By Cass ^^
by Winky
Monday, February 14, 2011
Tuesday, February 8, 2011
Group Experiential Exercise 2: Communication Technology - as a global indicator in globalization
The Global Story in International Management Contexts
Preface
Let’s use toll call or web-cam to send our blessing to our relatives during Chinese Lunar New Year! Sure! It’s fast to get in touch with people in the world.
Communication Technology connects people in different countries and builds up a global network. Although we are in different parts of the world, we are well-connected with the internet, telecommunication devices, cell phone technology, and handheld wireless mobile devices, and any other communication channels. [i]
How to indicate globalization with communication technology?
“Globalization communication facilities have the power to move things visible and invisible from one part of the globe to another whether any nation-state likes it or not.”[ii]
Interactions between people who come from a variety of countries, nations with different political, cultural, historical, technological and educational backgrounds are globalization as all of them are tightly-linked together in framework with a focal point. Information shares and merges through this framework and there are no space and distance restrictions.
Satellites stand at the centre and focal point of the communication technology. They help the sending and receiving of information in the globe which look like the door and hands to the world.[iii]
For example, the Electronic Fund Transfer is also the global electronic financial networks which associate the operation of the global finance.[iv] Communication technology do not only contribute into our daily life but also the global operations.
Communication technology grows rapidly and updates from time to time. Due to the development of world trade and share of information in mass media, communication technology spreads easily. Each developed or developing countries are so eager to import and promote communication technology as this is inevitable to use them in future nation planning and development.
People also welcome the use of communication technology to improve the efficiency of information transfers, luxury identifications of wealth and power, and easy trading of goods and services. Definitely, communication technology changes people’s living behaviours and make their life more convenient. That’s why communication technology spread quickly in the world. People are connected through communication technology devices and globalization also accelerates its speed to integrate into different countries.
According to recent survey[v], by the end of 2007, the world had 3.3 billion of mobile users, 1.3 billion fixed telephone lines, 1.3 billion of internet users and 336 million broadband subscribers. And the penetration rates per 100 inhabitants of fixed telephone lines, mobile users, internet users and broadband subscribers are 19%, 49%, 22% and 5% respectively.
Communication technology can affect globalization in several perspectives – (1) Economically, (2) Socially, and (3) Politically.
Economically
Communication technology has impacted the economy in term of productivity and this is one of the driving forces of economic progress. For example, it is now possible for transnational corporations to locate their headquarters in New York City, design facilities in Boston, manufacture in India and then assemble products in the UK. It is possible for any corporation to locate itself around the world like this.[vi] It can greatly reduce the cost and use resources efficiently. The company can do this due to the advance development of communication technology, such as wide use of the internet and satellite phones, which allow worldwide communication.
Companies always have to make conferences and meetings to discuss issues and make decisions. Yet, sometimes it is very difficult to bring several people together in a short time; especially they are in different places. In that situation, communication technology can help. Programs such as Skype or Gizmo Project offer Voice over Internet Protocol (VoIP) services that allow individuals and businesses to call places all over the world, which price is much cheaper than regular landline services. And it can save time and effort to arrange people at the same place as well.
Socially
Communication technology has brought convenience to human. It also changes the way people interact with others, express opinions and views as well as meeting old friends and making new friends. The social network of people can become very broad nowadays.
Sites such as Youtube can see millions of hits a day, with online video and audio becoming extremely prevalent on websites. It is a global trend. People can leave their comments, upload information and data to share with others from different places. Information transfer and exchange become much easier now. It fastens the pace of globalization as well. (Joanne Cichetti, 2010[vii])
With the rise of social networks such as Facebook, Myspace, Blogger and others, a form of crowd-based media known as social media has emerged. We can use such online social platforms to share our information and views with people from different places, e.g. uploading videos and photos, sharing opinions, etc. And we can have a more convenient way to interact with people. We can keep in touch with friends and relatives by checking their blogs; collaborate people with common interest, background or views on issues into online social groups and communities, etc.
