Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Submitted to
Dr. Md. Ataur Rahman Professor Department of Management Studies University of Dhaka
Submitted by
Team Name: Global Managers MBA (SIM), 13th Batch, Name Faisal Ahmed Reefat Amirul Islam Titas Ahmadullah Roll 261 262 263
Letter of Transmittal
January 24th, 2012 Dr. Md. Ataur Rahman Professor Department of Management Studies, University of Dhaka. Subject: Solicitation for acceptance of the Assignment on the Global Manger Sir, It is an immense pleasure for us to submit the assignment on The Global Manger which we have prepared by performing vigilant knowledge search regarding the global manager to fulfill the requirement of MBA degree on Strategic International Management in the Department of Management Studies, University of Dhaka. In the course of the preparation of this assignment, we have studied various documents and also gathered practical knowledge. In this assignment, we have tried to give my best effort. Besides this, there may be shortcomings. We shall be pleased to answer any kind of query you think necessary. Now, we have placed this report before you for your kind approval. For any of your further queries, we would be at your disposal at your convenience.
Sincerely Yours, Global Managers, MBA (SIM), 13th Batch, Name Faisal Ahmed Reefat Amirul Islam Titas Ahmadullah Roll 261 262 263
Acknowledgement
It is hard today to use the word "globalization" without a certain sense of irony, rueful or otherwise. Raven by Ideology, religion, and mistrust, the world seems more fragmented, more at odds, than at any time. But, however deep the political divisions, business operations continue to span the globe and executives still have to figure out how to run them efficiently and well. There is a proverb regarding the future: We are borrowing from the futurewhat we teach the next generation is a reflection of ourselves.. Tommy Benjamin from Old Crow, at the 1999 summit in Mt. Village, Alaska. Global Managers have the same attributes just as the above. The main challenge here is to integrate and coordinate these individuals in ways that will ensure success. People from different cultures tend to misunderstand each other's behaviors or stereotype people from other countries. It is essential to recognize the discrepancies between cultures in order to work together effectively. For this reason, it is our great privilege to express our gratitude to our creator Almighty for such great opportunity to be in touch with some these evolutionary business concepts. We also have to put our heartened feelings and gratitude for the kindness and assistance that was provided to us to complete our assigned report as on the topic The Global Manager. In preparing the proposed report we have taken great assistance, support and guidance from the various professionals, articles, journals etc. We also give our sincerest thankfulness to our course instructor Professor Dr. Ataur Rahman, Department of Management Studies, University of Dhaka, to give us such an opportunity to face these kinds of endeavors and provide platform to furnish our business knowledge in the context of International Management and become effective and efficient manager to make the business world more evolving and be a truly globalized manager.
Preface
Multinational corporations need to recognize the importance of international management development. Formal human resource programs, tied to business objectives, need to be established. Ignoring the importance of global management development leads to missed market opportunities. Understanding and support at the executive level is a necessity. Human resource information systems need to include international data elements to help in the identification of candidates. Training budgets have to shift course work from a domestic focus to multicultural and international marketplace issues. The home and host managers must agree to the objectives for the employee prior to the assignment start. Repatriation assignments must align with the experience. Success in today's international climate - a far cry from only a decade ago - demands highly specialized yet closely linked groups of global business managers, country or regional managers, and worldwide functional managers. This kind of organization characterizes a transnational rather than an old-line multinational, interactional, or global company. Transnationals integrate assets, resources, and diverse people in operating units around the world. Through a flexible management process, in which business, country, and functional managers form a triad of different perspectives that balance one another, transnational companies can build three strategic capabilities: global-scale efficiency and competitiveness; national level responsiveness and flexibility; and cross-market capacity to leverage learning on a worldwide basis. While traditional organizations, structured along product or geographic lines, can hone one or another of these capabilities, they cannot cope with the challenge of all three at once. But an emerging group of transnational companies has begun to transform the classic hierarchy of headquarters-subsidiary relationships into an integrated network of specialized yet interdependent units. For many, the greatest constraint in creating such an organization is a severe shortage of executives with the skills, knowledge, and sophistication to operate in a more tightly linked and less classically hierarchical network. In fact, in the volatile world of
transnational corporations, there is no such thing as a universal global manager. Rather, there are four groups of Specialists; Business managers, (Strategist + Architect + Coordinator) Country managers, (Sensor + Builder + Contributor) Functional managers, (Scanner + Cross-Pollinator + Champion) Corporate managers, (Leader + Talent Scout + Developer)
And there are the top executives at corporate headquarters, the leaders who manage the complex interactions among the four and can identify and develop the talented executives a successful transnational requires.
