Globalization and Values of Global Managers - Essay Example

PROJECTS IN (Global Managers) TABLE OF CONTENTS Globalization..3 The future of globalization..4 First phase of globalization.4 Second phases of globalization...5 Global Company.. Cross Cultural Management....6 Skills require for the new global MGT....................................................6 MULTINATIONAL CORPORATION (MNC)..7 FACTORS IN EXPATRIATE MANAGERS' SUCCESS & FAILURE8 International Strategy..10 Manager in Saudi Arabia..11 What can you do to be a global manager..12 Values of Global Managers. Global Information Technology13 CONCLUSION..14 REFERENCES..16 Globalization It is the name for the process of increasing the connectivity and interdependence of the world's markets and businesses. This process has speeded up dramatically in the last two decades as technological advances make it easier for people to travel, communicate, and do business internationally. Two major recent driving forces are advances in telecommunications infrastructure and the rise of the internet. In general, as economies become more connected to other economies, they have increased opportunity but also increased competition. Thus, as globalization becomes a more and more common feature of world economics, powerful pro-globalization and anti-globalization lobbies have arisen. The pro-globalization lobby argues that globalization brings about much increased opportunities for almost everyone, and increased competition is a good thing since it makes agents of production more efficient. The two most prominent pro-globalization organizations are the World Trade Organization and the World Economic Forum. The World Trade Organization is a pan-governmental entity (which currently has 144 members) that was set up to formulate a set of rules to govern global trade and capital flows through the process of member consensus, and to supervise their member countries to ensure that the rules are being followed. The World Economic Forum, a private foundation, does not have decision-making power but enjoys a great deal importance since it has been effective as a powerful networking forum for many of the world's business, government and not-profit leaders. The anti-globalization group argues that certain groups of people who are deprived in terms of resources are not currently capable of functioning within the increased competitive pressure that will be brought about by allowing their economies to be more connected to the rest of the world. The future of globalization: The first phase of globalization is to integrate economically most of the populations of the world. The advantages of these phases would be the reduction of geographical inequalities by spreading jobs and business opportunities all around the word. So, the main action of actors of the first phase is world trade negotiation against protectionism. First phase of globalization: During the first phase, a global market for all products has been created. The market equilibrium between undeveloped and developed country is obtained by the currency exchange rate. Countries, who have insufficient exported capabilities, have a weak currency. Weak currencies make imported products of developed countries outrageously expensive and prevent the local population to buy them. Then, according to the neo-liberal economical theory, the effect of low salaries make the country attractive to foreign investment and the local entrepreneurship become more competitive. The local industry exports more and so the country can bear higher salary and the level of importation will so increase. This classical scenario has one major drawback: foreign currency exchange rate volatility. The currency can adjust strongly against other currency or be linked to a strong currency (the bath and the dollar) and so follow the movement up of the strong currency. Second phases of globalization: The second phase of globalization is the constitution of global governance. Today, the United Nations is the first step of the second phases. The purpose of the United Nations is to prevent the risk of war on the principle of national sovereignty. But, due the development of mass destructive weapon and the multiplication of the number of nations, the principle of national sovereignty is more and more problematic. And, United Nations had to pronounce itself in favor of war against dictatorships like Iraq who can construct weapons which can threaten the future of the human kind. The companies are facing a great development in the global markets resulted from globalization. Therefore, they are thinking of a new generation of managers which we call global managers. They have a wide viewpoint of unexpected environmental changes that needs a fast and right decision to make. The old generations of managers don't have this competency. So, they can't adapt with the new environment. The global manager must be open-minded and ready to accept changes. He must be well oriented and trained on the new technologies, good communicator and good negotiator, too. All of that makes him more efficient, competitive and globally opened without distinguishing between religions, colors, genders and roots. Global Company What is new is not international or multinational business, but global business. Global business implies that the parent, or founding, company has become indistinguishable in relative importance from the other operating affiliates. It means that the dominating culture within a global business enterprise is not necessarily American or French or any other nationality. An imaginary global company may be domiciled in the Netherlands Antilles. The home office