Managing Information system in Multi National Companies

Implementing Managing Information system in Multi National Companies (MNC)

Multi National Companies:

The multinational company that has its facility in other country other than native place means in different country head office in one country and branches in the other country, the head office will control the all sub branches due to the global management, with this global management the multinational companies have very large and increasing the jobs and economy of the small countries.

All major multinational companies are from America, Japanese or western European like wall-mart (in U k its is known as ASDA) Coca-Cola, Honda and famous BMW, the multinational companies will say that they all are increasing the job in different countries and as well as wealth and technology also increasing in the small countries and those companies will helping to country to develop the country.

http://www.investopedia.com/terms/m/multinationalcorporation.asp

Multinational companies and global business:

Today the global products have demands from global customers and multinational companies are realize the cost advantages in traditional input factors like labour, raw materials. Finally the multinational companies are decided to investment in the knowledge and technology on the global basis.

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Computer business allow the multinational companies to provide service around the world wide, now a days the global market is on boom because Example:- the product which will lunched on America, the same product will receive the Europeans with the global market the product will lunched in the Europe also for this the company growth will increase and the job vacancies also increases so indirectly the MNC will helping to country to develop and the MNC sub branches in different countries like call centres to service the customer and helping them to using the product.

As the world economy continues to globalize and integrate, the imperatives for management to act in a globalized manner become more crucial. Companies must therefore rethink and reengineer their entire business processes their organizational structures, staffing, and especially their information systems and technology infrastructures on an international level. Those which fail to do this will never be able to attain or maintain a competitive edge in global market.

Information System Services Structures In Multinational Companies:

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Research on IS shows that alignment between IS and organisation is kost important issue. The alignment issues of IS and multinational companies (MNCs), particularly in the area of IS services in multinational environment. The factors which control this issues are

• ORGANISATIONAL CONTEXT
• SYSTEM OWNER
• SYSTEM GOAL
• DATA
• PEOPLE
• ORGANISATIONAL STRUCTURE
• COMPUTER SYSTEM AND
• ORGANISATIONAL ENVIRONMENT

over the past years re-alignment and removal of national boundaries around the world has been achieved by restructuring of national economic policies by opening many routes for international trading. This solved the problems faced in IS management by introducing this issues across a number of cultural barriers.

A Multinational Company (MNC) can be defined as a company that has operations in more than one domestic area, that is at least one foreign subsidiary company should exist.

Compared to domestic companies the major difference in managing MNCs relates to distance, time, and variability in multinational operations.

The headquarters and their subsidiaries are located in different areas and even in different time zones over the globe which affect the coordination between headquarters and subsidiaries which is further complicated to balance the subsidiaries demands for delegation of authority due to regional difference in foreign markets against headquarters demands.

Multi domestic MNCs view world as a composition of number of different domestic markets, they will decentralize all decision making authority to subsidiaries. In this subsidiary can be regarded as a fully autonomous unit (Each subsidiary acts as a single entity without the need of coordination with other groups). This is referred to as ‘decentralized MNC’.

Global MNCs view world as a single market, they control all the subsidiaries as a single entity and they ignore differences contingent in markets. In this decision making authorities are centralized and this form of MNC is referred as ‘centralized MNC’.As decentralization requires strong central direction, to be successful in decentralized approach it requires as much direction as centralization. Here exist an intermediate form of MNC — Transnational MNCs which emphasize the tension between force for integrationand national responsiveness. In this decision making authority should be divided among the locations. It should be partly centralised at headquarters to locate corporate issues (strategic) and partlybe decentralized into subsidiaries to take care of local issues. (Operational).

Is And Organisation Alignment-Is Resources Distribution:

IS and organisational alignment issues is restricted to the structural alignment between IS and organisational characteristics of MNCs and is particularly focused on IS resources distribution domain. The discussion of alignment is based on ‘fitness’ approach.

Organisational Context:

Different business strategies affect the location of decision making. Hence different degree of IS centralization / decentralization is demended to meet the needs.It is also the case that the greater level of international involvement of MNC,the greater the degree of heterogenous environment that the MNC will face.

Systems Owner

A view of the world that is homogenous influence top management to adopt global strategies and to produce standards products. this resultant will effect on the structuring of IS services, centralized IS is more suitable for a company with a homogenous view of world.

System Goal

Different IS services organization are oriented towards goals and focuses on centralized IS and tend to facilitate effeciency in use of company’s resources such as data, people, resources etc.,Centralization of IS supervise information access and achieve large measure of control over supply of informatio, there fore it favours effeciency and control.

Data:

If Greater the degree of the data shared, the more centralized IS services should be done to reduce duplication.All the unshared data should be decentralized into subsidiary locations to enhance the sence of data. Centralization generates an environment where it is more easier to ensure data standards.

