Developing a Global Management Cadre : Global Human Resource Management
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1. Global Human Resource management is a vital component of implementing global strategy and is increasingly being recognized as a major determinant of success or failure in international business.
2. The main staffing alternatives for global operations are the ethnocentric, polycentric, egocentric, and global approaches. Each approach has its appropriate uses, according to its advantages and disadvantages.
3. The causes of expatriate failure include the following: poor selection based on inappropriate criteria, inadequate preparation before assignment, alienation from headquarters, inability of manager or family to adapt to local environment, inadequate compensation package, and poor programs for career support and repatriation.
4. Appropriate and attractive compensation packages must be designed by IHRM staffs to sustain a competitive global management cadre. Compensation packages
for host-country managers must be designed to fit the local culture and situation as well as the firm's objectives.
5. Support programs for expatriates should include information from and contact with the home organization, as well as career guidance and support after the overseas assignment.
6. Global management teams offer greater opportunities for competition - by sharing experiences, technology, and international managers - and greater opportunities for cross-cultural understanding and exposure to different viewpoints. Disadvantages can result for communication and cross-cultural conflicts and greater complexity in the workplace.
7. Women and minorities represent an underutilized resource in international management; a major reason for this situation is the assumption that culturally based biases may limit the opportunities and success of females and miflorities.
The effectiveness of managers at foreign locations is crucial to the success of the firm's operations, particularly because of the lack of proximity to, and control by, headquarters executives. The ability of expatriates to thirtieth and maintain cooperative relationships with local people and agencies will determine the long-term success, even viability, of the operation. In a real sense, a company's global cadre represents its most valuable resource. Proactive management of that resource by headquarters will result in having the right people in the right place at the right time, appropriately trained, prepared, and supported. MNCs using these IHRM practices can anticipate the effective management of the foreign operation, the fostering of expatriates' careers, and ultimately, the enhanced success of the corporation.
Around the world, women are remaking companies, society, and them-
selves. But in each country, women have achieved different things,
fought different battles - and made different sacrifices.
Opportunities for female indigenous employees to move up the managerial ladder in a given culture depend on the values and the expectations regarding the role of women in that society. In Japan, for example, the workplace has traditionally been male domain as far as managerial careers are concerned (although rapid changes are now taking place). To the older generation, a working married woman represented a loss of face to the husband because it impied that he was not able to support her. Women were usually only allowed clerical positions, under the assumption that they would leave to raise a family and perhaps later return to part-time work. Employers thus made little effort to train them for upper- level positions. As a result, very few women workers have been in supervisory or managerial posts - thus limiting the short-term upward mobility of women through the managerial ranksi'
The younger generation and increased global competitiveness have brought some changes to traditional values regarding women's roles in Japan. Over 60 percent of Japanese women are now employed, including half of Japanese mothers. But how and when these cultural changes will affect the number of Japanese women in managerial positions remains to be seen.
Where one finds limitations on managerial opportunities for women in their own country, there are obviously even more limitations on their opportunities as expatriates. Overall, more managerial opportunities are available for American women than for women in most other countries. But, even for American women, who now fill over 25 percent of the managerial positions at home, commensurate opportunities are not available to them abroad: about 6 percent of North American expatriate managers are women. The reasons for this anomaly can often be [raced to the cultural expectations of the host countries - the same cultural values [hat keep women in these countries from the managerial ranks.
An explanation for the lack of expatriates who are female or represent other minority groups does not include their lack of desire to take overseas assignments; studies indicate their strong willingness to work abroad. Nor can the situation be explained by their lack of success: for example, a major study by Adler of North American women working as expatriate managers in countries around the world showed that they are, for the most part, successful.
The most difficult job seems to be getting the assignment in the first place. One of the major reasons is that North American executives are reluctant to send minorities abroad because they assume they will be subject to the same culturally based biases as at home, or they assume a lack of understanding and acceptance, particularly in certain countries. Research on 52 female expatriate managers, for
example, shows this assumption to be highly questionable. Adler showed, first and foremost, that foreigners are seen as foreigners; further, a woman who is a foreigner (called a gaijin in Japan) is not expected to act like a local woman. In fact, Adler and Izraeli say, “Asians see female expatriates as foreigners who happen to be women, not as women who happen to be foreigners.” The other women in the study echoed this view. One woman based in Hong Kong noted, “It doesn't make any difference if you are blue, green, purple, or a frog. If you have the best product at the best price, they'll buy.
Women and minorities represent a significant resource for overseas assignments - whether as expatriates or as host-country nationals, that is underutilized by American companies. Adler studied this pheromone regarding women and recommends that businesses (1. avoid assuming that a female executive will fail because of the way she wifi be received or because of problems experienced by female spouses; (2. avoid assuming that a woman will not want to go overseas; and (3. give female managers every chance to succeed by giving them the titles, status, and recognition appropriate to the position - as well as sufficient time to be effective.
