Globalization
Traditional definition of globalization? Movement of resources across national boundaries: money,
people, goods, services, ideas Globalization as complexity: The complexity inherent in doing business in a global economy
comes from: Multiplicity – many things happening at once Interdependence – all things being connected Ambiguity – less knowledge about all aspects Flux – rapid and consistent change
Implications for managing: rather than tactical solutions to problems, need people who can engage in collaboration, discovery, architecting and systems thinking.
Global Innovation
A process for innovating that transcends local clusters and national boundaries.
Sourcing and integrating knowledge from dispersed geographic locations, companies can generate more innovations of higher value and lower cost.
E.g. from China, Inc.
COMPLEXITY AND INNOVATION
Global Innovation Complexity Organizational Complexity Global Management Complexity Intra-organization Complexity
Importance of knowing the where and why of complexity, remaining flexible, and collecting
a toolbox of appropriate choices.
GLOBAL INNOVATION COMPLEXITY
Integrating multiple evolving technologiesTapping globally dispersed technology
sourcesServing globally distributed customers
ChiefExecutive
Officer
Manufacturing/Operations
Marketing Finance Human Resources
ChiefExecutive
Officer
Division1
Division2
Division3
Division4
Purchasing
Engineering
Operations
Marketing
HumanResources
Purchasing Purchasing Purchasing
Engineering Engineering Engineering
Operations Operations Operations
Marketing Marketing Marketing
HumanResources
HumanResources
HumanResources
Planning Legal
Finance Finance Finance Finance
Organizational Complexity
Consumer Pharma-ceutical
MedicalDevices
FranchiseMgmt
(MarketingSupport)
Group OperatingCommittee(StrategicSupport)
CEO
HumanResources
Finance
Environ-ment
190 Autonomous Business Units (Brand Focus)
Corp
ora
te F
un
cti
on
s
Markets
Bu
sin
ess S
eg
men
t Stru
ctu
re
Science &Technology
AdditionalCorporateFunctions
CustomerSupport
ABB’s Geography-Based Internal Network
CEO
Projects Finance HR Corporate R&D Global Staffs Accounts
Financial Industrial Power Power Europe / Americas Asia Services & Building Transmission Generation Middle East / Systems Africa Business-Area Transformers 140 Countries
4 Business Segments 3 Regions
40 Business Areas
1,000 Companies
5,000 Profit Centers
Finance Products/Functions R&D
Spanish TransformerBusiness
Spain
ShellEspana~
Shell
Management Complexity
Innovation is a strategic mandate leading to value-added outcomes
Innovating is about the actions, behaviors and management practices that create innovations.
Managers in a global business world come with their own culturally derived values, attitudes and norms; and they function within organizational and societal values, attitudes and norms.
Greater diversity = greater variation in beliefs about what, how, where and why.
Global Partnering – Interorganizational complexity Manage tensions (cross cultural and cross
organizational) Build networks (finding the right partners
and acting like the right partner) Achieve Outcomes
CROSS BORDER INNOVATIONWhat role does culture play in the study of innovation?
Culture is Hidden
Image by R.A. Clevenger
ARTIFACTS Visible, tangible.
NORMS, VALUES,ATTITUDES
Less visible, but can be talked about.
DEEPLY ROOTED ATTITUDESUsually not visible at all, often
held subconsciously, rarely (if ever) questioned in everyday life.
3-13
The culture of McDonald’s
Localized menus reflect norms, values, attitudes
Philippines McSpaghetti
Germany McBeer
Switzerland Vegi Mac
Malaysia Sugar Cane Juice
Netherlands Cappuccino Donuts
Greece Shrimp, Veggie Burgers, & Spring Rolls (sold during Lent)
Artifact looks the same everywhereDeeply Rooted Values change the way McDonald’s is used
Deeply rooted values change the way McDonald’s looks in France where a McDonald's breakfast meal in Villeurbanne, France includes fresh baguettes and jam spreads with coffee for $4.55BUT WHY?