Introduction:
The global manager is a multidimensional individual who has developed the mind-set and competencies to effectively function anywhere in the world. This individual is knowledgeable in the arts, history, science, and the culture and psychology of people. It is recognized that the standard managerial skills and competencies are not enough for the global manager. He has to master more than concepts and theories. He will also have to command new skills. However there are certain competencies that only the global manager would require to be effective. They are crucial to the function of the global manager in the global environment. The design of the framework is important. It implies that all the competencies outlined are interdependent of each other. One set of competencies cannot be achieved without possessing the others and no one competency has greater weight than the other.
In 2003, as globalization has become a much more pressing issue and the talents of global managers are in high demand, has Bartlett changed his views? Cynthia D. Churchwell interviewed him at his office at Harvard Business School.
Cynthia Churchwell: Since your article "What is a Global Manager?" was first published in the Harvard Business Review eleven years ago, what key differences have you seen in global managers? How have your own views changed?
Christopher Bartlett: Well, fortunately, the basic argument has held up. But the world has evolved and we do see some new patterns emerging. But first let's focus on the things that have stayed constant. Today, global managers need to see the world not just as a collection of national marketplaces, but also as a source of scarce information, knowledge, and expertisethe key resources required in the development and diffusion of innovation worldwide. So this increasingly important capability really is about using one's global presence to promote worldwide innovation and learning. Now these three strategic imperatives have to be reflected in the multinational company's organizational capability. And that is where the role of the global manager is shaped. We argued that companies should not define this as an offline specialist role, but neither must they try to make everyone global managers. Rather, there are three key groups who should be involved. Another big change is that companies are finally recognizing that being global is not just about entering incremental overseas markets. It is also about accessing scarce resources. And the scarcest of all resources is the human resource, particularly management. So the assumption that "all the smart, capable people were born within a ten-mile radius of our head office" is being eroded. As an Australian, I am aware that the current CEOs of Kellogg and of Coca-Cola, and the last CEOs of Ford and Philip Morris, are all Australians. And a recent BusinessWeek cover story tracked the impact that Indian managers have had on American management. To sum up, a major challenge for global companies is to develop a cadre of managers, who can understand and respond to the needs of the international business environment. These managers need to go beyond a narrow national perspective towards a multidimensional view, which takes into account the requirements of the entire global system. In other words, these companies have to create a cadre of people who are comfortable with 'global' careers.
dismissed as unnecessary overhead, functional managers are often given little chance to participate in, let alone contribute to, the corporate mainstream's global activity. In some cases, top management has allowed staff functions to become a warehouse for corporate misfits or a graveyard for managerial has-beens. Yet at a time when information, knowledge, and expertise have become more specialized, an organization can gain huge benefits by linking its technical, manufacturing, marketing, human resources, and financial experts worldwide. 4. Corporate Manager Clearly, there is no single model for the global manager. Neither the old-line international specialist nor the more recent global generalist can cope with the complexities of crossborder strategies. Indeed, the dynamism of today's marketplace calls for managers with diverse skills. Responsibility for worldwide operations belongs to senior business, country, and functional executives who focus on the intense interchanges and subtle negotiations required. In contrast, those in middle management and frontline jobs need well-defined responsibilities, a clear understanding of their organization's transnational mission, and a sense of accountability-but few of the distractions senior negotiators must shoulder. Meanwhile, corporate managers integrate these many levels of responsibility, playing perhaps the most vital role in transnational management. The corporate manager not only leads in the broadest sense; he or she also identifies and develops talented business, country, and functional managers-and balances the negotiations among the three. It's up to corporate managers to promote strong managerial specialists who can translate company strategy into effective operations around the world. Despite nearly two decades of corporate globalization efforts, many organizations still struggle to find managers who are comfortable and effective in the increasingly global economy. Most suffer both from a lack of cultural awareness when dealing with employees and partners overseas and from a lack of experience managing increasingly complex processes over long distances. Though a few insightful corporate giants such as General
10
Electric, Cisco Systems, and Intel have made strides in developing successful global managers, many human resources leaders and senior executives continue to be frustrated with the available skills and resources
11
knowledgeable in the arts, history, science, and the culture and psychology of people. Below is a summary of the Seven (7) critical competencies from an INSEAD questionnaire of more than 1,500 international managers. 1. Strategic Awareness: The fundamental requirements of this competency are the continual acquisition of information and the ability to synthesize that information to produce new knowledge.
