Building Multinational Capabilities: The management challenge

1
Building Multinational Capabilities The
management challenge

• Drawing from Bartlett, Ghoshal, Birkinshaw, 4th
  ed., chapter 7 and other readings

2
Global Business Management

• Work as a global strategist
• Crafting the configuration of assets and
  activities
• Coordinating flows across borders

3
Global business strategist

• Information, planning, control systems have to
  be configured so that consistent, integrated
  global reports result that are useful
• Integrate across the sometimes conflicting needs
  ideas of country and functional managers
• Fit the strategy of the worldwide business to the
  corporate strategy
• The vision thing

4
Global business strategist

• Subsidiary managers may feel that
  center-appointed global managers are insensitive
  to their interests / ideas
• Lingering international mentality may cause the
  suspicion that the domestic business outranks all
  others
• Global business managers should be located
  according to the dynamics of the business

5
Architect of asset / resource configurations

• The global business manager is best placed to
  lead the debate over asset configuration
• Are the subsidiary managers ready to participate?
• What obstacles exist to participation?

6
Architect of asset / resource configurations

• If decisions about asset configuration and
  resource sharing have to be rooted in the
  administrative heritage
• How should we handle acquired firms that are our
  country representatives?
• How do you handle retrenchment?

7
Architect of asset / resource configurations

• What is meant by leveraging existing resources
  and capabilities?
• How does one link resources and capabilities?
• What characterizes an integrated network form
  of organization?

8
Cross-border coordinator

• Deciding on sourcing patterns
• Managing cross-border transfer policies
• Coordinating mechanisms include
• Central control over internal shipments
• Control over transfer prices
• Setting up internal markets for inter-subsidiary
  flows of goods or knowledge

9
As goods become more commoditized, internal
coordination mechanisms come to resemble external
markets, with attributes, prices, delivery,
quality determined by a bidding mechanism.
10
Worldwide Functional Management

• Now, we deal with the global business manager
  drawing from their expertise in a functional
  field, but with duties as
• Worldwide environmental scanner and intelligence
  analyst
• Cross-pollinator of best practices
• Champion of innovations

11
Worldwide environmental scanner and intelligence
analyst

• Subsidiary-based intelligence, either market
  changes or competitor moves, was filtered by
  non-specialists at HQ
• The global business managers country and
  functional expertise should make them more
  sensitive to the import of intelligence

12
Cross-pollinator of best practices

• Global business managers informal network of
  relationships (trust and information), make them
  suited to not only hear but advocate the transfer
  of best practices from subsidiary to subsidiary

13
Cross-pollinator of best practices

• Mechanisms
• Informal contacts
• Formal evaluations of practice
• Frequent travel
• Conferences
• Task forces
• Cross-unit visits

• Measures

14
Champion of innovations

• Locally leveraged
• Identify innovations in product or process that
  are suitable elsewhere

• Globally linked
• Link intelligence sources with centers of
  excellence (where ever located) essentially
  becoming a market maker

15
Geographic Subsidiary Management (Country
Managers)

• Vicks in India
• Start with a strong brand name
• Add standardized product, packaging, and
  advertising (economies of scale)
• push a button (launch)
• Whats missing?
• Local passion think of your work as part of
  nation building, especially the training
  developing of younger managers

16
Bicultural interpreter

• all the money a company makes is made outside
  the company (at the point of sale), yet the
  employees spend their time inside the company,
  usually arguing over turf

17
National advocate / defender

• The country manager counter-balances the forces
  of global business managers and functional
  managers seeking monolithic economies of scale
  (one-size-fits-all thinking)
• One who speaks for the market
• Speaks for the interests of the national
  subsidiary

18
Frontline implementer of corporate strategy

• Dealing with suspicious local governments
• Expectations of being a frontline competitor
• Employees, customers, and unions may mistrust
  your national commitment
• Country-of-origin effect may weaken your
  brand-building efforts

19
When local managers think of your brand as
theirs, local consumers will believe it too.
20
having been developed through subtle internal
negotiations (complex finely balanced global
strategies) often leave the country manager with
little maneuvering room
21
The role of top-level corporate management

• Providing direction and purpose
• Leveraging corporate performance
• Ensuring continual renewal

22
Providing direction purpose (the vision
thing)

• The vision is a conception of the future of the
  most important target market segments and the
  firms role in that future
• It must be simple
• Relevant
• Continuously reinforced
• Despite any shifts in leadership, it must provide
  continuity
• It must be constantly communicated it needs to
  be shared by all

23
Leveraging corporate performance

• Delegating clear responsibilities
• Backing managers with rewards that link
  responsibilities to goals
• Support managers with resources, expertise, and
  protection (when innovating) from top management

24
Continual renewal

• Successful strategies become elevated to
  unquestionable wisdom
• Processes become routines
• The role of the organization becomes protection
  of past heritage (often called market share or
  market leadership)

25
How do we continuously renew?

• Customer orientation
• Benchmarking against best-in-the-world as well as
  competitors
• Creating dynamic imbalance among internal
  groups
• Defining corporate mission and values with
  stretch and maneuver room