The rapid growth of globalization has created a boundary less organization
ABSTRACT
The rapid growth of globalization has created a boundary less organization. To manage such an organization, there is a need for a global manager, one who manages across distances, countries and cultures. Considered by some authors to be a myth, wider research, readings and understanding suggest its existence. There are certain criteria which define a global manager, which are truly essential to successful manage in the international context. These managers are invaluable to the organization as they provide the competitive edge. However, there has been shortage of such global managers due to the recruitment of such managers only from the home country of the organization. This is created a limited pool of next generation managers. With the changing trend, organizations have been emphasizing on the recruitment of managers from home country and third nation country. Women, too, are being considered. The major challenge facing global organizations is attract and retain such global managers.
In view of some authors, such as, Christopher A Barlett and Sumantra Ghoshal1, "there is no such thing as a 'universal' global manager, rather there are 3 groups of specialists: business managers, country managers, and functional managers and there are top executives at corporate headquarters, who manage the complex interactions between the 3." According to Yehuda Baruch2, there is "no such thing as a global manager", because "the examination of a wide possible characteristics indicates that there seems to be no distinct set of individual qualities that constitute such a manager."
With globalization becoming a basic economic reality, national boundaries have become insignificant. As a result, companies worldwide have shifted their focus from domestic to an international or global arena by extending operations into different parts of the world. As companies become more global minded, the need for managers with global perspective, international experience and skills that translate well to broader global context has increased. These new breed of managers, known as global managers, are those who manage across multiple time zones, country infrastructures, and cultural expectations.
A major challenge facing many multinational firms to successfully compete and grow in worldwide markets is the recruitment and development of a cadre of good managers with a global mindset who can succeed in the international market place. Various studies have been conducted in order to come up with the criteria that constitute a global manager, based on skills, capabilities and knowledge.
A recent research conducted by the Center for Creative Leadership (CCL), a nonprofit educational institution, identified some essential managing capabilities to successfully manage the challenges of the global business environment. These managerial capabilities are similar but different when applied in a global setting and include decision making, planning, managing people, motivating others, leadership, managing action and information, stress management, and having business knowledge.
In addition to these managerial capabilities, the research identified four pivotal capabilities uniquely related to effective global managers. The first one being the superior knowledge of how business is carried out in different countries with different cultures. As a global manager, knowledge of a country's history, laws, culture, and political, economic, financial conditions are essential for carrying out the responsibilities in a different country. International business knowledge even means knowing how to leverage an organization's core business, within each country, where it has members, customers, staff, vendors, resources, and various operations.
Next, in order to be effective in this world of cultural diversity, global managers must effectively adapt themselves to different cultures. This requires in depth knowledge and understanding of various cultures and the differences amongst them, in order to interact affectively with them. Global managers must take into account the complex interactions of norms, beliefs, values and attitudes of different culture groups. They must address multiple and differing expectations about how people do business. This complex role, therefore, demands a contingency approach to dynamic environments.
Thirdly, global managers should represent perspective-taking, which is essentially cultural empathy. A global manager must have the ability to appreciate and respect beliefs, values, behaviors, and business practices of individuals and groups of other cultures. Such managers should think outside their culture, by looking at issues through the keys of others and recognizing different viewpoints. For a global marketing manager, empathizing with customer's culture is paramount.
Global managers should possess the skill of innovation. Innovative global managers can, through their international business knowledge, understanding of cultural differences, and ability to embrace the perspectives of others, create and ...
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Thirdly, global managers should represent perspective-taking, which is essentially cultural empathy. A global manager must have the ability to appreciate and respect beliefs, values, behaviors, and business practices of individuals and groups of other cultures. Such managers should think outside their culture, by looking at issues through the keys of others and recognizing different viewpoints. For a global marketing manager, empathizing with customer's culture is paramount.
Global managers should possess the skill of innovation. Innovative global managers can, through their international business knowledge, understanding of cultural differences, and ability to embrace the perspectives of others, create and invent different and unique product, service, policy procedure, or practice.
Apart from these, language skills are also considered to be essential for managers to conduct business abroad. Foreign language proficiency can lead to better communication with host country nationals or locals, greater business savvy and better understanding and appreciation of how people of other cultures think.