The ability to develop effective transnational teams is essential in light of the increasing proliferation of foreign subsidiaries, joint ventures, and other trans national alliances. As noted by David Doltish of Honeywell Bull Inc. (HBI), an international computer firm, effective international teamwork is essential because cross-cultural “double-talk, double agendas, double priorities, and double interests can present crippling business risks when your storefront stretches for 6000 miles.”7 HBI represents a joint venture of NBC (Japan), Campaigner de Machines Bull (France, and Honeywell (U.S.). To coordinate this joint venture, HBI considered it important to have transnational teams for front-end involvement in strategic planning, engineering, design, production, and marketing. Doltish notes that HBI's primary corporate question is how to integrate a diverse pool of cultural values, traditions, and norms in order to be competitive.
The effectiveness of global teams and their ability to integrate with organizational goals depends on the synergy it can attain despite the problems and setbacks that result from the workings of an intercultural group. The advantages of synergy are confirmed by Moran in a survey of managers from two multinational organizations. He found that the respondents could more quickly generate the advantages of cultural diversity in their organizations than the disadvantages. The advantages they listed included a greater opportunity for global competition (by being able to share experiences, technology, and a pool of international managers) and a greater opportunity for cross-cultural understanding and exposure to different viewpoints. The disadvantages they listed included problems resulting from differences in language, communication, and varying managerial styles; complex decision-making processes; fewer promotional opportunities; personality conflicts, often resulting from stereotyping and prejudice; and greater complexity in the workplace.
How can management find out how well its international teams are performing and what areas need to be improved? The following criteria for evaluating the success of such teams is proposed by Indrei Ration of the Intercultural Managernent Association in Paris:
• Do members work together with a common purpose? Is this purpose some thing that is spelled out and felt by all to be worth fighting for?
• Has the team developed a common language or procedure? Does it have a common way of doing things, a process for holding meetings?
Does the team build on what works, learning to identify the positive actions
before being overwhelmed by the negatives?
• Does the team attempt to spell out things within the limits of the cultural differences involved, delimiting the mystery level by directness and openness regardless of the cultural origins of participants?
• Do the members recognize the impact of their own cultural programming on individual and group behavior? Do they deal with, not avoid, their differences in order to create synergy?
Does the team have fun? (Within successful multicultural groups, the cultural differences become a source of continuing surprise, discovery, and
amusement rather than irritation or frustration.)
The term global management teams describes collections of managers from several countries who must rely on group collaboration if each member is to experience the optimum of success and goal achievement. Whirlpool International, for example, is a U.S - Dutch joint venture, with administrative headquarters in Comoro, Italy, where it is managed by a Swede and a six-person management team from Sweden, Italy, Holland, the United States, l3elgium, and Germany. To achieve the individual and collective goals of the team members, international teams must “provide the marts to communicate corporate culture, develop a global perspective, coordinate and integrate the global enterprise, and be responsive to local market needs.” The role and importance of international teams increases as the firm progresses in its scope of international activity.
Similarly, the manner in which multicultural interaction affects the firm's operations depends on its level of international involvement, its environment, and its strategy. In domestic firms, the effects of cross-cultural teams are limited to internal operations and some external contacts. In international firms that export products and produce some products overseas, multicultural teams and cultural diversity play important roles in the relationships between buyers, sellers, and other intermediaries at the boundary of the organization. For multinational firms, the role of multicultural teams again becomes internal to the company; the teams consist of culturally diverse managers and technical people located around the world and also working together within subsidiaries. The team's ability to work together effectively is crucial to the success of the company. In addition, technology facilitates effective and efficient teamwork around the world This was found by the Timberland U.K. sales conference planning team. In the past their large sales conferences were cumbersome to organize with their offices in France, Germany, Spain, Italy, and the U.K. Then the team started using the British Telecom Conference Call system for the arrangements, which saved them much travel and expense; the company
subsequently adopted the BT Conference Calls for the executive teams' country meetings.
There really was no point in travelling for two hour meetings. So we
would lock diaries for a coupe of hours over BT Conference Call.
For global organizations and alliances, we find the same cross-cultural interactions as in MNCs and, in addition, considerably more interaction with the external environment at all levels of the organization. Therefore, global teamwork is vital, as are the pockets of cross-cultural teamwork and interactions that take place at many boundaries. For the global company, worldwide competition and markets necessitate global teams for strategy development, both for the organization as a whole and for the local units to respond to their markets.