2.
Adaptability in New Situations: The key element of adaptability is being comfortable with not being in control of how situations naturally evolve; particularly where chaos appears to be occurring. The skill is to let go and trust the process.
3. Sensitivity to Different Cultures: The vital keys to cultural sensitivity are based upon resolving two fundamental issues of human relationship: human equality and 4. ethnocentrism. Ability to Work on International (or Multicultural) Teams: International (or multicultural) teams are an absolute necessity for a global operation. The fundamental requirements are valuing and integrating cultural diversity to create a competitive advantage and win/win situations. 5. Language Skills: It is an inevitable necessity that any global manager be multilingual; particularly with those countries where he or she conducts regular business. It should be a necessity for those expatriates residing in countries (or cultures) where the language is different from their native language.
12
6.
International Negotiating: The essential competency in negotiation is to find a solution or an agreement which is of mutual benefit to everyone involved. A successful negotiation is a win/win situation for everyone.
7.
Adaptability to Accelerated Change: The most important element of adapting to change is a transformation in mind-set from a resistant survival-base response to the realization that change is viewed as a continual opportunity to mold the future, rather than a crisis for movement.
13
This review might lead the reader to conclude that an effective global manager is superhuman. But keeping in mind the necessity of teamwork and the potential support to the manager through effective organizational design, systems, and processes, the prospect of developing global skills might be seen as an exciting challenge rather than an impossible task. To develop skills to the level necessary will be a lifelong process because the demands
14
will likely expand along with the global economy. Each of us needs to continue to improve in the aforementioned areas as we move through the beginning of the new century.
15
countries or regions, and integrate this for the development and diffusion of innovation on a global scale. Today's global managers may be developed within traditional corporate career paths. However, we are increasingly seeing employees starting out as global managers as well. This is often the case with firms that are born global, such as companies whose local markets are too small and so must operate immediately in a global context.
16
I.
Planning
The first stage of international planning is to decide how to do business globally: whether to export, to enter into licensing agreements or joint ventures, or to operate as a multinational corporation with facilities in a foreign country. To develop forecasts, goals, and plans for international activities, the manager must monitor environments very closely. Key factors include political instability, currency instability, and competition from governments, pressures from governments, patent and trademark protection, and intense competition. International firms should be sure that their plans fit the culture of the host country. Typically, U.S. firms feel that long-term plans should be three to five years in length; but in some cultures, this time period is too short. Many countries must plan with the assistance of governmental agencies. And working through bureaucratic structures, policies, and procedures is often time-consuming. II. Organizing
International businesses must be organized so that they can adapt to cultural and environmental differences. No longer can organizations just put carbon copies or clones of themselves in foreign countries. An international firm must be organized so that it can be responsive to foreign customers, employees, and suppliers. An entire firm may even be organized as one giant worldwide company that has several divisions. Above all, the new organization must establish a very open communication system where problems, ideas, and grievances can quickly be heard and addressed at all levels of management. Without this, employees will not get involved, and their insights and ideas are crucial to the success of the business. As an organization extends its operations internationally, it needs to adapt its structure. When the organization increases its international focus, it goes through the following three phases of structural change:
17
a) Pre-international stage. Companies with a product or service that incorporates the latest technology, is unique, or is superior may consider themselves ready for the international arena. The first strategy used to introduce a product to a foreign market is to find a way to export the product. At this phase, the firm adds an export manager as part of the marketing department and finds foreign partners. b) International division stage. Pressure may mount through the enforcement of host country laws, trade restrictions, and competition, placing a company at a cost disadvantage. When a company decides to defend and expand its foreign market position by establishing marketing or production operations in one or more host countries, it establishes a separate international division. In turn, foreign operations begin, and a vice president, reporting directly to the president or CEO, oversees the operations. c) Global structure stage. A company is ready to move away from an international division phase when it meets the following criteria: a. The international market is as important to the company as the domestic market. b. Senior officials in the company possess both foreign and domestic experience. c. International sales represent 25 to 35 percent of total sales. d. The technology used in the domestic division has far outstripped that of the international division. As foreign operations become more important to the bottom line, decision making becomes more centralized at corporate headquarters. A functional product group, geographic approach, or a combination of these approaches should be adopted. The firm unifies international activities with worldwide decisions at world headquarters.
18
III.
