Welcome to class of Global Manager by Dr. Satyendra Singh

Objective To develop Global Manager –Understand culture –Function in new environment –Create structure –Implement strategy –… No premature return from long-term assignment from abroad –Costs of failure can be very high Diversified MNCs have special issues

Diversified MNC Managers Face Substantive Issues Integrate large intl. acquisitions Build worldwide logistic capability - 5Cs –Character, cost, coverage, control, continuity Develop country-specific strategies –political and economic environment Form beneficial collaborative arrangements worldwide Balance pressures for global integration and local demands  Need certain set of traits and skills

Global Manager Traits: Now vs. Future

Skills of Global Manager Global mindset –Beyond learning culture and language Ability to –1 develop and use global strategic skills –2 manage change and transition –3 manage cultural diversity –4 design and function in flexible orgn structure –5 work with others and in team –6 communicate –7 learn and transfer knowledge in an orgn.

1 Global Strategic Skills No parochial views Flexible – required in different culture Good knowledge of –International relations, Foreign affairs –Global financial markets –Exchange rate movements (interest, inflation…) Standardization vs. customization Local yet should fit global strategy –Detergent: liquid vs. solid (Europe) –Retailing: family/value pack vs. sachets (EM) –McDonald (beer), KFC (rice)

2 Change and Transition Change –Unstable environment – ongoing challenge –Switch b/w standardization «» customization –Needs reorganization of resources Human, technology, marketing, distribution… Managers must agree with the strategy –Otherwise poorly implemented –Country Mgr feel lost control  Resignations Moved from customization  standardization (HO) Transition through Alliances or IJV –Alliances/IJV more difficult to change than wholly-owned subsidiary Requires multiple trusting relationship

3 Cultural Diversity - EPRG SRC: Self Reliance Criteria –one’s own cultural values, experiences, and knowledge as a basis for decisions EU ↑ multicultural than US Canada –↓ multicultural  may be ↑ conflicts HO culture sh’d not dominate entire orgn culture Ethnocentric: HCN, reward, HO superiority, ↑ control, ↓ risky venture – export, sales affiliates Polycentric: Recognize diff, have confidence, local Regiocentric: Recognize regional differences Goecentric: Optimize resources, best practices, superiority is not based on nationality. Performance: Geo>Regio/Poly>Ethnocentric

4 Flexible Orgn: Design and Function Learn, responsive and efficient Help people do more effectively –Develop strategic thinking and action –Open communication of plans –Alignment bw HO and BO re. decision-making –High tolerance for ambiguity Coordinate within and bw LOB –Financial, HR, marketing, manufacturing… Identify SCA and prioritize across different locations –Accommodate the new structure and process

5 Working with People, Team Due to specialization of people, complexity What is team –IJV partners, suppliers, customers… Becomes clear county requirement –Accounting Economic reality vs. just standard accounting Accounting vs. legal requirements are met So, team develops intl. auditing standards –Operations  relationship oriented… Participation in global team  global outlook  global manager Ex- International Journal production

6 Communications… Diverse Group –Multilingual –Cross-cultural awareness Particularly important in advertisements Lawsuit launched against global media by local media Global media wish to retain advertising revenue Local media wish to control advertising content –Sensitivity to colleagues, customers… It leads to forming trust Becomes corporate Culture Shared Global value system Global communications – effectiveness? –Ex. Kellogg Cereals, perfumes…

6 Communications…

6 Communications 

7 Knowledge Transfer Globally competent  highly curious –Experiment, take risks – calculated vs blind MNCs use the knowledge gained by Mgrs and transfer effectively in another country –Corporate management responsibility Not all MNCs do that –Particularly, if mgr re-enter home country  Ex: a visitor may learn > local, then wrote a book!