TCPI News Vol. 3, No. 11
February 15th, 2005
In this issue:
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1. Globalization and Management Attitudes
The term “globalization” in the business arena has been thrown around for the last decade as if it was something that is unstoppable. The question that comes to mind is how companies should adapt the business model and how much to standardize from country to country? Creating ventures in foreign markets requires training on both sides. The home company needs to learn about the employment habits and attitudes in the foreign country as well as the foreign employees learning about the habits and attitudes of their new employer. Which system should take precedence in a global venture? Does the home country have the advantage because they are in charge or do they adapt to fit into the new environment? There are several important steps that managers need to take in order to ensure a successful transition when expanding globally.
- Define the corporate vision and mission statements in
the new global environment
- Does the current vision and mission apply to different culture?
- Is the new global team involved in creating the vision and mission?
- Set objectives and strategies that includes the new
foreign workforce.
- Are the current objectives and strategies appropriate in the new culture?
- Should some strategies be altered if they are not culturally appropriate?
These things will not ensure a successful transition, but will create an awareness that some actions may need to change. In previous newsletters, the concept of “cultural cruise control” was discussed. When a company expands globally, they arrive in the new country on their cruise control. American companies have been known to come into a country and expect everyone to immediately conform to the “American” way. A successful foreign venture requires a look at the habits and customs of the new culture. Dr. Spears from University of Hawaii notes some of the complexities of international management.
- Different political sovereignties
- Different economic conditions
- Greater geological distance
- New culture
http://www2.hawaii.edu/~dspears/tim303/ch5s.ppt
There are three basic attitudes that management can take in an international setting.
- Ethnocentric attitude (home country oriented)
- Viewing the world with domestic references
- Managers tend to treat international departments as outlets for dealing with domestic issues.
- Polycentric attitude (host country oriented)
- Viewing the world with some domestic references
- Each national market is looked upon as a unique market requiring a separate, independent, and different strategy.
- Geocentric attitude (World oriented)
- The company views itself as citizens of the world not of a particular country.
- Gradual elimination of the very idea of a home or host country.
- National borders are ignored and the world is conceptualized as a single market.
http://www.sase.org/conf2003/papers/azavedo-bertrand.pdf
The attitude that managers adopt depends largely on the industry. For example, many IT firms are setting up offices overseas and adopt a more polycentric attitude so they can have a strong base in the local technology markets. IT companies need service and support from the local people if problems arise. Having a strong base in the local market by recognizing the uniqueness and independence of the foreign country allows for greater support from the local community.
2.Globalization and the Extension of Matrix Management
“ I work for a global company that has offices all over the world with work distributed across centers. Any one job might be distributed in components across 2/3 offices to execute. The offices would typically be in different countries. "
This quote, taken from a popular interest group site devoted to training issues, highlights the cultural problems facing global organizations.
Globalization is bringing various cultures and languages together in teams. These teams are expected to perform as if they were all based in the same office. Many companies have adopted a “matrix management” system for these new global teams. The matrix allows resources to be shared across the company. Typical companies are used to thinking in vertical terms. Projects go down the ladder from the manager to the team members. Functional management has a manager in charge and he/she is only responsible for the members directly under his/her supervision. Matrix management requires a new way of structuring and thinking about roles and responsibilities. According to research done by A.T. Kearney, “the matrix allows companies to leverage vast resources while staying small and task oriented. The matrix encourages innovation and fast action, and speeds information to those who know how to use it.” http://www.atkearney.com/shared_res/pdf/Waging_war_on_complexity_S.pdf
The matrix management model is not easy to implement and has many critics that doubt it’s effectiveness. One of the most common critiques is that the person who will evaluate your performance on the team, is not necessarily your manager. Another criticism is that people get spread too thin. Team members have their primary job responsibilities and then have to make time for matrixed teams.
An interesting thing about the matrix is that since the 1980’s, no one has really reexamined it. Christopher Bartlett in an article in the Harvard Business Review says, “all through the 1980’s companies everywhere were redefining their strategies and reconfiguring their operations in response to such developments as the globalization of markets." http://www.bnet.com/abstract.aspx?kw=matrix+management&group=jobs&docid=78945
Companies are operating under the matrix style of management after adopting it decades ago, but have never revisited whether or not it’s working. In most cases the structure falls apart as people change jobs or companies are restructured or grow.
The matrix can be successful at implementing and coordinating multi national teams, but there needs to be tracking systems to make sure that everyone is on task. One system is called the RASIC, (Responsible, Approve, Support, Inform, Consult).
| Person A | Person B | Person C | Person D | Person E | |
| Task A | S | R | A | I | C |
| Task B | R | S | I | R | A |
| Task C | C | A | S | C | S |
| Task D | A | C | R | S | R |
| Task E | I | I | C | A | I |
Each person on the team will have different roles regarding a task. Since each person on a matrix team comes from different parts of the organization, this is one way of listing all the roles for accountability. Matrix teams that are organized in the beginning often fall into the habit of not revisiting the RASIC as a project progresses. Teams need to refer back to a chart like the RASIC to make sure they are on track and to update roles that have been completed. Without proper accountability measures, the matrix will not be effective. This type of responsibility matrix can group members of team who are spread out internationally. Each person is aware of the other’s role in the project and the sequence of tasks.
Globalization has forced companies to look at whether or not they are prepared to operate internationally or have a diverse workforce. Many companies who have never operated outside the U.S. are hiring foreign managers and outsourcing internationally. The functional style of management needs to adapt to incorporate teams located across the globe. Matrix management has the potential to support these new teams if it is implemented carefully and regulated throughout the project lifecycle.
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