People:

Centralized IS structure assist in creating an attractive environment for technical staff by providing techinical IS career path. Decentralization encourages the transfer of knowledge from IS staff to users and vice versa. Different level of technology development and education infrastructures of countries means that required IS skills may not be available in all countries.suitable qualified IS staff are available in headquarter office . centralized makes it easier to carry out techinical support and decentralized IS staff can be found in subsidiary countries.

Finally the salaries of IS professionals are largely dependent on economic situations of the country from where he is hired.

Organizational Structure:

Global organizational structure have most information processing capacity in the headquarters, where decisions are made, to pass information in the organization. organization structure have processing capacity located in the subsidiaries, where decisions are made by supporting decentralization of IS services.

Computer Systems

A centralized IS can assist in maintaining high level of systems security by concentrating in all resources in one site which is easier to implement various procedures . A decentralized IS can assist in maintaining a high level system reliability in different sites. so that each system can act as a backup.

Required hardware and software may not be available in all countries ,which is a problem intensified by various factors. IS services should be centralized to make it easier in getting required hardware and software.IS should be decentralized to facilitate technical support and development.

Organization Environment:

MNCs use monopolistic power to crush competitionand to gain favourable ratingsfor investment.Government therefore , sought to exercise control over multinational corporations operating under their jurisdiction.

further setting up IS services in subsidiaries will involve a huge investment from MNCs.

Information systems strategies for multinational companies in Arab Gulf countries:

With the emergence of an expanding inter -dependent global economy, information systems (IS) strategies need to face the challenges of internationalization. The growth of multinational business has led many corporations to support significantly high level of IS operations and IS applications development in foreign environments. By developing a conceptual framework, this paper addresses multinational companies (MNCs) IS global policy formulation and several implications for IS management issues in Arab Gulf countries (AGC). The objective is to illustrate the uniqueness of the business and IS problems confronting MNCs in AGC. Insights have been gained from examining the implications of the pertinent economic, sociopolitical, legal, and cultural variables that affect MNC IS global policy formulation. The uniqueness of the business and IS problems confronting MNCs in the AGC are illustrated. Helping MNC IS executives/professionals to understand the differences between their own environment and the one in which they must operate can improve their IS functions in this region. AGC native companies with IS activities can also benefit from such an analysis in managing their multinational personnel.

Information systems for multinational enterprises–some factors at work in their design and implementation:

Information systems for multinational companies (MNCs), referred to as international information systems (IIS), have been a problem area for many years, yet have failed to attract more than token attention from the academic information systems research community. This study applies a grounded theory method to establish a first theoretical framework dealing with the structure of IIS and the dynamics of their development and implementation. The substantive theory is based on extensive, long-term work with three MNCs and covers four key areas: (a) the dealings between the actors concerned with an IIS take place in a force field; (b) the force field is reflected in a generic two-dimensional architecture an IIS, which always has a ‘core’ of systems used by all (or many) of the regions and ‘local’ systems, different at every regional site; (c) the balance of functionality between the ‘core’ and the ‘local’ parts of an IIS follows the degree to which the operations of the MNC require synchronous access to data and processing within the IIS. (d) The interactions of IT and users in the force field follow a cyclical, self-reinforcing dialectic such that an enforced consensus process is required in order to boost acceptance and to limit the probability that continuing rejection leads to catastrophic failure.

The Globalization of Information Technology in Multinational Corporations.

The most significant business trends during the 1990s has been sharply increased in global business activity. There is no sign that this growth will abate. The explosive growth of the internet and the world wide web–technologies which are inherently global in character– which has been equal or greater significance. these trends create unprecedented challenges and opportunities for multinational companies.The managers of multinational companies provided information to respond effectively, they need to be fully conversant with important issues related to international aspects of document technologies and business record keeping. this brief introduction was written for information specialist i,e computer specialist, record managers, knowledge management specialists,and other international initiatives at multi national corporations.

Globalizing the IT Infrastructure:

To under stand clearly about international information management for multinational corporation,to know it first we should undestand agendas

of information technology departments as they attempt to extend their global reach through out the economies of many countries.

The goal of IT departments of multinational companies can be simply stated: To create globally integrated information infrastructures that electronically link their entire supply chains — their sales, production, and delivery processes.

Executives of multinational companies see many benefits to this global integration of information systems, including shorter cycle and delivery times, closer relationships with business partners, greater flexibility in sourcing products or services, better inventory controls, and of course, improved customer satisfaction, cost reductions, and increased profits. In short, a more competitive business.

