MBA530 West Chester Need for A Global Corporate Mindset Summary Can you please help me out with my homework assignment that is due Sunday at midnight. Plea

MBA530 West Chester Need for A Global Corporate Mindset Summary Can you please help me out with my homework assignment that is due Sunday at midnight. Please can you summarize the key lessons and takeaways from the article at least 250 words. This does not have to be an in depth answer since it is only 250 words. WINTER 2003
VOL.44 NO.2
MITSloan
Management Review
Thomas M. Begley & David P. Boyd
The Need for a
Corporate Global
Mind-Set
Please note that gray areas reflect artwork that has
been intentionally removed. The substantive content
of the article appears as originally published.
REPRINT NUMBER 4423
The Need for a
Corporate
Global
Mind-Set
hen a certain U.S. multinational corporation sought to adopt
a global policy on employee mobility, it convened a yearlong
symposium with representatives from units worldwide.
Through a format that encouraged brainstorming and inIt’s not enough for a few executives
depth discussion, a consensus gradually emerged that enabled executives to
at a multinational to have a global
reduce mobility classifications from eight to two. One category, the expatrimind-set. All employees should excel
ate assignment package, encompassed managers who agreed to a companyrequested posting of two or more years; it included 23 core elements that
at balancing global consistency
were standard. The other category, the international assignment package,
with local responsiveness. That’s
covered employees who were assigned to a position for less than two years
why many organizations are testing
or requested an international posting; that had 13 core elements and left the
other 10 adjustable to local situations. Both the policies themselves and the
ways to embed a corporate global
process used to develop them were well received abroad.
mind-set in companywide policies.
In another U.S. multinational, however, a task force of U.S. employees
Research shows that managers
from different levels and functions drafted a major revision of work-force
policies. The draft was discussed in several managerial forums, and a deuniversally recognize the imperative,
tailed questionnaire solicited the opinions of all U.S. personnel. Corporate
but only a few are close to
executives considered the final product, which reduced the number of poliimplementing it.
cies from 120 to 10, a notable success. Unfortunately, the process included
little input from overseas. Instead, headquarters presented the results to all
geographic units as a fait accompli. A company executive later commented,
Thomas M. Begley and David P. Boyd
“International participation was an afterthought.” The policies and the
process were not well received abroad.
Both companies had progressive reputations. Why then did they approach international
involvement in such different ways? A corporate global mind-set was the critical difference:
The first company showed it, whereas the second did not. We define a global mind-set as the
ability to develop and interpret criteria for business performance that are not dependent on
W
Thomas M. Begley is an associate professor and David P. Boyd a professor of human-resources
management at Northeastern University’s College of Business Administration in Boston. Contact them
at t.begley@neu.edu and d.boyd@neu.edu.
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MIT SLOAN MANAGEMENT REVIEW
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the assumptions of a single country, culture or context and to implement those criteria appropriately in different countries, cultures and contexts.1 The global mind-set is a critical component
of globalization. And as often noted, the truly globalized corporation is more a mind-set than a structure.2
Getting to a corporate global mind-set requires individual
managers to demonstrate a glocal mentality, which features three
components.3 First, think globally; recognize when it is beneficial
to create a consistent global standard. Second, think locally: The
process of becoming “truly global … means deepening the company’s understanding of local and cultural differences.”4 Third,
think globally and locally simultaneously; recognize situations in
which demands from both global and local elements are compelling. Our research reveals that the corporate version of an individual manager’s global mind-set emerges from policy development led by a core group. A core managerial group with a
glocal mentality is an essential component of a corporate global
mind-set.5 However, such a mind-set will not become embedded
in an organization until executives pull the structure, process and
power levers to activate it. Then the newly glocalized lower-level
managers will pull their levers to convert employees in cascading
fashion through critical parts of the company.
Formerly, it was possible for a close-knit network of leaders to
handle organizational tensions through informal dialogue. But as
businesses grew more complex, fast-paced and dispersed, a small
group could no longer do everything, necessitating a broader
base of managers to share in global decision making. Lacking
globe-spanning experience, the broader group often demonstrated a parochial view just when global expansion was tearing the
fabric of home-country-bound corporate cultures. That’s why
the global mind-set is such a vital evolutionary adaptation, one
that helps companies give recognition, respect and representation
to all employees while improving agility and competitiveness.
