International Management
...eral competitors, who compete against each other across national markets and take decisions that can best fit the requirements of global integration and local responsiveness. However, achieving cooperation with the subsidiary managers was not so simple, nor easy. Usually, MNCs that engage in collaborations with local partners or smaller firms, come face to problems like divided loyalties or nervousness. Moreover, the managerial strategies may differ significantly from subsidiary to subsidiary, depending on its type (i.e. export platforms, large integrated, self-contained or small importing subsidiaries) and location. Hence, the managerial skills required and the experience gained, may vary a great deal from manager to manager making cooperation even more complex. The solution was to develop multiple methods of managing people, adjustable to the needs of the various operations. Subsidiary managers should develop a global or a local orientation, but should be sensitive to both of them. Sometimes, the demands for local sensitivity and for loyalty to the headquarters may be inconsistent, and it is very crucial for subsidiary managers to be able to balance them. By being sensitive to the local conditions, subsidiary managers help the firm acquire a visible local face, be easier accepted in the local community and be reasonably recognized by the local economy. It is important though, to counterbalance this dimension by other priorities such as loyalty to corporate interests. Subsidiary managers should work for the benefit of the whole corporation and contribute to a global –and not just a local- optimum. They should be committed to the overall performance of the firm and not just to the local results. By being loyal to corporate interests, subsidiaries are part of a global business network and can be centrally managed. Their responses to the headquarters are more direct and a strong central strategic control is allowed over the company’s objectives. Cooperation and corporate ideology set the basis for management to be able to match its strategic control process with the businesses’ requirements, in order to finally meet the company’s core vision. Part 2 1. The role of Global Management in the business organization Global management plays a very significant role in the business organization. Each organization that decides to go global needs to transform the business toward a marketing orientation with global cost competitiveness. For its global transformation, the company needs to adopt a global management system and the first step is to develop a team of managers and executives who deeply understand the global environment, have the capability to transfer this knowledge, and are willing to take opportunities for global careers. These individuals, in order to be able to lead the institutions into the 21st century, must have a global mindset, as well as global leadership skills and behaviors. They must concentrate on the complex geopolitical and cultural forces that impact businesses and must generally act as global networkers. Furthermore, they must have the ability to create effective cross-cultural teams across all the company’s poles and must have the energy, the talents and skills to bring about faster global integration. Managers must be capable of leading the harder tasks of global achievement, such as improvement of competitive analysis, product quality, customer satisfaction, worldwide product planning and management of new technology. In addition they must be able to develop new sets of values and templates in the organization, as well as new mechanisms and development processes to implement all these changes. Global managers must be sensitive to different cultures and be willing to accept different approaches to problem solving. Sony, considering all the above, tries constantly to undertake alternative new ways of rapidly developing global leaders, needed to pilot its institutions into the 21st century and in a highly competitive environment. 2. The role of culture in the international business organization The term “culture” in the business organization, can be defined as the “collective programming of the mind that distinguishes the members of one group, or category of people from another. The group or category may be a nation, an occupation, a type of business, or a corporation.” (Pucik, Tichy, Barnett, 1993:139) Today managers are asked to operate multiculturally, as there is an increasing integration of organizations across national borders and businesses. When borders are crossed, managers need to compare and reconsider some key aspects of the organizational life, such as motivation patterns, organization structures, leadership styles, training models. They often need to compare even their own way of acting and thinking with others’. Generally, in order to be successful, managers must be able to cope with cultural relativity and understand the ways in which people are influenced by environments, such as their families and schools, before they start working. People, equally gifted, may act pretty differently in a specific situation, and this is due to differences in socialization. Power distance, individualism versus collectivism, masculinity versus feminity and uncertainty avoidance are four dimensions for different cultures, that can be transferred in various ways during the socialization process and can influence the individuals differently in the way they perceive their work environment. Symbols, heroes, rituals and values are some interactive culture elements that have been initially developed in the family and school. Workplace socialization can alter all these dimensions and elements, but only to some extend. Employees need to adapt their personal values to the organization’s needs only to a limited extend, as –compared to family and school socialization- workplace socialization is not considered so vital for the mental programming. In a multicultural organization, such as Sony, two types of roles are particularly important; the top managers of business units in countries and the corporate diplomats. The first, operate in two cultures (the culture of the business and the corporate culture), while the latter are those who serve as contact persons with the head offices and are much experienced in functioning and living in other cultures, as they often serve as temporary managers for the new ventures as well. The availability of such people symbolizes a great challenge for multicultural personnel management. Cultural awareness-training, for employees who operate in foreign countries, and recruiting people from different nationalities, help Sony have the proper personnel available when it is needed. 3. International management opportunities An international business could be defined as a firm that engages in international trade and investment. Many opportunities are offered from global expansion as, through it, a firm can increase its profit by transferring core competencies from home to overseas, by dispersing value chain activities globally at the best places and by realizing scale or learning economies. Domestic firms can engage in international business activities by exporting or importing products to/from foreign countries. Many differences occur between international and domestic businesses, especially in the ways of managing them. Managing an international business is a much more complex task than managing a domestic one, as countries are different and managers face a wider range of problems. They have to choose the proper foreign market to enter, the appropriate entry type for the market selected and they have to coordinate production activities globally. An international business is exposed to certain risks that a domestic business is not so concerned about, and has also many managerial implications. Managers have to meet new standards for quality, cost, responsiveness to customers and flexibility, and they have to find the right balance between the need for global integration and local responsiveness. Global integration gives opportunities for greater international competition, reduction in costs, increasing similarity in customers’ needs, lower trade barriers and lower transportation costs. Local responsiveness can be linked to differences in consumer preferences, in market structures, in infrastructure and in host government demands. Managers must be capable of handling these two opposing pressures by developing strategies, deploying resources and competing. The intensity of competition among firms increases and the benefits and costs associated with the international business, are a function of the host country’s political, economic, legal systems and culture. However, despite all these implications and risks, most managers prefer to take the opportunity to become internationalized, as through traveling and assignment abroad they acquire language skills, cross-cultural know-how and knowledge about other social, political and cultural systems. From the moment they go abroad, most managers claim that their lives change, their horizons enlarge and an excitement about other cultures and languages is suddenly generated. Furthermore, they play a multiple role, as -by going abroad- they help internationalize local management, institutionalize the corporate culture and they contribute in developing knowledge and identification of the company as a whole. As firms become global competitors, there is an increasing value to expatriate assignments, and Sony’s philosophy is to provide this experience to as many managers as possible, according to the belief that the best individual and organization development occur simultaneously. 4. Reasons of failure of MNCs in their international operations MNCs must compete in an environment of over 160 independent nation states with very different objectives, political systems, languages, cultures and forms of social organization. All these, pressure the MNCs to respond to polit...