Running head: GLOBAL INFORMATION SYSTEMS 1

Global Information Systems

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1. Introduction

a. Overview of the Global Information System (GIS) technology.

b. Use of GIS by multinational corporations.

c. Advantages of GIS for the international business.

d. E-business.

e. Growth of the Internet.

f. Disadvantages of GIS.

g. GIS discussion in the textbook.

h. Recommendations for companies.

2. Conclusion
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Global Information Systems

Globalization continues to create new trends and rules for companies operating in

different countries. It requires them to manage an increased number of suppliers, customers, and

subsidiaries in an effective and efficient manner. Naturally, companies are faced with

unprecedented complexities while doing business and need solutions that help to overcome all

barriers. Global Information Systems (GIS) is one of the solutions that manage the challenges of

international companies by performing a number of functions, such as the provision of supply

chain information, facilitation of communication, and support of decision-making. Many

business experts consider GIS as the most important function that allows achieving operational

flexibility and desired profits. The present paper discusses the impact, advantages and

disadvantages of GIS in modern international business.

A global information system is defined by Bidgoli (2012) as “an information system that

works across national borders, facilitates communication between the main office and

subsidiaries overseas, and incorporates the technologies required to store, manipulate and

transmit data across cultural and geographical boundaries” (p. 9). There are three primary

components of GIS as described by Bidgoli (2012): “a global database, information-sharing

technologies, and a network capable of global communication” (p. 162). The first component, a

global database, is the online base of information related to the business, including names of

people, places, phone numbers, postal codes, and currency rates. Setting up this database is a

difficult and time-consuming task which requires maximum resources and efforts. The second

component includes information-sharing technologies which are built by companies to be shared

with the offices. The last component of the GIS ensures the possibility of global communication

between the subsidiaries and the headquarters. The globalization of world economies has
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established different needs for business, which underline the importance of using GIS. For

example, many customers around the world today require integrated worldwide services that

could be only implemented by international information systems.

Today, hundreds of thousands of companies have become global to provide their services

in different countries; for example, one of the largest companies in the world, Coca-Cola, has

announced that more than eighty percent of its revenue came from foreign markets outside the

United States (Bidgoli, 2014). The same author wrote that airline reservation system is widely

recognized as the world’s first interactive global system implemented on a large scale (p. 160).

After the success of the first GIS, many companies began to adopt similar technologies. Today,

multinational corporations like Toyota, Whirlpool, Microsoft, and General Electric use them. For

example, Apple has been expanding e-business in various ways: expansion of the mobile ad

platforms to other countries, development of the mobile payment service and other e-commerce

initiatives aimed their enhancement in the company’s business strategy (Besson & Bourdon,

2015). It is sufficient to claim that every business that has a website in some way utilizes a GIS

because it can be reached in various parts of the world.

In addition, to the opportunity of being international GIS’s bring a number of specific

advantages. To explain the benefits of GIS for global enterprises, e-business, and growth of the

Internet are described as conditions that enable the advantages (Sousa & Oz, 2014). First, E-

business is defined as the conduct of business processes on the Internet. It is one of the most

important factors in the expansion of GIS because it involves transactions that support the

generation of profits and operations that concentrate on purchasing and selling goods and

services. Specifically, these operations include creating demand, promoting business

communication between companies and providing aftersales support. Without these operations,
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the efficiency of the GIS would be considerably low, which would eventually lead to negative

consequences.

The list of the activities associated with E-business includes website marketing, online

personnel training, communications, electronic retailing and selling of the goods and services

online through the online stores. In addition to these functions, the technology provides control

over administrative and operational activities, such as HR management, customer relationship

management, online banking, and accessing Internet for business-related inquiries. Eventually,

E-business ensures faster and easier communication, increases operational hours, brings new

market opportunities, and reduces the cost of business.