may be not much more than a communications center tying the various corporate entities together. The choice of the Netherlands Antilles may be for local reporting requirements (minimal), tax advantages (little or no taxes for activities carried out by the home office), access to the international banking community (easy in this age of instant communications), and access to a recognized legal system for the resolution of corporate matters and disputes and to an accepted set of accounting principles for the issuance of consolidated financial reports (the Dutch legal and accounting systems). The choice of the Netherlands Antilles as the corporate headquarters may also be a way of communicating to the world that no particular nation can lay claim as being the nation of domicile or as being the dominant culture within the corporation. Below the corporate parent would be divisions representing the interests of the company in broad areas of the world, such as continents. Below these would be another layer of organizations representing the business interests of the global corporation in various countries on the continent. Herein lie the beginnings of complications both in operational, organizational, and marketing matters and in financial reporting. The European organization may be headquartered in Switzerland, which may also handle Swiss sales. The Swiss organization may own 75 percent of the company conducting business in Spain and Portugal. This company may conduct business in Morocco through an operating affiliate that is 50 percent owned by a Moroccan company. The Moroccan affiliate may, in turn, own a partial interest in the organization's activities in France, and the French affiliate, in turn, may end up owning a partial interest in another company in Switzerland, which, in effect, competes with the Swiss corporate entity that is supposed to be running matters in Europe. A common problem for multinational companies conducting business through various operational affiliates is the matter of jurisdiction, the drawing of boundary lines separating the activities of one corporate entity from another. Most companies are understandably organized in a more provincial fashion because their assets are not easily moved from the jurisdiction of one country to that of another. However, there certainly is a tendency for companies to conduct their business on a more global basis. No company is forever fixed to any one nation as long as it enjoys the right to build new factories in whatever nation provides the most attractive and stable environment. Therefore, over a long period of time, a company can, and often will, redeploy its assets from one nation to many nations. Cross Cultural Management: The study of the behavior of individuals in organization around the world . this study attempts to extend the study of demotic management to take in global and multicultural consideration. Skills require for the new global MGT: Global strategic skills: When the managers try to shift their work globally, they will need working knowledge such as: -International relationships. -Foreign affairs. -Global financial market. -International law. -Exchange rate movement. And they must understand: - Global economies of scale. Work ethics of employees. Host government policies. Team Building Skills: The need of work teams increased as a result of the complexity of global operations. These teams work include culturally diverse groups. These kinds of teams have many advantages; one of these advantages is to avoid cultural dominance. Communication Skills: Cross-cultural communication often results in misunderstanding caused by misperception, misinterpretation, and misevaluation. This misunderstanding can be avoided if managers possessed multilingual skills and high levels of cross cultural awareness and sensitivity MULTINATIONAL CORPORATION (MNC) Head quartered in one country, with operations in different nations. Each operation is viewed as a separate enterprise, pursuing a specialized market with a particular product. Human Resources for International Assignment: Host country nationals, workers from local population. For example, P&G employed Saudi workers for its operation. Parent country nationals, employees sent from the country in which the organization is headquartered. Third country nationals, employees that from country other than where the parent organization's headquarters are located. FACTORS IN EXPATRIATE MANAGERS' SUCCESS & FAILURE: The phrase, global manager, defines a manager by the context of global complexity in which he or she works. The global manager lead, country borders and cultural expectations is a much broader role, a more complicated role, and one that creates a set of particular leadership challenges unique to the global manager. Distance: Global managers work largely in a virtual environment in which face-to-face contact is often not possible. They typically handle fifty to seventy-five e-mails daily, meet in person with subordinates once every six weeks, and work in airplanes and from airports. Global managers must deal with both the inconvenience of time differences and the significant difficulty of working with people who cannot see one another. Country: Global managers work with people who may have very different ideas about how business gets done. They must understand and adapt to country differences in unions, currency exchange rates, corporate governance, political legislation, investment policies to name just a few of the issues that can have an impact on business. In addition, global managers must stay aware of and often deal with political, environmental and other events occurring