Naturally, the U.S. is its no. 1 market, but guess who is no. 2? You got it: France. … McDonald's is such a success in the land of Michelin three-star restaurants because it has adapted to French eating habits and tastes. There are now 1,200 franchises in France; the company opened 30 restaurants per year in the past five years alone.
http://www.npr.org/blogs/thesalt/2012/01/24/145698222/why-mcdonalds-in-france-doesnt-feel-like-fast-food
14
Influences on CultureHistory, LanguageReligion, Climate,Physical Environment, etc.
CultureShared Assumptions and Values,Systematic,Learned
Individual Perceptions and Interpretations based onValues andAttitudes
Individual Behavior
Cultural Institutions Educational,Social,Political, Legal,Economic,etc.
Influences on, and of, Culture
B:f(P*S)
Person
Situation
3-16
Daily Coffee Consumption per Capita
0 0.5 1 1.5 2 2.5
Finland
Austria
France
Italy
U.S.
U.K.
Source: Business 2.0. July 2002.
3-17
Did You Know?
s In Turkey it’s rude to cross your arms while you are facing someone.
s In the Arab world the left hand is considered unclean; don’t eat with it!
s In India never pat someone’s head, it’s the seat of the soul.
s The Chinese associate gifts such as straw sandals, clocks and handkerchiefs with funerals.
3-18
Favorite Campbell Soups Around the World
Hong Kong - Watercress & Duck Gizzard
United States - Chicken Noodle, Cream of Mushroom
Britain - Tomato
Japan - Corn
South America - Cream of Asparagus
Australia- Cream of Pumpkin
3-20
Days of Annual Vacation
0 5 10 15 20 25 30 35 40 45
Italy
France
Germany
Brazil
United Kingdom
Canada
Korea
Japan
U.S.
Source: AAA World
3-21
Nations That Have Not Converted to the Metric System
United States
Liberia
Yemen
Myanmar
(Burma)
Brunei
Is everyone an equal player?
Friedman claims the World is Flat Technology has leveled the playing field across
nations Richard Florida, author of The Flight of the
Creative Class claims the World is Spiky. The most populated areas of the world are also
the least economically and innovatively active.
Global Innovation Index
Generates a ranking of countries based on innovation.
Source: The World Business/INSEAD Global Innovation Index (GII).
The Global Innovation Index (GII) was conceived at INSEAD as a formal model to help illuminate the degree to which individual nations and regions are currently responding to the challenge of innovation.
The framework groups the eight pillars of innovation into two categories: Inputs and Outputs.
Global Innovation IndexOverall Rankings
1 United States 5.80
2 Germany 4.89
3 United Kingdom 4.81
4 Japan 4.48
5 France 4.32
6 Switzerland 4.16
7 Singapore 4.10
8 Canada 4.06
9 Netherlands 3.99
10 Hong Kong SAR 3.97
World Competitiveness Report
The IMD World Competitiveness Yearbook, published since 1989, ranking and analysing how a nation's environment sustains the competitiveness of enterprises.
Understanding Diversity
• Provide frameworks for using diversity to get higher performance
• Increase awareness of ourselves and others, and the impact of our similarities and differences
• Test the applicability of the ideas to situations from your experience
Does diversity result in synergy?
• Diversity yields–Wide range of perspectives–Variety of potential solutions
and opportunities–Potential for synergy
http://www.ft.com/businesseducation/imd
What are the implicationsfor Managing Global Teams?
Performance
Homogeneous Teams
Numberof Teams
Diverse TeamsManaged Well
Diverse Teams Managed Poorly
Despite their potential, most diverse teams don’t perform as well as homogeneous teams do…
LowLow
High
High
‘Destroyers’
‘Equalizers’
‘Creators’
But synergy doesn’t come often enough….
The MBI Model:Managing Cultural Diversity for Personal and Team Effectiveness
BRIDGECommunicate
across the differences
• Prepare: Motivation, Confidence
• Decenter: Perspective taking,
Explain without blame• Recenter:
Common view, common norms
INTEGRATEManage
the differences
• Build Participation
• Resolve Conflicts• Build on Ideas
HighPerformance
Value & Utilize
TheDifferences
MAPUnderstan
dthe
differences
• Cultural Orientations Framework
Source: Lane, DiStefano & Maznevski. International Management Behavior. 4th ed.