Integrative Issues in International Business

ICT includes all devices, networking components, information systems and applications, and other digital systems that are combined to allow people and companies to interact, learn, live and work. They encompass both wired Internet-enabled and wireless mobile networks.

ERP refers to a suite of computer software that allows an organization to use a system of integrated applications to manage core business processes and activities such as marketing, risk management, and supply chain operations.

E-business refers to the use of the Internet and other digital technologies to execute a firm’s business processes and activities and for the internal management of the firm.

E-commerce refers to the buying and selling of goods and services conducted over the Internet.

E-commerce activities conducted through wireless handheld devices like smartphones and tablets are called mobile commerce or m-commerce.

Cloud computing is the delivery of on-demand self-service computing resources over the Internet on a pay-for-use basis from any connected devices and locations.

The following are the three major types of services:

• IaaS or Infrastructure as a service where customers use processing power, data storage, networking, and other computing resources from cloud service providers to run their information systems and applications. For example, a company can buy data storage or computing power as needed from Amazon’s AWS and get charged for actual usage. It does not have to buy specialized and expensive equipment for itself.

• PaaS or Platform as a service where customers use ICT infrastructure and software programming tools supported by cloud service providers to develop their own applications. For example, IBM offers a service for companies to develop and test their own software applications on the IBM cloud infrastructure for a fee.

• SaaS or Software as a service where customers use software hosted by and is resided on the vendor’s cloud infrastructure and delivered as a service over the Internet. For example, companies can use Google Apps (such as Google doc) where Google maintains the data and software on its computing facilities and customers can use the applications anywhere with Internet access.

Benefits of cloud computing are:

• Cost efficiency

• Choice

• Scale: Flexibility and Elasticity

• Speed

• Integration

• Audit and Compliance

• Business Continuity and Planning

We can look at four important dimensions to define and distinguish big data:

1. Volume – the amount of data: Volume refers to the mass quantities of data that continue to increase though vary by industry and geographic locations.

2. Variety – different types of data: Variety of structured, semi-structured, and unstructured data and data sources (traditional and non-traditional sources from within and outside an organization). They include texts, web data, tweets, sensor data, audios, videos, click streams, log files, etc.

3. Velocity – data in motion: Velocity concerns the speed with which data is created, processed, and analyzed. It continues to accelerate with data created real-time. This enables decision making to be made instantly such as real-time fraud detection instead of detecting fraud after it takes place.

4. Veracity – data uncertainty: Veracity refers to the reliability of certain types of data. For example, weather and customers’ sentiments are inherently unpredictable.

Prescriptive analytics tries to find the best outcome for a given situation.

A digital technology that is likely to influence international business activities is the Internet of Things, which is a sensor network of physical objects that are connected to the Internet so they can collect and share data among people, systems, and other applications. 

IoT devices need four capabilities to deliver value to businesses:

• Identifying capability – each device must be uniquely identifiable, such as the electronic product codes that are used in supply chain and manufacturing.

• Sensing capability – use of sensors.

• Communicating capability – ability to exchange information between devices.

• Computing capability – ability to process instructions, often using the cloud.

Deepfake is AI-based technology used to produce or alter video content and present something that didn’t actually occur.

Blockchain is a distributed, decentralized public ledger that facilitates the process of recording transactions and tracking tangible assets and intangible assets in a business network.

Ethical issues in global business occur on many levels:

• The individual-level – ethical or unethical behaviors in firms are due to the behavior of individuals, managers, and employees.

• The organizational level – individuals and managers operate within an organization under its organizational culture and policies that influence their actions.

• The national-level – businesses operate under the rule of law of each country that impacts the ethical behavior of individuals and organizations.

• The international level – global businesses need to acknowledge and work through the various levels of ethical issues in question.

SA8000 is a social certification standard that can be used as a framework by businesses to help certify their dedication to the fair treatment of workers across industries in any country.

Often, moral courage is more difficult in MNCs (Multinational companies) because it may mean losing a lucrative contract, losing the market share, or lowering the competitiveness abroad. Businesses can appoint ethics officers to make sure that employees behave in an ethical manner when making decisions. In other words, Ethics Officers are responsible for looking at the different aspects of an organization’s procedures to make sure that they are consistent with the code of ethics of the organization.

CSR (Corporate Social Responsibility) refers to a view of corporations that assume a responsibility to pursue social goals in addition to profit maximization and a responsibility among their stakeholders to hold them accountable for their actions.

There are four types of social responsibilities:

• Philanthropic responsibilities – contribute resources such as money, facilities, and employees’ time to the community and improve its quality of life.

• Ethical responsibilities – obligations to do what is right, just, and fair while avoiding harm to stakeholders

• Legal responsibilities – obey the law of the society.

• Economic responsibilities – provide products and services while maximizing profits. Economic performance is seen as the foundation upon which all other responsibilities rest.

Four broad strategic responses or approaches that global managers can use are: reactive, defensive, accommodative, and proactive.

Defensive approach indicates that managers focus on legal compliance but nothing more. In this case, a manager’s attitude is that CSR initiatives add costs for the firm. Since firms may face pressures from the media and activist groups, managers may admit some responsibility in case of wrongdoing but will fight the situation. Global firms may act and operate differently in different locations depending on the rule of law and other pressures from various stakeholders.

Corporate social audit is defined as a systematic or formal analysis to identify, measure, monitor, and evaluate the performance and effectiveness of a firm’s social efforts, goals, and programs.