around the world - issues over which they have no control. Culture: Global managers must take into account the complex interactions of norms, beliefs, values and attitudes that distinguish one cultural group from another. Working globally, managers must address multiple and differing expectations about how people (employees, colleagues, customers, suppliers, distributors, etc.) should behave, and how work should get done. Given the cultural diversity of our world, this is an extremely challenging task. The manager must recognize that the nature of global leadership creates roles and pressures that are unique is the first step. Then we can look at the specific skills and traits that a manager must learn over time to become an effective global leader. What does it take to be a global manager In an increasingly international business world, cross-cultural encounters are ever more frequent. International mergers and acquisitions, joint ventures, multinational meetings and special project teams now put greater demands on the communication skills of managers to establish, maintain and repair business relations. In a global company, a manager of any nationality has a chance to achieve the ranks of top management. The role of top management is to guide the overall direction of the company in pursuit of an agreed on set of corporate objectives. The role of top management has not changed--it is just that when they do meet around a table, they may not be all of one nationality. They may not even meet around a table. Teleconferencing can electronically create a conference without the physical presence of the participants. Modern means of communications can tie together the top management team no matter where they are located. The orientation of top management may not be bound by the political or economic considerations of any one nation. The quintessential American company, Coca-Cola, has banned the words "domestic" and "foreign" from corporate communication. Although Americans are still the largest per capita consumers of Coca-Cola, the United States only has about 5 percent of the world's population. That means that 95 percent of the potential market is outside the United States. The U.S. market, in 1991, represented one third of sales and one fifth of the operating income for CocaCola. Not only is four fifths, or 80 percent, of operating income outside the United States, but the non-U.S. share is growing and is expected to reach 90 percent in a few years. Top management is increasingly non-American. This is intentional because Coca-Cola wants to become a global company with global management. Coca-Cola is even thinking of global advertising, one commercial to be aired throughout the world. International Strategy: Any international strategy must acknowledge the determining role the management of cultural differences can play in the success or failure of strategic international alliances of all kinds. Creating a team of managers and key professionals with the right linguistic, communication, and attitudinal skills to operate in global markets is essential for cross-border alliances to function effectively. Difference language: We all know the problems that language can cause for international marketing; the car name that means "no go" in Spanish; the Swedish biscuit that sounds particularly unpleasant in English -- but how controversial can the color of product packaging be The short answer is very! Producing a standard package design for the European market makes sound financial and brand image sense but satisfying the varying cultural influences at work in different European markets can prove extremely difficult. The Italians may want bright colors and vivid graphics but why is simple brown cardboard such a hit with the Germans, Danes and Swedes However nowadays the global language for communication in world commerce is English, or some might say, American. This is a legacy of the times when Great Britain, as progenitor nation of the industrialized world, ruled a quarter of the world's land surface. Although it might be advantageous for a businessman to understand the native language of another businessman with whom he is negotiating a transaction, it is not necessary. In fact, a company that attempts to transact business on a global scale without the ability to communicate in English would be at a competitive disadvantage. One can also sense the rise of a global culture. With much misgivings among individuals, the global culture appears to be American. American TV shows and movies provide much of the entertainment fare for the world's population. The golden arches of McDonald's can be found in every part of the world along with showings of "Married, With Children" and video tapes of Madonna, which to some is a rather gruesome thought. Manager in Saudi Arabia: Saudi Arabia will join the World Trade Organization (WTO). Therefore, employees' organizational involvement in Saudi companies becomes one of the key issues that management must evaluate on departmental and organizational levels. Generally, Saudi organizations are centralized where employees are structured in a fellow-me-fashion. This way must change in order for Saudi organizations to compete locally and globally with many international companies competing in the fast lane. There is no room for old management to work competitively in today's turbulent environment. Saudization may not always be the answer to the national economic development in the country if organizational involvement does not become an integrated part of Saudi organizations' cultures. However, only employees with high involvement can help Saudi organizations to