Managers and executives who can effectively operate across cultures are invaluable to organizations with global business interests. A global manager's knowledge of international business, attained through a degree in international business and work experience in different countries, can create an innovative corporate culture to leverage unique, cultural-based knowledge and information for new product and service development. They can conduct business successfully by making deliberate choices among alternatives, effectively conducting cross-cultural negotiations, practicing business ethically, and applying the knowledge of public regulatory framework, to deal with certain issues. By being culturally adaptable, global managers change their behavior in response to cultural expectations. They overlook cultural differences and evaluate the work of people of different cultures neutrally. Global managers also add value to their organization by selecting, developing, motivating multicultural team members, and also inspiring them to share information amongst themselves by disregarding cultural differences. They also add value to the organization by being culturally empathetic. Effective global managers are capable of viewing a situation from other viewpoints. They listen and respect other's concerns, ideas and views, and take them into account, while affecting change. A global manager's skill of being an innovator provides the extra competitive edge to its organization over its competitors. This skill to innovate forms unique ideas that create new and different ways to solve problems rather then accepted norms of thinking and behaving. Such managers consistently generate new ideas and face risks by trying new approaches or methods. Innovative managers even persuade others, and can easily promote an idea or vision. Through foreign language proficiency, global managers prove to be an asset for their organization. By possessing multilingual ability, they can relate more easily to a foreign culture and can promote a better image of the multinational in the host country.
The successful implementation of global strategies depends, to a large extent, on the existence of an adequate supply of internationally experienced and oriented managers. One of the most important challenges facing multinational companies, today, is to attract and retain managers of high potential, who can fit in well into different cultures and can deal with numerous complexities. Traditionally, multinationals had been recruiting a high proportion of global managers from their home countries. However, the trend has been changing, as companies have now started hiring and developing managers from host-country and to some extent, third country nationals also.
However, the demand for such international managers has been exceeding their supply, as multinationals continue to rely on the ethnocentric approach of staffing that is, hiring home country managers to fill overseas positions. The main reason for limited supply, apart from following the ethnocentric approach, has been the decline in international mobility, which can be attributed to various factors including growing unwillingness to disrupt the education of children and career of spouses; the growing importance of 'quality of life' considerations, and, finally, recent circumstances of international terrorism, such as the attacks on America (September 11), war in Iraq and greater political unrest around the world.
Managers of international grade are become less mobile due to family concerns. High caliber managers are becoming less attracted to international offers due to concerns about dual careers and disruption to children's education. While international experience enhances the manager's career prospects, it makes it impossible for the spouse, generally women, to continue their careers in a foreign country. Families have also been concerned about the education of their children in a foreign country, which they consider to be of lower quality than that of their home country.
Another reason, which has had an impact on the supply of internationalists, is the failure of many companies to adequately address repatriation problems. With companies dealing unsympathetically with the problems faced by expatriates on re-entry, managers have become more reluctant to accept the offer of international assignments, as such problems are likely to cause subsequent loss of status, autonomy and career direction on reentry.
To attract managers for international assignment, companies like Shell International, have implemented a number of programs to address the problems faced by the working spouse and children. For the education of children at the foreign locations, Shell has built elementary schools and has provided grants to local schools to upgrade their offerings of secondary education. Shell has also been helping spouses with their careers by setting up employment centers, which provide counseling and job search assistance. Another such company, Monsanto's, manages the repatriation problems faced by the manager and the family members on reentry, by reintegrating them back into their work life within the home country organization, and by encouraging them to share important experiences abroad and utilize the global knowledge in the organization.
Recruiting and holding quality international executives have become a major task for companies operating on a global scale. Professionals of Human Resources Departments universally, have been spending time to study foreign exchange rates and controls, tax regimes and social programs to create fair and equitable compensation packages that are highly flexible and locally sensitive such as that of 3M Corp. With the formation of the European Union, 3M has created a Euro-pay salary and compensation package that intends to encourage managers to move easily among its 20 continental operations. Under this compensation package, managers transferring from one country to another receive the new salary higher than the old, no matter how great the disparity. Thus, a vice president moving from Dusseldorf to Milan would retain his higher German salary.
Compensation differs from country to country due to the varying cost of living standards. For example, the Hay International Business Group in Brussels, specialists in comparing the compensation of executives doing the same jobs in different nations, finds that the vice president of marketing for a German operation doing $150 million to $250 million in annual sales pulls down $163,000, while his U.S. counterpart makes $102,700. Even after heavy deductions for social benefits, the German still makes more, although his purchasing power may be no greater.