Here is the statistic of top five Social Media Sites of 2008[viii].
1. Blogger (222 million)
2. Facebook (200 million)
3. MySpace (126 million)
4. WordPress (114 million)
5. Windows Live Spaces (87 million)
As the subscribers and users are continually increasing, the online social sites have great influence to the world now, and it driven the globalization.
Politically
Communication technology builds bridges linking to different countries, and brings new ideas and cultures, such as human rights, freedom to speech, to the conservative and dictated countries, e.g. Iran. Thus, it affects people’s minds and culture, which finally lead to globalization.
Politically
Communication technology builds bridges linking to different countries, and brings new ideas and cultures, such as human rights, freedom to speech, to the conservative and dictated countries, e.g. Iran. Thus, it affects people’s minds and culture, which finally lead to globalization.
From blogs, chat room, or other communication technology, people from rather conservative countries can know more western values and ideas. Some may have discontent with political situation in home country after understanding more how outside is. They may eager to have democracy like those western counties. This simulates the seeds of political reforms afterwards.
Such communication technology has become a part of our life. It is also a driver of globalization which changes the world a lot. It is no doubt that we can use communication technology as global indicator.
How does communication technology inform international management in the global context?
Censorship: Google case in China
To start with, I would like to clarify that there are censorship policies and regulations in many countries. For example, the prohibitions of homophobic hate speech and advocatory of illegal drugs may account for some cases in France. (Wikipedia, 2011)[ix] Absolute Internet freedom can be found hardly around the world.
In China, though the Article 35 of the Chinese constitution promises the right to "freedom of speech, of the press, of assembly, of association, of procession and of demonstration, (Palmer, 2010)[x] the Chinese government started a project called Golden Shield Project (or Great Firewall of China) to filter any information that violates to the interest of the regime.
In order to gain market share in China, many technological MNCs choose to cooperate with Chinese government. Cisco, which provides filtering facilities for Chinese government, stated that there is no feasible way to prevent China from blocking access by using their equipment in US congressional hearing. (Earnhardt, 2006)[xi] Microsoft’s MSN online publishing service in China is preventing users from posting such words as "democracy" and "freedom,". (Bishop, 2005)[xii]
But there is an exception. Google, launching its China website Google.cn in 2006, quitted its business in China owing to the failure of reaching an agreement with Chinese authorities to operate an uncensored search engine in 2010, though its ICP license was renewed. (Anonymous, 2010)[xiii] From now on, Google redirects all China users to its Hong Kong search site, in which Chinese Internet users have to use bypasses to enter. David Vise, a Pulitizer prize winning journalist and author of The Google Story, urges that Google ha scored political points in the West as a ‘victim’ to get support and sympathy from them. (Anonymous, 2010)[xiv]
To have an in-depth analysis, I think that the loss of Google is far less than people expected, owing to the high brand loyalty of Google users in China. Chinese users can still get access to Google through Google Hong Kong by proxy server. After the Google case occurred, a study shows that while the user numbers of Baidu, the top search engine in China, reportedly increased, there was also “a very sharp drop in the user satisfaction for Baidu”. (Anonymous, 2010)[xv] It is properly because that Google’s action has aroused mainland users’ awareness of its search engine which defends human rights by no political censorship. On the other side, Google has established a new standard set of business ethics that are coherent to its motto “Don’t be evil”. Compared with Google, other technological MNCs are still assisting Chinese government to censor the content on the Internet. They will be under high pressure by the West to change their way to do the business.
