Roles of a Global Manager - Essay Example

Roles of a Global Manager Introduction Rus Wane Equipment was formed as joint venture between Wane Machines, Inc. and NLZ, a medium-sized factorylocated outside Moscow. The joint venture unit faced several obstacles when it started construction and prepared to establish itself. Some of the challenges faced were downturn in demand and difficulty in securing reliable suppliers. In addition, the legal framework was constantly changing and the government policies were unpredictable. The company continued to grow despite these challenges but another major challenge was staffing key managerial positions amidst cultural differences. According to the Soviet-Belgian joint venture agreement, Wane Machines was supposed to send three experienced executives for the key managerial positions -– to serve as Rus Wayne’s deputy general manager, manufacturing manager and financial manager for the first two or three years. After that the Russians would take over the positions. The major objectives of this policy were to provide "assistance in technology and management skills transfer, management systems and processes development, and local personnel coaching." While the obstacles and the issues that came up in staffing were basically due to cultural differences, not all the issues arising out of culture difference would be handled here. This report focuses on the inefficiencies in cross-cultural communication that impacted the smooth functioning of this joint venture. 2. Analysis 2.1 Situation analysis The Soviet law insists that local managers should be in charge as they are most knowledgeable and capable of handling local situations although they do not insist that Soviet citizens should hold the senior-most position. Local nationals were taken in the positions of sales and service managers and human resources manager from the beginning as the knowledge of local and employment practices helps in overcoming these obstacles. These decisions were not implemented. The general manager could not send the three expatriates to Russia as per agreement nor was an HR managers appointed on schedule. The general manager wanted to play the role of HR manager as well. The deputy general manager, an American, sent to Russia had no experience of working in Russia but accepted the job because of career move. The manufacturing manager was from France and his interest in Russia was purely career development. The financial manager, an Englishman sent to Russia had merely 2 years of experience at Wane and hence they provided him training for 6 months before sending him to Russia. Because of the lack of experience of the financial manager, the GM appointed NLZ’s chief accountant to head the finance department of the joint venture. Hence, the key expatriates came from different cultural backgrounds – an American, Soviet, French and English - and they had not worked together before this. 2.2 Problem analysis The key personnel were from different cultural backgrounds; the GM wanted to double as the HR managers. After arriving into Russia, the financial manager, being young and inexperienced, was asked to work as consultant for some time till he was familiar with the language and the local culture. He also lacked administrative skills. Chaos prevailed in the finance department because nobody was sure who was in authority. The local accountants had expected the western accounting system while the finance manager was asked to understand the Russian accounting system. The expatriate was not involved in the decision-making including selection of staff for the department. This shows lack of strategic planning and communication. Language was a major issue within the department. All these confusion led to delays in execution of business plans, in cash management and in inventory control. 2.3 Theoretical application 2.3.1 Competencies of a Global manager Global managers are supposed to be people who know how to conduct and manage business across borders. In this regard, Lev was a global manager, even though he was based in the home country. The basic attribute that a global manager needs to possess is the ability to adapt to different business environments (Barlem, 2008). Other attributes including effective cross-cultural communication, quick problem-solving abilities in the new circumstances, respect for the different beliefs and cultures, multi-lingual ability, the ability to deal with the local government and the enthusiasm to deal with others. He must also know how to deal with a multicultural workforce because the leadership styles, the motivation, recruitment strategies, planning – all vary across countries. The expatriate managers undergo cultural shock, disillusion and frustration and needs careful handling. Knowledge about foreign cultural perspectives, tastes, and how to interact with the foreign colleagues on a day to day basis is required (Cappellen & Janssens, 2008). The GM was seldom available for guidance and discussions. People living in a multi-cultural environment have the capability to become global managers (LeaderToLeader, 2003) which the GM at Rus Wane did not have. They tend to see the world through their own lens. However, when working in global teams, it is essential to have the ability to think outside your own culture. Callahan (1989) believes that global managers must be fluent in quick-change strategies rather than in foreign languages. In addition, the ability to gather local data and apply it to the strategies pursued by the parent company is also required. The global manager must also possess traits such as tolerance, persistence, flexibility and self-esteem (Ramburuth & Welch, 2005). The GM lacked the business skills for conducting cross-cultural negotiations, managing cross-cultural conflicts and working in a cross-cultural team. 2.3.2 Expatriate managers Global managers work in a different environment and they seek career oppurtunities while expatriate managers seek career development. The expatriate managers usually move away from the heart of the organization. At Rus Wane too, the expatriate managers were all keen for personal career growth and hence this was an individualistic approach. All three came from high individualistic societies (US, UK and French – low to medium) as per the country cluster and their value system (Buttery & Holt, 2000). Managers should be able to respond to change in strategy with same enthusiasm and pace (Callahan, 2000) but this was not found at Rus Wane. 2.3.3 Closely linked groups in international business