Chapter 10 Developing a Global Management Cadre

Chapter 10 Developing a Global Management Cadre PowerPoint by Kristopher Blanchard North Central University

Introduction • To maximize long term retention and use of international cadre through career management so that the company can develop a top management team with global experience • To develop effective global management teams • To understand, value, and promote the role of women and minorities in international management in order to maximize those underutilized resources • To maximize the benefits of an increasingly diverse workforce in various locations around the world • To work with the host country labor relations system to effect strategic implementation and employee productivity.

Preparation Adaptation, and Repatriation • Effective HRM ends with the successful repatriation of the executive into company headquarters • Companies must prepare to minimize the potential effects of reverse culture shock • Ineffective repatriation practices are clear – few managers will be willing to take international assignments

Preparation Adaptation, and Repatriation • A mentor program to monitor the expatriate’s career path while abroad and upon repatriation • As an alternative to the mentor program, the establishment of a special organizational unit for the purposes of career planning and continuing guidance for the expatriate • A system of supplying information and maintaining contacts with the expatriate so that he or she may continue to feel a part of the home organization.

The Role of the Expatriate Spouse We began to realize that the entire effectiveness of the assignment could be compromised by ignoring the spouse. —Steve Ford, Corporation Relocations, Hewlett-Packard • Research on 321 American expatriate spouses shows effective cross-cultural adjustment is more likely • When the firms seek the spouse’s opinion about the international assignment • When the spouse initiates his/her own pre-departure training

Expatriate Career Management

Slide 10-6, Support services provide timely help for the manager and, therefore, are part of the effective management of an overseas assignment.The overall transition process experienced by the company’s international management cadre over time. It comprises three phases of transition and adjustment that must be managed for successful socialization to a new culture and resocialization back to the old culture: (1) the exit transition from the home country, the success of which will be determined largely by the quality of preparation the expatriate has received; (2) the entry transition to the host country, in which successful acculturation (or early exit) will depend largely on monitoring and support; and (3) the entry transition back to the home country or to a new host country, in which the level of reverse culture shock and the ease of re-acculturation will depend on previous stages of preparation and support

In the international assignment, both the manager and the company benefit from the enhanced skills and experience gained by the expatriate. Many returning executives report an improvement in their managerial skills and self-confidence. Some of these acquired skills, as reported by Adler, include the following shown on slide 10-9.

Developing a Global Management Cadre • Managerial Skills, not Technical Skills – learning how to deal with a wide range of people • Tolerance for Ambiguity • Multiple Perspectives – learning to understand situations from the perspective of local employees and businesspeople • Ability to Work with and Manage Others – learning patience and tolerance

Global Management Teams • describes collections of managers from several countries who must rely on group collaboration if each member is to experience the optimum of success and goal achievement. An example?

Global Management Teams

As shown slides 10-11, when a firm responds to its global environment with a global strategy and then organizes with a networked “glocal” structure, various types of cross-border teams are necessary for global integration and local differentiation. These include teams between and among headquarters and subsidiaries, transnational project teams, often operating on a “virtual” basis, and teams coordinating alliances outside the organization. In joint ventures, in particular, multicultural teams work at all levels of strategic planning and implementation, as well as on the production and assembly floor.

Virtual Transnational Teams • Virtual groups, whose members interact through computer-mediated communication systems, are linked together across time, space, and organizational boundaries • Virtual global teams are horizontal networked structure, with people around the world conducting meetings and exchanging information via the Internet, enabling the organization to capitalize on 24 hour productivity

Operational Challenges for Global Virtual Teams

The ability to develop and lead effective transnational teams (whether they interact “virtually”, or physically, or, as is most often the case, a mixture of both) is essential in light of the increasing proliferation of foreign subsidiaries, joint ventures, and other transnational alliances.Slide 10-16 highlights some suggestions to determine if the team is successful

Managing Transnational Teams • Do members work together with a common purpose? Is this purpose something that is spelled out and felt by all to be worth fighting for? • Has the team developed a common language or procedure? Does it have a common way of doing things, a process for holding meetings? • Does the team build on what works, learning to identify the positive actions before being overwhelmed by the negatives? • Does the team attempt to spell out things within the limits of the cultural differences involved, delimiting the mystery level by directness and openness regardless of the cultural origins of participants? • Do the members recognize the impact of their own cultural programming on individual and group behavior? Do they deal with, not avoid, their differences in order to create synergy? • Does the team have fun?

Managing Transnational Teams • Cultivate a culture of trust: One way to do this is by scheduling face-to-face meetings early on • Rotating meeting locations • Rotating and diffusing team leadership • Linking rewards to team performance • Build social networks among managers from different countries

The Role of Women in International Management • Avoid assuming that a female executive will fail because of the way she will be received or because of problems experienced by female spouses • Avoid assuming that a woman will not want to go overseas • Give female managers every chance to succeed by giving them the titles, status, and recognition appropriate to the position – as well as sufficient time to be effective.

Management Focus: Japan’s Neglected Resource: Female Workers When Yuko Suzuki, a Japanese woman, went into business for herself, she found that customers only pretended to listen to her. She was often asked by potential customers about her boss, so she hired a man to go along with her on sales calls. Having a man by her side helped Yuko increase sales. While 40 percent of Japanese women work, only about 9 percent hold managerial positions. A recent World Economic Forum report ranks Japan 69th of 75 member countries empowering women. Women in Japan are often hired only for clerical and service positions. Despite Japan’s economic troubles, women remain a neglected resource.

