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Globalization and innovation. Globalization. Traditional definition of globalization? Movement of resources across national boundaries: money, people, goods, services, ideas Globalization as complexity: The complexity inherent in doing business in a global economy comes from:

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globalization
Globalization
  • Traditional definition of globalization?
    • Movement of resources across national boundaries: money, people, goods, services, ideas
  • Globalization as complexity:
  • The complexity inherent in doing business in a global economy comes from:
    • Multiplicity – many things happening at once
    • Interdependence – all things being connected
    • Ambiguity – less knowledge about all aspects
    • Flux – rapid and consistent change
  • Implications for managing: rather than tactical solutions to problems, need people who can engage in collaboration, discovery, architecting and systems thinking.
global innovation
Global Innovation
  • A process for innovating that transcends local clusters and national boundaries.
  • Sourcing and integrating knowledge from dispersed geographic locations, companies can generate more innovations of higher value and lower cost.
  • E.g. from China, Inc.
complexity and innovation
COMPLEXITY AND INNOVATION
  • Global Innovation Complexity
  • Organizational Complexity
  • Global Management Complexity
  • Intra-organization Complexity

Importance of knowing the where and why of complexity, remaining flexible, and collecting a toolbox of appropriate choices.

global innovation complexity
GLOBAL INNOVATION COMPLEXITY
  • Integrating multiple evolving technologies
  • Tapping globally dispersed technology sources
  • Serving globally distributed customers
organizational complexity
Organizational Complexity

Chief

Executive Officer

Planning

Legal

Chief

Executive Officer

Division

4

Division

1

Division

2

Division

3

Human Resources

Marketing

Manufacturing/Operations

Finance

Purchasing

Purchasing

Purchasing

Purchasing

Engineering

Engineering

Engineering

Engineering

Operations

Operations

Operations

Operations

Marketing

Marketing

Marketing

Marketing

Finance

Finance

Finance

Finance

Human

Resources

Human

Resources

Human

Resources

Human

Resources

slide7

CEO

Markets

Consumer

Pharma-

ceutical

Medical

Devices

Human

Resources

Group Operating

Committee

(Strategic

Support)

Finance

Business Segment Structure

Customer

Support

Corporate Functions

Science &

Technology

Franchise

Mgmt

(Marketing

Support)

Environ-

ment

Additional

Corporate

Functions

190 Autonomous Business Units (Brand Focus)

slide8

ABB’s Geography-Based Internal Network

CEO

Projects Finance HR Corporate R&D Global

Staffs Accounts

Shell

4 Business Segments 3 Regions

Financial Industrial Power Power Europe / Americas Asia

Services & Building Transmission Generation Middle East /

Systems Africa

Business-Area

Transformers 140 Countries

Spain

40 Business Areas

1,000 Companies

5,000 Profit Centers

Spanish Transformer

Business

Shell

Espana

~

Finance Products/Functions R&D

management complexity
Management Complexity
  • Innovation is a strategic mandate leading to value-added outcomes
  • Innovating is about the actions, behaviors and management practices that create innovations.
  • Managers in a global business world come with their own culturally derived values, attitudes and norms; and they function within organizational and societal values, attitudes and norms.
  • Greater diversity = greater variation in beliefs about what, how, where and why.
global partnering interorganizational complexity
Global Partnering – Interorganizational complexity
  • Manage tensions (cross cultural and cross organizational)
  • Build networks (finding the right partners and acting like the right partner)
  • Achieve Outcomes
culture is hidden
Culture is Hidden

ARTIFACTS

Visible, tangible.

NORMS, VALUES,

ATTITUDES

Less visible, but

can be talked about.

DEEPLY ROOTED ATTITUDES

Usually not visible at all, often

held subconsciously, rarely (if ever) questioned in everyday life.

Image by R.A. Clevenger

slide13

The culture of McDonald’s

Deeply Rooted Values change the way McDonald’s is used

Artifact looks the same everywhere

Deeply rooted values change the way McDonald’s looks in France where a McDonald's breakfast meal in Villeurbanne, France includes fresh baguettes and jam spreads with coffee for $4.55

Localized menus reflect norms, values, attitudes

Philippines McSpaghetti

Germany McBeer

Switzerland Vegi Mac

Malaysia Sugar Cane Juice

Netherlands Cappuccino Donuts

Greece Shrimp, Veggie Burgers, & Spring Rolls (sold during Lent)

BUT WHY?

