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    Globalization and Management Changes

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    Over the years, say 20 years, how has management changed with respect to one of the following:

    Corporate responsibility and ethics
    Society and trends (such as diversity)?

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    Please see response attached (also presented below). I also attached an article about the differences between managers and leaders and how there has been a move from transactional (i.e., managers of the past) to transformational (managers of the present and future need to use both styles, but transformational style fits best with the global economy and ambiguity of the future). I hope this helps and take care.


    Let's look at globalization and the changes in the last 20 years.


    A. Management Changes

    In today's business world, international experience has become critically important. Companies can no longer get away with operating loosely connected groups of businesses that happen to be located around the world, but must strategically integrate their activities. As Ian Mitroff has said, only businesses, industries, and whole societies that clearly understand the new rules of doing business in a world economy will prosper. Global competition has forced executives to recognize that they must think differently about management. As a global company, the only way to succeed is to develop an effective global human resource management system with personnel capable of designing and implementing transnational business strategies. While it is possible to find managers who can develop global business strategies, global human resource strategists are scarcer. For example in the mid-1980s Eastman Kodak Company changed its structure from having an international division to having seventeen global lines of business. The executives leading each of the 17 global lines of business needed to integrate operations worldwide while remaining nationally responsive. Kodak created a global executive program stressing cross-cultural management to facilitate the change from a traditional international approach to a more global approach.


    In most cases firms have historically gone from domestic, to international, to multinational, and finally to global operations. At each phase, the approach to human resource management changes significantly along with the changes in competitive strategy, company structure, the product or service being marketed, profit margin, and expenditure required for research and development.

    Phase I: Domestic

    Company Profile: The company comes into the market with a product or service researched and developed at home, produced at home, and then marketed to people at home. The profit margin is high because the product or service is new and unique and therefore has no competitors. The organization structure is centralized. There are no exports because the competitive strategy is primarily domestic, the importance of international business is marginal. The dominant orientation is the product or service.

    Culture: In domestic firms, international cross-cultural differences are not important. Because domestic firms make and sell their products or services at home to local consumers, they assume that there is one way to operate, the company's home culture way.

    Human Resources: There are no expatriates, therefore cross- cultural training and development is not an issue.

    Phase II: International

    Company Profile: As a firm expands to international markets it changes orientation from emphasizing creating a new product or service to marketing. Technology is now shared among several firms, profit therefore decreases due to increased competition. A logical first place to expand is across the nearest border. For American and Canadian firms, the pattern of expanding across the U.S.-Canadian border is typical. Companies expand to similar countries before moving into unfamiliar parts of the world. Once the product is exported to a foreign country, that country often begins to demand local jobs. Low-level assembly jobs frequently are offered first. Later, as the foreign country demands higher level jobs, the parent company starts setting up multi-domestic production facilities, perhaps a plant in Canada for the Canadian market, a plant in France for the French market, etc. Each plant is operated with a great deal of autonomy.

    Culture: Cultural sensitivity becomes very important to market to clients in each foreign country. The expatriate manager sent to Brazil must know how to market to the Brazilians and once production starts, how to motivate and manage the Brazilian workers. However, the domestic core of the company does not need to understand how to manage cultural differences. Cross-cultural communication is very important but only for the few people assigned to the international division and/or working in foreign countries.

    Human Resources: The international firm now includes many expatriates. Good people but not great people (not future CEOs) are sent abroad. Re-entry for these managers is often difficult. Generally, people in marketing are sent abroad in this phase. Unfortunately, over 50 percent of expatriates sent by international firms find that their foreign experience hurts their career. This is primarily because international operations are neither highly valued nor well integrated into the core of the home company.

    Phase III: Multinational

    Company Profile: Unlike the prior multi-domestic international phase, firms in the multinational phase become more centralized, pulling decision making back to headquarters. As firms change from international to multinational strategies, they change their focus from marketing to price. In this phase, companies source factor inputs, produce, assemble, and market in multiple countries around the world. Labour and other resource inputs are selected on the basis of least cost for desired quality. Distribution is worldwide, and profits are made through large scale sales. For example, in the l980's multinational consumer electronics firms focused on price. Because each firm's FAX machines, VCRs, and microwaves had become almost identical, consumers did not care whether a particular item was made in Europe, North America, or Asia. The consumer strictly looked for quality equipment with the lowest price.

    Culture: In the multinational phase, cultural sensitivity becomes slightly less important outside the firm (with clients). While multiculturalism begins to become less important outside the firm, it becomes more important inside of the company. Staff from different parts of the world work together on a day-to-day basis. Unfortunately, assumptions are made, often mistakenly, that, ...

    Solution Summary

    This solution explains management changes in the last 20 years with respect to globalization. Specifically, the four stages of corporate evolution from domestic to global orientation are explained. It also provides two supplementary case examples, as well as one highly relevant article.