What is a Global Manager? By Christopher A. Bartlett and Sumantra Ghoshal

1. 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

2. 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.

3. 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

4. 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

5. 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

6. The Business Manager(Strategist + Architect + Coordinator) • Leif Johansson of Electrolux • Now President of the company • Made several Acquisitions • Created new overall strategy

7. 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).

8. 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.

9. 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.

10. 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.

11. 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

12. 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.

13. 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

14. 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

15. 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

16. 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

17. 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)

18. 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)

19. 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

20. 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

21. 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

22. 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)

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.