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MIS:

MIS is generally defined as an integrated, user-machine system for providing information to support operations, management and decision-making functions in an organisation.The system utilizes computer hardware and software;manual procedures, models for analysis, planning, control and decision-making and a distance.

It is also popularly knows as the information system, the information and decision system, the computer-based information system.

According to Institute of Management Accounts, U.K. “MIS is a system in which defined data are collected, processed and communicated to assist those responsible for the use of resources.”

According to G.B. Davis, “Management information system is an integrated man/machine system for providing information to support the operations, management and decision-making function in an organisation”.

The management information system has been described as a pyramid structure (four levels are there in pyramid). Each level of information processing may make use of data provided for lower levels; but new data may also be introduced.

Nature of management information system:

• Report-Orientation:

In the early years, the function of Management Information System was to process data from the organisation and present it in the form of reports at regular intervals.Information being the finished product was prepared after processing the raw data. So because of this fact the concept of management information system is further modified, as information rather then voluminous data has become the requirement of the user.

• Action- oriented:

This concept was further modified due to the need that information should be suh that it leads to some action, decision or investigation or research.

• Exception-oriented:

After having action-oriented nature of Management Information System it was realised that there must be some specific or selective approach to the action or the analysis of data.

• Database orientation:

As we know our environment is dynamic in nature so the change in every system is must. So is the case with Management Information System as the business environment becomes competitive. To fulfill this need, a common data base is prepared which can be used by each and every individual accordingly.

• End-User orientation:

After successfully implementing these changes, the concept of end user computing using multiple data bases emerged.This concept brought a basis changes in the nature of Management Information System that is decentralization of system and independency of user over computer professionals or experts.

• Academic Discipline Orientation:

Management Information System is based on the information gathered for analyzing the data. While analyzing the data it relies in many academic disciplines like theories, principles, and concepts from management, organization behaviour, computer science, psychology and human behavior.

Scope of MIS:

1) MIS is an integrated system for providing information to support:

• The operations;
• Management;
• Decision-making functions in an organisation.

2) MIS utilizes computer hardware/software, manual procedures, management and decision models, and data base.

3) MIS has a pyramidal structure:

• Bottom layer provides information for transaction processing.
• The next level provides information resource to support routine operations.
• The third level offers information resources to hale tactical planning and decision making for middle management planning control
• The top level presents information resources in support of strategic planning and policy making by top management groups.

Characteristics of MIS:

MIS is a comprehensive coordinated set of information sub-systems, which are rationally integrated and transform data into information, in a variety of ways to increase productivity in conformity with the management style of working. Thus, the following are the main characteristics of MIS:

• MIS is an Integrated System
• MIS is a sub-system concept
• MIS provides relevent information to management
• MIS is flexible
• MIS enhances productivity
• MIS is a coordinated system
• MIS is a feed back system
• MIS is management oriented
• MIS is management directed
• MIS is common database
• MIS is distributed data processing
• MIS is a computerised system
• MIS transforms the data into information

Objectives of MIS:

When any organisation wishes to establish the MIS, it must be very clear about the need of information required by the different levels of management. Following are the reasons for the adoption of the MIS:

• To store and manage data effeciently from all the functional areas of the business.
• To process the collected data and derive information out of them.
• To provide information quickly as and when required.
• To collect and store the data for the purpose of internal research.
• To provide the information regarding production and inventory.
• To provide information for planning, organizing and controlling purpose.
• To smooth up the flow of data through various levels of the organisation.
• To speed up the execution of the results with the reliable data available.

Importance of MIS:

In present business organisations, MIS plays a very important role. It is a process of collection and storage of the data useful for the organisation. Executives retrieve these data, when required and process for generating information.Previously, the business organisation were not perceived as a system. All the functional areas were independent and there was not a cross discussion amongst the managers of different functional areas.However, in present days,all departments hold equal responsibility. This mechanism helps the organization to achieve its objectives effectively and economically.

Thus, the following points can summarize the importance of MIS:

• It helps in minimizing risk in decision-making.
• it processes the data and derives information out of them.
• it provides information about the various aspects of business.
• It helps the executives to avail the information regarding the functional areas quickly.
• The data base helps in conducting research. The data stored are used as secondary data.
• It helps in preparing corporate report.

Limitations of MIS:

1. The quality of the operation of management information system depends on the quality of input process.
2. MIS is not a substitute for effective management.
3. MIS may not have requisite flexibility to quickly update itself with the changing needs of times, especially in a fast changing and complex environment.
4. MIS can not provide tailor-made information packages suitable for the purpose of every type of decision made by executives.
5. MIS is less usefull in non-programmed decisions which are not of routine nature.
6. MIS is not successful where secrecy is maintained in adisseminating information to their workers.