Global Organizational Issues and Management - Coursework Example

Global Organizational Issues and Management Introduction Boundaries almost cease to exist in the modern world. There seem to be no boundaries for media, culture or business. The modern world has taken the shape of a single platform where there is a race of the survival of the fittest. Earlier, international business was considered to be only for large multinational companies. But times have changed drastically since it is very common for an organization to have international offices at different places on the globe. This increment in the concept of international or global business has brought about new meanings to the concept of managerial practices, monitoring activities of employees and planning for execution. A number of challenges are faced by the management to successfully manage global organization so that they all prosper up to the same mark. These challenges needs to be faced boldly and effective risk management needs to be adapted so that a productive business organization can be established. 2. Management Issues in Global Organization Global businesses have been around since over a century. In the first half of the century, the mechanism of handling global organization was basically a British colonial model in which the headquarters and capital were found in a single place and the managers were sent to manage the local processes in colonies. Later in the second half of the century, companies starting promoting the multinational model in which several offices were established outside the vicinity of the head offices. These offices could be considered as replica of their home country establishments (McGregor & Hamm 2008). There are many risks involved in the management of such setups; some of the major issues are discussed below along with risk management techniques that have proved to be helpful in the past. Strategic management systems can also help to define risks involved in the business and thus assist in risk management. 2.1 Cultural Diversity One of the most frequent issues that arise in the management of global business is that of cultural clashes that might be apparent between employees of different origins. Every region has a different approach to handle problems and execution of plans. Management at the headquarters might make the business plans and vision of the product in accordance to their own offices but the execution has to be done by the local offices’ management. The regional offices might not be able to execute the plans according to the expectations of the management that is taking care of the organizations globally (Overby 2009). The regional offices might have a different management style that they are accustomed to. For example; PDI researched the different management styles that are adapted by people around the world and they concluded that higher executives in Japan gave utmost importance to “establishing plans” and “providing direction to the team” and regarded them as two of the five top most managerial traits. These characteristics have been regarded important globally but no other country ranked them with such high priority. This change in their priorities of actions will mean a different action plan for their products and projects (Nilsen et al 2005). In a similar example; a Japanese branch of a multinational computer nearly missed the scheduled launch of a product since they were not able to alter the project management framework in time. Their European offices were not able to reply to their queries on time, regarding the changes they needed to make in the product design. Ways to Reduce This Risk The global management should be broad-minded enough to understand that different people can come up with good ideas even if they don’t belong to their own culture and origin. The global management should refrain from any cultural hostility as it can prove to be very harmful for the organization. The global management should issue policies that have provisions for the important religious holidays for their employees. This will induce a cordial and healthy culturally diverse environment for everyone. They should give equal opportunity and facilities to all their employees and never let their employees feel that the management is biased towards any certain culture or origin. 2.2 Communication Barriers If a company expands its offices to another location in the world then the aspect of communication is threatened to a great extent. Some of the barriers in effective communication in this case can be the language barrier. The regional offices might not be fluent in the first language of their global office which will pose many difficulties to communicate with them and vice versa (Tolan 2006). The regional offices might comprehend the language used by the management at their respective global office but will certainly not be used to the slang that is used in their part of the world. It is often witnessed that phrases are repeated in a meeting where people from regional offices are also present and discussions take place in smaller sentences. Another factor that proves to be a barrier in communication is the difference in time zones. Global companies are spread from one end of the world to the other due to which they might experience a big difference of even 12 hours. This means that when the Americans come to work, it is time for the Indians to head back home. Due to this, the employees might have to put in extra hours at work or simply rely on the internet for communication (Tolan 2006). Ways to Reduce This Risk One of the most common ways to reduce the language barrier is to ensure that an interpreter is arranged by the regional office whenever an online conference or personal meeting is