Policy and law
Concerning foreign ownership in communication industry, though in US, the Federal Communications Commission may refuse to approve a license if more than a 25% interest in the controlling company is foreign, most of the European countries do not impose restrictions on foreign ownership in communication industry. (OECD Communication Outlook, 2007)[xvi] It means that global communication giant companies can disperse their business in several countries to gain economies of scale in purchase of equipment. Vodafone and 3 are typical examples which operate their mobile network in global scope. They can adopt a united global strategy to do their strategy. As a commitment of entering World Trade Organization, China has to open mobile services market for foreign investors by Equity Joint Venture. (Lai, 2006)[xvii] The trend of deregulation is expected to continue. Technological MNCs can enjoy profit growth by exploring new markets. Meanwhile, Chinese technological firms, which are encouraged to go international business, have to face new business opportunities and new threads in foreign market. Lenovo is a good example to illustrate this idea. Lenovo merged IBM’s PC sector in 2004 and plans to merge NEC’s Japan business. (Hamada, 2011)[xviii] Initially, Lenovo faced difficulties in serving customers from different countries. The reorganization took time and it made Lenovo suffer a loss in the process.
The behaviour of Internet users
Concerning foreign ownership in communication industry, though in US, the Federal Communications Commission may refuse to approve a license if more than a 25% interest in the controlling company is foreign, most of the European countries do not impose restrictions on foreign ownership in communication industry. (OECD Communication Outlook, 2007)[xvi] It means that global communication giant companies can disperse their business in several countries to gain economies of scale in purchase of equipment. Vodafone and 3 are typical examples which operate their mobile network in global scope. They can adopt a united global strategy to do their strategy. As a commitment of entering World Trade Organization, China has to open mobile services market for foreign investors by Equity Joint Venture. (Lai, 2006)[xvii] The trend of deregulation is expected to continue. Technological MNCs can enjoy profit growth by exploring new markets. Meanwhile, Chinese technological firms, which are encouraged to go international business, have to face new business opportunities and new threads in foreign market. Lenovo is a good example to illustrate this idea. Lenovo merged IBM’s PC sector in 2004 and plans to merge NEC’s Japan business. (Hamada, 2011)[xviii] Initially, Lenovo faced difficulties in serving customers from different countries. The reorganization took time and it made Lenovo suffer a loss in the process.
The behaviour of Internet users
There is no doubt that there are similarities and differences in preference of Internet users around the world. The rapid growth of Google, Youtube and facebook in many countries implies that the difference in consumer preference around countries may not be as huge as we thought. As long as communication companies deliver the best value to their clients, their success can be predicted.
On the other hand, MNCs have to make fine adjustments to each region they operate in order to meet customers’ requirement.
On the other hand, MNCs have to make fine adjustments to each region they operate in order to meet customers’ requirement.
Take Japan’s mobile market as an example. As of May 2008, 31.3% of elementary school students, and 57.6% of middle school students own a cell phone, with many of them accessing the internet through them. (Wikipedia, 2011)[xix] Famous web sites, such as Yahoo! Japan have mobile version which attracted more than 60% of NTT DoCoMo and Softbank users to get access in 2009. (Inoue, M, 2011)[xx] Inevitably, mobile service has become a competitive necessity for Internet content providers (ICP) in Japan.
In China, the software privacy rate in 2007 was 82% (Business Software Alliance, 2007)[xxi], which is relatively high. It can be induced that video game companies cannot rely on selling copies to earn money. To capture the greater China video market, companies try to introduce online game with monthly fees to encourage users to pay for the costs of development. It contributes to the prosperity of online gaming market in China, estimated to hit US$ 9.2 billion by 2014. (Takahashi, D, 2010)[xxii]
All in all, technological MNCs have to provide standardized products to gain scale economies and services with sufficient local customization, such as local language to cater the needs of different culture of people.
The relationship between communication technology and labour productivity
With the aid of technological devices and information systems, te growth of GDP and labour productivity accelerated between 0.3 and 0.8 percentage points in OECD countries over the 1995-2001 periods. (OECD, 2003)[xxiii] A study shows labour productivity convergence in advanced and emerging economy in 1996-1997. (Tirenuh, 2010)[xxiv] Geographical managers can engage in cross-national business meetings to exchange ideas and thoughts in a more efficient and effectively way through video conferencing and international direct dialing. This change reduces the costs associated with working time, travelling and accommodation.