International businesses require highly specialized but closely linked groups of global business managers, country or regional managers and worldwide functional managers (Bartlett & Ghoshal, 2003). While Rus Wane has all these roles but the top management did not succeed in managing the complex interaction between the three. He was unable to identify and develop the talented executives. The country managers are responsible to meet the local customer needs, to satisfy the host government’s requirements and defend their country’s market positions against local and external competitors. The global business managers are expected to further the company’s global-scale efficiency. They must be able to recognize the oppurtunities and risks across national and functional boundaries. In addition, they have to work as strategists, architects and coordinators. However, at Rus Wane, the country manager and the deputy general manager assessed the situation differently and the GM joint venture was unable to manage these relationships. 2.3.4 Training and Development When sending an expatriate manager it is essential to provide proper training but no orientation of the country culture and language was provided to them. In fact, for best recruitment and selection strategy, it is essential to select good people is to develop an identifiable career path that includes preparing them for foreign assignments (Callahan, 1989). The strategy itself was unclear at Rus Wane and the training was not linked to the strategy and the overall objectives. 2.3.5 Selection process Selection decisions for global managers must adhere to certain norms. The selection of the finance manager itself was wrong from the beginning which compounded the problems in the department and overall functioning of the unit. The personality scores of the incumbent are important in the selection process (Oswald, 2008). Neither the cultural factors were taken into account nor his capability and qualifications. 2.3.6 Communication Communication challenges arise in a multicultural setting because of the differences in cognition, affect and patterns of behavior (Spencer-Rodgers & McGovern, 2002). Hence effective intercultural communication requires adaptation to the values, norms, beliefs, language, customs and communication. These differences manifest even in non-verbal communication and body language. This is a challenge because most groups prefer to maintain their cultural identity. Being culturally sensitive is essential to the success of international business (Huang & Kleiner, 2005). Ignoring the cultural differences can reduce productivity and lower the morale and loyalty. 2.3.7 Decision-making process Managers’ decision-making process is divided into what the managers should do and what they actually do. Steps in the rational decision process involve first identifying the problem and that a decision is needed. Then the decision criteria have to be identified. The criteria have to be prioritized based again on the expected outcome and the maximization of benefits. The alternatives have to be generated and evaluated and then the optimal solution arrived at. Culture plays a dominant role in the amount of information gathered, identification of criteria and evaluation of alternatives. Who makes the choice and how long the decision takes is also based on the culture in which the individual has grown up. The GM at Rus Wane continued to function as the GM of the old factory and hence there was conflict of interest. The GM also wanted to function as the HR manager. This impacted decisions as well as caused stress because of role conflict and role ambiguity (Barlem, 2008). However, Lev failed to fulfill the responsibilities as a global manager. He was never available when he was needed and his communication strategy was inefficient. When the GM was approached for confirmation, he seldom responded or gave curt replies without explanations. 2.4 Solution and implementation analysis 2.4.1 Gathering information Curiosity is an inherent characteristic of human beings and the search for information or curiosity is the motivation to overcome the lack of knowledge (Harvey, Novicevic, Leonard, & Payne, 2007). The global manager must posses the attribute to seek information and gather data. The element of curiosity leads to the use of tacit knowledge, explicit knowledge and the application of human intellectual capital can help increase the global manager’s capabilities of making global decisions. In unfamiliar environments, the role of intuition has also been emphasized upon and the global managers must posses this attribute. Curiosity is essential because lack of knowledge can influence the decision-making process. The GM should be interested to work closely with the entire team of expatriate and the country managers. The more information he has, he would be able to resolve the linked issues that arise out of cultural differences. 2.4.2 Training and development/socialization Cultural boundaries should be seen as permeable rather than as walls that differentiate or segregate (Jacob, 2005). It is essential to understand that cultural diversity can exist even within a single country let alone across nations. Hence, the global manager has the responsibility to bridge this gap through effective communication mechanisms. The attitude of the expatriate managers is not unexpected because Schraeder, Tears and Jordan (2006) contend that the culture in which an individual is immersed since birth has a much stronger effect on him than organizational culture. These cultural imprints are unconscious forces which could emerge in the form of myths, symbols, images, narratives or files which helps them make a sense of the world around them (Rapaille, 1999). These have to be changed at Rus Wane because the moment a different culture is confronted, there is resistance. This can be done through effective training and development programs through international seminars and even international business trips. All the managers should be brought into the home office for training and they should be made familiar with the overall corporate strategy. The training should focus on flexibility and Callahan contends that managers that are closest to the customers need the training the most. They must have the ability to respond to the changing circumstances and customer demands quickly. An understanding of these cultural archetypes should be done through cross-cultural training because Friday and Friday (2003) contend that cultural differences can lead to differences in goals, expectations, values and proposed course of action. Routines and repertoires, according to Morosini, Shane and Singh (1998) are shaped by national cultures and national cultures can constrain the achievement of corporate objectives. Culture should be used as a value creation tool (Chanmugam, Shill & Mann, 2005). Organizational culture can be constrained by the local culture and Kumar, Ulijn, Weggeman and Van der Van (1997) contend that changes can be brought about in the culture of the employees through through the socialization process. 