Managing Globalization

Managing globalization is a difficult task as it involves coordinating the efforts of managers of various international subsidiaries of a multinational organization to achieve global benefits. The following section discusses some of the approaches that many organizations use to manage globalization.

Changing the Organization's Structure

Organizations need to redefine their organizational structures to effectively handle the requirements of globalization. Designing an organizational structure is a difficult task; but designing an organizational structure for a global organization is even more difficult because it has to take into consideration the different objectives of individuals (sales personnel, engineers purchase agents, and so on) working in different business environments. It is difficult for a single manager to effectively handle all such requirements effectively. Thus, the organizational structure adopted by most global organizations is characterized by the presence of authority in the lower levels of the hierarchy.

Developing Core Competencies for Global Learning

Kevin P Coyne, Stephen J D Hall and Patricia Gorman Clifford defined core competence in The McKinsey Quarterly (1997), as a combination of complementary skills and knowledge bases embedded in a group or team that result in the ability to execute one or more critical processes to a world-class standard. Canon's knowledge of optics and its ability to miniaturize electronic goods and Walt Disney's ability to create innovative products in the animated film business are examples of the core competencies of these companies. Managing core competencies is not an easy task for an organization. The approaches for managing core competencies differ widely from the approaches that are used for managing capital base or strategic business units. Organizations need to focus on their abilities to implement information technology for coordinating global businesses and to make tradeoffs between corporate interests and the interests of local subsidiaries to successfully implement global operations strategies.

Changing Managers' Attitude

Some organizations believe that the process of globalization can be made more effective by changing the mindsets of their managers. To change the attitude of their managers, senior managers are educated about the importance and benefits of globalization. These trained senior executives then conduct sessions for middle and lower level executives to convince them of the importance and benefits of globalization, thus spreading knowledge and information throughout the organization. This approach involves conducting many such sessions at many levels, and requires huge investments. Still, many organizations like Phillips and Whirlpool use this approach because of its effectiveness. This approach slows down the pace of globalization but organizations prefer this approach because they feel that any sudden change in an organization may lead to a situation where managers are not able to perform their tasks effectively. A trained manager can understand and appreciate the global policies of the organization and participate effectively in achieving global benefits.

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