On the Road to a Global Mind-Set
To increase its global presence, a company must manage its global work force. Geographic dispersion and cultural diversity create
challenges in their own right. The prospect of uniting employees
in pursuit of company prosperity is further daunting. Yet success
depends on a corporation’s ability to direct employee behavior toward collective goals. Thus, a company must optimize its relative
emphasis on worldwide requirements and country variations.
Academics have long highlighted the need to adjudicate between global consistency and local responsiveness.6 Ill-advised
About the Research
We began by conducting an in-depth
examination of worldwide humanresources policy and program development in one high-technology multinational corporation. That pilot stage
included more than 20 hours of interviews with the executive responsible for
worldwide HR policies, interviews with
six managers involved in the process,
and questionnaire surveys of five additional HR executives in the Asia-Pacific
region, Canada, Europe, Latin America
and the United States. Fortified by a literature review, those sessions guided
direction of subsequent interviews.
The interview set included 39 HR
executives in 32 publicly traded hightechnology multinational enterprises.
All were headquartered in the United
States. Of those interviewed, 21 were
vice presidents, seven were directors,
and 11 were managers. Executives were
chosen through a combination of convenience (personal contacts) and snow-
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MIT SLOAN MANAGEMENT REVIEW
ball sampling (interviewing executives
recommended by earlier interviewees).
The fiscal year 2000 size of companies
ranged from $1.4 billion to $85.9 billion
in revenue and from 6,500 to 320,000
employees. The number of company
employees working outside the United
States varied from 100 to 160,000.
We followed a semistructured interview format. The average interview
lasted 70 minutes. Both authors took
extensive notes and audiotaped the
sessions. Analysis followed the template approach.i After initially coding
responses into thematic constructs,
we continued categorical revision and
refinement as we developed the data.
We then qualitatively interpreted emergent patterns. Analysis focused on corporate culture, national culture, humanresources systems and the interactions
among them.
Concentrating on the U.S. hightechnology sector permitted us to limit
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the effects of cross-industry and crosscountry variability. Targeting companies
above a minimum threshold of $1 billion in annual revenue ensured that
companies would have the capability
to run substantial operations in several
countries.
The companies studied included
Advanced Micro Devices, Analog Devices,
Apple Computer, AT&T, Bell Atlantic,
Cisco Systems, Compaq Computer, EMC,
Gateway, GTE, Honeywell, HewlettPackard, IBM, Intel, Lotus, Lucent Technologies, Media One, Microsoft, Motorola, NCR, Oracle, Polaroid, Qualcomm, SCI
Systems, Seagate Technology, Sun Microsystems, Teradyne, Texas Instruments,
3Com, Unisys, Wang Global and Xerox.
i. The template approach was applied to organizational research by N. King, “The Qualitative
Research Interview,” in C. Cassell and G. Symon,
eds., “Qualitative Methods in Organizational
Research: A Practical Guide” (Thousand Oaks,
California: Sage, 1994), 14-36.
scope can have far-reaching implications: Companies that shortchange global reach lose opportunities to maximize efficiencies
and consolidate costs; companies that shortchange local responsiveness endanger market share and alienate employees.
For example, tensions surfaced at Sun Microsystems when
local managers were accorded wide discretion in adopting employee stock-option plans. The longtime practice perturbed the
central human-resources and finance executives, who wished to
manage incentive compensation as a strategic tool. Conversely,
Cisco Systems pushed for a global culture that encouraged employees to disregard hierarchy, upsetting Asian employees’ tendency to look to higher levels for authority.
A grid can help crystallize the organizational parameters. (See
“The Global Consistency/Local Responsiveness Grid.”) Companies that emphasize global consistency seek cost advantages by
maximizing world-scale systems. Those maximizing local responsiveness adjust for country differences by allowing local autonomy. Those combining both dimensions use mutually inclusive arrangements.