Naturally, the U.S. is its no. 1 market, but guess who is no. 2? You got it: France. … McDonald's is such a success in the land of Michelin three-star restaurants because it has adapted to French eating habits and tastes. There are now 1,200 franchises in France; the company opened 30 restaurants per year in the past five years alone.

http://www.npr.org/blogs/thesalt/2012/01/24/145698222/why-mcdonalds-in-france-doesnt-feel-like-fast-food

slide14

Cultural Institutions

Educational,

Social,

Political, Legal,

Economic,

etc.

Influences on Culture

History, Language

Religion,

Climate,

Physical Environment, etc.

CultureShared Assumptions and Values,

Systematic,

Learned

Individual Perceptions and Interpretations based on

Values and

Attitudes

Individual Behavior

Influences on, and of, Culture

Situation

B:f(P*S)

Person

slide16

Daily Coffee Consumption per Capita

Source: Business 2.0. July 2002.

slide17

Did You Know?

  • In Turkey it’s rude to cross your arms while you are facing someone.
  • In the Arab world the left hand is considered unclean; don’t eat with it!
  • In India never pat someone’s head, it’s the seat of the soul.
  • The Chinese associate gifts such as straw sandals, clocks and handkerchiefs with funerals.
slide18

Favorite Campbell Soups Around the World

  • Hong Kong - Watercress & Duck Gizzard
  • United States - Chicken Noodle, Cream of Mushroom
  • Britain - Tomato
  • Japan - Corn
  • South America - Cream of Asparagus
  • Australia- Cream of Pumpkin
slide20

Days of Annual Vacation

Source: AAA World

slide21

Nations That Have Not Converted to the Metric System

United States

Brunei

Yemen

Liberia

Myanmar (Burma)

is everyone an equal player
Is everyone an equal player?
  • Friedman claims the World is Flat
    • Technology has leveled the playing field across nations
  • Richard Florida, author of The Flight of the Creative Class claims the World is Spiky.
    • The most populated areas of the world are also the least economically and innovatively active.
global innovation index
Global Innovation Index
  • Generates a ranking of countries based on innovation.
  • Source: The World Business/INSEAD Global Innovation Index (GII).
  • The Global Innovation Index (GII) was conceived at INSEAD as a formal model to help illuminate the degree to which individual nations and regions are currently responding to the challenge of innovation.

The framework groups the eight pillars of innovation into two categories: Inputs and Outputs.

world competitiveness report
World Competitiveness Report
  • The IMD World Competitiveness Yearbook, published since 1989, ranking and analysing how a nation's environment sustains the competitiveness of enterprises.
slide32

Understanding Diversity

  • Provide frameworks for using diversity to get higher performance
  • Increase awareness of ourselves and others, and the impact of our similarities and differences
  • Test the applicability of the ideas to situations from your experience
slide33

Does diversity result in synergy?

  • Diversity yields
    • Wide range of perspectives
    • Variety of potential solutions and opportunities
    • Potential for synergy
slide34

What are the implications

for Managing Global Teams?

http://www.ft.com/businesseducation/imd

slide35

High

Homogeneous Teams

Diverse Teams

Managed Poorly

‘Equalizers’

Diverse Teams

Managed Well

Number

of Teams

‘Destroyers’

‘Creators’

Low

Performance

Low

High

Despite their potential, most diverse teams don’t perform as well as homogeneous teams do…

But synergy doesn’t come often enough….

the mbi model managing cultural diversity for personal and team effectiveness
The MBI Model:Managing Cultural Diversity for Personal and Team Effectiveness

High

Performance

  • MAP
  • Understand
  • the
  • differences
  • Cultural Orientations Framework
  • BRIDGE
  • Communicate across the
  • differences
  • Prepare:
  • Motivation, Confidence
  • Decenter:
  • Perspective taking, Explain without blame
  • Recenter:
  • Common view, common norms
  • INTEGRATE
  • Manage
  • the
  • differences
  • Build Participation
  • Resolve Conflicts
  • Build on Ideas

Value &

Utilize

The

Differences

Source: Lane, DiStefano & Maznevski. International Management Behavior. 4th ed.