The Key to Global Business Victory? 'More and Better Troops.' (1991 Global Conference in Management Innovation; Includes Related Articles on Corporate Culture, Japanese Firms, Mergers and Speaker George Bain) (Global '91: Report from the Second International Global Conference)(special Supplement)
Johnson, Mike, Management Review
"Companies who get more and better troops into the field will be the companies who win the day in tomorrow's global markets. In a world where anyone can buy machines, software, ingredients, components, courses and consultants, profit will migrate swiftly and surely to the factor still in short supply - experienced management that can be poached but not manufactured." With that statement, Michael Heron, Uni-lever's Personnel Director, underpinned the key issue at Global 91, 'What does going global mean to a company's future strategy and culture?'
Perhaps more important: what are the differences between the Eastern and Western views of globalization?
According to Heron the thrust towards globalization is making top management talent "more and more scarce. Ultimately, it derives from the increasing complexity of the management task as markets become global," he says. "Some theorists would have us see global executives as a sort of business marine corps. In the real world, existing senior managers in operating companies are having their lives enriched, but complicated by global trends."
Unilever's actions (and those of many other companies in the West) are in marked contrast to the activity in Japanese corporations.
For the vast majority, global strategy is still getting products to an export market and governed by strong management from home base - even in the case of manufacturing start-ups in other countries.
This was verified by Noritake Kobayashi, Dean of the School of Business at Keio University, who has followed the attempts of Japanese companies to globalize since 1978.
"Few Japanese corporations have any real autonomous operations, although they seem to want this to change," he says, "and very few have foreign managers in senior positions. But in Western companies there is a long history of developing and promoting capable foreign managers to all levels in the already existing global structure. "In his research, Kobayashi has identified five stages on the road to globalization. He says that the best Japanese companies are just getting to stage three; in the West, truly global corporations - at stage five - already exist.
Kobayashi's stages are: Stage one: Export from home office Stage two: Produce in host country Stage three: Integration into activities of host country/region Stage four: Coordination between regional activities Stage five: Develop logistics to realize global business activities.
As Texaco Europe's President, Peter Bijur, illustrated, "this is the world of global localization. Hewlett Packard has centered its computer business in France (only nano seconds, electronically, from its other home base in Palo Alto). Dupont has based its agricultural division in Switzerland - a half-way point between the US breadbasket and the regions of the developing world." Bijur did bestow one global accolade on the Japanese. The highly successful Mazda Miata sports car was "designed in California, engineered in Japan and the prototype built in England."
But, that example apart, it appears that many Japanese are happier to talk about globalization - and measure their lack of involvement - than participate directly.
Even the Chairman of Canon, Ryuzaburo Kaku, was only able to offer hopes for a better future and call for corporations to assume better social responsibility to the communities they operate in.
He, too, had been measuring what globalization really meant and had developed a four point scale that ended - at stage four - with the truly global company assuming what he termed, "genuine social responsibilities that focus on the needs of shareholders, employees and customers."
However, he went on to say that to be a stage four survivor (on his scale at least) the strategy had to be: superior R&D, product diversification and a world-wide network. …