Second, the growth of the Internet all over the world ensures that GIS can be

implemented. According to Bidgoli (2012), the developing countries have seen “the highest

increases in Internet users over the last decade, and the pace in developed countries has

decreased” (p. 161). Specifically, the number of users in Latin America/Caribbean and Asia has

exceeded 200 million and 820 million respectively. The expansion of the technology provides the

international companies with the opportunity to share information, control performance,

coordinate operations and, therefore, conduct strategic planning function. Moreover, the Internet

allows international businesses to enhance its management and coordination of the organizational

efforts of the numerous subsidiaries, which is especially useful for large enterprises that attempt

to enter new global markets. Therefore, the growth of the Internet along with E-business have

greatly contributed to GIS and provided many advantages to international companies.

Along with great benefits of GIS, there are several disadvantages described in the

relevant literature. For example, Biehl (2007) suggested that unemployment, privacy and

establishment of the dominant culture are the most widely recognized issues. Firstly, GIS may
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lead to mass unemployment because it created job redundancies, downsizing, and outsourcing.

When an international company moves its production facilities to a developing country in an

effort to cut costs, it takes tens of hundreds of low and middle-level jobs away and increases

unemployment rates. If international expansion is implemented by many companies,

unemployment rates increase dramatically, along with nationwide protests of former workers.

Secondly, although information technologies have made the communication as accessible as

ever, they also created significant concerns over the privacy matters. Today, privacy breaches are

frequent occurrences that expose private information of companies and individual users and

require more effective safety solutions. Thirdly, as the latest trends showed, the influence of the

dominant Western culture and the English language have overshadowed other cultures and

languages, making them unnecessary in the business communication (Leidner & Kayworth,

2006). Therefore, GIS also carry considerable disadvantages that require correspondent solutions

from IT security experts.

The topic of GIS is given considerable attention in the textbook. Specifically, the Chapter

9 is dedicated to the investigation of GIS, reasons to become a global business, E-business, the

growth of the Internet, and multinational corporations that utilize GIS. This part of the textbook

is concerned with the detailed description of GIS’s components and its implementation by large

international corporations. Furthermore, it discusses the barriers to implementation of

information systems and ways to overcome them. Therefore, the textbook provides all essential

information needed for an understanding of the GIS for the readers and could be considered as a

reliable source of the information.

Having identified all relevant benefits and shortcomings of the GIS, it is sufficient to

recommend its technology for international companies. The technology of GIS is attractive to all
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international organizations and companies that intend to enter global markets because of the

widespread availability of Internet, reduced communication costs, and enhanced

telecommunication systems. By taking an advantage of these conditions, the companies will be

able to increase collaboration, sharing of information, and decentralizing of sales, production,

and marketing activities. However, the utilization of GIS requires major considerations of data

protection during storage and transfer. Moreover, the technology requires profound

understanding and unanimous approval by the top management, therefore, such conditions are

also recommended.

With the advancement of globalization, more and more organizations enter global

markets to increase their revenues and cut costs. For these purposes, they need to use the GIS, a

system that functions across the borders and facilitates the communication, collaboration, and

sharing between the headquarters and the subsidiaries in different countries. One of the most

important functions of the GIS is to deliver timely, relevant, and useful information that can be

further utilized to make effective managerial decisions and guide business towards the defined

objectives. Apparently, the use of GIS is a complex process that requires the involvement of all

organizational members and partners from different units. Therefore, it is recommended to

everyone in the company to have a profound understanding of the process and correspondent

outcomes.

References
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Besson, M., & Bourdon, B. (2015). Can Multimarket Competition Theory explain why

manufacturers are reluctant to adopt e-commerce? The case of the French household

appliances' manufacturers. In EAERCD 2015: 18th International Conference on Research

in the Distributive Trades of the European Association for Education and Research in

Commercial Distribution. EAERCD.

Bidgoli, H. (2014). MIS5. Cengage Learning.

Bidgoli, H. (2012). MIS2. Cengage Learning.

Biehl, M. (2007). Success factors for implementing global information systems.

Communications of the ACM, 50(1), 52-58.

Leidner, D. E., & Kayworth, T. (2006). Review: a review of culture in information systems

research: toward a theory of information technology culture conflict. MIS quarterly,

30(2), 357-399.

Sousa, K., & Oz, E. (2014). Management information systems. Nelson Education.