The Transnational Managerial Persona: Typology and Significance


By:

Chintha Sam Sundar
Faculty
College of Business and Economics
Ministry of Education
Asmara, Eritrea. N.E. Africa
E-mail:
sam_chintha@yahoo.com

&

Babu P. George
Lecturer in Tourism Studies
School of Management, Pondicherry University
Pondicherry, India-605014
E-mail:
myselfgeorge@gmail.com / georgebabu@indiatimes.com
 


Abstract: The present paper argues that the notion of transnational managerial leadership is not a singular universal whole but something which can take one of the different typologies according to the contextual particularities. Seven typologies are summarized and explanations are given under which circumstances each of these fits better than the others. The paper is concluded with the suggestion that transnational managers for the new millennium enterprises have to outgrow the conventional management styles practiced thus far and have to creatively invent more adaptive styles that suit better for chaotic systems. Keywords: Transnationals, Managerial leadership typology, Transnational management futures.

INTRODUCTION

The last quarter of the bygone century was the harbinger of entirely new ways of doing businesses for many nationalities and regions in the world (Adler, 1997). Economic system reengineering in many parts of the world, especially in the emerging market driven economies of Asia and Eastern Europe, began with the breakdown of the USSR. Historically, most of these economies have been operated by huge centrally planned enterprises while the presence of private enterprising was limited to very small scale merchandizing. However, the USSR episode compelled the nationalities with command and control oriented systems to rethink for a paradigmatic shift and the outcome was a revolution in their political economies. The liberalization-privatization-globalization triplet was a visible, compelling, and proven alternative and these nationalities in general did adopt it in some degree. While some naively copied the western model others were cautious of adopting it readily. Despite these apparent differences, the overarching process of managerialization came to pass within and across a variety of fields, the scope of which did not restrict within economic-business fields. Even social, political, and public administration fields saw the incorporation of the new philosophy.  Though not under any immanent threat, countries like China sensed that the triplet is a customizable package and that spectacular opportunities are obtainable if the package could be incorporated after mending it to the specific contextual factors surrounding them. An incredibly positive aspect of all these changes is that the liberalization of economy had to invariably result in the democratization of polity, which did take place.

The route to democratization of polity was principally through the movement of consumerism, for it is impractical to fuel a market economy without first giving enough room for the invisible hand to take control. This meant a lessening influence of the state over the everyday routines of the citizens, among others. The freed up individual will coupled with an increased demand for products, growing competition, and the persistent creation and creative-destruction of technologies have been instrumental in redefining the socio-economic geography of the new millennium. Enterprises began to feel that they have thus far lost sight of the treasures over which they sat idly for decades, but did not realize. The biggest realization was that there is a market somewhere in the world for every conceivable thing that they could produce and that the walls that hindered them in reaching up to these markets were their own creations. Turbulent transformations in the world system have offered both new opportunities to and required significant adaptations from business organizations, and many of them, with an impeccable urge to belong to the boundary-less world of business, achieved important changes in strategies and structures (Steger et al., 1998).

A number of transnational companies have thus evolved which modularized their operations and scheduled them across production centers located at places across the world where they have got a comparative advantage for each of the operations. For example: Ford motor company, essentially of American origin, which designs its automobile engines in Japan, has assembly facility in countries like Australia to cater to the global market. Enterprises in the service industries outsourced most of their back office operations to countries like India where labor cost is comparatively low and labor quality is at par with that in the west. According to UNCTAD (1998), by the second half of 1990s, transnational companies have augmented their business vigor across not only the OECD countries, but also the newly emerging markets (Eastern Europe, China) and the newly industrialized economies (Southeast Asia, South America). Citibank, which once operated only within the US, is one of the largest banks in the world and GE, whose name nobody had heard outside of its home turf, are all widely recognized transnational companies now. Sony of Japan is another company in this category, which apart from electronics also owns a number of entertainment businesses. Companies that have not kept up with the times like Pan Am & United Airlines are today bankrupts.  In sum, transnational companies in our times play an extensive role in all the important dimensions of international affairs, by virtue of their size, enormous economic power, and unique structure. The annual incomes of the largest few of them now dwarf the GNP of most countries, and the top few hundred companies control over two third of world's wealth.

