Managing Globally
Ernest Gundling
November 2, 2006
People  Culture  Performance
What is Your Company’s
Global Business Model?
Global: Fully integrated network that combines
global sourcing & scale, local product adaptation,
and rapid exchange of data and ideas
Multinational: Relatively
autonomous local
operations that leverage
corporate assets
Leveraging
Core
Competencies
Domestic Focus: Additional profit &
economies of scale through selling the
same products or services abroad
People  Culture  Performance
International: Domestic
model replicated abroad;
strong control from
headquarters
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Business Objectives/
Growth Markets
1. Where is the revenue coming from?
 Ratio of domestic vs. non-domestic revenue; there is a big
difference between 60/40 and 40/60
 What was the ratio 10 years ago? What will be the ratio 10 years
from now?
2. Where are we making money?
 Relative profitability of different regions
3. Where is the potential for future growth?
 Comparative growth rates in different markets
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People  Culture  Performance
The Manager’s Role:
Common Tasks
Plan &
Budget
Evaluate
Performance
Staff or
Recruit
Solve
Problems
Assign
Tasks
Provide Training
& Guidance
Allocate
Resources
Coordinate &
Track Progress
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People  Culture  Performance
Global Management:
What’s the Difference?
 Geography
 Time Zones
 Language
 Historical Context
 Institutions
– Educational, Legal, Political, Religious
 Cultural Values
 Common Business Practices
The issues are similar but the gaps are wider!
People  Culture  Performance
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Global Organizations:
Strategic Challenges
 Home market assumptions do not fit new
environments
–
Distinctive products or services have different levels of
appeal in global markets
–
Different institutional frameworks create unfamiliar political,
regulatory, and labor environments
–
People in some countries don’t like “us” very much
 Local capabilities and infrastructure are inadequate
to implement strategy
–
Organizational support systems cannot be duplicated in
every market
 Local agendas run counter to headquarters goals
and directives
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People  Culture  Performance
Example #1:
Transnational Account Teams
 Business Driver: Customers are increasingly
transnational, with headquarters and the core R&D in one
country, manufacturing in another, sources of supply in
several locations, and end users who need servicing
worldwide.
 Key Challenges: The traditional country-based
organizational structure impedes transnational teamwork
because Transnational Account Team members have a
matrix reporting structure, with strong local country
managers.
 OB Implications: Why is this an organizational behavior
issue and what would you do about it?
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People  Culture  Performance
Example #2:
Cross-Border M&A
 Business Driver: You belong to a successful Asian
company with very ambitious targets for growth in global
markets. These targets appear to require M&A in order
to accelerate growth. There are several Silicon Valleybased firms that have technologies and technical talent
you believe could be leveraged globally through your
established channels.
 Key Challenges: The last acquisition you made was a
disaster, ultimately resulting in the loss of every single
employee.
 OB Implications: Why is this an organizational behavior
issue and what would you do about it?
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People  Culture  Performance
Example #3:
Moving Manufacturing to China
 Business Drivers: You are a Midwest manufacturing firm that
now earns more than 60% of its revenues in overseas markets.
Although you still have a strong position in most of your key markets,
many of your best customers are moving their assembly operations
to China, and you are also under severe cost pressure from foreign
competitors.
 Key Challenges: You have decided to move a large segment of
your manufacturing base into China through a wholly owned foreign
subsidiary operation. Although the operations there are still only a
few years old, you have very ambitious growth plans in order to both
serve the Chinese domestic market and to source product for global
customers, both in China and elsewhere. You are bringing on and
training large numbers of Chinese employees to accomplish this
task, but find that your operations are also plagued by high turnover
rates.
 OB Implications: Why is this an organizational behavior issue and
what would you do about it?
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People  Culture  Performance
Example #4:
IT Globalization
 Business Drivers: Your company is now in a “growth market”;
there is increasing pressure to innovate in order to meet internal
customer needs; business units are asking for new products and
services
 Key Challenges: A headquarters-centric organization, with limited
pieces implemented abroad, cannot adequately meet these needs
from a cost or customer service standpoint; IT employees must now
collaborate more effectively across numerous global work sites
(Hyderabad, Hong Kong, Manila, Moscow); people who have been
“implementers” in the past will now have to contribute at a new level
in a global network. IT has strong pockets of global expertise, but
needs to be able to disseminate this expertise across the entire
organization in order to increase efficiency and effectiveness.
 OB Implications: Why is this an organizational behavior issue and
what would you do about it?
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People  Culture  Performance
Dimensions of
National Culture
Formal
Hierarchical
Task
Nonverbal
Future
Indirect
Universal
Group
Individual
Situational
Direct
Past
Verbal
Relationship
Informal
Egalitaria
n
People  Culture  Performance
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THE IMPACT OF CULTURE
IN THE WORKPLACE
Culture Influences:
– Customer/vendor
relations
– Work patterns and office
layout
– Ideal images of leader and
subordinate
– Spans of control
– After-work socialization
– Views of gender-
appropriate behaviors
– Standards of ethical
behavior
– Planning methods and time
horizons
– Concepts of career path
– Employee benefits
– Extent of specialization
– Responses to change
– Negotiation and meeting
– Ways of handling problems
styles
or disagreements
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People  Culture  Performance
GlobeSmart Country Profiles
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People  Culture  Performance
Global Mindset / Global Skills
LEADERSHIP
Managing Change
Organizational
Innovating
Transferring Knowledge
Strategic Planning
Negotiating
Group
Selling
Training & Development
Building Global Teamwork
Evaluating People
Obtaining Information
Interpersonal
Giving & Receiving Feedback
Establishing Credibility
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People  Culture  Performance
RELATIONSHIP BUILDING
Ernest. Gundling, Ph.D.
President, Aperian Global
Dr. Gundling is a co-founder of Aperian Global, a company with offices in North America, Europe, and
Asia that assists clients in achieving their globalization objectives. He currently acts as a senior Asia
specialist and President of the company's operations. Dr. Gundling is also a Lecturer at the Haas
School of Business at the University of California, Berkeley. His research and consulting work focus
on the areas of innovation, change management, and leadership development in global enterprises.
Dr. Gundling holds a Ph.D. from the University of Chicago. He wrote his dissertation on Japanese
management training programs; his field research was funded initially by a U.S. Department of
Education Fulbright Fellowship. He also received a Master's degree from the University of Chicago,
and a B.A. from Stanford University.
Dr. Gundling has been involved with Japanese language, culture, and business for over twenty years,
including more than five years' residence in Japan; he has also worked and traveled extensively
elsewhere in Asia, and lived for extended periods in Germany and Mexico. He formerly worked as the
Director of Consulting and Organization Development at Clarke Consulting Group, and is the author
of numerous publications, including The 3M Way to Innovation: Balancing People and Profit, and
Working GlobeSmart: 12 People Skills for Doing Business Across Borders. A partial list of clients that
Dr. Gundling has served includes AT&T, Canon Information Systems, Cisco, Ford, Fujitsu, HewlettPackard, Hitachi, Honda, Intuit, KLA-Tencor, Kodak, Levi Strauss, Lucent Technologies, Mazda,
Morgan Stanley, Motorola, Pitney Bowes, Rockwell Automation, and 3M.
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People  Culture  Performance