As shown in Exhibit 9-il, when a firm responds to its global environment with a global strategy and then organizes with a networked “global” structure (discussed in Chapter 8., various types of cross-border teams are necessary for global integration and local differentiation. These seclude headquarters - subsidiary teams and those coordinating alliances outside the organization. In joint ventures, in particular, multicultural teams work at all levels of strategic planning and implementation and on the production and assembly floor.
Increasingly advances in communication now facilitate virtual global teams, with people around the world conducting meetings and exchanging information via the Internet, enabling the organization to capitalize on 24-hour productivity. In this way, too, knowledge is shared across business units and across cultures. Virtual global teams are not without their challenges - including cultural misunderstandings, and the logistics of differences in time and space; group members must build their teams bearing in mind the group diversity and the need for careful communication.
In addition to the managerial and cross-cultural skills acquired by expatriates, the company benefits from the knowledge and experience those managers gain about how to do business overseas and what new technology, local marketing, and competitive information they acquire. The company should position itself to benefit from that enhanced management knowledge if it wants to develop a globally oriented and experienced management cadre - an essential ingredient for global competitiveness - in particular where there is a high degree of shared learning among the organization's global managers. If the company cannot retain good returning managers, then the potential shared knowledge is not only lost but also conveyed to another organization who hires that person. This can be very detrimental to the competitive stance of the company. Some companies are becoming quite savvy about how to use technology to utilize shared knowledge to develop their global management cadre, to better service their customers, and - as a side benefit - to store the knowledge and expertise of their managers around the world in case they leave the company; that knowledge, it can be argued, is an asset in which the company has invested large amounts of resources. One such savvy company is Booz-Allen & Hamilton, which instituted a Knowledge Online Intranet.
Research by Black and Gregersen of 750 U.S., European, and Japanese corn- panics concluded that those companies which reported a high degree of job satisfaction and strong performance and which experienced limited turnover used the following practices when making international assignments:
• They focus on knowledge creation and global leadership development.
They assign overseas posts to people whose technical skills are matched or
exceeded by their cross-cultural abilities.
- They end expatriate assignments with a deliberate repatriation process.
A successful repatriation program, then, starts before the assignment. The company top management must set up a culture which conveys that the organization regards international assignments as an integral part of continuing career development and advancement, and that it values the skills of the returnees. The company's objectives should be reflected in its long-range plans, commitment, and compensation on behalf of the expatriate. GE sets a model for effective expatriate career management. With its 500 expatriates worldwide, it takes care to select only the best managers for overseas jobs and then commits to placing them in specific positions upon reentry. In fact, a study of the Shrive policies of British multinationals indicates that careful planning for foreign assignments pays off. Farsighted policies, along with selection criteria based more on the adaptability of the manager and her or his family to the culture than on technical skills, apparently account for the low expatriate failure rate - estimated at less than 5 percent.
Managers returning from expatriate assignments are two to three times more likely to leave the company within a year because attention has
not been paid to their careers and the way they fit back into the corporate structure back home.
One purpose of the international assignment is that both the manager and the company benefit from the enhanced skills and the experience gained by the expa
triate. Many returning executives report an improvement in their managerial skills and self-confidence. Some of these acquired skills, as reported by Adler, are shown in Exhibit 9-10.
Support services provide timely help for the manager and therefore are part of the effective management of an overseas assignment. The overall transition process experienced by the company's international management cadre over time is shown in Exhibit 9-9. It comprises, three phases of transition and adjustment that must be managed for successful socialization to a new culture and resocialization back to the old culture. These phases are (1. the exit transition from the home country, the success of which will be determined largely by the quality of preparation the expatriate has received; (2. the entry transition to the host country, in which successful acculturation (or early exit) will depend largely on monitoring and support; and (3. the entry transition back to the home country or to a new host country, in which the level of reverse culture shock and the ease of reacculturation will depend on previous stages of preparation and support. Although we discussed these broad issues earlier, this model offers an interesting overview of the interdependency and the timing of the three transitions.
Support services provide timely help for the manager and therefore are part of the effective management of an overseas assignment. The overall transition process experienced by the company's international management cadre over time is shown in Exhibit 9-9. It comprises, three phases of transition and adjustment that must be managed for successful socialization to a new culture and resocialization back to the old culture. These phases are (1. the exit transition from the home country, the success of which will be determined largely by the quality of preparation the expatriate has received; (2. the entry transition to the host country, in which successful acculturation (or early exit) will depend largely on monitoring and support; and (3. the entry transition back to the home country or to a new host country, in which the level of reverse culture shock and the ease of reacculturation will depend on previous stages of preparation and support.60 Although we discussed these broad issues earlier, this model offers an interesting overview of the interdependency and the timing of the three transitions.