The Multinational Man (RLE International Business)

The Role of the Manager Abroad

Thomas Aitken

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781135134983
• Edition: 1
• Topic: Economics
• Subtopic: Business General
• Index: Economics

The growth and proliferation of multinational companies has both imposed new responsibilities on and offered new opportunities to, the men who represent them around the world. This book dissects the functional responsibilities of the manager abroad in the light of his relationships with the home office and with his local environment, and explores the consequences of various types of relationships. The discussion is a practical one drawing heavily on a wealth of experience and actual case studies.

Chapter 1

The Multinational Man

In recent years much has been written about the international corporation, but little about the international man. History’s revolving door spins all into its carousel, for even in this less dramatic aspect of human destiny a complete change has taken place. In former eras, epochs or centuries the international man was placed front of stage, with his company in the wings. He was the stuff from which the tales of Kipling, Conrad and Richard Harding Davis were drawn, and Macaulay found literary material in the international man’s role as a displaced person. Finally, the romance of the man abroad filled the pages of many of Somerset Maugham’s sagas. By then we knew the role of the international man: to be our own distant selves, to carry our dreams to the uttermost ends of the earth, there to find confirmation or to crumble under the challenge of the unknown. All this was endowed with the wonder of the readers, we who stayed at home, with our belief in revelation, our willingness to acknowledge the power of the unseen.

Technology changed us, and in many ways. One was to wipe out the reverie about discovery in far-off lands, another to erase bewilderment about the secrets of these lands. For mystery has vanished as the searchlight of technology has exposed life overseas, and distances have been reduced to the span of an airmail letter or a Telex message to the Orient. Suddenly the international man has become nothing more than the rest of us, grinding away at his daily work wherever he may be, while behind him, and looming over our lives, there has appeared the international company which employs him, the organization which the jargon of our times has named the multinational corporation.

The giant company of today is a multinational corporation and, while it has not found its way into the consciousness of our fiction writers, it has taken a leading role in our business literature. It has assumed this stance because it is big, larger than anything we have ever known in the economic world, and because it stands ready for a showdown of power with nation-states whose place in history is already being queried by political and sociological forecasters. Arnold Toynbee has reminded us that the nation-state as we know it is a relative newcomer on the world scene. It has spurted out of dying institutions or ancient empires like the European nations out of the Roman state, or has been implanted where tribal society existed before, as in America and Africa. Indeed, Toynbee contends that as the multinational company becomes better able to satisfy society’s future needs, it may well supersede the nation-state. But for all its power, despite its technological accomplishments and the instruments which give such an organization instant knowledge and instant control of its far-flung activities, its destiny depends largely on the performance of its men abroad. At the nerve ends of the multinational corporation stands the international manager, the international executive. If both he and his company comprehend his role, and if he fulfils it well, the multinational corporation may well achieve its nobler destiny as the swift communicator of knowledge and the effective investor of funds to alleviate the plights of underdeveloped economies and to develop an economic language common to all nations. The alternative destiny, which threatens the independence of nations, the purity of their cultures and the self-determination of their economic systems can, it has been predicted, lead to the death of multinational corporations, a death accelerated by the ineptness of their representatives at the far ends of the line.

These representatives, these international managers, are therefore called upon to fulfil a role less romantic and less subjective than their literary antecedents, but perhaps far more important to the world’s wellbeing. The demand on the international manager as a human being is a many-dimensioned one. His predecessor’s role was relatively simple. The eighteenth- and nineteenth-century company he represented abroad operated to the benefit of its home government in return for which that government guaranteed its safety and usually its prosperity. The British, French and Dutch East India companies were prototypes which were succeeded by the oil, mining and rubber combines in a later century. All were able to rely on a regiment or a gunboat to secure their interests when the distant environment became querulous. The manager abroad knew that a single line of loyalty and authority led to headquarters and if necessary to the Foreign Office and the War Department. No interruption by host governments was permitted. Today if the residue of this history influences a board-room a company is heading for trouble, and when its man on the spot tends toward a Kiplingesque posture, he is immediately the wrong man for the job.

