the systems of specific foreign units are chosen to duplicate for use by other units.
D) opponents to a planned global system are brought into the process of designing and implementing the solution.
E) all the relevant parties are asked to participate in the design of global systems.

Question 55

In order to define centers of excellence in a global firm, you would first need to identify

A) functional areas.
B) core business processes.
C) SOPs.
D) core competencies.
E) international best practices.

Question 56

Transnational companies have tended to use a(n) ________ systems configuration.

A) duplicated
B) centralized
C) networked
D) decentralized
E) autonomous

Question 57

Effective networked systems must have a

A) powerful telecommunications backbone.
B) culture of shared applications development.
C) shared management culture that crosses cultural barriers.
D) both B and C.
E) A, B, and C.

Question 58

From your reading of the chapter case, which of the following best describes the challenge Unilever was facing as a global company?

A) inadequate information for managerial decision making
B) lack of buy-in for global systems by foreign units
C) too many systems in too many data centers, making it difficult to process transactions in a timely fashion
D) poor governance of global systems
E) managing a global supply chain

Question 59

Most large companies with overseas operations have inherited

A) recently built technology platforms for international systems.
B) batch-oriented reporting from independent foreign divisions to corporate headquarters.
C) transaction-oriented reporting based at the home office for overseas business.
D) global marketing systems developed domestically.
E) enterprise systems developed by local firms.

Question 60

In duplicated systems

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.
B) each foreign unit designs its own unique solutions and systems.
C) systems development and operations occur in an integrated and coordinated fashion across all units.
D) foreign units design the solutions and systems used at the domestic home base.
E) systems development is a combined effort of domestic and international units which are then duplicated across the world.

Question 61

Which systems are worth sharing on a transnational basis, from a cost and feasibility point of view?

A) only systems that support functions that are absolutely critical to the organization
B) core systems and worthwhile provincial systems
C) core systems and any financial systems that can be easily integrated with each other
D) financial and accounting systems
E) systems that support decentralized units

Question 62

To comply with European privacy laws, many multinational firms have developed information systems within each European country.

Question 63

Which of the following is not an important technology issue to consider when developing an international information system?

A) standardizing the global computing platform
B) deciding how mobile computing will fit into your international system
C) finding specific software applications that are user friendly and enhance productivity
D) building sufficient connectivity
E) developing common data standards

Question 64

Which of the following is not an important factor when implementing a global information system solution?

A) agreeing on common user requirements
B) understanding if your computer system can operate in a global environment
C) introducing changes in business processes
D) coordinating applications development
E) coordinating software releases

Question 65

One major telecommunications challenge in an international setting is making data flow seamlessly across networks shaped by disparate national standards.

Question 66

Global systems allow fixed costs to be amortized over a much smaller customer base.

Question 67

Based on your reading of the chapter, why should companies avoid creating an all-encompassing, new global system when moving towards global operations?

A) This approach may fail due to a lack of visibility.
B) It is difficult to quantify and explain the benefits of information systems that are large.
C) "Grand design" approaches typically fail to identify centers of excellence.
D) Opposition is strengthened because of requirements for huge resources.
E) This approach will fail because of a lack of concrete objectives.

Question 68

Software localization is important for global systems because

A) all users need to be trained in English to use global systems.
B) only some users need to know English, while others can use their local languages.
C) productivity of employees rises when systems use their local languages.
D) computer programs are almost always written in English.
E) most managers around the world use English as their business language.

Question 69

European countries have very strict laws concerning transborder data flows and privacy.

Question 70

When 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) cooptation.
B) change management.
C) implementation.
D) advocacy.
E) cooperation.

Question 71

Japanese consumers who only want to purchase products made in Japan are an example of

A) cultural particularism.
B) political culture.
C) universal global attitudes.
D) different laws in different countries.
E) different business standards.

Question 72

You work for a business consulting firm, and you have been asked to advise Bamboo Home, a home furniture retailer on implementing a global information systems. What general benefits can Bamboo Home expect from a globalized system?

Question 73

List at least four difficult problems for management in the development of the international information system. Which do you see as the most problematic, and why?

Question 74

Software localization is the process of

A) translating a user interface into a second language.
B) converting software programming to run on a different platform.
C) converting software to operate in a second language and with local conventions.
D) modifying software so that it can be adopted in other countries without engineering changes.
E) modifying software so executives can understand its command language.

Question 75

The way to identify core business processes is to conduct a

A) cost-benefit analysis.
B) work-flow analysis.
C) business process analysis.
D) feasibility analysis.
E) systems analysis.

Question 76

A global firm can develop transnational centers of excellence as an effective technique to

A) ensure connectivity between regional systems.
B) encourage user support of global systems.
C) effectively identify global business processes.
D) develop a merit-based hierarchy among regional groups.
E) identify who opposes the proposed global changes.

Question 77

Accounting practices can vary significantly from country to country.

Question 78

You are working for a global electronic parts manufacturing company with divisions in Taiwan, Malaysia, Australia, and Germany, that has embarked on developing a global enterprise system. To ensure that overseas divisions comply with the new system, they are considering a cooptation strategy in which they will permit each country unit the opportunity to develop one transnational application first in its home territory, and then throughout the world. What are the benefits and drawbacks to this approach?
Are there any other solutions for the company's cooptation strategy?

Question 79

The chapter outlines four steps in developing an effective global system solution. Which of the following is not one of these steps?

A) Identify outdated legacy systems to be replaced.
B) Identify the core systems to coordinate centrally.
C) Choose a developmental approach, incremental, evolutionary, or other.
D) Make the benefits clear.
E) Define the core business processes.

Question 80

With the growth of the Internet and reliable phone networks, skilled consultants are readily available to companies operating in global markets.