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

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What is a Global Manager?By Christopher A.
Bartlett and Sumantra Ghoshal
International Business 05/06 Edited by Fred
Maidment

• Presentation by
• Salina Hardin, Amanda Wesson, Stefanie van Kempen
  James McClinton III

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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.

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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

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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

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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

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The Business Manager(Strategist Architect
Coordinator)

• Leif Johansson of Electrolux
• Now President of the company
• Made several Acquisitions
• Created new overall strategy

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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).

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• 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.

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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.

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• 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
  units responsibilities with its particular
  competence.

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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

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• 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 managers
  position.
• Requires great interpersonal and administrative
  skills.

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The Country Manager (Sensor Builder
Contributor)

• It is important to
• meet local customer needs
• connect local intelligence with global strategy
• satisfy the host governments requirements
• defend the companys market positions against
  local and external competitors

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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

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Example (1/2)

• Howard Gottlieb general manager of NECs
  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

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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

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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)

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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)

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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

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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

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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

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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)

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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.

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• 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.

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• Zakis 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.

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• The RD 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 RD.

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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.

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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.

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• 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.

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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.

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Conclusion

• A companys ability to identify individuals with
  potential, legitimize their diversity, and
  integrate them into the organizations corporate
  decisions is the single clearest indicator that
  the corporate leader is a true global manager.
  This makes the company a true transnational.