The present rate of knowledge explosion and its spread to the previously neglected, smaller countries like Singapore, Taiwan, Thailand, and Vietnam have caused a situation that the size or history of a country no longer influences its presence in the global corporate scenario; what matters is the human ability to learn, adapt, change, and become globally competitive that will distinguish the winners from the losers. Needless to say, all the aforementioned abilities are human competencies and are not mechanically adjustable variables. Since a transnational enterprise functions in multiple cultural contexts and parts of even a single business transaction simultaneously involves stakeholders belonging to different national cultures, a standardized universal formula for what determines human competencies in the transnational arena is difficulty to say. What can be said at the most is that a good transnational manager is one who manages the resources of his organization in a transnational environment with sensitivity to these diverse cultural mores, especially to the tacit elements of them. At times, especially during crises situations, transnational management becomes some sort of cultural resource management itself, since the success of a transnational is determined equally or more by cultural adaptation than by operational efficiency (Boyacigiller & Adler, 1991). Respecting the seemingly quaint and idiosyncratic organizational practices of the subsidiaries gives a premium mileage, since these practices are often the embodiments of locally treasured values and norms as cultural artifacts (Schwartz, 1999).

Indeed, there has never been a time before in the history of businesses when the quality of managerial leadership became so central a concern for theoreticians and practitioners alike. Though managerial leadership as an area of serious study has a rich past, the first major challenge to a universally factual leader-manager model came from Geert Hofstede (1990). The manager is a manager within a particular cultural setting composed of specific norms and values and so also is a subordinate. When the manager and the subordinate belong to different cultural settings, which regularly happens in transnational companies, it is but natural that mismatches in expectations and performances occur (Yiu & Saner, 2000). Dent (1986) warn that transnational companies should expect intriguing issues like this as they attempt to optimize efficiency, national responsiveness, and learning simultaneously. The idea of a stereotypical scientific manager who occupied a hierarchical position and who was expected to take the best (means, technically right) decision has paved way for multiple context sensitive conceptions of managers (Bartlett & Ghoshal, 2000). According to these authors, enduring transnational competitiveness for many firms can best be pursued by achieving the three goals of worldwide efficiencies of scale, local differentiation, and worldwide learning, in chorus.

THE TRANSNATIONAL MANAGER PERSONA

The surge in the number and types of transnational enterprises has led to the distinctive notion of a model transnational leader-manager who can drive his organization to success by leveraging and coordinating the technical and environmental capabilities necessary to exploit national differences, economies of scale, and economies of scope. The model is not uni-dimensional, but gives room for different sets of skills and traits, each uniquely suitable to excel in one or the other context (Peters, 1995; Covey, 1991; Mexon, 1993; Kripal & Singh, 1999; Chowdhury, 2000). Accordingly, the seven different transnational managerial typologies that emerge are summarized below:

    1) Boundaryless thinkers
    2) General purpose specialists
    3) Technology optimizers
    4) Cooperative competitors
    5) Integrity strivers
    6) People builders
    7) Pie enlargers

Boundaryless Thinkers: Bondaryless thinking is an essential response to the need for speedy generation diffusion of innovations around the veins of a transnational firm. Boundaryless organizations require boundaryless thinkers who stand out by their ability in combining a series of jobs around broad, flexible career categories so that they can focus on becoming the best in a career band instead of aiming for vertical advancement up in a single ladder. Also, they nurture a fluid workforce with a flexible skill-set that can move from location to location or task to task to respond to customer needs (Ashkenas, Ulrich, Jick, &Kerr, 2002). Managers excelling in boundaryless thinking can give their subordinates the much needed holistic identity in a highly fragmented world (Mirvis & Hall, 1996).

