Globalization Group Project D594 – International Strategy Team Moscow: Mike Bensi, Mike Sale, Lori Thorp, Marc Yoder

1. Globalization Group Project D594 – International Strategy Team Moscow: Mike Bensi, Mike Sale, Lori Thorp, Marc Yoder 7.9.12

2. Overview • Global Issue Defined • Key Issues and Relevant Examples • Capabilities/Training • Implications for our personal careers • How can Kelley help us? • Summary

3. Global Issue Defined Selected Topic: Integrating Human Resources and Informal Culture into Companies with International Presence Human Resources Component:From a hiring and human resources standpoint, how can a company integrate a global mindset into their HR practices to effectively (and legally) grow in new global markets Informal Culture Component: How can a company prepare their employees to appreciate and be more knowledgeable on cultural differences in unique regions?

4. Human Resources Issue + Examples From a hiring and human resources standpoint, how can a company integrate a global mindset into their HR practices to effectively (and legally) grow in new global markets? Key HR Issue #1:Companies expanding globally need to fully understand the ethical and personnel expectations within global operations Resolutions from class materials: • Understand significant culture differences and ensure teams accept/embrace these differences – “In Filipino culture, ‘yes’ often means ‘I hear you’, not ‘I agree with you’ Ensuring you have agreement is therefore much more complex”. - Isdell • Create firm international boundaries on acceptable practices for the company – “Coca-Cola is due to come in for fresh criticism next week over its corporate practices following allegations of child labor and environmental abuses to be aired on television next week.” – Marketing Week, Nov. 2007

5. Human Resources Issue + Examples Key HR Issue #2: Companies with an international country presence need to integrate the expatriate and local members of the management team. Management needs to be on the same team regardless of origin. Resolutions from class materials: • Integrate expatriate management with local management by working as one team and avoid any segregation, physical or supervisory – “We’re not going to be the expats in one corner, the Filipinos in another. We are one team”. - Isdell • “They (Pepsi) committed the sin that I was avoiding. The expats sat around at the Manila Polo Club, drank beer, and complained about the Filipinos being lazy. That is what happens when management is disconnected from society.” - Isdell

6. Informal Culture Issue + Examples How can a company prepare their employees to appreciate and be more knowledgeable on cultural differences in unique regions? Key Issue #1: Companies need to understand the culture that they are now a part of. It’s important to study the culture and to find out as much as possible before entering a new country or territory. Support from the reading: • “Before arriving, I read as much as I could about Filipino culture, something I had failed to do when we moved to Australia”- Neville did not feel prepared and never felt comfortable in Australia. While the Philippines was an adjustment, he seemed to adapt more quickly. • Leif Johansson of Electrolux recognized the importance of advanced research and planning and developed a task force in order to discuss strategies, analysis of local markets and trends. • “I had read about German culture do’s and don’ts”- Neville, Coca Cola

7. Informal Culture Issue + Examples Key Issue #2: One must understand the priorities as well as the “taboos” of the society. Understanding the culture and what motivates or inspires the people is key. People respond to different approaches- you must be able to adapt. Reading/Video Examples: • When Neville was in the Philippines, he was “doing pushups on the stage, riding in a tank, smashing Pepsi bottles…” in order to motivate his people. This approach worked beautifully in that laid back culture, however likely would have failed in West Germany or Saudi Arabia. • West Germany was a very stoic and reserved culture. Office managers kept their doors closed for example. Instead of trying to “alienate the culture” by making widespread changes, Neville simply made a small change by keeping his own office door open. • “Play against these stereotypes- using the local language, say, or demonstrating in meetings that you understand the strengths, problems areas, and idiosyncrasies”

8. Capabilities/Training So what capabilities are required by an organization? • Stay Local • Allow the structure to meet the needs of the local culture – “Product localness sometimes trumps product design” – Isdell • A Flexible Structure • Be flexible enough to fragment the national market – “By tracking product and market trends across borders, Leif Johansson captured valuable global-scale efficiencies while reaping the benefits of a flexible response to national market fragmentation.” – Harvard Business Review • Firm Guidelines • Be clear around acceptable practices within the organization regardless of the region

9. Capabilities/Training So what capabilities are required from the candidate going overseas? Awareness • Come in with your ideas, but be prepared to listen. “If you start reaching out on day one, word will quickly spread across the organization.” – Harvard Business Review • Appreciation • Don’t just welcome the culture, but embrace it. • Adaptability • Develop the ability to make adjustments midstride while maintaining trust through honesty and transparency. Collaboration • Look for those who can brief you on the culture, local competitors, and overall market. “I realized immediately that I needed to hire…someone who knew the business but could also be a cultural interpreter.” - Isdell

10. Implications for our Personal Careers • Career Strategy • Be open to new opportunities and locations • Involve family in the decision process • Importance of Mentors and Role Models • Look for your own “King King” at each new location • Stayed connected to HQ • Managing Potential Tensions between Corporate HQ and Assigned Location • Diagnose the situation • Establish your strategy • Communication, communication, communication

11. How can Kelley and this class help us? • Open Discussion + Culture Absorption • We are fortunate to be in a hugely diverse classroom for this specific class and the overall program • Opportunity for us to take time with our peers and professors in an effort to gain an appreciation of the differences and similarities that we have. • Basic Cultural Exposure • Continual discussion done on cultural differences between regions • Sharing of studies and real-life examples • Regulation/Rules Understanding • Some base knowledge of legal systems in different regions (i.e. patents, labor) • Easy reference tools that can be reviewed at a later time after the class and program have ended

12. Summary • In summary, a successful global manager must remember the following • key points: • Understand the ethical and key personnel expectations. • Integrate all members of the management team and • consider the local culture. • Study the country and local culture before arriving, and • strive to fully understand it. • Understand the “do’s and don’ts” of the culture and • know what is important. • Consider your capabilities- does your team have • the necessary capabilities?