Staffing
Because obtaining a good staff is so critical to the success of any business, the hiring and development of employees must be done very carefully. Management must be familiar with the country's national labor laws. Next, it must decide how many managers and personnel to hire from the local labor force and whether to transfer home-based personnel. For example, U.S. firms are better off hiring local talent and using only a few key expatriates in most cases, because the costs of assigning U.S.based employees to positions overseas can be quite expensive. Simply, expatriates (people who live and work in another country) are expensive propositions even when things go well. Adding up all the extrashigher pay, airfare for family members, moving expenses, housing allowances, education benefits for the kids, company car, taxes, and home leavemeans that the first year abroad often costs the multinational company many times the expatriate's base salary. The total bill for an average overseas stay of four years can easily top $1 million per expatriate. In any case, managers need to closely examine how to select and prepare expatriates.
IV.
Directing
Cultural differences make the directing function more difficult for the international manager. Employee attitudes toward work and problem solving differ by country. Language barriers also create communication difficulties. To minimize problems arising from cultural differences, organizations are training managers in cross-cultural management. Crosscultural management trains managers to interact with several cultures and to value diversity. In addition, the style of leadership that is acceptable to employees varies from nation to nation. In countries like France and Germany, informal relations with employees are discouraged. In Sweden and Japan, however, informal relations with employees are strongly encouraged, and a very participative leadership style is used. Incentive systems also vary
19
tremendously. The type of incentives used in the U.S. may not work in Europe or Japan, where stable employment and benefits are more important than bonuses. V. Controlling
Geographic dispersion and distance, language barriers, and legal restrictions complicate the controlling function. Meetings, reporting, and inspections are typically part of the international control system. Controlling poses special challenges if a company engages in multinational business because of the far-flung scope of operations and the differing influences of diverse environments. Controlling operations is nonetheless a crucial function for multinational managers. In many countries, bonuses, pensions, holidays, and vacation days are legally mandated and considered by many employees as rights. Particularly powerful unions exist in many parts of the world, and their demands restrict managers' freedom to operate.
This management concept is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation.
20
The IMC function/tools that a global manager uses are of four types. a) The Foundation - corporate image and brand management; buyer behavior; promotions opportunity analysis. b) Advertising Tools- advertising management, advertising design: theoretical frameworks and types of appeals; advertising design: message strategies and executional frameworks; advertising media selection. Advertising also reinforces brand and firm image. c) Promotional Tools - trade promotions; consumer promotions; personal selling, database marketing, and customer relations management; public relations and sponsorship programs. d) Integration Tools - Internet Marketing; IMC for small business and entrepreneurial ventures; evaluating and integrated marketing program.
21
Competencies
Technology savvy
Acculturation
Self awareness
International knowledge Cross-cultural awareness Business & Industry savvy Global risk management Best practice standard
Diversity management Leading & motivating Cultural Networking skill Creation of a Clear vision Capacity for Managing conflict
Inquisitiveness
Open mindedness
Adaptable
Optimism
22
Cultural knowledge
Empathy
a) Technology savvy
The rapid onslaught of globalization has been largely due to advances in technology interconnecting companies across the world. Goldsmith, Walt, and Doucet (1999) see technology savvy as a key competency for global managers as it significantly impacts the organizations core business. Technology is not only vital for communication, and effective information management, but also greatly impacts the organizations production processes. In the fast pace world of technology certain products, processes and services can be outdated very quickly. It is therefore necessary for global managers to not only be able to use technology, information systems and telecommunications effectively but also understand its
23
impact by assessing and analyzing the affect it has on the global operations of the firm (Kedia and Mukherji 1999). Technology solutions that may be pertinent to the global managers include Business Intelligence tools such as the SQL Server suite (Analysis Services, Reporting Services) and Oracle; and collaborative tools such as Microsoft Office SharePoint Server, Skype, Microsoft Groove 2007, Google Apps, and instant messaging tools such as MSN Messenger (P. Culmsee, personal communication. May 3, 2008). Solutions such as those listed above may not be required by all managers as it depends on the type of industry they are in, and the organization itself.
b) International knowledge
Competency in this field means an understanding of the different socio-political and economic policies governing each country. A global organization operates world-wide abiding by the rules and regulations that govern that particular nation. Therefore it is essential to clearly understand the structure of these systems, their decision-making processes, and how they impact business operations and those around them (Whitfield 2003). Subject matter such as international finance, international law, and comparative labour relations should be familiar to the global manager (Caligiuri 2006). Knowledge in this field not only assists in penetrating foreign markets distribution networks (Tan, Erramilli, and Liang 2001) and the smooth running of the business but it can be a competitive advantage. Take Procter & Gamble for example. In the early 1980s, in their fight for higher margins from the pharmaceutical industry, Indian pharmacists nationwide targeted the company by boycotting Vicks products. Gurcharan Das, CEO of Procter & Gambles Indian subsidiary realized that the Vicks products contained all natural herbal ingredients, found in the age-old Sanskrit texts. Products compliant under this Ayurvedic system of medicine in India could be sold in food shops, general stores, and street kiosks. Das proved this compliance to the Delhi government and the local FDA and had the registration changed from Western medicine to Indian medicine. With the new registration, the company was able to expand its distribution channel beyond pharmacies and build a new plant for Vicks, enjoying the tax-advantages and lower labour costs (Das 1994, 197-210).
