Going Global

Practical Applications and Recommendations for HR and OD Professionals in the Global Workplace

Kyle Lundby, Jeffrey Jolton, Kyle Lundby, Jeffrey Jolton

• Publisher: Pfeiffer
• Year: 2010
• Print ISBN: 9780470525333
• eBook ISBN: 9780470626504
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Today's global organizations operate at an extraordinary level of complexity. They not only contend with diverse languages, cultures, and political/legal situations, they must also deal with differences based on national boundaries, organizational size, product and services mix, functional specialization, and customer sets.

Going Global offers human resource professionals and I/O psychologists a comprehensive resource for meeting the challenges of the global work environment. Edited by Kyle Lundby, along with Jeff Jolton and a team of leading-edge practitioners, this comprehensive volume uses the employee lifecycle as an underlying framework and is organized into three sections:

• Practical considerations for HR and OD practitioners in a global environment;
• Attracting and selecting global talent; and
• Maximizing performance in the global workplace.

Within each section, authors explore key cornerstones of I/O practice (e.g., selection, leadership development) applied to the global workplace.

Going Global outlines the best practices in the field and is filled with down-to-earth advice from those who have worked in the field. The book not only provides insightful analysis of such broad topics as what it means to be global and HR's strategic role in global organizations, it examines the undercurrent of culture and its pervasive influence on organizations and the people that comprise them. Going Global also contains valuable information on global employee attraction, selection, and retention strategies, as well as current thinking about intercultural competence training, work-family balance, and the expatriate experience.

Going Global doesn't offer a one-size-fits-all approach but rather includes many strategies and solutions that can apply to a wide variety of situations and organizations. Going Global offers firms a roadmap for creating a winning program for international success.

PART 1
Practical Considerations for HR and OD Practitioners Working Across Geographic-Cultural Boundaries: The Changing Workplace

CHAPTER 1
Navigating the Complexities of a Global Organization

Mariangela Battista, Patricia Pedigo, and Erica Desrosiers

We live and operate in a global world. A flu outbreak in Mexico has an impact on fruit pricing in Asia. A mortgage meltdown in the United States has an impact on world financial markets. Globalization brings with it a web of interconnectedness that did not exist previously, or at least not to the extent that it does now. Organizations today are affected by nearly everything that transpires around the world, not just the local markets or communities in which they operate. Although global supply chains have created huge market efficiencies, they have also brought vulnerabilities. Disruption to a key node in the supply chain can cause dramatic and unpredictable turbulence in the whole system. The financial and economic events of 2008 have demonstrated how tightly intertwined globalization has made the world and its systems.

Globalization has also had significant implications for organizational processes, systems, and operations. Years ago, when most of an organization’s employees were generally in the same country and most of their business was conducted in their home country, life was simple. There was no need to worry about cultural differences, language differences, time zones, or local relevance. That luxury has long since disappeared and the reality of organizations today is that operating globally is a more complex undertaking than one might have expected. Becoming a truly global operator entails far more than simply selling the same thing in more places, hiring the same people in more locations, or just pushing out the same processes and procedures around the world. Operating in this mind-set is likely a recipe for failure. Globalization requires a business model that is adaptable and employees who openly welcome new ways of thinking.

Human Resources professionals provide value to their organization by successfully navigating the complexities of a global organization, and in doing so they bring the business strategy to life for their employees. They understand the human dynamics of operating in different cultures and how to facilitate the organization’s success. HR professionals are tasked with the strategy and execution of all people-related processes and initiatives in the organization. In global organizations, that role takes on the additional complexity of operating across cultural and language barriers, operational differences, local relevance and appropriateness, time zones, and peak business and holiday schedules, just to name a few. This chapter will highlight examples of situations and contexts often encountered by HR practitioners operating within global organizations that may present challenges and offers specific suggestions for how to navigate in these global waters.

What Does It Mean to Be Global?

Although we live in a globalized world, there are still challenges in defining a global organization. Think of global organizations as snowflakes—no two look exactly alike. Organizations can operate under four distinct stages of globalization (Hewitt, 2009)—multinational, international, transitioning to global, and global. Multinational organizations have cross-border operations that are primarily decentralized and autonomous. International organizations have a headquarters that retains some decisionmaking control but the organization is still largely decentralized. Organizations transitioning to global are taking concrete steps to develop worldwide business strategies and policies (note that most organizations identify themselves as transitioning). Some organizations are truly global in that they develop strategies and policies on a worldwide basis and share resources across borders. Even for domestically focused organizations, globalization is just as salient, given relationships with suppliers, investors, and even nonnative employees.

What are the implications of those differences in globalization? In more decentralized organizations operating in the earlier stages of globalization, systems and processes are largely independent and disconnected. There are certainly advantages of this, in that these systems and processes can be tailored to the unique needs of the local operation and are often easier to create, execute, and adapt when local conditions warrant. A local operation can often be more nimble when not restricted to the longer and more effortful design and implementation of a global process (Sirkin, Hemerling, & Bhattacharya, 2008). If everyone is working independently and autonomously, however, the organization is not poised to leverage the best practices created and implemented within their very own organization. In addition, there is a significant amount of duplicated and wasted effort, as everyone works to re-create the wheel over and over again.

