Chapter 1 A global manager is set apart by more than a worn suitcase and a dog-eared passport. -- Thomas A. Stewart Editor, Harvard Business Review, USA (p. 1) 2 Global managers are made, not born. This is not a natural process. We are herd animals; we like people who are like us. -- Percy Barnevik Former CEO, ABB Group, Switzerland CEO, Hand-in-Hand International, UK (p. 1) 3 Opening question: To what extent do you agree or disagree with the observations of Stewart and Barnevik about global managers? Why? 4 Consider: “Excellent” companies 1. Why have so many so-called “excellent” companies failed in recent years? 2. What might managers have done to prevent some of these failures? 3. What is your definition of an excellent company? 4. Is this definition universal to all countries, or would you modify it to meet local situations? If so, how? (p. 1) 5 Topic for today: Global realities and management challenges • • • Globalization, change, and competitiveness The new global realities Challenges facing global managers 6 The new global manager • Managers are responsible for utilizing human, financial, informational, and physical resources in ways that facilitate their organization’s overall objectives in turbulent and sometimes hostile environments about which they often understand very little. • These challenges can be particularly problematic when operations cross national boundaries. (p. 2) 7 What is globalization? Globalization is the inexorable integration of markets, capital, nation-states, and technologies to a degree never seen before. -- Thomas Friedman (p. 4) 8 Why the upsurge in globalization? Globalization drivers • Increased customer demands and access to competing products and services. • Increased technological innovation and application. • Increased power and influence of emerging markets and economies. • Shared R&D and global sourcing. • Increased globalization of financial markets. • Evolving government trade policies. (pp. 5-6) 9 Consider: What are the consequences of globalization? 1. 2. 3. What are some of the positive consequences of globalization? What are some of the negative consequences? How can managers and their companies work to mitigate these negative consequences? 10 Globalization pressures on business From isolation to interconnectedness From biculturalism to multiculturalism (p. 12) 11 Business challenges facing global firms Developing innovative ideas and products Acquiring and allocating raw materials Developing predictable logistical support Developing workable supply chains BUSINESS CHALLENGES FACING GLOBAL FIRMS Acquiring solid financing Developing marketing strategies 12 Accessing and developing competitive labor People and communities are also under globalization pressures (p. 8) 13 People challenges facing global firms Meeting the needs of various stakeholder s Developing global organization structures Managing in ethical and socially responsible ways Communicat ing across cultures PEOPLE CHALLENGES FACING GLOBAL FIRMS Working with a global workforce Negotiating and managing global partnerships Building and leading global teams (pp. 17-21) 14 Consider: Working across cultures • Over 50% of international joint ventures fail within the first 5 years of operation. The principal reason cited for these failures is cultural differences and conflicts between partners. Why is this? • What does it take to succeed in building successful partnerships in today’s increasingly turbulent global business environment? 15 So, what do managers need to know to work successfully across cultures? 16 Challenges facing global managers/1 1. Develop a learning strategy to guide both short and long-term professional development as a global manager. 2. Develop a basic knowledge of how different cultures work, what makes them unique, and how managers can work successfully across such environments. 3. Develop effective strategies for working with managers from other cultures who may process information differently and view their roles and responsibilities in unfamiliar ways. 17 Challenges facing global managers/2 4. Develop an understanding of the competing interests and demands of various stakeholders in an organization, as well as the organizational processes necessary for achieving targeted outcomes. 5. Develop an understanding of how business enterprise can be organized differently across cultures, as well as the implications of these differences for management, cooperation, and competition. 18 Challenges facing global managers/3 6. Develop effective cross-cultural communication skills. 7. Develop an understanding of leadership processes across cultures, and how managers can work with others to achieve synergistic outcomes. 8. Develop a knowledge of how cultural differences can influence the nature and scope of employee motivation, as well as what global managers might do to enhance on-the-job participation and performance. 19 Challenges facing global managers/4 9. Develop effective negotiating skills and an ability to use these skills to build and sustain global partnerships. 10. Develop an understanding of how ethical and legal conflicts relate to managerial and organizational effectiveness, as well as how managers can work and manage in an ethical, fair, and socially responsible manner. 20 Application: Learning objectives 1. How will increasing globalization affect future management careers like yours? 2. What can you learn from this class to help prepare you for these challenges? 3. What are your learning goals for this class? What specific objectives would you like to achieve? 4. What are you—as individuals and groups—prepared to invest to achieve these goals? 21 Think about it: Becoming a global manager 1. How important are global issues and challenges to your future career aspirations? 2. What principal skills do you currently bring to a global manager’s job? 3. What skills do you believe you need to acquire or further develop in order to succeed in today’s increasingly competitive business environment? 22