Answer Happy

Essentials of Management - GOING GLOBAL Courtesy of Various Wall Street Journals Source by: Alan Murray, Deputy Managing Editor You must learn to manager from afar. Most managers have their workers nearby, and management was a contact sport. But today there's a good chance you'll find some of your workers aren't nearby, and may be thousands of miles away. You may have to manager outsourcing or other relationships with groups overseas, and you may be working with people who don't speak your language, or speak it imperfectly. Such increases the importance of having a very clear set of goals agreed to and committed to by all parties, and an agreed upon set of measurements for achieving those goals. You must learn to be respectful of other traditions and cultures. You've got to be sensitive to cultural differences, you can't let that sensitivity get in the way of clear and candid communication, goal setting, and accountability. Your strategic plan must take into account developments overseas. Just because you've never been subject to competition from overseas doesn't mean you won't be in the future. Keep a close eye on potential overseas competition as well as on potential overseas suppliers. Take care before starting a venture overseas. Go global, sometimes seems like a business imperative these days. But proceed with caution and fully analyze the hidden costs and the unforeseen consequences. Explore fully in advance by asking and answering the following three questions: What are the benefits of the proposed mover overseas? Is it primarily to reduce costs? Is it to expand the market for your goods and services, because the domestic market is mature or stagnant? Or is it to acquire critical knowledge or experience to survive and thrive? Does your organization have the capabilities for this expansion? Don't make the mistake of thinking you can simply appoint a deputy to oversee the international operation. Do the benefits outweigh the costs? This is where organizations usually go wrong. THE LIMITS OF GLOBALIZATION Differences among nations still matter a great deal in modern business, and will continue to matter for the foreseeable future. 90% of all the investments that companies do make happens within the countries in which they are located. For example, Coke headquartered in Atlanta launched a reorganization that put the decision making closer to the local markets, some centralization at Atlanta headquarters, including global marketing, and substantial power to regional managers. Coke recognized their brand to have global power and advantages, also recognizing that it might not make sense to compete the same way in all markets. In short, Coke has had to adapt to a world that is much smaller and more integrated than ever before. The Chinese Example: The clearest evidence that business practices vary sharply around the world can be found in China. Measured by purchasing power, China is already the world's fourth largest economy. The income of the average Chinese is still a fraction of that of the Page 1 of 2 Essentials of Management - GOING GLOBAL Courtesy of Various Wall Street Journals Source by: Alan Murray, Deputy Managing Editor average American, but the sheer number of Chinese citizens makes up much of the difference. And when it comes to the consumption of some basic commodities, fast-growing China set the pace-consuming, for instance, a third or more of the world's steel production. China is the world's largest consumer market and, increasingly, the world's factory. Yet it is also a place where capitalism is suffering through enormous birthing pains and still faces the overlay of a centralized, Communist government. The unique nature of Chinese business provides the following discoveries: Avoid joint ventures with government entities unless you have no choice. Understand that partnership is about China obtaining your technology, know-how, and capital while maintaining Chinese control. Expect the revenues and profits will not justify the high-level management time required for the first several years. The Chinese appear to the West to be a collective society. Just below that collective veneer is a dog-eat-dog competitive spirit that makes the Chinese among the world's most individualistic and selfish people. In China's business world the expectation is that you'll be cheated. In China, a conflict of interest is viewed as a competitive advantage. If you must fight with bureaucracy, take your fight to the highest possible level where officials are the most reasonable and focused on China's larger interests. China's greatest management challenges are to create organizations that are not dictatorships, to accept responsibility for mistakes, and to share information - all behaviors that have been almost absent. In short, it should be clear that doing business in China is a very different thing than doing business elsewhere in the world. Page 2 of 2