24
25
26
2. Interpersonal competencies:
It is not sufficient for global managers to only gain knowledge but also critical for them to possess the appropriate skills to transfer this knowledge into action effectively. Interpersonal competencies are those that relate to the social/relationship interaction or management of others. Competency in this area will lead to fruitful results when dealing with others. These competencies, acculturation, diversity management, leading and motivating a diverse workforce, cultural networking skills, creation and conveyance of a clear vision, and
27
capacity for managing uncertainty and conflict in the global environment, are described below.
a) Acculturation
Acculturation is the process whereby the attitudes and/or behaviors of people from one culture are modified as a result of contact with a different culture (Maxwell n.d.). Awareness of cross-cultural differences is vital but not enough. The challenge for the global managers, after gaining cross-cultural knowledge, is the willingness and ability to embrace and integrate multiple perspectives (Aycan 2001, 119-135) and use it to their advantage. To achieve this they must learn to let go of their own cultural certainty, unquestioned acceptance of basic assumptions, personal frames of references, unexamined life, accustomed role or status, social reinforcement knowledge, accustomed habits and activities, and known routines (Osland 2001, 137-156), accept that differences do matter (but not inferior), be open and receptive to new ideas, ready to accept another perspective (Rifkin 2006) and be able to master both non-verbal and verbal communications (Jokinen 2005) pertinent to the culture. Caligiuri (2006) recommends fluency in language to assist in effective verbal communication. An example of how acculturation will benefit the global manager can be demonstrated by the understanding of a brief explanation of the Japanese negotiation style (Adachi n.d.). Japan still maintains a hierarchical business structure. Prior to commencing the negotiation, they ascertain their standing/ranking and that of their organization in respect to others. Their language is indirect, ambiguous and controlled (agreeable) as harmony and the concept of face-saving is important to them. The subject matter is talked around rather than being approached directly. Even if they have strong views or oppose someone elses view, they will avoid offence preferring to skate around the subject so as to maintain the relationship. They value long-term relationship over short-term monetary gain. If an agreement cannot be reached, they are more likely to change the subject or ignore it all together. Information gathering about the other is important and negotiations will not be commenced until they
28
obtain what is needed. A broad agreement is first made from the negotiation, and detailed agreements later.
b) Diversity management
Managers who perceive diversity as important and have the ability to manage this diversity can leverage these differences for mutual business gains (Whitfield 2003). Managing diversity pertains to the ability to co-ordinate groups of people from differing backgrounds, characterized by culture, gender, age, religion, etc., working effectively and productively together on the same tasks. To manage diversity effectively, the organizations culture must value its diversity. For behavior and thinking to change this value of diversity must be embedded in processes and structures (Parker 2005). With globalization comes culture diversity. To be successful, it is crucial for global managers to be competent in this skill.
29
is critical. Khan (2007) believes that the adage It doesnt matter what you know, its who you know that matters holds true in most countries. To further themselves and their organization Khan suggests that it is necessary for global managers to develop good relations with the influential and effective people around the world who will impact the business positively.
30
negotiation, interviewing, and non-verbal cues), ability to scan the world for information, and an understanding of diversity and its impact are a necessity.
3. Personal competencies:
The fundamental personal characteristics or traits of a person will not only affect the attainment of knowledge but also how and if the knowledge will be executed. Knowledge and skills alone do not make a global manager. It is the personal traits of the person that will drive the acquisition of the knowledge and affect how the skills are performed.
a) Self-awareness/Emotional Intelligence
To be self-aware, the global managers would have an astute insight of how they are perceived by others, clear insight of themselves, and a clear insight of their own roles with respect to others in the group (Maznevski and Zander 2001). Self-awareness will assist towards the development of emotional intelligence, which is the subset of social intelligence that involves the ability to monitor ones own and others feelings and emotions, to discriminate among them and to use this information to guide ones thinking and actions (Salovey and Mayer, 1990). It is this deep understanding and intuitiveness of self and others that will assist the manager to transform and develop.
b) Inquisitiveness
The inquisitive mind is one that has an insatiable demand for knowledge. It will assist global managers in seeking information and strive for continuous learning (Parker 2005). The inquisitive mind will question and probe until the best course of actions and results are obtained. Global managers with inquisitive minds are adventurous and will always have upto-date knowledge and skills to achieve their goals.
