Ashridge

Virtual Learning Resource Centre

A managers guide to globalization

Bookcover

by Stephen H. Rhinesmith, Irwin Professional Publishing, 1993, 2nd edition: 1996.

Abstract

The key to success is to develop a global mindset and to filter the view of the world through it, balancing contradictory forces and working for the total organisation, not just a function. The book devotes attention to Human Resource Development as crucial to global business success.

(Reviewed by Kevin Barham in July 2001)

(These book reviews offer a commentary on some aspects of the contribution the authors are making to management thinking. Neither Ashridge nor the reviewers necessarily agree with the authors’ views and the authors of the books are not responsible for any errors that may have crept in.

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Globalisation was the management buzzword of the 1990s until e-commerce started to overshadow it recently. Although books on internet business now outnumber those on globalisation, going global is still a central challenge for organisations. In practice, the two forces go hand in hand, each facilitating and reinforcing the other. Technology has fuelled globalisation and globalisation has stimulated new, better, faster technologies. As a recent study shows, however, while some sectors such as pharmaceuticals, computers and petrochemicals have all recognized the inevitability of early globalisation, the pattern of globalisation is far from consistent in other industries (1). Some sectors are still 'dipping a toe in the water' while others are 'yet to summon up sufficient courage to meet the worldwide challenges'.

One of the biggest challenges for globalising firms has been to decide what global strategy to pursue (for example, which parts of the business to globalise and which to localise) and how to structure themselves for global business. E-commerce has certainly complicated that debate. As the above study notes, few business managers have any clear appreciation of the likely long-term impact of new communications systems. The sheer novelty, the numerous definitions and the large scale of some forms of e-commerce mean that operators and observers are unclear exactly how it will develop. However, globalisation is not just a matter of strategy and structure. Whatever global strategy and structure a firm adopts and regardless of whether e-commerce is central or peripheral to its business approach, it is vital that its global activities, including its e-commerce operations, are underpinned by a global mindset among its key people worldwide.

So what is a global mindset and how can we develop and foster it? One of the best books of recent years that provides some answers to these questions is that by Stephen Rhinesmith, now in its second edition. Rhinesmith is an expert on corporate globalisation and global human resource development. He is better known in the US perhaps than Europe but his work has wide applicability as it offers important insights into understanding and developing the new mindsets and skills needed for management success in an increasingly challenging global market.

One of Rhinesmith's strengths is that he empathises with the real problems of global managers. Global managers are supposed to have new ideas and new methods for helping others cope with massive change but it seems that they are struggling to understand the changes occurring, let alone create new strategies that can help others adjust. They are asking questions about a range of important issues such as authority and decision-making within matrix organisations (and, we might add, within virtual organisations), how to communicate in a cross-cultural environment, how to supervise and coordinate people from different locations and cultures, how to develop new suppliers from anywhere in the world, and how to respond to global rather than local customers.

One major challenge is that managers in a globalising organisation are responsible for more than just their own job and function. More than ever, they are being asked to think about the total organisation, and increasingly this means an organisation that stretches around the world. While they do not have to become a systems theorist, they do have to think about their organisation as a total business, to understand how it achieves its objectives and how they contribute to its success. Functional managers are increasingly being asked to take the perspective of general managers in dealing with global customers and workforces. And this means thinking much more broadly than ever before and moving into areas where they may not have had much experience, such as finance, manufacturing, marketing, sales, human resources and engineering.

As a global manager, says Rhinesmith, you are ultimately the facilitator of personal and organisational development on a global scale. You must be attentive to and a developer of organisational culture, values, and beliefs that reach well beyond your own cultural, technical, and managerial background. You also need to be a consummate 'reframer' of the boundaries of your world view, to find ways to develop a flexible mindset, work with few fixed rules, and become comfortable with the constant readjustment of goals, objectives, and strategies.

Globalisation is therefore largely the business of mindset and behaviour change. According to Rhinesmith, a mindset is a predisposition to see the world in a particular way, a filter through which you look at the world. In order to become an effective global manager, you must examine and modify your existing mindset, essentially to broaden your perspective. Mindset is more than a set of skills, it is an orientation to the world that allows you to see certain things that others do not see. People with a global mindset look at the world as an arena in which to express their talents, maximise their success, and influence others. Most importantly, a global mindset is something you can develop. It helps you scan the world from a broad perspective, always looking for unexpected trends and opportunities that may constitute a threat or an opportunity to achieve your personal, professional, and organisational objectives.