Operating today under the multiple demands and pressures of the home company’s office management, home government policy, the attitude of his host government and the components of its society, the international manager begins by having to be a rather complex human being. One magazine has written:

‘Ideally, it seems, he should have the stamina of an Olympic runner, the mental agility of an Einstein, the conversational skill of a professor of languages, the detachment of a judge, the tact of a diplomat, and the perseverance of an Egyptian pyramid builder. That’s not all. If he is going to measure up to the demands of living and working in a foreign country he should also have a feeling for culture; his moral judgements should not be too rigid; he should be able to merge with the local environment with chameleon-like ease; and he should show no signs of prejudice.’¹

This compendium of attributes is only one of many. Although most catalogues of an international manager’s required virtues are less fanciful than the above, they do coincide on some points. One article states that the manager abroad must: (a) be adept at dealing with abstractions and variables, (b) have a flair for conceptual synthesis, (c)have a high degree of sensitivity and (d) a firm sense of values.

Another requires that managers be aware of themselves as culturally conditioned persons, be alert to the differences in perception between themselves and others, be aware of their own social needs and those of others and be willing to adapt and communicate.²

Endless lists have been drawn up citing the attributes required of a successful chief executive abroad or, rather, a successful overseas representative of a multinational company. Appropriately, most of them are more concerned with what kind of man the manager should be than with what kind of knowledge he should have. Of the human qualities recommended the most frequently named is sensitivity, sometimes called awareness, and often adaptability. Obviously this refers to a manager’s need to acknowledge rather than ignore his environment. It doesn’t mean he must ‘do as the Romans do’. He might make a fool of himself at that game, unless he can also do it the way they do. In other words, adapt with grace rather than earnest clumsiness. Sensitivity might include discovering that Germans respond sympathetically to an effort to speak a few words of their language, even if badly, whereas the French scorn the foreigner who distorts their idiom.

The business environment is a vast area for a visitor to comprehend, particularly when it requires understanding a nation’s social structure. Most natives do not understand the social structure of their own country which conditions them, but because it does condition them they live within it quite naturally unless they are young rebels, old eccentrics or the few thinkers who question rather than accept the premises offered them.

The trick for the international manager is to accept differences in life style and thereafter to seek the reasons for them. He will find in Latin America that businesses are run by autocrats, single strong personalities who in their fiefdoms parallel the man on horseback who is usually found in the country’s history books to be that nation’s historical hero. He will find that northern European businesses are mostly guided by boards, that French managers come from a few élite schools and that German managers come from technical academies. As Doina Thomas says: ‘Most European nations have the style of management which the state of their economy demands.’³ Accepting this statement requires an understanding of the culture and economic environment, but accepting it entirely can lead to pitfalls, especially when an economy is changing and its style of management is falling behind. This is undoubtedly occurring in Japan where only when the new generation of middle managers reach the top will they be able to bring their country’s management concepts abreast of its social as well as economic needs.

Sensitivity, then, is accepted as an essential attribute for the international manager. Adaptability enables him to act in accordance with the learning that sensitivity gives him. But awareness is an attitude, and this can be assumed even when sensitivity comes in short supply. As one international management student at the Centre d’Etudes Industrielles (based in Geveva) remarked, the international manager should recognize other cultures as legitimate alternatives; he should be sceptical perhaps, but not cynical. And this will make it possible for him to make what may be the most important adjustment of all.

This realization concerns time and the arrangement of time that makes up a man’s life. Thinking of his assignment abroad as transitory, limited to the period of his contract, can help an executive put up with the unpleasant aspects of his environment, but it will usually negate any efforts to understand or adjust to it. To consider oneself impermanent makes everything around one illusory and therefore valueless. There becomes little point in learning the language, so one seeks helpers who know it – and becomes dependent upon them. Because of this the daily newspapers, the radio, the television, the theatre, the conversation of people in a restaurant remain meaningless. One will not be in the same place more than a few years, so why invest in the comforts the local people enjoy – a Peruvian barbecue spit, a horse in Argentina, skis and lessons on the slopes in Switzerland, a Mercedes in Germany, a Cordon Bleu course in cooking for one’s wife in France, subscriptions to some local clubs in Spain or even the books, records and furniture that make a home more comfortable? Why indeed invest time, money and energy in becoming part of the local scene when all this will some day disappear? Simply because it makes an executive a better manager and his family a happier group. It does more. It focuses a man’s mind on the local scene. He need not forget London, or Cincinnati, or Toronto, but if that is where his mind is, energies that are required for a delicate and demanding job are diluted. Best that he return home as soon as possible because abroad he is losing the use of his subconscious mind, the area that never stops working or dreaming and often unexpectedly reveals solutions to problems.