be productive and competitive. The global manager must be open-minded and ready to accept changes. He must be well oriented and trained on the new technologies, good communicator and good negotiator, too. All of that makes him more efficient, competitive and globally opened without distinguishing between religions, colors, genders and roots. The problems that most organizations in Saudi Arabia and elsewhere hire employees for their education while ignoring the dark side of highly educated employees who have high expectations which cannot be met. Thus, they lower their involvement to the level they perceive fair. Saudi organizations can hire low education employees then train them for the job. We cannot argue the fact that training employees on the job is an extra cost to Saudi organizations, but management should know that it motivates them to stay with their employing organizations. A specific need for global skills training: There is an emerging need for communication training for both native and non-native speakers, which focuses primarily on the first of these skills. It is a lack of sensitivity to the cultural factor, which too often impedes their effectiveness as communicators despite competent linguistic skills and an interpersonal style appropriate to communicating with colleagues, and counterparts who share 'acceptable' ways of behaving. What can you do to be a global manager: You must appreciate different business cultures and develop the skills and confidence you need to build successful business relationships. You must learn techniques and skills that they can apply to your work situation immediately and to prepare for the challenges of the international market place you must know some of things like: Use strategies for building more productive teams Use a highly effective model for understanding cultural assumptions Communicate critical information clearly Work in a manner that inspires new ways of thinking in a diverse group Understand how culture impacts work styles, teamwork and communication Specific knowledge of foreign languages Specific overseas experience Time-consuming research Values of Global Managers Training in management ethics requires both a framework and an understanding of what is valued in the organization. Values influence behavior, but equally important, values influence our approach to the desirability or undesirability of achieving certain ends, goals, and objectives. Each of our organizations has developed certain structures, functions, policies and processes that have impacted on our operations. Each of these areas were strengthened, changed, or modified because of certain values espoused early in their development and inherent in proposals for changes in management. Historically, with the growth of urbanization, complex organizations, and fast-paced industrialization, leadership depended on the three Es: efficiency, effectiveness and economy. These three provided the management tools to move nations, governments, and private sector organizations to stronger practices and operations when carrying out their vision and mission. These three tools of management were valued, and today they continue to be valued. Efficiency was learned from the writings of Max Weber, the German Sociologist, and others who revered bureaucracy with its hierarchy, span of control, chain of command, et al. It was Weber who encouraged pyramidal top-down communication, coordination, and strict written rules in organizations. As the Industrial Revolution emerged and evolved around the world, leadership has developed Weberian bureaucracies placing Weber's organizational design into action and operation. Effectiveness was added as a value when human relations consultants, such as Mayo, Fayol, and Maslow told us that the organizations Weber prescribed were too rigid, too rigorous, and workers had become too righteous. It was learned that the service delivery systems at that time needed modification. Effectiveness became valued and urged by the Human Relations practitioners who encouraged more responsive working conditions where the workers would identify with the process and organization. Economy, the third tool of management, is an element of both efficiency and effectiveness, but stands alone as an important management value because it alone encourages, really urges, the wise and frugal use of resources. The most economic way may save monies, and accomplish the assigned tasks swiftly and directly, as well as provide additional opportunities to increase new programs through the ensuing savings. Leaders value the curtailing of wasteful practices through the economic use of materials, people, plant; i.e. all resources. Each of these three values has been identified as vital in every nation's movement to maturity. They are the basic tools. Each are still valued in our country's organizations, whether public, private, or non-profit. These three values have driven nations and organizations to a strong plateau where they provide evidence of a sound, maturing country. Yet, national leaders during the nineties have found that applying these three valued elements and management tools is not enough. During the late 80s and early 90s productivity was flat in highly developed countries; a search for management improvement took place. A search for mission, vision, goals, objectives, and the values therein was found to be important. Global Information Technology: A Global Information Technology Architecture (GITA) is an important organizational enabler for the implementation of an international business strategy. Specifically, hardware and software standards will guide the development