Boundaryless managers are generally non-parochial in nature and are beyond protectionism. They think beyond the local boundaries, are telecommuters, and offer their services on the Internet. In virtual organizational communities, they offer tele-magnetic leadership to a dispersed workforce. Boundaryless thinkers are at their best as competition analysts (Hamel & Prahalad, 1989) since they can think beyond current and local competition and understand the complete picture likely to escape the eyes of country managers. Some organizations managed by boundaryless thinkers are: The Matriot hotel, Norweigians cruiser lines, Voitcilla, and Citibank. For example an applicant for a Citibank home loan in the US should not be surprised if his request is processed by an employee some 9000 miles away working for a BPO, say in New Delhi. They are playful, post-modernistic, do not conform to the traditional bureaucratic control structures, and many of them believe in the 'beehive logic' of organizing people to realize the business vision.

General Purpose Specialists: They are oxymoronics that perform ostensibly contradictory functions, both as general purpose managers and as specialists. They look into functional areas like marketing, finance, HRM, supply chain management etc as different, equally valid, perspectives of a singular whole of business. The heydays for them began when multinational businesses began to realize that organizational design and structure as the primary control devices to implement strategy and the use of hierarchically and functionally oriented control practices do not deliver results and what is needed instead are managerial henchmen all across the organization with a more nimble mind matrix (Ghoshal & Bartlett, 1997). These authors establish that traditional, structurally-embedded, job-based managerial forms are inadequate to address the complexities and pace created by the need to globally balance an in-depth local understanding with the orchestration of global capabilities and resources and they advocate for the use of the term "competencies" in place of "jobs" in the transnational vocabulary. Extrapolating this line of argument, general purpose specialists are those who have broader sets of human attributes than the narrowly defined knowledge, skills, and abilities acquired from, say, functional managerial experience (Sanchez & Levine, 1999).

Organizations managed by general purpose specialists outperform others in task situations characterized by continuous flux, when group-related tasks are critical, or when missions, core business values, and organizational factors such as location call for flexibility and change. Often, pioneering efforts in mass customization begin from such organizations. Toyota for example custom builds a car on a mass production assembly line in just about 7 days.

Technology Optimizers: These breed of managers leverage competitive advantage through optimization of technology. This can be achieved in any one of the following ways:

* Product technology optimization: Product design, formulae, trademarks, or other characteristics can be used optimally for the success of organizations. For e.g., the world famous motorbike manufacturer Harley Davidson has patented the sound from its engine to maintain its exclusivity.

* Process technology optimization: A process or procedure can also be effectively utilized or modified for growth and success of an enterprise. For example many global companies today are doing away with conveyor systems, which have proved to be useless and expensive, the major bottleneck being that the product comes out at the front end without any knowledge as to who made it and how it was made at the back end. Toggle switches have replaced this system, wherein the product comes out one at a time.

* Information technology optimization: Optimization through the use of information technology began in the late 20th century. A number of companies have harnessed the power of information technology, employing it to become globally savvy and competitive, like Unilever Ltd with its subsidiaries across various countries around the globe. It is the knowledge about consumer behavior and lifestyle patterns in their local markets, which have helped them, become global companies and this knowledge has been harnessed through the efficient use of information technology.

* Managerial technology optimization:  Management technologies like Total Productivity Management (TPM), Total Quantity Management (TQM), Re-engineering, Six Sigma, and Just in Time (JIT) are being used by organizations today to make their human resources more efficient and productive. The human brain by and large is a huge reservoir of technologies and must be put to effective use to manage other resources.

Cooperative Competitors: The creation and commercial exploitation of technology in the form of new products and services are central to the long-term economic performance of corporations for which transnationals are increasingly seeking inter-organizational bases of support. Competition within worldwide markets in a way forces strategic interdependencies and fluid partnerships amongst peoples of diverse cultural heritage. The business sense behind cooperation is that it can often become more useful than competition in leveraging strategic advantages. Many transnational enterprises have exemplified as to how to compete through a cooperative synergy. In cooperative strategy, two corporations come together and leverage upon their combined strength to become transnational enterprises. For e.g., the two fast food giants Kentucky Fried Chicken (KFC) and long John Silver have set up fast food outlets that combine both their identities.  One half of the building has a KFC ambience and the other half has a Long John Silver ambience. The managers excelling as cooperative competitors essentially should have long term orientation and holistic thinking. They will have the sheer acumen in envisioning combinatorial strengths and weaknesses of associating the people, processes, and products of competing firms. It has been observed that managers from collective and feminine societies with low power distance exhibit a natural flair for cooperative behavior (Hofstede, 1980).