Working within Local Labor Relations • Differences in economic, political, and legal systems result in considerable variation in labor relations systems across countries. • Labor relations - the process through which managers and workers determine their workplace relationship. This process may be through verbal agreement and job descriptions, or through a union written labor contract which has been reached through negotiation in collective bargaining between workers and managers.

Working within Local Labor Relations • The participation of labor in the affairs of the firm, especially as this affects performance and well-being • The role and impact of unions in the relationship • Specific human resource policies in terms of recruitment, training, and compensation.

Organized Labor Around the World • Wage levels which are set by union contracts and leave the foreign firm little flexibility to be globally competitive • Limits on the ability of the foreign firm to vary employment levels when necessary • Limitations on the global integration of operations of the foreign firm because of incompatibility and the potential for industrial conflict.

In most countries, a single dominant industrial relations system applies to almost all workers; but in both Canada and the United States there are two systems—one for the organized and one for the unorganized. 2.The traditional trade union structures in Western industrialized societies : industrial unions, representing all grades of employees in a specific industry, and craft unions, based on certain occupational skills. More recently, the structure has been conglomerate unions, representing members in several industries—for example, the Metal Workers unions in Europe, which cut across industries, and general unions, open to most employees within a country.

The system of union representation varies among countries. In the United States most unions are national and represent specific groups of workers—for example, truck drivers or airline pilots—so a company may have to deal with several different national unions. A single U.S. firm—rather than an association of firms representing a worker classification—engages in its own negotiations.In Japan, on the other hand, it is common for a union to represent all workers in a company. In China, by law, any firm with over 100 employees must open a branch of the national union, however, the law is frequently ignored.

Industrial labor relations systems across countries can only be understood in the context of the variables in their environment and the sources of origins of unions. These include government regulation of unions, economic and unemployment factors, technological issues, and the influence of religious organizations. Any of the basic processes or concepts of labor unions, therefore, may vary across countries, depending on where and how the parties have their power and achieve their objectives, such as through parliamentary action in Sweden. For example, collective bargaining in the United States and Canada refers to negotiations between a labor union local and management; but in Europe collective bargaining takes place between the employer’s organization and a trade union at the industry level.

The AFL-CIO is a federation of 78 labor unions represents some 13.6 million working men and women. Through organizing, collective bargaining and legislative/political action, the unions of the AFL-CIO work to advance and defend the rights of working people everywhere. http://www.aflcio.org/

Convergence Versus Divergence in Labor Systems • Convergence in labor systems occurs as the migration of management and workplace practices around the world results in the reduction of workplace disparities from one country to another. This occurs primarily as MNCs seek consistency and coordination among their foreign subsidiaries, and as they act as catalysts for change by “exporting” new forms of work organization and industrial relations practices. Learn about world labor practices at LaborNet www.labornet.org.

Trends in Global Relations Systems

Comparative Management in Focus: Germany • Codetermination Law (mitbestimmung) – refers to the participation of labor in the management of the firm • Mandates representation for unions and salaried employees on the supervisory boards of all companies with more than 2,000 employees and work councils of employees at every work site

Comparative Management in Focus: Germany • Union membership is voluntary with one union for each major industry • Set the pay scale for about 90% of the country’s workforce • Play an active role in hiring, firing, training, and reassignment during times of reorganization and change

Comparative Management in Focus: Germany • Foreign companies operating in Germany also have to be aware that termination costs are very high • Including severance pay, retraining costs, time to find another job

Management Focus: China Drafts Law to Empower Unions and End Labor Abuse China is planning on adopting new laws that provide better protection for worker’s rights and ending the abusive practices of some employers. While the laws will apply to both domestic and international companies, the emphasis will be on foreign companies and their suppliers. The new laws are the result of an increasing government concern over the growing income disparity and civil unrest developing in the country. The laws make it more difficult to fire poorly performing employees and appear to some as a return to China’s “iron rice bowl” mentality of the 1950s and 1960s. “

“This is really two steps backwards after three steps forward” states Kenneth Tung, Asia-Pacific director of legal affairs at Goodyear Tire and Rubber Company in Hong Kong who is a legal advisor to the American Chamber of Commerce in China. With costs already rising in China, the new laws worry some companies already doing business in China. They feel that the country will begin to look less attractive as a place to do business, and may cause the price of labor to rise by fifty percent or more. Some feel that if current labor laws were to be enforced, which often they are not, the problem of worker abuse would be stopped. Some migrant workers complain that they are sometimes not paid or that their pay is delayed. The new laws would impose heavy fines, and the state-controlled union will be given greater power, making it very difficult to fire an employee. While the American Chamber of Commerce is lobbying against the new laws, others, including the Global Labor Strategies group, feel that new laws are needed and represent only modest reform in Chinese labor law.

Looking Ahead • Chapter 11 – Motivating and Leading • Motivating • Cross Cultural Research on Motivation • Leading • The Global Leader’s Role and Environment • Cross-cultural Research on Leadership • Contingency Leadership – The Culture Variable

Chapter 10 Developing a Global Management Cadre