Understanding and leveraging organizational-level insights is also difficult. For example, assessing and securing enterprise-wide talent pools becomes much more of a challenge when there is little consistency in how things are measured and what information is tracked or shared. In organizations that are further along on the “global” continuum, everything often takes longer because of the required alignment and integration needed to be successful, but the synergies that are created are quite beneficial to the organization in the longer term. Getting to that point, however, requires a significant amount of work.

The Inherent Complexity of Globalization

The people in and related to organizations—whether employees, shareholders, or customers—bring with them cultural, geographical, geopolitical, and language attributes. How these different and varying attributes are managed and leveraged across constituent groups within the organization has an impact on how well organizations are run and ultimately on the organization’s success. Cultures vary, even within countries, and certainly within and across continents. Understanding the complexity both within regions and on a global scale is especially important based on the significant increase in regional and global trade since 1959 (Kim & Shin, 2002). In the geographically structured organization, where divisions are represented by geography or country, as opposed to product or brand, understanding cultural complexities is critical to business success. For example, leaders responsible for an Asia Pacific division must understand the cultural differences that exist between Taiwan and New Zealand, or Japan and China, and modify their products and marketing appropriately. This is similar for a North American division—one cannot assume that what works in the United States will work also in Canada.

Cultures

These cultural implications apply to customers as well as to employees. In the late 1990s Walmart decided to open stores in Germany as part of their strategic growth initiative. Walmart purchased some small German retail chains and had a successful Walmart executive from Bentonville, Arkansas, run the operations. Nine years and one billion dollars later, Walmart pulled out of Germany. Their planned expansion was a total failure (Solomon & Schell, 2009). Walmart made a then common mistake by assuming that what worked in the United States would work everywhere. They expected that German shoppers would react the same way that American shoppers do to the greeters at the door and the clerks bagging their purchases at checkout. However, the German culture is more hierarchical. Shoppers were not as comfortable receiving the “How are you?” greeting at the door, nor were the German Walmart employees comfortable giving the greeting. German employees also participated in daily morning cheering sessions led by store managers, a practice in all U.S. stores. Corporate culture and national culture clashed. The successful Bentonville executive did not even speak German and required his management team to speak English. Walmart exported its entire U.S. corporate culture without appreciating the differences—and suffered significant consequences.

Governments and Regulations

Cultures are shaped by geography, language, politics, and leadership. Italy has seen over 60 governments in power since World War II. Changing governments and administrations imply changing laws and regulations. For example, if you are a global organization with operations in Italy, the changing government may affect how your business operates and ultimately your very success. Western organizations did very little business in Asian markets a generation ago. As governments lifted trade barriers, organizations recognized opportunities for new markets. For example, Pepsi was one of the first brands in Vietnam as soon as the trade barrier was lifted. Navigating geopolitical relationships can also be a challenge and can often influence how geographic organization structures are established. Do you put China and Taiwan in the same geography? How do you manage the Middle East? These political relationships spill over into how the organization is structured and even how products are transported and services provided.

In order to conduct business in a particular market, more and more global companies are relocating key operations and production facilities to high-growth countries. In addition to providing a significant local presence, this often enables the company to more effectively compete for local governmental contracts.

Languages

One cannot underestimate the power of language. In many global organizations, English is the official or de facto language of the business. Yet, if an organization wants to engage the hearts and minds of its employees, then communication in the native tongue is essential to ensure effectiveness.

We know that the way an organization communicates has huge implications for the engagement of the employees and the success of the organization (Welch & Welch, 2008). Literal translations often do not communicate the correct message or with the passion needed to motivate employees. Conducting translations and having in-country employees review the translation often works to ensure that the right message is being communicated. Even that may not be enough, though. Just because a message is translated accurately, the content of the message itself may be perceived as headquarters-centric. This may serve to alienate business units rather than bring them closer together as global units; they may feel that “corporate doesn’t ‘get us.”’

Other examples can be quite basic in their headquarters-centric style. One of the authors worked with senior HR leadership to create a global communication regarding an upcoming global survey, noted as coming “later this summer.” That was fine for employees who would actually be in the summer months but for some regions, it would be winter. Such missteps are confusing at best, and divisive at worst, implying a very headquarters-centric mind-set and attitude. For many HR practitioners, it usually takes at least one or two such missteps before they start to operate in a truly global mind-set, more appropriate for the organization.

Organizational Structure

As described earlier in the various stages of globalization, organizations can have very centralized or decentralized operations. In a centralized organization there are typically centers of excellence which exist in a headquarters-type environment where they are responsible for the design and execution of programs and initiatives implemented in the field business units. Centralized organizations create standards of operation and performance to ensure consistency in global deployment. For example, the Disney experience is expected to be the same whether it is in Orlando or Paris. The organization is dependent upon the highest-quality customer experience for business success. In decentralized organizations, every business unit operates independently with its own set of processes and initiatives. For a business whose success is dependent upon local adaptability and flexibility, this model enables rapid response to changes in local markets. Each approach has its advantages and disadvantages depending upon the business model and market requirements. In at least one la...

Table of contents

• Cover
• Contents
• Series Page
• Previous Professional Practice Series volumes include
• Title Page
• Copyright
• Series Editor
• Foreword
• Preface
• Contributors
• PART 1: Practical Considerations for HR and OD Practitioners Working Across Geographic-Cultural Boundaries: The Changing Workplace
• PART 2: Attracting and Selecting Employees in the Global Workplace
• PART 3: Maximizing Performance in the Global Workplace
• The Editor
• Subject Index
• Name Index
• End User License Agreement