Some generally identifiable characteristics of this category of managers are that they: dislike to beat others; make others feel better; allow ample time for discussions; endeavor to use analogous language; share the pies of leadership among group members; make use of cooperative problem solving tools like brainstorming; practice reciprocity; share resources and information; reinforce team efforts; take pleasure in the positive feeling of self-betterment that was resulted  from cooperative behavior, and so on.

Integrity Strivers:  In the present world of business, corporate ethics and integrity have become a major force driving managerial value, which decides, among other things, whether a company is allowed to do business with another company or country. The chances of somebody questioning the integrity of a business are multifold high in the case of a transnational corporation given the diversity of interpretations possible upon each action. Integrity strivers champion values and ethics in management. They are the best sort of managers where managing the power relationships between a transnational and its non-business stakeholders, technically termed as business diplomacy management, is of pivotal importance. Often, failures in coping with non-business related issues could easily lead to crisis, open conflicts, or missed business opportunities (Saner, Yiu & Levy, 2000). Likert has anticipated this in the early sixties and coined the term 'linking-pin' (Likert, 1961) to symbolize the 'go-between' supportive leadership that could overcome the problems associated with business diplomacy.

With the recent debacle of Enron and Anderson consulting, the emphasis on integrity in business dealings has gained a far greater significance. Cross-border environmental management practices of transnationals and their affiliates have increasingly come under the scanner of citizen groups and environmental ethics has by now become an issue that cannot just be neglected. Companies that adopt differential and discriminatory environmental policies and standards and those that show deviations in local practices from the intentions and policy commitments stated at the headquarters are perceived by the public as dishonest and lacking in integrity (Rudd, 2002).

Companies that have lower levels of corporate accountability and are dishonest in their dealings have little chances of succeeding as transnational entities. In the global rating of Corruption Index (CI), an index that determines the level of corruption in a nation, many countries in Asia and Africa have poor ratings and transnationals that pursue business with these countries compromise their stated integrity, which affects their image, especially in those countries where they otherwise put up a stature of high integrity. Companies in countries with high integrity may desist from doing business with companies in countries with high CI. The lowest in CI is Finland from where the global brand and mobile communication leader Nokia originates. The Finnish people are said to be straightforward people, which is evident from their architecture that is very basic and plain. It is one of the few countries where a CEO can be readily sent to jail for impropriety in business accounts. Hence no manager of a worldwide company can underestimate the role of ethics and integrity if he wants to run a truly transnational company.

People Builders: It is inevitable for transnationals to have powerful groups within it negotiating for often conflicting ends. For instance, regional managers may demand responsive measures suiting local conditions and opportunities; functional managers may push for the transfer of technology and marketing expertise; product managers may want product standardization; and so on, and the transnational organization needs to simultaneously balance the perspectives of all these groups.

Transnational managers must essentially be people builders and not people destroyers. Building people is a long-term initiative and can be achieved through commitment to human values, empathy, tolerance, and mutual respect.  People have to be set up for success and not failure.  It takes a long time to build people but very little time to destroy them. For instance, people can be destroyed simply by the way the manager talk to them. The need of the hour is not managers who are laying-off people in the name of organizational growth but managers who fit people to jobs.  One company with exemplary HR practice is the transnational courier company FedEx, which has never laid-off an employee in 30 years. The company has a massive work force of 2,50,000 employees and is having plans to acquire DHL in the near future.

People builders are called for managing the newly emergent pluri-locally integrated communities, those social connections not coterminous with the boundaries of the nation-states, emerging as part of the trans-nationalization process of organizations. This they achieve, first by changing individual attitudes and mentalities, then interpersonal relationships and processes, and lastly, formal structures and responsibilities (Evans, Pucik, & Barsoux, 2002).

