Academic journal article Human Resource Planning

Management Development as Glue Technology

Academic journal article Human Resource Planning

Management Development as Glue Technology

Article excerpt

Executive Summary

In the global enterprise, one of the major tasks of management development is providing organization "glue" - gluing or integrating subsidiaries and other units that need their own autonomy. In this way the firm is able to escape the traditional centralization-decentralization dilemma. This article outlines a hierarchy of tools of glue technology and the pitfalls in their use. It emphasizes the importance of "dosing the glue" so as to focus on building strategic and operational linkages and avoiding the traps of "strong culture" firms. Finally, a paradox is discussed: while the human resource function has an important role to play in managing management development, that function is itself often a prisoner of the centralization-decentralization dilemma.

The role of management development is changing. its focus has long been on "getting the right people into the right places at the right times" through recruitment, succession management, training, and other forms of development. And as the "places" have changed from static boxes on an organizational chart to strategic and business goals, so the role has come to encompass the implementation of these new strategies and plans.

In today's multinational firm, the management development role is broadening further. Management development has become a tool for organization development - for managing the informal organization that is often known as "the network" (Evans, 1989a). In multinational enterprises, the formal tools of organization (structure and systems) cannot cope alone with dilemmas such as the opposing pulls of centralization and decentralization. Many firms have tried, for example, devising matrix structures. As Davis and Lawrence (1977) saw it, matrix offers the promise of a release from the dilemma, of the flexibility of both centralization and decentralization, specialization and integration (p.xi). Yet when the two-dimensional matrix of product by geography becomes a four- to six-dimensional matrix (product, geography, customer/industry segment, supplier segment, core competence, and functional competence), even the most stalwart advocate of matrix structure is forced to acknowledge its limits. And when speed in implementation becomes a competitive success factor in the shape of "time to market" and transfer of know-how, we find that the formal organization always lags behind. Matrix becomes not so much a question of structure but more one of management development. How can one create a matrix in the mind of managers, and build a matrix of needed relationships (Bartlett and Ghoshal, 1990)?

The objective of this, article is to answer the above question, based on a study of more than 40 firms that have been struggling with these dilemmas (see Evans, Doz, and Laurent, 1989 for an earlier report). The implications for the human resource (HR) function are examined, also. The starting point is the discussion of the centralization-decentralization dilemma that confronts every major international organization.

The Background:

The Centralization-Decentralization Dilemma

I begin by outlining the history of this dilemma in simplified form. In the, early stages of internationalization, until the late 1960s, most firms were comparatively centralized. This was logical in that the center had the skilled technical and managerial resources, the manufacturing know-how, and the access to capital (Doz and Prahalad, 1981). Export departments became international divisions, companies invested in sales subsidiaries abroad, and exported skilled personnel to command operations or to establish local plants.

As internationalization accelerated in the late 1960s, the pendulum began to swing toward decentralization. Foreign affiliates and labor markets had developed their own technical and managerial resources. With the internationalization of capital markets, they could often secure their own financing. …

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