31
just and fair and will do what is best for others. Global managers with honesty and integrity will ensure that best practice standards are implemented and maintained. Employees working for them will be empowered (Parker 2005). This trait will assist the global managers to lead and motivate their team. The case below, taken from Parkers (2005, 387) book, demonstrates the ultimate act of integrity through leading by example and trust building, exemplified by the actions of Norbert Reinhart.
d) Open-mindedness
Global managers with open minds are less likely to be judgmental and view diversity as inferior. They will be more receptive to new experiences and ideas, and be able to see and accept change more readily (Caligiuri 2006).
e) Adaptable/flexible
This is the capacity to adjust or vary ones thoughts and thus behavior according to the immediate requirements of the condition or situation. An adaptable or flexible mind will assess and analyze the foreign culture, compromise, and then find innovative and creative ways to arrive at a solution (Stahl 2001, 197-210).
f) Optimism
Optimism is a mindset that looks on the positive side of a given situation. Optimistic managers are forward thinkers, will most likely persevere, learn from their mistakes, and encourage and motivate others to succeed. They themselves will be more motivated and proactive. This positive outlook will also assist the global managers to cope in unfamiliar and uncertain situations and people (Jokinen 2005).
g) Empathy
Empathy is a genuine understanding, concern and respect for anothers thoughts, feelings, needs, motives and assumptions and ones capacity to respond to those factors appropriately. Empathetic managers will consider someone elses situation, show appropriate discretion, and argues from position of the host country (Stahl 2001, 197-210). This trait will assist the global managers in their relationship with people worldwide as their listening skills will improve, and are able to appreciate differing viewpoints. This understanding of others will
32
lead to cross-cultural sensitivity and expertise in global human resource management (Jokinen 2005).
33
competencies but in a very distinctive way. In our view these competencies fall into four distinct areas. These are as below:
a) Business leadership
Business leadership in a global company has very specific challenges. In new markets, particularly new international markets, there is an overriding imperative to form strategic alliances and partnerships. Whether due to the need to gain distribution in a foreign environment, to gain lower cost production through scale, or to navigate the regulatory environment of foreign countries; the ability to build alliances and business partnerships is a key to successful business leadership in new markets. "It's not sufficient to mirror head office structures..." A second imperative relates to company structure and organizational dynamics. It is not sufficient, and indeed it might even be counter-productive, to simply mirror the head office structure in new or emerging markets. The most successful businesses in new markets are flexible and responsive. The lack of critical mass and the geographic dispersion of operations require a high degree of ambiguity in terms of roles and reporting lines. In this situation, it is critical that there are effective links between the new, evolving business and head office. Inevitably, this requires constant communication and a lot of travel. Finally, business leadership in the context of an internationalizing company creates special demands in terms of communicating the corporation's shared values and strategy. The successful business leader has an almost evangelical role. He or she must infuse the local management team with the corporation's vision and culture otherwise the company will never be institutionalized in the local market and, long term, will probably fail.2
b) Functional leadership
Functional leadership is typically defined in terms of the specific functional skills an individual brings to a business situation. In the context of a globalizing company specific
34
functional skills are often critical and relate to the challenges facing the business, such as in the areas of marketing, manufacturing or logistics. "Deep functional skills give the global manager credibility..." But over and above the specific functional requirements of a particular situation, deep skills in a functional area of relevance are critical because they give the global manager credibility. The executive brings something to the party. He or she has neither simply been 'parked' by the corporation nor are they passing through as part of a career development plan. This is most relevant in situations where there has been high turnover of expatriate managers who, often due to the short tenure of their appointment, have not had a positive or lasting impact on local operations.
One way that functional leadership is demonstrated very tangibly in the context of global companies is in the individual's ability to leverage the corporate network. Is he, or she, plugged in? Can the leader get his or hands on the necessary information from head office? Can the leader get decisions made quickly and efficiently?
