Ch-01 Notes – The Challenging Role of the Global Manager

More Complex and Dynamic Work Environment

• Downsizing, privatization, and team-based management are reshaping organizational stability.
• Globalization → layoffs can move from Milan/Seattle to Mexico/Malaysia due to cheaper labor.
• Mergers & acquisitions increase to stay competitive → workforce reductions; affect both leavers & stayers (Offerman & Gowing, 1990).

• International migration changes workforce composition.
• \text{Permanent migrants in 2015}\approx 244\text{ million} (GCIM, 2015) ≅ population of Brazil (world’s 5th largest country).
• Largest migrant-recipient countries (share of total population):
• Saudi Arabia 31\%; Australia 28\%; Canada 21\%; United States 14\%; Spain 14\%; UK 12\%; Germany 12\%; France 12\%; Ukraine 11\%.
• 2014–today: Surge of Syrian, Afghan, Somali war-refugees → Turkey, Pakistan, Lebanon, Iran → later into Europe.
• Gender shift: women migrants <15\% in 1976 → 70\% in 2005 → 48\% in 2015.
• Skill shift: Post-WWII migrants = low-skilled; contemporary migrants = highly skilled (Carr et al., 2005).

• Privatization trends.
• Governments (developed & developing) sell state firms → foreign purchase possible → blurs national boundaries.
• Post-Soviet states: 9 joined EU; Russia annexed Crimea, contentious with Ukraine, formed Eurasian Economic Union.
• China follows unique gradual privatization → rapid growth (slowed since 2014).

• Team-based management spreads globally (Hoerr, 1989).
• Demographic shifts already realized: more cultural diversity, higher average age, more women.
• Implementing teams in multicultural settings demands changes in work methods, compensation, employee involvement, and supervisor roles (Thomas et al., 2000).

Increased Use and Sophistication of Information Technology (IT)

• IT advances = “most significant force toward globalization” (Naisbitt, 1994).
• Instant global transmission of voice/data/text/graphics.
• IT reduces barriers of scale/scope, enabling “virtual firms” (Cairncross, 2001; Govindarajan & Gupta, 2001).
• Falling cost + rising power gives SMEs capabilities once reserved for large MNCs.

• Debates on IT’s impact.
• Some: place will become irrelevant → potential “undoing of the nation-state” (Knoke, 1996).
• Others: face-to-face presence still psychologically powerful (Leung & Peterson, 2011).

• Managerial implication: roles must adjust to info-driven environments.

More and Different Players on the Global Stage

• Argument: globalization isn’t new (trade % of gross world product only slightly above pre-1914 levels) → “business as usual” (Parker, 2005; Farnham, 1994).
• Yet: sheer number & diversity of players have exploded.

• Fortune Global 500 (2014–15):
• USA 134 companies; China 103; Japan 52; France 29; Germany 28; UK 25; South Korea 15; Switzerland 15; Canada 12; Netherlands 11.

• SMEs’ international role rises.
• Mid-1990s: 25\% of exporting firms <100 employees (Aharoni, 1994). • 1996: SMEs = 80\% of Swedish MNCs, 60\% Italy, >50\% of new Japanese foreign affiliates.
• 2014: >90\% of EU enterprises = SMEs (Eurostat, 2015).

• Service sector dominance.
• Accounts for 70\% of advanced economies (USA 80\%).
• Trade in services ≈ 20\% of world exports (Parker, 2005).

• Transnational crime & terrorism now key actors.
• Enabled by better transport, telecom, finance (Rollins & Wyler, 2013).
• Overlapping activities: kidnapping, human smuggling, illicit finance, narcotics, illegal tobacco.
• Post-1991: fall of Soviet funding → terrorists rely more on criminal groups.
• Events (9/11, Arab Spring violence, Madrid train bombings) show global repercussions.

• Result: managers face an environment that is “more complex, dynamic, uncertain, competitive”.

Environment of Global Management

• Four key external elements:
• Economic, Legal, Political, Cultural.

• Culture singled out for 3 reasons:

  1. Economic/legal/political systems are manifestations of culture.

  2. Culture is largely invisible → easily overlooked.

  3. Management is interpersonal → cross-cultural interactions central.

What Global Managers Do (Roles)

• Classical view (Fayol 1916): plan, organize, coordinate, command, control – hard to observe.
• Mintzberg (1973): managerial work = interpersonal, informational, decisional roles; characterized by brevity, variety, fragmentation.

