28.6 ISSUES IN THE GLOBAL MANAGEMENT OF IT. A variety of issues are specific
to the management of technology internationally.
(a) Trans-Border Data Flow. Trans-border data flow (TBDF) is the transmission of
data in machine-readable form, such as a data file in ASCII format, between two
countries. The medium used for transmission is unimportant. Whether TBDF is an
issue for a particular firm depends on the laws governing data transmissionin the
sending and receiving countries and the type of databeing transmitted. The Scandi-
navian countries, Germany, the Netherlands, Brazil, China, and Singapore have reg-
ulations governing data flow across borders.^26 Of most concern is human resource
and payroll data.
The basic issues concerning TBDF are: individual privacy, and economics.Coun-
tries are concerned that private information about individuals contained in a com-
puter database may be used in a manner that compromises that individual’s privacy.
When this information is transmitted beyond a country’s borders, the country loses
some jurisdiction over the data and may have a more difficult time protecting the
rights of its citizens. For example, medical records are usually considered to be con-
fidential. If a worker’s medical records are transferred from the country in which he
is working to another country and then disclosed in a manner that embarrasses the
worker, he may be unable to seek redress in the courts due to privacy laws in effect
in the second country. In such a situation, the worker may have difficulty taking legal
action against the company unless the transmission of the data to the second country
was explicitly prohibited.
The economic concern stems from a desire to promote local work activities. If pro-
cessing of data is done in the host country, local jobs are created, hardware and soft-
ware are purchased and configured, work space is rented, people are hired, and value
is created. If the processing is done in another country, this value is lost to the host
country.
Fortunately, payroll and human resource records systems, the two classes of ap-
plications most vulnerable to TBDF regulation, or to be in violation of local privacy
legislation, do not lend themselves to global use. Only the transnational firm may
have need for an integrated worldwide skills inventory system. As a general rule,
firms need to provide the same level of security and access to personnel data stored
abroad as is required by the most stringent privacy legislation in all of the countries
in which they operate.
Originally predicted as the trade war of the 1990s, the control of trans-border data
has not become a major issue.^27 Part of the reason is that many of the laws and reg-
ulations governing TBDF are vague and difficult to enforce. Also, as countries have
tended to work together to remove trade barriers among goods and services, they
have been less inclined to erect new barriers to the flow of data. A strategy followed
by some firms is to inform responsible officials in local countries as to what they in-
tend to do and ask if this presents difficulties.
28.6 ISSUES IN THE GLOBAL MANAGEMENT OF IT 28 • 19(^26) See, for example, the French Data Processing, Data Files, and Individual Liberties Act of 1978 and
the Swedish Data Act of 1973.
(^27) Ives and Jarvenpaa, 1991.