2.4 Anticipated consequences There has been no determination of job requirements at Rus Wane and no identification of the talent required for the jobs. Mindset is a way of being and not a set of skills (Rhinesmith, 1992). Once the orientation of the executives can be changed through cross-cultural training as well training in the development of the required skills, it is likely they would then look for unexpected oppurtunities and risks and make advance preparations. Effective training could also give rise to self-confidence and humility, both of which are essential in an international business environment. Such roles are challenging and rewarding but unless they have the needed attributes and characteristics, it could become frustrating. As of now they do not even try to procure reliable suppliers and this is because they have not bothered to collect information. It is likely that after training and exposure, they would constantly seek new information on the location, suppliers, the market and the culture. They would know how to involve people in their project because they would realize the value of team work. They would attain the quality of being flexible because international situations require adaptability to the new situation at a quick pace. They would be able to adjust to the local and global demands through proper utilization of the firm’s resources. They would be able to identify when to ignore the policies and procedures if they are sensitive to cultural diversity. This requires a fairly developed ego and self-concept. Such people have a well-developed approach to life. They would develop the capability and also be willing to make decision based on their experience and intuition. They would get into the habit of continuous reflection which helps to deal with the challenges. 3. Conclusion International business requires experience, insight and intuition because situations change at a fast pace and the manager s must have the ability to deal with such changes. Global managers are responsible for the overall functioning of the country managers, the expatriate managers and the regional managers. International businesses have people from diverse cultural backgrounds and hence cross-cultural training through seminars and overseas trips are essential. Different societies have different ways to respond to situations and these can lead to conflicts. Thus a cultural orientation is essential as it would help them to attend to contradictory situations and events. They would develop the capability to understand each other’s problems and help each other instead of confronting and creating conflicts. Corporate strategies need to be clear and concise so that the concerned people know and understand exactly what is expected of them. Role ambiguity contributes to stress and conflicts. Thus, cultural orientation and training is essential before sending expatriate managers for overseas assignments. References: Barlem, B. (2008). Are Global Managers Able to Deal with Work Stress. Journal of Accounting – Business & Management. 15, 53-70 Bartlett, C.A., & Ghoshal, S. (2003). What Is a Global Manager? Harvard Business Review. August 2003. 101-108 Buttery, N., & Holt, J. (2000). SUBORDINATE PERCEPTIONS OF WHAT CONSTITUTES AN EFFECTIVE MANAGER IN DIFFERENT CULTURAL SETTINGS: REVIEW AND RESEARCH AGENDA. SCHOOL OF INDUSTRIAL RELATIONS AND ORGANISATIONAL BEHAVIOUR. Retrieved online May 5, 2010 from: http://wwwdocs.fce.unsw.edu.au/orgmanagement/WorkingPapers/wp130.pdf Callahan, M.R. (1989). Preparing the new Global Manager. Training and Development Journal. March 1989 Cappellen, T., & Janssens, M. (2008). Global managers’ career competencies. Career Development International. 13 (6), 514-537 Chanmugam, R., Shill, W.E., & Mann, D. (2005). Mastering the art of value-capture in M&A. Retrieved online May 5, 2010 from http://www.accenture.com/Global/Research_and_Insights/Outlook/By_Alphabet/MasteringAcquisitions.htm Friday, E., & Friday, S.S. (2003). Managing diversity using a strategic planned change approach. Journal of Management Development. 22 (10), 863-880 Harvey, M., Novicevic, M., Leonard, N.,& Payne, D. (2007). The Role of Curiosity in Global Managers’ Decision-Making. Journal of Leadership and Organizational Studies. 13 (3), 43-58 Huang, N., & KLeiner, B.H. (2005). New Developments Concerning Corporate Communications. Management Research News. 28 (10), 57-63 Jacob, N. (2005). Cross-cultural investigations: emerging concepts. Journal of Organizational Change Management. 18 (5), 514-528 Kumar, R., Ulijn, J., Weggeman, M., & Van der Van, R. (1997). Managing the strategic process: the impact of national/corporate culture on the strategic behavior of European MNCs. Retrieved online May 5, 2010 from http://alexandria.tue.nl/repository/books/499291.pdf LeaderToLeader. (2003). The Best Sources of Global Managers. Leader to Leader. 28, 59-60 Morosini, P.S., Shane, S., & Singh, H. (1998). National cultural distance and cross-border acquisition performance. Journal of International Business Studies. 29 (1), 137-158 Oswald, F.L. Global Personality Norms: Multicultural, Multinational, and Managerial. International Journal of Testing. 8, 400-408 Ramburuth, P., & Welch, C. (2005). Educating the Global Manager: Cultural Diversity and Cross-Cultural Training in International Business Education. Journal of Teaching in International Business. 16 (3), 5-27 Rapaille, C. (1999). Cultural imprints. Executive Excellence. 16 (10), 20 Rhinesmith, S.H. (1992). Global mindsets for Global Managers. Training and Development. October 1992 Schraeder, M., Tears, R. S., & Jordan, M. H. (2006). Organizational culture in public sector organizations. Leadership & Organization Development Journal. 26 (6), 492-502 Spencer-Rodgers. J., & McGovern, T. (2002). Attitudes toward the culturally different: the role of intercultural communication barriers, affective responses, consensual stereotypes, and perceived threat. International Journal of Intercultural Relations. 26, 609-631 Read More