There are no pure types; all organizations must optimize the
balance between two forces inherently at cross purposes. Variables
such as industry sector, company strategy and organizational capability will pressure companies toward different points. Even
within companies, functions have different grid locations. Marketing, for example, often must respond to local tastes, whereas finance pursues a globally unified approach. In addition to such
complexities, work-force management decisions must take into
account the cultural, governmental and social dimensions that
affect human behavior and limit managerial discretion.7
To enact the particular work-force management approach that
best fits their company’s positioning on a consistency vs. responsiveness continuum, managers need tools. The two most often
used criteria for evaluating management decision making have
been effectiveness and efficiency. Effectiveness means extracting
maximum gain from the external environment; efficiency is the
ability to secure optimal use of internal resources. But work-force
management policies also directly affect employee well-being, so
recent studies accent the importance of a third criterion, fairness.8 Policies judged as unfair will be resisted and hence will be
neither efficient nor effective.
In our research, executives strove to deal with all three workforce management concerns amid the tensions of the competing
forces. For effectiveness, they structured policies to channel
employee behavior toward productive activity, asking, To what
extent should policies be set as formal regulations or as flexible
guidelines? For efficiency, they streamlined the process for policy
enactment, framing the key question as, To what extent should
policies be universally standardized or locally customized? And
they sought to enhance fairness by locating the power to develop
policy at the suitable level of organizational hierarchy, asking,
The Global Consistency/Local Responsiveness Grid
To achieve success internationally, managers must balance
global consistency vs. local responsiveness to varying degrees.
Extreme global consistency seeks cost advantage by maximizing world-scale systems. Extreme local responsiveness adjusts
for country differences by allowing local autonomy. Companies combining both dimensions use mutually inclusive
arrangements.
High
Maximize
world-scale
systems
Balance
global with
local
concerns
Export
domestically
produced
products
Encourage
local
autonomy
Global
Consistency
Low
Low
Local
Responsiveness
High
To what extent should policies be centrally mandated or geographically delegated?
When the dimensions of each tension are placed in a grid, the
resulting planes clarify options available to decision makers in
formulating policies worldwide. (See “The Three Tensions of a
Global Business.”) Policy development challenges managers to
enact the skill contours of a glocal mentality — that is, to recognize when global consistency, local responsiveness, or a balance of
global and local tensions is best. By dealing with the tensions,
companies can ensure that the glocal mentality of individual
executives becomes embedded enterprisewide.
The Structure Tension: Global Formalization vs. Local Flexibility The
primary structural tension concerns the proper mix of rules vs.
guidelines (and guidelines can be formal or informal). A case in
point, U.S. companies continue to wrestle with enforcing the Foreign Corrupt Practices Act. The act prohibits bribery of foreign
officials to procure business. Following a formal-rules approach,
Intel strictly defined a bribe as “a thing of value given to someone
with the intent of obtaining favorable treatment from the recipient.” The company specifically proscribed payments to expedite a
shipment through customs if the payments did not “follow applicable rules and regulations, and if the agent gives money or
payment in kind to a government official for personal benefit.”
Texas Instruments adopted the middle way, a formal-guidelines
approach. It called on employees to “exercise good judgment” in
questionable circumstances “by avoiding activities that could
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MIT SLOAN MANAGEMENT REVIEW
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The Three Tensions of a Global Business
To achieve a corporate global mind-set, managers must balance global formalization vs. local flexibility, global standardization vs. local customization, and
global dictate vs. local delegation.
High
Formal rules legislate
dependence on global
systems
Standardized processes
maximize global
uniformity
Unilateral decisions push
global adherence
Formal guidelines
support interdependence of global
and local units
Custom components
around a standard core
balance global with local
processes
Participation builds
global-local consensus
around a standard core. Dimensions that reflected its win/execute/team core values were mandatory. But the company allowed customization of
particular steps in the process according to
national, divisional or functional needs. The
number of items rated and their effect on pay
differed by country. Meanwhile, GTE opted for
customized processes in its international units
and encouraged (but did not require) overseas
operations to tap the expertise of other units and
headquarters.