For workers, their work is not limited to office hours. Through mobile devices connected to the internet, workers can continue their duty in their leisure time.
With the aid of technological devices and information systems, te growth of GDP and labour productivity accelerated between 0.3 and 0.8 percentage points in OECD countries over the 1995-2001 periods. (OECD, 2003)[xxiii] A study shows labour productivity convergence in advanced and emerging economy in 1996-1997. (Tirenuh, 2010)[xxiv] Geographical managers can engage in cross-national business meetings to exchange ideas and thoughts in a more efficient and effectively way through video conferencing and international direct dialing. This change reduces the costs associated with working time, travelling and accommodation.
For workers, their work is not limited to office hours. Through mobile devices connected to the internet, workers can continue their duty in their leisure time.
The pros and cons of communication technology in business
In economic theory, capital is a substitute for labour. Big firms with numerous resources can easily adjust the composition of labour force and capital infrastructure in their business, especially in long run. It provides firms with flexibility to do business. Since investment on technical equipment can be regarded as fixed cost, big firms have a higher chance to afford and utilize the investment in communication technology. Together with globalization, companies can explore foreign potential markets and reduce costs by setting up different business procedures in different regions with cost advantages. Communication technology can become a catalyst to integrate several business sectors into one company to reduce transaction costs. In an ideal case, both consumers and companies can enjoy the benefits of higher productivity in business.
On the other side, for small and local firms, they face keen competition in the globalization process. Some marginal firms may be forced to quit the market because of the competitive disadvantage in scale economies. Industry restructuring may occur more frequently as a consequence of fierce competition. It may bring out instability factors in society.
Is there any limitation in measuring communication technology indicators?
Development variance between countries
More developed countries have higher degree of usage in communication technology devices while developing countries opposites as their citizens cannot afford these luxury products and these developing countries have not developed such communication technology yet. Therefore, this limits the effect of globalization and the measurement of communication technology as an indicator.
In less developed countries, the communication technology development is very week. People have to struggle with the basic necessities and living. There is a low priority in spending in IT innovation and technological learning in their countries while they need to solve the poverty and unemployment basic social problems first.
Therefore, these LDCs are less competitive in communication technology development and inadequate to develop its IT industry and increase the usage. That’s why LDCs even do not have the IT tools and facilities to link with the global framework.[xxv]
Geographical broadband barriers
Some parts in the world didn’t have the coverage of the broadband network and therefore limits the spread of communication technology and globalization. For example, the broadband is concentrated in the capital of Korea, Seoul.
Measurement standards and accuracy
In measuring the communication technology usage as indicator of globalization, there are the number of usage of IT devices, internet or broadband coverage. However, this may be limited by the geographical locations, nations’ governmental policy. Also, it is difficult to ensure the usage of communication technology devices as one person may use different and double or triple the usage of the same communication technology devices.
Conclusion
Communication technology keeps expanding in the globe which helps the spread of globalization absolutely. It is expected that the LDCs may be also connected and accessed one day due to the rapid growth of globalization. The globe will be linked together with communication technology.
However, when managing the IT international business, managers should notice the effects of globalization as there're limitations in expanding into a new market in another country. These limitations would be the huge obstacle to the business international furture development, just like the case of google.cn.
Managers should design flexible strategy and policy in order to tackle these difficulties in entering the global market threshold.
However, when managing the IT international business, managers should notice the effects of globalization as there're limitations in expanding into a new market in another country. These limitations would be the huge obstacle to the business international furture development, just like the case of google.cn.
Managers should design flexible strategy and policy in order to tackle these difficulties in entering the global market threshold.