Successful functional leadership also requires the individual to maintain a functional edge. It is imperative that the leader does not become isolated from best practice. This is especially true of executives leading operations in isolated situations such as parts of China. The successful global executive must continue to invest in the development of his or her functional area of competence, even when based in remote locations. "The dominant culture can be alien to the business leader..."
c) Team leadership
Team leadership is the first of the two 'soft' competencies that we believe sets successful global business leaders apart from other managers. Global markets are typically
35
characterized by rapid change and a high degree of uncertainty. Typically, the dominant culture of the working environment is alien to that of the business leader and the organizations operations can cover a large and diverse geography. Keeping the team focused and motivated in such an environment creates particular team leadership challenges for the manager of an internationalizing business. Mentoring, coaching, motivating, and even day-to-day communication can be difficult in an environment where cultural norms, symbols and values are all fundamentally different to those of the leader. Leading change is particularly challenging in new and emerging markets. The political, regulatory and business landscape can change quickly and without warning, as has been the case in South East Asia in recent years. In China, for example the Government will often change the regulatory environment, seemingly on a whim, creating dramatically new competitive dynamics overnight. The ability to communicate a consistent vision, and inspire the troops to action in such an environment, requires a special kind of leadership.3
d) Personal leadership
Personal leadership is the other 'soft' competency that defines successful managers, particularly in the context of internationalizing companies. This, perhaps more than the other competencies, sets successful global managers apart from their domestic counterparts. We often forget how much we rely on our home environment for support and structure. Our family life, sports clubs or religious affiliations, all provide rhythm and context for our business activities. "We forget how we rely on our home base for support..." Business leaders in the international context often lack these supports and accordingly require a level of personal leadership well beyond what is typically needed in a domestic environment. For the executive who is constantly travelling, living in hotels, regularly crossing time zones and doing business over meals and late evenings, it is challenging to maintain energy and balance. It takes discipline, focus and maturity.
36
Another aspect of personal leadership that is specific to working in foreign environments relates to cultural identity. If an executive is to be successful working in another culture he or she must demonstrate a deep respect for, and sensitivity to, cultural differences. This does not mean however those successful managers 'go native'. To the contrary, if the individual is to be truly respected by the local team, he or she must also remain grounded in his or her own culture and national identity. Finding this balance is a defining characteristic of the most successful global managers. A further aspect of personal leadership of successful global managers is the ability to continue to manage their own personal growth and career development. This is an imperative, particularly for executives working for extended periods at locations a long way from head office. Keeping networks alive and fresh, staying on the corporate radar screen, and maintaining one's edge when working at the coalface of international business is extremely difficult.
37
between 20 percent and 50 percent, and the average cost per failure to the parent company ranges from $55,000 to $150,000. There are studies claiming the failure rate is between 30 and 70 percent. The accurate identification of the actual rate of failure is less important than how high the range is. The fact that this range represents a large number of managers who cannot function successfully in other culture is disturbing. The reduction in expatriate personnel also has ramifications for strategic management and control, such as less identification with, and knowledge about, the globe operations and organization, and less control by headquarters over local subsidiaries. Thus: there is increasing value to expatriate assignment as firms become global competitors... A means must be found to provide this experience to as many managers as possible. That would probably involve shorter-term expatriate assignments whose purpose is avowedly developmentalfor both the individual and the organization.
38
The integration dimension represents the intensity of the exposure. A person could be sent for a short term, technical, trouble-shooting matter and experience little significant contact with the local culture. On the other hand, a person could be sent for brief negotiation where the cultural interaction could be very intense. So, the training is different and it depends of the dimension of the visit. Effective preparation would also stress the realities and difficulties of working in another culture and the importance of establishing good working relationships with the locals. c) Repatriation: Selecting the right people, train them up, and sending them to foreign posting is not the end of the exercise. Getting these people back and integrated into the company so that the company can continue to benefit from their experience and expertise has been shown to be a problem. Research suggests that the average repatriation failure rate. Those people who return from an overseas assignment and then leave their companies within on year is 25%. To hold them in the company, they need to adopt a better repatriation strategy.
39
40
2. Awareness and Appreciation: To instill in new global managers awareness and appreciation for the vast differences among the cultures in which they do business. 3. Tools and Support: To give global managers the tools and support they need to succeed by the companies.
