Globalization: Learning To Close The Continental Divide

The Investor’s Business Daily reported that the fast-spinning ball of globalization poses both a blessing and a curse for business leaders. Here is an extract from their illuminating analysis on globalization.

“The upside is that companies can sell far more goods and services in far-flung markets. The downside is they must align workers who embody different languages and cultures with business aims. It’s a complex balancing act.

Most firms are still grappling with how to manage global work forces, says Chris Newell, a senior research fellow at the Boston University School of Management. To make things easier, Newell has just co-founded the Institute for Global Work at the university. The other co-founder is N. “Venkat” Venkatraman, a professor at the graduate school.”We want to crack the code on how to manage global work,” Newell said.

The group is developing guidelines that will highlight the most efficient ways to organize complex global teams. They also intend to create certification programs for global project managers.

The shift for management today goes beyond just moving jobs to low-cost nations, Venkatraman says. Rather, he says it involves an emerging notion of the proper ways to “architect” global work.

“We’re looking at how to change organizational structures, strategies and processes,” he said. “The next phase involves global process management.”

Managing shared business processes in a global work force is a kind of puzzle with multiple dimensions. Leaders like Intel (NASDAQ:INTC) INTC or General Motors (NYSE:GM) GM must synchronize their intellectual capital with financial capital across whole continents.

Digital Tech Helps

They also need to adopt technologies that allow dispersed teams to collaborate. Such technologies include collaborative work spaces, shared Blogs, automated language translations, online training and technical support.

Perhaps most important, companies need to earn the trust and respect of workers and citizens in foreign locales where they operate, says Stanley Litow, IBM (NYSE:IBM) IBM vice president of corporate affairs and citizenship.

“We’ve seen wide acceptance and discussion of the concept of a globally integrated enterprise,” Litow said. “Obviously, this is very easy to say but very hard to do.”Over the past year, IBM Chief Executive Sam Palmisano has put a laser focus on his company’s worldwide vision and strategy. At a global leadership forum in July, he called global integration “the seminal economic and societal development” of this age.For the first time in history, businesses, transactions and billions of individuals are connected, Palmisano told the group of business leaders gathered in Washington, D.C.”And when everything and everyone is connected, we know what happens — work moves. It flows to the places where it will be done best — that is, most efficiently and with the highest quality,” he said. “It’s like water finding its own level.” In general, experts agree that modern business has reached its third phase of global evolution. The first phase involved companies that simply traded across national borders.The second “multinational” wave entailed setting up full operations in each country. That meant separate groups for sales, marketing, finances, human resources and procurement in every nation where business was done. Now comes the era of the globally integrated enterprise. In this phase, firms are breaking down geographic barriers to perform work wherever they can find the best skills and resources, says Venkatraman. IBM As Model ”The third wave is tapping into knowledge and talent on a global scale,” Venkatraman said. For instance, IBM makes computer chips in New York and Vermont. Its data centres are located in Colorado. Global procurement is done from China. Software shops in India deliver global services. Workers in Brazil and Ireland support Web sites around the world. IBM’s back office for financing is based in Rio de Janeiro. ”These people are not leading teams focused on China or India or Brazil or Ireland — or Colorado or Vermont,” Palmisano explained. “They are leading integrated global operations.” The Institute for Global Work is working to help companies develop management systems that emulate IBM’s sophisticated approach. A key part of the equation involves nurturing relations among widely scattered colleagues, Newell says. For instance, co-workers can connect through online forums where they share personal data about their backgrounds, families and interests. In this way, global teams have a chance to gel even before their work gets underway. ”A lot of this involves people who haven’t formed relations,” Newell said. “We’re looking at how to manage a virtual team to build social capability before you ever get into a project.”In large part, building teamwork depends upon a clearly defined division of labour, according to Manfred Davidmann, a corporate management consultant. He also favours more “participative” management styles over authoritarian ones.”To ensure effective teamwork between work units, the division of work between them has to be clearly stated and functional relationships have to be defined,” Davidmann wrote in a management study. The fast pace of business change also dictates that workers get ongoing training that remains relevant to their jobs. In order to cultivate loyal bonds, corporate leaders also should pay attention to how their employees and partners are treated.

For this reason, IBM requires all its suppliers to sign a code of conduct. The policy ensures that IBM only does business with firms that adhere to fair labour and environmental practices, Litow says.

 ”It makes sense to pay attention to local cultures, but it’s also important to uphold a basic level of trust between a company and its employees and their communities,” he said.All of which leads back to the notion of building or “architecting” a global work force in the same way that you would assemble a structure or machine. After all, corporations are made up of people who work together like parts. To get there, savvy managers are adopting new software programs that map out and analyze their organizational networks. In this way, they can identify and collect key knowledge that is stored in the minds of seasoned staff members. Such fine-toothed analysis also uncovers which people are “brokers,” or those who freely make connections with others. They differ from the “blockers” who resist sharing knowledge, contacts and resources, says Venkatraman. ”In general, we still know very little about how to manage unstructured knowledge work,” he said. “We hope to create new diagnostic tools and methods to get a clearer view.”

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