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International Business 05/06 Edited by Fred Maidment. What is a Global Manager? By Christopher A. Bartlett and Sumantra Ghoshal. Presentation by: Salina Hardin, Amanda Wesson, Stefanie van Kempen & James McClinton III . Globalization.
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International Business 05/06 Edited by Fred Maidment What is a Global Manager?By Christopher A. Bartlett and Sumantra Ghoshal Presentation by: Salina Hardin, Amanda Wesson, Stefanie van Kempen & James McClinton III
Globalization • Companies strive for globalization, but the world just becomes more fragmented because of ideology, religion, and mistrust. • Four types of managers needed- business managers, country managers, functional managers, and senior executives to coordinate the efforts of the other three.
Corning Glass and ITT • Both companies made the wrong choices • Corning hired an American ex-ambassador to head international division • ITT attempted to “globalize all its managers • Transnational set-up works much more effectually • Integrates assets, resources, and diverse people in operating units around the world
Transnational's Success • They build three strategic capabilities • Global-scale efficiency and competitiveness • National-level responsiveness and flexibility • Cross-market capacity to leverage learning on a world-wide basis • Traditional companies cannot cope with all three of these issues at once
Universal Global Managers • There is no such thing with transnationals • Instead the four different groups function together • The top executives function to coordinate the efforts of the other three managers. • Electrolux, NEC, and Proctor and Gamble have all three had very successful individuals in these positions
The Business Manager(Strategist + Architect + Coordinator) • Leif Johansson of Electrolux • Now President of the company • Made several Acquisitions • Created new overall strategy
The Strategist • Johansson developed a product-market strategy that identified 2 regional brands to be promoted in all European markets. • Electrolux (conservative customers) • Zanussi (trendsetters) The local brands were then clustered into the other two market segments( yuppies and environmentalists).
By tracking product and market trends across borders, Johansson captured global-scale efficiencies while reaping the benefits of response to national market fragmentation. • He took on the role as the strategist, but he relied on corporate and local managers.
The Architect • The global business manager leads the debate on where major plants, technical centers, and sales offices should be located-and which facilities should be closed. • They have to achieve the most efficient distribution of assets and resources while protecting and leveraging competence.
Johansson upgraded and tailored existing facilities whenever possible instead of closing old plants. • He averted a political fallout and organizational trauma, and retained valuable know-how. • Decided to leverage diversity by matching each unit’s responsibilities with its particular competence.
The Coordinator • Johansson coordinated product flow by establishing broad sourcing policies and transfer-pricing ranges that set limits but left negotiations up to internal suppliers and customers. • He coordinated business strategy by relying on teams to monitor implementation and resolve problems
Coordinated various product strategies across Europe by developing product-line boards to oversee strategies and exploit synergies. • Coordination takes more time that any other function of the global business manager’s position. • Requires great interpersonal and administrative skills.
The Country Manager(Sensor + Builder + Contributor) • It is important to • meet local customer needs • connect local intelligence with global strategy • satisfy the host government’s requirements • defend the company’s market positions against local and external competitors
Sensor • Sensor and interpreter of local opportunities and threats • Gathering and sifting information, interpreting the implications, and predicting a range of feasible outcomes • Conveying the importance of such intelligence to people higher up
Example (1/2) • Howard Gottlieb – general manager of NEC’s switching-systems subsidiary in the U.S. • In the late 80s he was assigned to build the U.S. market for a widely acclaimed digital telecom switch, designed by the parent company in Japan
Example (2/2) • Local-market background and contacts led Gottlieb to diagnose the problem quickly • The product lacked many features that customers in the U.S. wanted • He had to convey the parent company and to bridge two different cultures
Builder • Builder of local resources and capabilities • Gottlieb created a software team that became a big corporate asset (first only for local projects) • Because of his credibility he could expand the team (not only for North America but also for Asia)
Contributor • Contributor to and active participant in global strategy • Has influence over the way his organization makes important strategic and operational decisions (links to local markets)
The Functional Manager (1/2)(Scanner + Cross Pollinator + Champion) • Is often not allowed to participate in or contribute to the corporate global activities • But he is important to link the technical, manufacturing, marketing, human resources, and financial experts worldwide • He is responsible for worldwide learning
The Functional Manager (2/2)(Scanner + Cross Pollinator + Champion) • Skill to transfer specialized knowledge and connect scarce resources and capabilities across national borders • Build an organization that can use learning to create and spread innovations
Scanner (1/2) • Scan for specialized information worldwide • Has the perspective and expertise to detect trends and move knowledge across boundaries • Can transform piecemeal information into strategic intelligence
Scanner (2/2) • Serves as linchpin and connects areas of specialization throughout the organization • Creates channels for communicating specialized information and knowledge (by using informal networks)
Examples • Electrolux: • Through such links technical managers were alerted to the shift from analog to digital switching technology. • Procter & Gamble (Europe): • Wahib Zaki broke down the high-walled organizational structures, which isolated and insulated the technical development in each country. • He supported teams from different countries to meet and to build informal communication networks.
The functional manager can transform piecemeal information into strategic intelligence. • In response to competitive threats, European headquarters asked the Brussels-based research to develop a new liquid laundry detergent.
Zaki’s technical team drew the product profile necessary for healthy sales in multiple markets with diverse needs. • They also developed a method that made enzymes stable in liquid form, a bleach substitute effective at low temperatures, a fatty acid that yielded good water-softening performance, and a suds suppressant that worked in front load washing machines.
The R&D group was so successful that the European headquarters adopted the use of teams for its management of the new brand launch. • As a reward for his work, Zaki was promoted to Senior Vice President of R&D.
The Corporate Manager(Leader + Talent Scout + Developer) • The corporate manager does not only leads in the broader sense; they also identify and develop talented businesses, country, and functional managers, also they balance negotiations among the three.
Example • Floris Maljers, co-chairman of Unilever, has made recruitment, training, and development of promising executives a top priority. • He or she believes that limitation in human resources, not unreliable or inadequate sources of capital, has been the biggest constraint in most global efforts.
As a first step, senior executives can identify those in the organization with the potential for developing the skills and perspectives demanded of global managers. • Top management may have to track the careers of promising executives of over several years before giving them senior responsibilities.
Example • At Unilever, the company maintains four development lists that indicate both the level of each manager and his or her potential. • Once corporate managers identify the talent, they have the duty to develop it. They must provide opportunities for achievement that allow business, country, and functional managers to handle negotiations in a world wide context.
Conclusion • A company’s ability to identify individuals with potential, legitimize their diversity, and integrate them into the organization’s corporate decisions is the single clearest indicator that the corporate leader is a true global manager. This makes the company a true transnational.