Conclusion:
Competency in business leadership, functional leadership, team leadership and personal leadership are all key elements of a successful business leader's skill set. The requirement for well-developed competencies in team leadership and personal leadership, however, is particularly important in the international context. Too few organizations really provide their executives with the right framework to assess their individual abilities or have adequate mechanisms to provide frank and honest feedback and developmental support. That is why Egon Zehnder International has developed its Management Appraisal practice. The focus of this practice is the individual assessment of executives based on a structured interview and exhaustive 360 degree references. The output, which involves detailed personal feedback, is focused on identifying developmental opportunities based on each executive's personal career aspirations and the needs of the organization.5 Executives who aspire to business leadership positions, particularly in globalizing companies, must take a hard headed look at their level of competence in each of these areas and proactively address their individual developmental opportunities. This might involve seeking the support of a mentor or coach, seeking job change or completing an executive
41
program. There are many developmental options but, self-awareness, through structured and regular feedback, and proactive career planning, are the first steps.
42
Q-7 a) what are the Leadership Skills for global managers? b) How international assignments are managed? c) How to develop a global manager? Q-8 a) what are the different problems of global managers? b) How the different problems of global managers can be solved? Q-9 a) briefly discuss about the possibilities of global managers in Bangladesh. b) what is Emotional Intelligence of Global Managers?
The Focus Online interview with Cor Boonstra of Royal Philips Electronics, "If I had to do
The Focus Online article "The power of diversity" by Fritz Frohlich of Akzo Nobel. The Focus Online article; Emotional intelligence in mergers and acquisitions by Daniel
Goleman.
5
The Focus Online article; The value of impartial views by Dr Hansjorg Franzius of
Siemens AG.
6
http://wiki.answers.com/Q/What_is_the_role_of_global Aycan, Z. 2001. Expatriation: A critical step toward developing global leaders.
InDeveloping Global Business Leaders: Policies, Processes, and Innovations, eds M. Mendenhall, T.M.Kuhlmann and G.K. Stahl, 119-135.London: Greenwood Publishing Group.
43
Barnevik, P. 2001. Preface. In Harvard Business Review Global Strategies: Insights from
the worlds leading thinkers, eds P. Barnevik and R.M. Kanter. Boston: Harvard Business School Publishing.
9
Bartlett, C., and S. Ghoshal. 1994. What is a global manager? In Harvard Business Review
Global Strategies: Insights from the worlds leading thinkers, eds P. Barnevik and R.M. Kanter, 77-91. Boston: Harvard Business School Publishing.
10
MCQ Test: 1. _____ firms favor less-risky and higher control modes such as exporting and sales subsidiaries a) Polycentric b) Regiocentric c) Geocentric d) Ethnocentric
2. Geocentric firms have the ____ level of performance a) Lowest b) Highest c) Mid d) None of the above
44
3. There are ____ distinct attitude clusters that are useful in thinking about, and charactering, corporate worldviews or mind-sets a) 3 b) 4 c) 5 d) 6
4. The increase in specialization of people and differentiation in organizations was driven bya) Technological improvement b) Fragmentation of markets c) Explosions in product variations d) All of the above
5. Participation in global terms should occupy a) Early in the career b) Mid level of career c) Late in the career d) At any level of career
45
6. Studies claim that the failure rate of expatriates is a) Between 20% to 40% b) Between 30% to 50% c) Between 30% to 60% d) Between 30% to 70%
7. What would suffice for short stays and low integration? a) Language training b) Survival level language training c) Case studies d) Stress reduction training
8. The international assignment may be an important vehicle for a) Developing global manager b) Achieving strategic management control c) Co-ordinating and integrating the global organization d) All of the above
46
11. there is no such thing as a universal global manager was provided by a) David Whitwam b) Christopher A. Barlett c) Cynthia cahrchwell d) Kedia and Mukherjee
12. Which one is a critical competency of a global manager? a) Strategic awareness b) Adoptability in new situations c) Language skills
47
13. Which one is an ability of a global manager? a) Ability to communicate b) Ability to manage cultural diversity c) Ability to manage change and transition d) All of the above
15. Which one of the following is not under the knowledge competencies of a global manager? a) Technology savvy b) Global risk management c) Acculturation d) Business and industry savvy
48
16. Its necessary for global managers to develop good relations with____ who will impact the business positively. a) Influential people b) Influential and effective people c) Effective people d) None of the above
18. Which one of the statement is true? a) Its not sufficient to mirror head office culture b) Deep functional skills give the global manager credibility c) The dominant culture can be alien to the business leader d) All of the above
49
19. While managing international assignments the emphasis shouldnt be on a) Selection b) Training c) Firing d) Repatriation
20. Which one of the elements of emotional intelligence doesnt involve personal element? a) Self-awareness b) Motivation c) empathy d) self-regulation
11 B
12 D
13 D
14 A
15 C
16 B
17 B
18 D
19 C
20 C
50
51