1. Building multidimensional global capabilities5
Lecture 5
Building multidimensional global capabilities
Copyright © 2012 Karol Pelc; Copyright © 2011 McGraw-Hill Irwin

2. Initial questions:
Why personal capabilities of a manager in a global company need to be different than those of other managers? Illustrate with examples.
What barriers/challenges a manager in global business may be faced with?
3. How to develop “global” capabilities of managers?

3. Three Key Management Roles in the Transnational Company
The Global Business Manager
The Worldwide Functional Manager
The Country Subsidiary Manager
(But other roles also starting to emerge e.g. the Global Account Manager)

4. Global Business Manager
Responsible for developing
global efficiency and competitiveness
Global Business Strategist
Architect of Asset & Resource Configuration
Cross-Border Coordinator

5. Role as Global Business Strategist
Needs to resolve diverse perspectives and interests of geographic and functional managers
Consistency of business strategy with corporate strategy
Location of business unit: often outside home country

6. Role as Architect of Asset and Resource Configuration
“One product, one facility”
Dispersal for robustness
Building on existing capabilities
Responsibility according to competencies

7. Role as Cross-Border Coordinator
Cross-border flow of materials: Transfer prices and policies
Cross-border coordination of operations: brand committees and product area boards
Cross-border coordination of strategy

8. Worldwide Functional Manager
Worldwide Intelligence Scanner
Sense and act on information wherever in the world it emerges
Cross-Pollinator of “Best Practices”
Identify sources and recipients; smooth process of transfer
Champion of Transnational Innovation
Locally leveraged and globally linked forms

9. Geographic Subsidiary Manager: Traditional Role
Traditional role of foreign subsidiary manager
Source of sales and profits
Access to local factors of production
Leverage parent company assets and resources

10. Geographic Subsidiary Management: New Role
Bicultural Interpreter
National Defender & Advocate
Frontline Implementer of Corporate Strategy

11. Role as Bi-Cultural Interpreter
Interpret host country environment for corporate management; interpret corporate strategies and priorities to the national organization
Causes of Failure: Upward Communication HQ
SUB. CM
Poor Receptivity of HQ Management
Blocked HQ/Subsidiary Channels of Communication
Limited Sensitivity or Understanding at the Subsidiary
& Downward Communication
Weak Connections or Support at HQ HQ
Limited Understanding of Corporate Strategy, Priorities
SUB. CM
Lack of Credibility within the Subsidiary

12. Role as National Defender and Advocate
Defends need for national responsiveness;
advocate for role of subsidiary within the global operations
Causes of Failure:
CM (Country Manager) unwilling or unable to act as a strong advocate or defender of subsidiary interests
Structural or cultural blocks that prevent CM from gaining access and influence in corporate decision-making process HQ F B G
Functional Perspective
Business Perspective
Transnational decision process requires multi-dimensional perspectives; implies CM access and influence in process
Geographic Perspective
Subsidiary

13. Role as Frontline Implementer of Strategy
Converts strategic plans into action
for subsidiary
Cause of Failure
Organizational or managerial inflexibility prevents diversity and changeability of subsidiary roles
CM unable to make the complex trade-offs and compromises required
Parochialism in subsidiary due to inappropriate systems or inflexible managers

14. Pressures and Constraints on Country Manager
MNC
Internal
Motivations
Organization Structure
& Systems
Corporate
Strategy
Internal Norms
& Values
Host Governments Objectives, Policies
Country Manager
Personal Values
National Competitor’s Actions
National Constituent Interests (Employees, Consumers, Unions)
Global Competitive Activity
Host
Country
Interests
Global
Competitive
Environment
Local Market & Industry Structure
Local Norms
& Values

15. The Many Hats of the Country Manager
Pioneer Role:
Define the territory:
market structure,
customer needs
Establish the base camp: make contacts, develop relationships
Intelligence Role:
Analyze the
environment:
intelligence on
competitors, technology, market trends
Develop innovative ideas and capabilities as input to strategy
Trader Role:
Build profitable
operations: base
camp, trading post;
control expenses,
manage pricing
Develop local resources:
contribute to overall strategy
Quarterback Role:
Confer with HQ coaches
to defend, and advocate
the field view
Motivate team to achieve results
Maintain entrepreneurship,
creativity, and drive

16. Skills & Qualifications of the Country Manager
Entrepreneurial Skills
Strategic Skills
Innovator &
Opportunist
Country
Manager
Creative Analyst
Administrative Skills
Executive Skills Skills
Personnel Implications:
Need CMs with different strengths at various stages of development;
But in a mature subsidiary, the CM must have all of these characteristics.
Organizational
Leader
Controller
& Manager

17. Top Level Corporate Management
Providing direction and purpose
Clarity, Continuity, Consistency
Leveraging corporate performance
Control systems based on supporting actions of managers, not directing them
Coordinate and legitimize diverse perspectives
Ensuring continuous renewal
Develop a questioning attitude
Legitimize new initiatives
Help the organization embrace, not deny, complexity

18. SUMMARY
Multidimensional roles of managers in TNO: Building managerial capabilities
Tasks, success criteria and potential of failure in multiple roles of a manager in TNO
Role of top corporate management