The components of a typical expatriate compensation package are base salaries, incentive programs, allowances of various types and perks. But, firms need to alter their compensation packages according to different situations. For instance, American executive compensation programs are composed of salary plus bonus and other pay-for-performance incentives like stock, due to the high risk, entrepreneurial U.S. society. In other parts of the world, like Japan, employees are offered mostly cash salaries and the promise of lifetime employment. In Europe the pay philosophy falls between these two extremes. Although bonuses and incentives are more attractive to Europeans than their Asian counterparts, most are conservative and frown upon awards of stock since they don't feel employee performance should be tied in any way to the vagaries of the capital markets.
Organizations cannot really rely on old compensation formula based on internal compensation policies and procedures, which are unfavorable from the firms view point. Such outdated pay structures, different from the prevailing markets rates, may cause dissatisfaction and therefore loss of valuable talent.
The challenge also lies in designing new-and-improved benefits to help differentiate their organizations as the "organizations of choice" to attract this important resource.
Due to the ethnocentric approach of the staffing policy, companies have paid less emphasis on women, host country and third country managers to meet their needs of international managers. This has led to an acute shortage of competent mangers for overseas assignments. To counter this, firms have moved towards hiring young graduates as managers and giving them international experience at an early age. Also, companies have realized the importance of developing effective internal and external international management development programs, in order to attract and retain key superior talent. Firms, through such developments programs, foster to provide high-quality international education to its global managers in order to widen their international business knowledge. As firms expand over different countries and cultures, it is essential for them to provide cross-cultural training to its global managers in order to foster an appreciation of the host country's culture. For UK managers transferring to countries in the Far and Middle East, firms need to organize extensive cross-cultural training, due to a greater cultural gap, in comparison to international assignments across Europe. Such training programs provide exposure to diverse backgrounds, perspectives and experiences of multi-cultural team members.
International management, for long, has been dominated by male, with little attention given to woman expatriates. Because of gender bias, female managers are not considered for selection for an international assignment. There has been under-representation of female managers, because of certain misleading perceptions, such as, in cases of greater uncertainty of international assignment, male global managers are preferred. Some companies fear the acceptance of female managers in certain countries, as is evident in a UK pharmaceutical company, were majority of domestic marketing staff comprises of women, in contrast to vast majority of males handling foreign operations of the company. The upper level management positions, highly dominated by males, have also been less enthusiastic to hire women for overseas management with the threat of female managers being more successful than their male counterparts. Due to such perceptions, there has been lack of willingness to recruit and develop women as international managers.
However, it is often argued that women managers are more sensitive to cultural differences and can effectively manage across multiple cultures and work with managers from other countries. In order to meet the shortage of international managers, firms and organizations should rise over their stereotype image of the expatriate manager as male, and create career opportunities for women. Organizations need to realize the importance of such culturally sensitive managers and need to pay greater attention to selection, recruiting, training and development of female managers. Organizations should provide adequate preparatory training to the global woman managers and their families in order to deal with additional stress factors associated with balancing work and home life in their new surroundings. Such managers should be provided with job placement assistance for the trailing spouse and repatriation counseling for all family members. With little international human resource management research directed towards the importance of global women managers and their position, opportunities for further research on the scope of global women manager still exist.
ADD PARAGRAPH ON PERSONAL ASSESSMENT
Business competitiveness has now evolved to a level of sophistication that many term globalism, and will continue reaching new and greater levels in the coming future. The invisible hand of global competition is and will be propelled by the phenomenon of an increasingly borderless world. Managers in the twenty-first century are being challenged to operate in an increasingly complex, interdependent and dynamic global environment. Those involved in global business have to adjust their strategies and management styles to those regions of the world in which they want to operate. However, there are certain areas, which will need constant revaluation and development, in order to make such managers effective, with changing times. From the firm's point of view, the management would need to be more 'broad' in their selection and recruitment of such managers (females). Also they would have to ensure constant quality performance from these managers by providing them with appropriate training, access to resources and incentives. On the other hand, from an individual's perspective, he/she will have to keep pace with the changing business environment in order to be effective in its decision-making and therefore its actions would be altered in accordance to changing times.
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