set up with the global head office. Since the frequency of such meetings is never too much therefore this approach can work. Another approach is to arrange language learning sessions for the executives who are required to interact with the global management. They should be acquainted with the language to an extent that would help them in understanding their point of view and be able to get their opinion across to everyone. The time zone difference can be solved by introducing new technologies in the company for example; OpenTeams.com offers an interactive medium for colleagues to share ideas and interact with them directly and efficiently. It offers many features like Whiteboard activities where employees can interact on a single platform and perform brainstorming sessions with their own convenience and availability (OpenTeams.com 2007). Incase a face to face meeting or an online conference is necessary, then the employees should be held back after working hours. They should be paid over time for such extra hours of work. 2.3 Global Policies and Strategies The head offices of multinational companies tend to make policies and procedures that are communicated to their regional offices and thus expected to be followed by them. These policies might be sensitive to their local offices but their global application might arise some disadvantages for the regional employees. For example; a global policy might be made that bonuses will be given only once a year at the end of the year. This policy might be good for the people in America as they celebrate Christmas in a big fashion but it will not satisfy the employees working in Middle Eastern part of the world who don’t celebrate Christmas. This might create an element of de-motivation among the employees and reduce their productivity (PricewaterhouseCoopers 2005). There exists great diversity in the world in terms of accounting standards due to which financial figures might not have the same significance in different regions. Studies, surveys, reports and thus strategic planning might have differing relevance and meaning in different regional offices. Therefore the top management might be faced with the need of identifying different drivers of success for different offices around the world (IMD 2007). For example Coca Cola alters the taste of its beverages to suit the local needs of their customers across the globe (Zinnov n.d). Ways to Reduce this Risk The global management should try to get information about their working standards and the approach with which their regional management handles execution of the plans. The top management executives at the regional offices should also be kept in email chains to ensure that they have full knowledge about how the execution plans are being formulated. They should be given a chance to send their feedback to the global management incase they have some serious issues regarding some process. 2.4 We vs. Them Attitude A challenge that is faced during the management of global offices is to maintain a cooperative and cordial relationship between the different teams in different establishments (Time-Management-Guide.com 2005). The management should promote the concept of loyalty to the whole organization and not just their regional offices. It is often witnessed that employees tend to develop a ‘we versus them’ attitude against the other offices in the world. This inhibits the concept of working together to make the company progress and also reduces the spirit of helping each other in every way. This attitude is usually apparent when sales records of different branches are compared and the high ranking ones are rewarded. Competition is very good for progress but it should be controlled by the management so that it doesn’t start harming the organization. Ways to Reduce this Risk As stated earlier, collaborative platforms should be implemented in the organization to give the employees a chance to interact with each other, even on a personal level. This makes them get to know the people at the other end and remove hostilities against each other. Another approach can be to organize free trips for the top ranked employees. There is a tradition in HSBC that they select best performance employees from all over their regional offices (two employees from each country) and invite them for a free trip to their Head Office (HSBC 2010). All the employees interact, spend time with each other and return with good feelings about their new friends. This reduces any ill-feelings that they might have had against any specific set of people and induce the spirit of being a part of a global team. 2.5 Interdependency There might exist a great deal of interdependency among the different regional offices. Many advantages can be extracted from the concept of interdependency but at the same time, it poses few challenges too. Some failure in an establishment might cause some effects in other ones as well. The effect might be too rapid at times to be controlled by the management (IMD 2007). Ways to Reduce This Risk To reduce the effect of chained failures, it should be ensured by the management that the regional offices have a proactive approach to handle failure rather than reactive approach (IMD 2007). 