There are, however, other kinds of managers of international companies. There are the nationals hired on the spot or taken on as second men and trained for managership. There is the growing class of international ‘professionals’ whose nationality is a minor factor and who are transferred from country to country in accordance with their employers’ expediency. Where does their need for sensitivity lie, if there is one? In what direction does their awareness lead them? And to what do they have to adapt? If they are moved to a country other than their own, their problems are much the same as those of men sent out from the company’s home office – except that they do not identify the home office with home. These are truly the professionals of the trade, a small but growing élite in the multinational world. In their case the human attributes we have been discussing become, and are, professional qualifications.

The national who accepts representation of a multinational company in his own country is perhaps best served by overlooking his possibly equivocal position. We asked one if the same sensitivity was required of him as it would be of a man from headquarters sent to his country:

‘Sensitivity? Sensitivity to what?’

‘Not to your country, of course. It’s yours. But perhaps to the fact that you are serving a company whose objectives may not parallel those of your government.’

‘But that happens with our own national companies. Why should I be so concerned about that?’

Our taxi stopped for a traffic light at this point, allowing for a moment of reflection.

‘But let us suppose that your employer’s policies’, we persisted, ‘were contrary to your own government’s objectives. Where would your loyalties tend?’

‘I do my job in that case, understanding, of course, that there is no question of national security involved. After all, a government’s policies can change with the next election. We usually hope they will.’

‘So if you have no need to be unusually acute about the atmosphere surrounding you because it is yours anyway – perhaps you have to tune your antennae when they turn to your company’s home office because that is foreign territory.’

‘Ah, now I understand you. Of course.’

‘This is a question of communications?’

‘But of course. Why didn’t you ask me that before?’

The question of communications deserves comment in another chapter, but the national manager facing that problem may have to call on the same personal reserves in dealing with his company’s home office as the home office man abroad. For the manager hired or trained abroad, company headquarters are the exotic environment. They represent concepts of business operations different from those in his native country. Although they usually seek some accommodation between their own philosophy and those prevailing overseas, headquarters do not go so far as to relinquish the home office viewpoint, and the national manager abroad must learn to represent it even when it jars against the policies and mores of his homeland. His income is now dependent on a foreign source and his career is committed to a power outside his own country. This is his problem of awareness to a strange environment, an environment physically distant but in his work always present. Directives from headquarters, the visits of executives and supervisors from the home office are constant reminders that there is a continuing call on his loyalties from beyond his country’s borders.

Whereas this pressure on the loyalties of the national manager abroad – and to some degree on that of the headquarters representative who has stayed overseas for some years – was once only important in the underdeveloped countries which have long seen the multinational company as a threat to their sovereignty, it may now exist in the most advanced of nations, for the multinational firm has expanded its power to such an extent that all nations view it as a challenge to their sovereignty.

This has not aroused unreserved hostility toward the multinational company. There is recognition even in Servan-Schreiber’s plea for an adequate European defence against the American incursion that the multinational firm brings benefits which nations cannot ignore. Most nations still try to attract multinational business, although increasingly on a selective basis. They accept the multinationals’ capital and their ability to contribute to capital formation within the country. They know that the multinational organization is a tremendously effective transmitter of technology and management, that it can aid in the development of depressed areas of a country, that it can create new sources of exports to help a nation’s balance of payments. In fact the power to make beneficial contributions is so great on the part of the multinational firm that its ability to withhold its participation in a nation’s economy may be a threat to that nation’s growth. And it may keep its distance if one nation’s tax policies are less attractive than another’s, or if its political environment is less stable or less friendly, or if its currency is less dependable. By staying out, the multinational firm affects a nation’s growth. By entering, it may operate according to its own and not to its host country’s economic plan, for its action in one country is only a part of its multinational policy.

The international manager in most cases has learnt to live with the open or disguised discord of his company with the nation where he is employed. But new areas of responsibility are looming for the multinational company as its significance in world affairs increases and as its weight on society is increasingly discernible. These responsibilities place new strains on the international manager as a human being, bringing his conscience and co...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• Introduction
• 1. The Multinational Man
• 2. The Small Multinationals
• 3. Strategist and Planner
• 4. Administration – Centralize or Decentralize?
• 5. The Manager and the Money
• 6. Who Controls the Market?
• 7. Labour Pains and Issues
• 8. Communications
• 9. Citizen of What?
• 10. The Multinational Company
• Select Bibliography
• Index