Pie Enlargers: Pie enlargers improve production through good planning, organizing, effective communication, proper delegation, and control instead of resorting to staff reduction as a panacea for lower performance of the firm. The pie enlarger manager creates employment, because as more people are employed, more companies are built and more services are provided and consumed. This is sort of a chain reaction.

According to management gurus, among managers roughly one fourth misunderstand productivity for production. Production is the output of a process while productivity is the ratio of output to input. The inputs are the four M's of production, namely man, money, machines, and materials. It is a well-known fact that on an average labor and material costs accounts for 50-70% of the cost of the finished product. Hence both labor and material cost have to be optimally managed for maximum productivity. An associated problem is the managerial confusion between the terms of efficiency and effectiveness, even though there exist real differences between the two. While effectiveness is the degree of accomplishment of relevant objectives, efficiency is the ratio of actual output to the expected output.  Many companies operate efficiently but do wrong things i.e., are totally ineffective. Pie enlargers are interested more in increased production and efficiency, often at the cost of productivity and efficiency, which is of course acceptable when a particular technological regime reaches the state of maturity. Pie enlargers cannot make a new pie, but they work upon a pie conceived and developed by innovators and generate surplus value with the economies of experience. They are bureaucratic, procedure oriented, standardizing, and the right choice of managers for a mass producing firm. The 'pie' metaphor is also a useful aid in reminding managers in general about these and quite a large number of successful companies in matured industries have what we call the pie enlargers as managers.

THE WAY FORWARD

A transnational organization is a seamless heterarchical entity having a network of presence in investments and operations spanning across many national boundaries. Although it may have a centralized headquarter in some country to coordinate global management, it does not have any particular allegiance to that or any other country.  In a way, intense integration is at the heart of the transnational solution -- integration across products, functions, regions, firms, industries, and so on -- which must be celebrated rather than feared. As noted elsewhere, integration is not standardization, but trans-cultural adaptation. Given the uncertainty and uproar of the times, transnational managerial leadership as a domain of scientific enquiry has a great challenge ahead. Managers of transnationalizing companies have to learn how to broaden their competencies in order to be successful in business and non-business environments because the boundaries that demarcate these two realms are differently defined across nationalities. They have to be dynamic enthusiasts who can steer their organizations towards targets even as the targets themselves move in unanticipated ways.  It is only then that the organization can hope to survive, grow, and succeed.

Some predicted that different managerial behaviors may find a greater harmony given the globalization of the world economy and the resultant convergence of cultures while others contend this by pointing out that these forces have only sharpened the cultural consciousness of individuals and societies (Levitt, 1983; Ettorre, 1993; Friedman, 2000). While accepting that multilateral and intergovernmental organizations are increasingly defining industry standards that become mandatory framework conditions for global companies wherever they might operate, it can not be hoped that globalization can succeed in the long run in any other way than as a mutual and co-operative process in which both localities and global forces play important roles. The Western economies undeniably cannot ignore the cultural differences of hundreds of millions of people living in other countries. Due to the growing harmonization between the local and the global forces, what might result in is a hybridized single multi-local culture than the dominance of any particular national culture over others (Robertson, 1992). If this is so, the future transnational managers may become exemplifiers of the triumph of an eclectic synthesis of the different managerial typologies listed out in the present paper.

In conclusion, transnational managers for the new millennium enterprises have to outgrow their conventional management styles practiced thus far and have to creatively invent more adaptive styles that suit better for chaotic systems. The extant models of managerial leadership themselves need constant revisions since many of them are cross-culturally impotent approaches too narrowly focused to provide adequate direction for management education, training, and practice.

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Chintha Sam Sundar
Faculty
College of Business and Economics
Ministry of Education
Asmara, Eritrea. N.E. Africa
E-mail:
sam_chintha@yahoo.com

&

Babu P. George
Lecturer in Tourism Studies
School of Management, Pondicherry University
Pondicherry, India-605014
E-mail:
myselfgeorge@gmail.com / georgebabu@indiatimes.com
 

Source: E-mail September 2, 2005

  

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