Answer to Question #185413 in Management for Victor Campbell

Question

In developing an international system, discuss the strategy a firm should take in order to make a successful move toward globalization, discuss the challenges posed by global information systems, and the management solutions for these challenges.

Answer 1

International Systems

Strategies to Consider

In order to make a successful move toward globalization, a firm need to consider basic strategies which are essential for developing international business. These strategies include domestic exporter, franchiser, multinational and transnational.

• Domestic exporter – is a strategy that involves heavy centralization of commercial activities in the country of originality. Herein, international sales are dispersed through agency agreements and foreign marketing totally relies on domestic home base strategies.
• Franchisers – in this strategy, products are created, designed, financed and initially produced in the country of origin, but for some specific reasons, a product must heavily rely on foreign personnel for further production.  
• Multinational – this concentrates control and financial management out of a central home country while decentralizing production, marketing and sales operations to units in different countries.
• Transnational – in this strategy, firms have many regional headquarters instead of single national headquarters and are managed globally without reference to national borders.

Challenges Posed by Global Information Systems

Global information systems tend to pose challenges due to political, cultural and language diversity. This diversity results in the magnification of differences in business processes and organizational culture thus encouraging proliferation of local information systems that are difficult to integrate. Also, businesses may struggle to identify the correct global business strategy which can make a firm to lack a conscious plan.

Management Solutions

To manage challenges, global businesses need to identify common set of user needs for the entire enterprise by coordinating the development of applications and software releases, and using legitimacy to enlist user support during change process.