of the information technology (IT) infrastructure platform. Prior research shows that the selection of IT standards in a large multi-business company is influenced by the corporate management style. The desire to integrate operations and the need to be responsive to local conditions are factors that have been demonstrated to influence the organizational form of multinational enterprises (MNEs). In turn, researchers have shown that the organizational form of the IT function often reflects the MNE organizational form. Hence in exploring the GITA, it is necessary to understand the mechanisms by which IT is managed. The advantages of information technologies help global managers to compete on the marketplace. Specifically GITA helps to reduce product-development time and life cycles, and make it possible to compete for fragmented market segments. The technology also helps develop differentiated products that appeal to consumers. Some of the benefits of GITA are summarized below: 1. Inventory is significantly reduced if not eliminated. The philosophy of just-in-time or zero inventory becomes easier to implement. 2. It becomes easier to respond to variations in product design. A spectrum of products that are not standardized, as in mass production (traditional assembly line systems), can be offered. 3. Organizations can respond swiftly to their competitive environment through improved quality of products; reduced costs as a result of the reduction in wastes, scraps, reworks, and inventory; increased level of dependability; rapid response to product design and demand changes; ability to collect and disseminate timely information; and reduce the use of direct labor. 4. There is better coordination of activities since the production system is highly integrated and a technological link can be established with suppliers and dealers. To be successful in the global marketplace, managers must be able to be effective in and across many cultures; be able to manage diverse staff; and be able to evaluate and respond to sometimes difficult situations. CONCLUSION: Globalization refers to "the compression of the world and the intensification of consciousness of the world as a whole In thought and action, it makes the world a single place. What it means to live in this place, and how it must be ordered, become universal questions. These questions receive different answers from individuals and societies that define their position in relation to both a system of societies and the shared properties of humankind from very different perspectives. The confrontation of their world views means that globalization involves comparative interaction of different forms of life. The universal ideas and processes involved in globalization necessarily are interpreted and absorbed differently according to the vantage point and history of particular groups. In some cases, this is done strategically, for example when global marketers create local traditions on the assumption that difference sells. More generally, globalization captures the way in which homogenization and heterogenization intertwine. Saudi Arabia will join the World Trade Organization (WTO). Therefore, employees' organizational involvement in Saudi companies becomes one of the key issues that management must evaluate on departmental and organizational levels. Generally, Saudi organizations are centralized where employees are structured in a fellow-me-fashion. This way must change in order for Saudi organizations to compete locally and globally with many international companies competing in the fast lane. There is no room for old management to work competitively in today's turbulent environment. Saudization may not always be the answer to the national economic development in the country if organizational involvement does not become an integrated part of Saudi organizations' cultures. However, only employees with high involvement can help Saudi organizations to be productive and competitive. The results may lead the researcher to suggest that Saudi organizations may consider restructuring their pay system (reward) because it can influence employees' organizational involvement. Highly involved employees may receive extra bonus to motivate them to put extra effort and stay with the companies. The problems that most organizations in Saudi Arabia and elsewhere hire employees for their education while ignoring the dark side of highly educated employees who have high expectations which cannot be met. Thus, they lower their involvement to the level they perceive fair. Saudi organizations can hire low education employees then train them for the job. We cannot argue the fact that training employees on the job is an extra cost to Saudi organizations, but management should know that it motivates them to stay with their employing organizations. REFERENCES: Kanungo, Rabindra N. (1982). Measurement of job and work involvement. Journal of Applied Psychology, 67( 3), pp. 341-349. Buchanan, B. (1974). Building organizational commitment: The socialization of managers in work organization. Administrative Science Quarterly, 19, pp. 533-46. The Business Impact of Management Attitudes towards Dealing with Conflict: A Cross-Cultural Assessment Journal of Managerial Psychology, 1995, pp.22-27. Adler, International Dimensions. P11 R.M Kanter, World Class: Thriving Locally in the Global Economy,'' (New York: Simon and Schuster, 1995). Global Competitiveness Issues: Involvement of Employees and Their Personal Characteristics in Saudi Construction Companies. www.banking.web.unsw.edu.au/workpap/wp8_03.pdf www.toeic.or.jp/ghrd/en/glc/ - 21k www.stacks.iop.org/1355-5111/8/1159 Read More