According to Rhinesmith, people with a global mindset tend to approach the world in specific ways. By understanding and cultivating these attitudes you can develop the global perspective that underlies the skills needed for success as a global manager. These mindset attributes are aligned with the three levels of globalisation: strategy/structure (managing competition and complexity), corporate culture (managing alignment and change), and people (managing teams and learning). To manage strategy and structure, you must be concerned about how your function and organisation fit into your industry, how to create competitive advantage, and how to prepare yourself to meet the increasing demands of a complex world. Two mindset attributes are required here. People with a global mindset drive for the broader picture; they are constantly looking for context and are concerned about the backdrop against which current events are happening. They are constantly scanning the horizon of their profession, business, and industry to learn more about potential markets and competitors, new technology, and new suppliers.

People with a global mindset also balance the contradictions inherent in the many demands placed on them by the competition, the marketplace, stakeholders, and the environment. This entails the simultaneous appreciation of contradictory ideas. A classic example of this occurs when your country manager asks you to be responsive to a local customer but this may undercut your ability to be responsive to a global customer or to reduce costs on a regional level to fend off a global competitor. A global manager must learn to manage the tradeoffs among many competing interests, as well as deal with the inherent contradiction and conflict that exist in all global organisations. You need to understand what should be centralised and what should be decentralised, where country managers should have power and authority, and in what areas global product managers must have the final authority. This means that you need to hone your analytical, negotiating, and influencing skills if you are to survive in the constant push and pull of global management.

The successful global manager must align corporate culture and have a mindset that balances the contradictory forces of control and flexibility. People with a global mindset trust process over structure, says Rhinesmith, and align it to ensure consistency of execution of global strategies and the effective deployment of global policies. They recognise and acknowledge that process is more powerful than structure and that process is the key to organisational adaptability, resilience, and survival. They also flow with change and manage their organisation's ability to respond to surprise and ambiguity as opportunities for new initiatives. They are comfortable with surprise, ambiguity and change because they have experienced enough of the world to know that events are unpredictable for many reasons.

The ability to develop an effective global strategy and structure, then align and execute it through an appropriate corporate culture, ultimately depends on the global manager's people skills. People with a global mindset value diversity and work well with multicultural teams as a basic way to accomplish their professional and organisational objectives. Global organisations cannot be successful without teamwork among many different regions, product lines, and functions. Managers with a global mindset cannot conceive of operating successfully by themselves because the challenges are too great, too diverse, and too geographically spread out to be dealt with by any one person. Teamwork and interdependence must therefore replace the 'superman' management style. At the same time, you must acquire sensitivity and flexibility to meet the needs of diverse people while still attaining project and organisational objectives.

People with a global mindset continuously seek to learn globally by rethinking boundaries and trying to be the best in the world at what they do. They constantly search for improvement in their professional and private lives by opening themselves to surprise, not insulating themselves from the unexpected. In other words, they actively pursue lifelong learning. The global mindset is closely linked to certain personal characteristics. These include openness, a capacity for reflexion and a willingness to constantly re-examine both your own and your organisation's performance. While sensitivity to others is important in a cross-cultural setting, Rhinesmith also points that a fairly well-developed ego and self-concept are important too.

The challenge of developing the global mindset lifts the human resource function of global organisations into a higher orbit. HRD no longer focuses only on compliance (compensation, benefits, and labour relations) but must now include facilitation (of global attitudes, knowledge, skills, and corporate culture). This demands a strategically linked and integrated approach to human resource development, one that is integral to the corporate culture glue that holds a global organisation together.

In a section that HR practitioners and other managers interested in global organisation and management development will find particularly valuable, Rhinesmith describes what he sees as the necessary components of an effective, multi-pronged global HRD strategy. These include:

  1. global sourcing.
  2. assessment and selection.
  3. global orientation centres.
  4. global mindset education.
  5. global business training.
  6. cross-cultural management training.
  7. culture and language training.
  8. multicultural team building.
  9. staff exchanges and network development.
  10. relocation transfer, mentoring and re-entry.
  11. career pathing.
  12. performance management.

The benefits of global orientation or education centres in fostering networks and a cross-border culture are already well recognised by some global firms. Interestingly, Rhinesmith suggests they can also be excellent places for corporations to conduct research about their global markets and operations, as the managers who come through these centres can be polled on any number of current or future issues. Too few corporations, he says, use these centres for research as well as education and are missing a valuable input into the global planning process.

Rhinesmith only briefly mentions mentoring as a way to support individual managers on international assignments. Mentors do indeed have a valuable role to play here. Mentoring may, however, have a wider application in the global corporation. Some firms have become increasingly interested in the way that global mentoring schemes can also play a strategic - and cost-effective - role in creating a global mindset among key groups of people such as high-potential managers, for example, and in thereby nurturing global learning networks and a a global corporate culture. For those who are interested in looking in more depth at the role of mentoring in developing both global managers and global organisations, a useful supplement to Rhinesmith's book is Strategies for Mentoring by Christopher Conway (Wiley, 1998) which includes chapters that explore these topics.

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(1) E-commerce and globalisation, Kay Reynolds, published by The Certified Accountants Educational Trust on behalf of the Association of Chartered Certified Accountants