LEADERSHIP

Leadership is not about hierarchy or title or status; It is about having influence and mastering change Leadership is not about bragging rights or battles Or even the accumulation of wealth; its about connecting and engaging at multiple levels. Leaders can no longer view strategy and execution as abstract concepts, but must realize that both Elements are ultimately about people.

---Carly Fiorina, former CEO, HP

Beliefs Values Policies Intended geographical scope and activities

Companies are realizing that they have a portfolio of human resources worldwide, that their brightest technical person might come from Germany, or their best financial manager from England. They are starting to tap their worldwide human resources. And as they do, it will not be surprising to see nonAmericans rise to the top.

Christopher Bartlett, Harvard Business School

 Executives were judged on their ability to identify, nurture, and exploit the organizations core competencies in the 1990s as opposed to the focus on reorganization in the 1980s
Core competencies must; Provide potential access to a wide variety of markets Make a significant contribution to the perceived customer benefits Be difficult to imitate

The goal is to find a structure that Enables the company to respond to relevant market environment differences Ensures the diffusion of corporate knowledge and experience throughout the entire corporate system Organizations must balance The value of centralized knowledge and control The need for individualized response to local markets Key issue in Global Organization how to achieve the balance between autonomy and integration

In global marketing there is not a single correct structure that exist

Leading-edge global competitors share one key organizational design characteristic Structure is flat and simple --> increase the speed and clarity of communication and allow the concentration of organizational energy and valuable resources on learning rather than on controlling, monitoring and reporting.

You must create an organization whose people

are adept at exchanging ideas, processes, and systems across the boarders, people who are absolutely free of the not- invented-here syndrome, people who are constantly working together to identify the best global opportunities and the biggest global problems facing the organization

In the twenty-first century corporations will have to find new, more creative ways to organize Must be flexible, efficient, and responsive to meet the demands of globalizing markets

Successful companies must have both good strategies and good execution

Organizations vary in Size Potential of targeted global markets Local management competence Conflicting pressures may arise For product and technical knowledge Functional area expertise Area and country knowledge

Foreign sales offices or subsidiaries that report directly to the company president or other designated company officer. person carries out his or her responsibility without assistance from a headquarters or staff group

Four factors that lead to this structure 1. Top managements commitment to global operations has increased enough to justify the position 2. Complexity of international operations requires a single organizational unit 3.The firm has recognized the need for internal specialists to deal with the demands of global operations

4. Management recognizes the importance of proactively scanning the global horizon for opportunities and threats

Functions of Regional Centers: Coordinates decisions on pricing, sourcing, and other matters Executives at the regional centers also participate in the planning and controls of each countrys operations with an eye toward applying company knowledge on a regional basis optimizing the utilization corporate resources on a regional basis

 Advantages of Regional Management

Many regional managers agree that an on-the-scene regional management unit makes sense where there is a real need for coordinated, pan-regional decision making Coordinated regional planning and control are becoming necessary as the national subsidiary continues to lose its relevance as an independent operating unit Regional management can probably achieve the best balance of geographical, product, and functional considerations required to implement corporate objectives effectively

Disadvantages: COST

Involves the assignment of operational responsibility for geographic areas of the world to line managers. Most common in companies with closely related products lines that are sold in similar end-use markets around the world. Ex. Oil companies

Matrix Organization
type of total competence
Product or business, function, area, and customer know-how are simultaneously focused on the organizations worldwide marketing objectives Management must achieve organizational balance that brings together different perspectives and skills to accomplish organizational objectives well-suited for global companies because it can be used to established a multiple-command structure that gives equal emphasis to functional and geographical departments.

Four considerations regarding the Matrix Organizational Design

1. The matrix is appropriate when the market is
demanding and dynamic. 2. Employees must accept higher levels of ambiguity and understand that policy manuals cannot cover every individuality. 3. In country markets where the command-and-control model persists, it is best to overlay matrices on only small portions of the workforce. 4. Management must be able to clearly state what each axis of the matrix can and cannot do.

Four Basic Competencies of the Matrix Design on a worldwide basis

1. Geographic knowledgeunderstanding of economic,
social, political, and governmental market and competitive dimensions

2. Product knowledge and know-howproduct

managers that have a worldwide responsibility can achieve new levels of product competency

3. Functional competencecorporate staff with worldwide

responsibility contributes toward the development of functional competence on a global basis

4. Knowledge of customer or industry and its needsstaff

with responsibility for serving industries on a global basis assist organizations in their efforts to penetrate specific customer markets

KEY TO SUCCESS: Ensuring that managers are able to resolve conflicts and achieve integration of organization programs and plans. Matrix organization ---requires a fundamental change in management behavior, organizational culture, and technical system. In matrix, Influence is based on technical competence and interpersonal sensitivity not on formal authority. Matrix culture managers recognizes the absolute need to resolve issues and choices at the lowest possible level and do not rely on higher authority

Compares craft production, mass production, and lean production; Craft production meant one worker created one product Mass production gained advantages because one worker could do far more specialized work due to the moving assembly line

Lean production uses less factory space, smaller inventories, and quality control methods, which results in increased efficiency by 50% over typical mass production

TRADITIONAL ASSUMPTIONS 1. Maximize machine utilization 2. Fixed setup times 3. Build to inventory to reduce unit cost 4. Inspect at end of process 5. Maximize backwards integration

OHNO & SHINGOS INSIGHT 1. Labor is more costly than machines 2. Can reduce set up time 3. Minimize inventory to cut cost, waste 4. Inspect to prevent defective production 5. Outsource from supplier specialist

Mass Production versus Toyota Production System

Assembler Value Chains Many of the worlds automakers are studying lean production methods and introducing them in both existing and new plants throughout the world Downstream Value Chains The differences between U.S. mass producers and the Japanese lean producers reflect their fundamental differences in business objectives

Todays CEO must be a proactive steward of the firm He or she must respond to: Stakeholdersmanagers, employees, customers, stockholders, suppliers Secondary stakeholders general business community, local community groups, and nongovernmental organizations (NGOs)

An obligation to pursue goals and practices that are in the best interest of society

Many companies create a formal Code of Ethics that summarize core ideologies, corporate values, and expectations

Perhaps we have the opportunity to be a different type of global company, a global brand that can build a different model, a company that is a global business, that makes a profit, but at the same time demonstrates a social conscience and gives back to the local market. -Howard Schultz, CEO, Starbucks, responding to a
question about the likelihood of anti-globalization activists

How do CEOs decide what is in the best interest of society?

Bangladeshi children lost garment industry jobs after the U.S. threatened trade sanctions and the children were worse off

Nike has been criticized for alleged poor working conditions in its factories
Wal-Mart has been under fire for a number of reasons including labor practices, resulting in social repercussions in communities it serves