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What Is a Global Manager? by Christopher A

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What Is a Global Manager? by Christopher A BEST OF HBR 1992 What Is a Global Manager? by Christopher A. Bartlett and Sumantra Ghoshal It is hard today to use the vword "globalization" without a certain sense of irony, rueful or otherwise. Riven by ideology, religion, and mistrust, the world seems more fragmented, more at odds, than at anytimesince, arguably, World War II. But however deep the polit- ical divisions, business operations continue to span the globe, and executives still have to figure out how to run them efficiently and well. The question that Christopher Bartiett and Sumantra Choshal pose-"What is a global manager?"-seems therefore even more pressing than itdid when their article originally appeared in these pages n years ago. Their answer, too, feels particularly timely. "There is no such thing,"they write,"as a universal global manager." Multinational companies instead require three kinds of specialists-business managers, country managers, and functional managers-and a set of senior executives to nurture the specialists and coordinate their efforts. Bartlett and Ghoshal provide comprehensively researched examples of all four types of managers, exploring the different skills and perspectives they require to succeed. Their article lays out a model for a management structure that balances the local, regional, and global demands placed on companies operating across the world's many borders. If your operations span the IN THE EARLY STAGES of its drive ovei- the company's national specialists with seas, Coming Glass hired an American global generalists. globe, you need to develop ex-ambassador to head up its inter- Corning and ITT eventually realized three very different kinds national division. He had excellent con- they had taken wrong turns. Like many tacts in the governments of many na- other companies organizing for world- of managers and then unite tions and could converse in several wide operations in recent years, they them in a common purpose. languages, but he was less familiar with found that an elite of jet-setters was Coming and its businesses. In contrast, often difficult to integrate into the cor- ITT decided to set up a massive educa- porate mainstream; nor did they need tional program to "globalize" all man- an international team of big-picture agers responsible for its worldwide overseers to the exclusion of focused telecom business - in essence, to replace experts. ACHANCED WORLD AUGUSl 200=; 101 BEST OF HBR Success in today's international cli- manage the complex interactions be- some 40 countries, with acquisitions mate - a far cry from only a decade ago - tween the three - and can identify and continuing throughout the decade. demands highly specialized yet closely develop the talented executives a suc- Zanussi, for example, the big Italian linked groups of global business manag- cessful transnational requires. manufacturer acquired by Electrolux in ers, country or regional managers, and To build such talent, top management 1984, had built a strong market presence worldwide functional managers. This must understand the strategic impor- based on its reputation for innovation kind of organization characterizes a tance of each specialist. The careers of in household and commercial appli- transnationai rather than an old-line Leif Johansson of Electrolux, Howard ances. In addition, Arthur Martin in multinational, intemational, or global Gottlieb of NEC, and Wahib Zaki of France and Zoppas in Norway had company. Transnationals integrate assets, Procter & Gamble vividly exemplify the strong local brand positions but limited resources, and diverse people in operat-^ specialized yet interdependent roles innovative capability. ing units around the world. Through a the three types of global managers play. As a result of these acquisitions, Elec- flexible management process, in which trolux had accumulated a patchwork business, country, and functional man- The Business Manager quilt of companies, each with a different agers form a triad of different perspec- Strategist + Architect + Coordinator product portfolio, market position, and tives that balance one another, trans- Global business or product-division competitive situation. Johansson soon national companies can build three managers have one overriding respon- recognized the need for an overall strat- strategic capabilities: global-scale effi- sibility; to further the company's global- egy to coordinate and integrate his dis- ciency and competitiveness; national- scale efficiency and competitiveness. persed operations. level responsiveness and flexibility; and This task requires not only the perspec- Talks vtfith national marketing man- cross-market capacity to leverage learn- tive to recognize opportunities and risks agers quickly convinced him that drop- ing on a worldwide basis. across national and functional bound- ping local brands and standardizing While traditional organizations, struc- aries but also the skill to coordinate ac- around a few high-volume regional and tured along product or geographic lines, tivities and link capabilities across those global products would be unwise. He can hone one or another of these capa- barriers. The global business manager's agreed with the local managers that bilities, they cannot cope with the chal- overall goal is to capture the full bene- their national brands were vital to main- lenge of all three at once. But an emerg- fit of integrated worldwide operations. taining consumer loyalty, distribution ing group of transnational companies To be effective, the three roles at the leverage, and competitive fiexibiiity in has begun to transform the classic hier- core of a business manager's job are to markets that they saw fragmenting into archy of headquarters-subsidiary rela- serve as the strategist for his or her more and more segments. But Johans- tionships into an integrated network organization, the architect of its world- son also understood the views of his di- of specialized yet interdependent units. wide asset and resource configuration, vision staff members, who pointed to For many, the greatest constraint in cre- and the coordinator of transactions the many similarities in product char- ating such an organization is a severe across national borders. Leif Johansson, acteristics and consumer needs in the shortage of executives with the skills, now president of Electrolux, the Sweden- various markets. The division staff was knowledge, and sophistication to oper- based company, played all three roles certain Etectrolux could use this advan- ate in a more tightly linked and less clas- successfully in his earlier position as tage to cut across markets and increase sically hierarchical network. head of the company's household ap- competitiveness. In fact, in the volatile world of trans- pliance division. Johansson led a strategy review with national corporations, there is no such In 1983, when 32-year-old Johansson a task force of product-division staff and thing as a universal global manager. assumed responsibility for the division, national marketing managers. While Rather, there are three groups of SF)e- he took over a business that had been the task force confirmed the marketing cialists; business managers, country built up through more than 100 acqui- managers' notion of growing segmen- managers, and functional managers. sitions over the previous eight years. tation, its broader perspective enabled And there are the top executives at cor- By the late 1980s, Electrolux's portfolio Johansson to see a convergence of seg- porate headquarters, the leaders who included more than 20 brands sold in ments across national markets. Their closer analysis also refined manage- Christopher A. Bartlett is a professor of business administration at Harvard Business ment's understanding of local market School in Boston. Sumantra Ghoshai is a professor of strategic and international needs, concluding that consumers per- management at London Business School. They are the coauthors q/'Managing Across ceived "localness" mainly in terms of Borders: The Transnational Solution (Harvard Business School Press, 1989) and how a product was sold (distribution Transnational Management: Text, Cases, and Readings in Cross-Border Manage- through loca! channels, promotion in ment (McCraw-Hill/Irwin, 1992)- local media, use of local brand names) 102 HARVARD BUSINESS REVIEW What Is a Global Manager? instead of how it was designed or what In fact, the global business manager's thereby reducing dependence on the features it offered. responsibility for the distribution of small pool of skilled labor and manage- From this analysis, Johansson fash- crucial assets and resources is closely ment in Sweden. ioned a product-market strategy that tied to shaping an integrated strategy. Instead of closing old plants, Johans- identified two full-line regional brands While he or she often relies on the input son insisted on upgrading and tailoring to be promoted and supported in all of regional and functional heads, the existing facilities whenever possible. European markets. He positioned the business manager is still the architect In addition to averting political fallout Electrolux brand to respond to the cross- who usually initiates and leads the de- and organizational trauma, Electroltix market segment for high prestige (cus- bate on where major plants, technical would then retain valuable know-how tomers characterized as conservatives). centers, and sales offices should be lo- and bypass the start-up problems of cated - and which facilities building from scratch. An outstanding should
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