[i] Globalization & Communication Technology | eHow.com http://www.ehow.com/about_6773168_globalization-communication-technology.html#ixzz1D6RkiZ80
[ii] Christopher Chase-Dunn, Yukio Kawano, Denis Nikitin, Department of Sociology, Johns Hopkins University, Baltimore, MD. 21218 USA, ‘Globalization: A world-systems Perspective-Future of Globalization at the International Sociological Association, XIV World Congress of Sociology, July 26-August 1, 1998, Montreal, Canada
[iii] Effects of Technological Developments on Globalization Process http://mediaif.emu.edu.tr/pages/atabek/GCS7.html
[iv] Effects of Technological Developments on Globalization Process http://mediaif.emu.edu.tr/pages/atabek/GCS7.html
[v] International Telecommunication Union, 2007, Global ICT developments, http://www.itu.int/ITU-D/ict/statistics/ict/index.html
[vi] Joanne Cichetti,, 2010, Role of Technology in Business Communication, http://www.ehow.com/facts_5965861_role-information-technology-business-world.html
[vii] Matthew Read, 2010, Information & Communication Technologies Impact on Globalization, http://www.suite101.com/content/information--communication-technologies-impact-on-globalization-a262517
[viii] Erick Schonfeld, 2008, Top Social Media Sites of 2008, http://techcrunch.com/2008/12/31/top-social-media-sites-of-2008-facebook-still-rising/
[ix] Wikipedia (2011) “Censorship in France – Wikipedia, the free encyclopedia”, http://en.wikipedia.org/wiki/Censorship_in_France
[x] Palmer, B (2010) “Is there freedom of speech in China?” http://www.slate.com/id/2270522/
[xi] Earnhardt, J (2006) “Cisco Q&A on China and Censorship”, http://blogs.cisco.com/gov/cisco_qa_on_china_and_censorship/
[xii] Bishop, T (2005) “No 'freedom' on MSN in China?”, http://www.seattlepi.com/business/228344_msftchina14.html
[xiii] Anonymous (2010) “Google’s license Renewal in China: Victory, Defeat or Stalemate?”, http://knowledge.wharton.upenn.edu/arabic/printer_friendly.cfm?articleid=2505
[xiv] Anonymous (2010) “Google’s license Renewal in China: Victory, Defeat or Stalemate?”, http://knowledge.wharton.upenn.edu/arabic/printer_friendly.cfm?articleid=2505
[xv] Anonymous (2010) “Google’s license Renewal in China: Victory, Defeat or Stalemate?”, http://knowledge.wharton.upenn.edu/arabic/printer_friendly.cfm?articleid=2505
[xvi] OECD (2007) “Communications Outlook 2007”, p 43-44, www.cesifo-group.de/portal/page/portal/68AC3499386B6A7AE04400144FAFBA7C
[xvii] Lai, C. Y. (2006) “New Trend of Chinese Mobile Communication Industry
after China’s WTO Accession”, page 10, http://libproject.hkbu.edu.hk/trsimage/hp/03017427.pdf
[xviii] Hamada, K (2011) “Lenovo, NEC in talks to combine PC businesses: sources”, http://www.reuters.com/article/2011/01/21/us-nec-lenovo-idUSTRE70J68L20110121
[xix] Wikipedia (2011) “Japanese mobile phone culture”, http://en.wikipedia.org/wiki/Japanese_mobile_phone_culture#cite_note-0
[xx] Inoue, M (2011) “Message from President and CEO”, http://ir.yahoo.co.jp/en/policy/talk.html
[xxi] Business Software Alliance (2007) “Fifth Annual BSA and IDC Global Software Piracy Study”, page 4, http://portal.bsa.org/idcglobalstudy2007/studies/2007_global_piracy_study.pdf
[xxii] Takahashi, D (2010) “China online games market to hit $9.2B in revenues by 2014”, http://venturebeat.com/2010/03/31/china-online-games-market-to-hit-9-2b-in-revenues-by-2014/
[xxiii] OECD 2002. OECD Information Technology Outlook: ICT and the Information
Economy.
[xxiv] Tiruneh, M. W. (2010) “The Contribution of Information and Communications
Technologies to Global and Regional Competitiveness: An empirical exploration 1”, page 4, http://www.icabr.com/fullpapers/Bu%E8ek%20Milan.pdf
Subscribe to:
Posts (Atom)