3. Role of Leadership A leader is the captain of the ship. He is often mistaken to be a manager. After extensive research on the difference of a manager and a leader, different researchers have finally concluded that there is a significant difference between a manager and a leader. A manager merely monitors the activities so that they are executed in a planned fashion. Whereas, a leader not only monitors processes but also provides his team with a vision and a direction towards the achievement of goals. A leader understands his team members and gives them the correct guidance when needed (Heldman 2002). The world has witnessed great leaders over the years who have set remarkable examples to be followed by the rest. One such example is of the CEO of General Electric, Jack Welsh. He was the CEO of the company for 20 years and has been known one of the greatest business leaders. He was responsible for generating great profits for the company and his tenure proved to be one of the most productive ones (General Electric Company n.d). Jack Welsh gave great growth to the company under his management. One of the many contributions by Jack Welsh is that the teams under his management were able to invent a new plastic called PPO. It was after this great success that he was made the head of the entire plastic division of GE. He led the people with integrity and flexibility. Fortune gave him the title of “Manager of the Century” in the year 1999. Financial Times also recognized his contributions of his entire career and termed him as one of the three most admired business leaders of all times (General Electric Company n.d). A global leader needs to be equipped with two main skills: Hard Strategic Skills Strong Leadership Hard strategic skills may include the development of strategies regarding global competitors, opportunities, global as well as local threats, understanding customer’s needs. Whereas strong leadership involves providing a set of clear rules and objectives to his employees while displaying a flexible attitude towards the global offices’ needs (Niblett n.d). It is very important for a leader to understand the cultures of his regional offices so that he can communicate with them accordingly. Some of the things that constitute towards the culture of an organization are given below in the figure; Fig.1: (Zinnov n.d) A leader tends to face numerous challenges when he is assigned with the task of making a team gel together. This proves to be even more difficult when the employees are at different locations and workplaces. A good leader realizes that one size never fits all. This reaffirms the employee that the organization is sensitive to his needs and are not only trying to get maximum work out of them (Overby 2009). He should be able to understand the political, social, economic differences of the environments that these employees might be working under (Niblett n.d). ABB is a successful company that has evolved into a global company by tackling the issue of cultural diversity. They have employees from all cultures and do not have any particular national identity. The company claims to have a global identity (Zinnov n.d). A leader who is responsible to manage establishments around the world needs to have commendable social skills so he is able to connect and work with people at the other end of the globe. Jack Welsh said in one of his addresses once that he was a leader of the past, a leader who lived his whole life in the US. But the leader of tomorrow will be required to be a person of multi-cultural origins and experiences for example, who has lived in India, Hong Kong, Dubai etc (General Electric Company n.d). The leaders who are responsible for managing global offices and teams need to possess the talent of handling uncertainty and show a positive response to changes. He should be flexible enough to cope up with the unplanned changes and deduce the best possible outcome from it. He should be able to understand the different working conditions that people work under in different countries and be flexible with justified demands. Conclusion Modern technology has broken all boundaries and has enabled man to expand their ventures from one end of the world to the other. Global organizations have proved to be very beneficial for organizations around the world since the regional offices can understand the needs of their local customers in a better way and hence cater accordingly. However, this concept involves great leadership skills and effective planning to ensure that the regional offices feel like an important part of the global team. It should also be managed if these establishments are able to execute the aims and objectives of the company. But it should be realized that alterations can be made to the execution plans with respect to the regional needs of the employees or customers. References General Electric Company n.d., ‘Past Leaders’, viewed 19th April 2010, HSBC 2010, ‘Benefits and Rewards’, viewed 20th April 2010, Heldman. K., 2002, PMP: Project Management Professional Study Guide, SYBEX, Inc.CA, ISBN: 0-7821-4106-4. IMD 2007, ‘Perspective for Managers’, viewed 19th April 2010, McGregor J, Hamm, S 2008, ‘Managing the Global Workforce’, Business Week, January 17, viewed 16th April 2010, Nilsen, D, Kowske, B, Anthony, K 2005, ‘Managing globally: managing a diverse, global environment, HR Magazine, viewed 16th April 2010, Niblett, KB, n.d. ‘Global Strategy: The Challenges of Leading an Organization into the Global Arena’, viewed 15th April 2010, Overby, S 2009, ‘Best Practices for Managing Globally’, CIO, viewed 19th April 2010, OpenTeams.com 2007, ‘About us’, viewed 19th April 2010, PricewaterhouseCoopers 2005, ‘Survey of Global HR Challenges: Yesterday, today and tomorrow’, World Federation of Personnel Management Associations (WFPMA), viewed 18th April 2010, Tolan, VE, 2006, ‘Managing in the new global environment’, EE-Evaluation Engineering, Vol: 45, pg. 12-16, viewed 17th April 2010, < http://direct.bl.uk/bld/PlaceOrder.do?UIN=187574250&ETOC=RN&from=searchengine > Time-Management-Guide.com, 2005, ‘A Virtual team benefits and challenges’, viewed 15th April 2010, Zinnov LLC n.d., ‘Global Organizations’, viewed 18th April 2010, http://www.softwareceo.com/files/white_papers/GlobalOrganizations.pdf Read More