• Interpersonal interaction is core; later chapters focus on leadership, decision-making, communication, negotiation.

Sources of Guidance for Managers

• Managers rely on:
• Personal judgment (experience, training).
• Role-set members (colleagues, superiors, subordinates, consultants, even family).
• Norms (explicit rules, laws; implicit “how we do things here”).

• Usage of sources varies by culture (see Chapter 3) → knowing local preferences helps influence effectively.

Organizational Context, Culture & Managerial Roles

• Environmental/technological complexity, firm size, uncertainty, and structure affect role emphasis (Gibbs 1994; Choran 1969; Leifer & Huber 1977; Hales & Tamangani 1996).
• E.g., more centralized orgs → more downward communication; decentralized → more upward.

• Managers with similar constraints still choose different emphases (Graen 1976; Stewart 1982).
• Cultural comparisons: German vs British (Stewart et al., 1994); Chinese, Japanese, Korean vs U.S. (Doktor 1990).

• Indirect cultural influence: culture shapes context, which shapes roles.
• Chinese managers: heavy communication with superiors; limited with peers/outsiders (Boisot & Xing 1992).
• German firms: flatter, more technical control → managers do more technical work, less supervision than British.

Evaluating Cross-Cultural Management Studies

• Need for improved cross-cultural research to guide practice.
• Current theory heavily US-centric — product of post-WWII dominance.
• Parochialism: extreme individualism, belief in personal control (free will), low-context communication bias.
• Indigenous theories rare; testing across cultures uncommon.

Six Types of International Management Research (Table 1.3)

• Domestic
• Single-country; assumes universality; ignores culture.

• Replication
• Repeats study in another country; tests universality; faces translation/equivalence issues.

• Indigenous
• Developed within one culture; assumes uniqueness (e.g., \textit{simpatía}, \textit{amae}, \textit{guanxi}).

• Comparative
• Two or more countries; seeks similarities & differences; may test universal vs culture-specific hypotheses.

• International
• Focus on MNEs; culture present but not central (e.g., expatriate HR policies).

• Intercultural
• Examines interaction between culturally different individuals/groups; mechanisms of cultural influence explicit (e.g., cross-cultural negotiation, multicultural teams).

Methodological Issues in Cross-Cultural Research

• Equivalence (Leung 2008; van de Vijver & Leung 1997):
• Conceptual – Do constructs mean the same?
• Method – Response styles (acquiescence, extremity bias), familiarity, setting.
• Metric – Do items have same psychometric properties?
• Statistical adjustments & careful instrument development essential.

• Sampling:
• Representativeness is hard; matching across nations tricky (occupations, gender, status differences).
• Random country sampling nearly impossible – \approx 200 countries.
• Strategies: use multiple independent datasets; document within-country subculture variation.

• Data Collection:
• Questionnaires = most common quantitative; issues: literacy, suspicion of motives, hypothetical reasoning.
• Interviews = most common qualitative; interviewer-respondent cultural mismatch risk.
• Ethnography offers depth but limited breadth.

Critiques of Current Research

• Questionable theoretical base – over-reliance on few culture-value dimensions.
• Parochialism – Western industrial model as implicit benchmark.
• Country homogeneity assumption – ignores subculture variation.
• Relevance – foreign managers may find U.S. research questions irrelevant.
• Single-method bias – heavy questionnaire dependence.
• Large-company bias – SMEs under-studied.
• Single organizational level – rarely samples multiple hierarchy levels.
• Limited geographic spread – over-focus on W. Europe, Japan, China; neglect Eastern Europe, Middle East, Africa, Latin America.

Overall Summary / Key Takeaways

• Global managers confront a rapidly evolving environment – tech advances, demographic shifts, privatization, crime/terror, new competitive players.
• Culture permeates economic, legal, political dimensions and shapes both direct managerial behavior and the organizational context.
• Managerial work = highly interpersonal; understanding cultural variance in roles and guidance sources is crucial.
• Six distinct research types illuminate different cultural questions; each entails unique methodological challenges.
• Rigorous cross-cultural research requires attention to equivalence, sampling, and data-collection validity; current literature shows biases but is improving.