The Power Tension: Global Dictate vs. Local Delegation
The primary fairness tension involves the locus
of power in the exercise of worldwide decision
Formalized
making. Corporations address the tension as
Structure
A global structure does
Informal guidelines
Standardized
they consider how to design and implement innot exist
protect independence of
Processes
localized adaptations
Global
processes
do
not
centive compensation schemes. Recently, compaDictated Power
exist
Customized processes
nies have reacted differently to questions about
accommodate countryA global power
specific conditions
orientation does not
who should decide the form and amounts of
exist
Delegation encourages
local autonomy
such incentives. The questions are particularly
relevant to the power-orientation dimension.
SCI Systems, a company that globally enLow
forced its unilateral policies, developed the same
reward formula for top managers in each of its 35
Low
High
Forces for Local Responsiveness
plants worldwide. Sun Microsystems took a parFlexible Structure
Customized Processes
ticipative approach. In response to requests from
Delegated Power
country units, it sought to extend profit sharing
worldwide. Negotiated agreements between
country units and corporate headquarters ensured that both corcreate even the appearance that our decisions could be comproporate requirements and local needs were accommodated. At
mised.” TI further required employees to abide by the letter and
Seagate Technology, control was delegated to local units, which
spirit of the company’s code of conduct as well as country laws.
were responsible for adapting incentive schemes to their needs.
Analog Devices, following an informal-guidelines approach, set up
a policy manager as a consultant to overseas operations. The policy manager helped callers think through the issues and informed
Applying the Model
them how the corporate office handled similar situations — but
Use of the structure, process and power-orientation grid helps
also emphasized that the decision was local management’s.
embed a corporate global mind-set. But because top managers
control the necessary levers, they must have a glocal mentality
themselves as well as a vision for guiding the company toward a
The Process Tension: Global Standardization vs. Local Customization
global mind-set. When a core group initiates a process to identiThe primary process tension concerns the appropriate blend of
fy the optimal configuration of global and local elements, it can
uniformity and uniqueness in worldwide processes. Companies
begin to establish its mind-set in the company. In the context of
deal with the tension when they ponder the development of
policy development, application of a global mind-set requires exprocesses for performance reviews, for example. Adopting a stanecutives to recognize options presented by various locations in
dardized-process approach, EMC identified 15 competencies rethe grid. Then they can make decisions that maximize three imquired of all executives. The company initiated a process to evalportant kinds of consistency: consistency across the structure,
uate managerial performance against the same competencies
process and power dimensions within each policy; consistency
worldwide, using a standard form and a common set of defined
between policies; and consistency of the policies with the values
steps. The executives in our study believed it provided a basis for
guiding the company’s approach to global work force manageevaluating talent and developing managerial skills.
ment. Within-policy and between-policy consistency are virtues
IBM sought to customize performance appraisal processes
Forces for
Global
Consistency
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MIT SLOAN MANAGEMENT REVIEW
WINTER 2003
only if alignment occurs with values. So a corporate global mindset also is demonstrated in the emphasis on the values that guide
a company’s orientation toward work force management issues.
Within-Policy Consistency Choices made on the structural, process
and power-orientation questions are interdependent. Consistency
across the grid is desirable; inconsistencies generate problems. For
example, in the past, Hewlett-Packard’s benefits managers tried to
combine insurance coverage of many countries to get volume discounts. Following the company’s consensus-oriented culture, a
task force was formed that spanned national, divisional and hierarchical lines. After a lengthy process, member support was split
among several alternative plans attempting to address concerns of
all parties. Minimal cost advantage was obtained. The integrative
task force’s processes and the company’s participative orientation
combined to undermine the formal rules needed for cost savings.
More recently, as part of a move toward accentuating the primacy
of performance, a few executives at headquarters formally centralized the criteria for insurance vendor selection, identified
substantial cost savings through worldwide pooling, and then
communicated the selected vendors and rationale to benefits
managers in various countries.
Between-Policy Consistency Policy optimization occurs when a policy not only shows …
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