Guidelines for Global Managers
Global management is an important aspect for successful global organization. Global management has a wide scope that requires managers to have knowledge and skill for understanding operations and market to attain organization goals (Varela, & Gatlin-Watts, 2014). Global management involves planning, leading, staffing, organizing, and controlling organization activities to achieve its goal with international expansion (Henson, 2016). Global managers require capacity to manage complexity of organizations running across different countries, divergent cultures, and markets. It is important for global managers to understand global management concepts for effective and efficient meeting of business goals. Global managers have a responsibility to makes informed decisions and lead the business toward achieving predetermined goals. International businesses require global strategies and adequate resources to penetrate and compete in the global markets. Global managers are therefore tasked to manage organization’s business internationally by organizing sales, hiring, marketing, and financial practices (Whetten, & Cameron, 2014).
The following write-up is manifesto on critical issues for guidance for global managers a case study of Modeen Gears. This will involve offering guidance to James as the Chairman in leading the Board of a growing global Modeen Gears and reviewing critical reflections of the outgoing CEO Stefan Eliss-Hao.
Modeen Geas is gear box manufacturer that has extended operations from UK to other manufacturing sites in India, Italy, and United States. The company has acquired several companies by integrating forward and backward in the supply chain. The integrations gave the company a growing status from Euros 180K in 1990 to Euros 85M in 2012. The outgoing CEO Stefan has been managing the company in the process of growing to global that has resulted to financial losses, unskilled personnel, and customers shifting to the company competitors. James is the Board Chairman and believes that Stefan should have done things strategically to enable the company perform in the global platform. Stefan was driven by the desire for dominance and personal legacy that led him to make irrational decisions. Stefan gets fired and James needs to lead the Board of a global growing company.
James needs to lead Modeen Gears back to profits. As the Chairman of the Board, James needs to provide leadership to protect shareholdings interests. This will require James to work with the management for the company to improve performance. The following is a guanine for James to follow in leading a Board of global growing organization;
First, James has to lead the Board to formulating company’s strategic plan. A strategic plan sets the company mission, vision, and objectives that have to be implemented by the managers (Mendenhall et al., 2017). A strategic plan will outline objectives to be met in every activity, resources required, and results expected. This will prioritize objectives and activities and keep the managers focused towards a specific goal. The strategic plan will outline resources for each business unit and managers will not have to rely on the CEO to get funding. The strategic plan will also analyze the company macro environment to assess threats and opportunities (Morschett, Schramm-Klein, & Zentes, 2015). This will enable the business use it strengths and minimize threats of the changing business environment.
Formulating a Strategic Plan
Secondly, the company has to close under-performing manufacturing site or business units. James has to lead the Board of the company to evaluating all the business units, acquisitions and manufacturing sites in terms of performance and strategic importance to the company. The outgoing CEO Stefan has been acquiring business without considering the valuation of the businesses. Stefan decision for acquisition was based on critical mass production for economies of scale and gaining size that could enable him penetrate the US market. The CEO decisions for acquisitions were not based on the company’s best interest rather self interests that led to current company financial burdens. This is a very important decision to the company and James should lead the Board to making the decision on which business unit and acquisition to close to improve the company efficiency.
Thirdly, James should undertake monitoring and control in the company financial performance. The financial reports of Modeen Gears were not accurate. The outgoing CEO used the acquisitions to cover the company’s core business performance. The actual accounts prepared annually did not reflect the actual performance of the company for the period. The Chairman should involve a good auditor to verify if the accounts prepared reflect the true state of the business. Monitoring will also enable the chairman to notice specific business unit need. For instance, James will be able to know the consistent high profits performance of Mk IV sport gears business unit and it current out of date machinery and management systems. Monitoring and control function will enable the James to closely understand the business units performance against company set standards and offer corrections to ensure the company activities and performance are in line with the organizational plan.
James should protect the company assets. Assets are valuable to the success of the business. James should take the responsibility of protecting and representing investors’ interests. First, James should formulate a replacement policy. The policy will be used to replace worn out or out of date equipments in the company. This will ensure all equipments owned by the company for production function are effective and timely replacement. Secondly, James should invest in human resource training. The chairman should lead the directors to formulating a policy that will control hiring, promotion, termination of tenure and training. This will set an adequate budget for the training allowing staff to be highly skilled adding value to the company (Cascio, 2018). The policy will also enable managers and employees to work with a sense of job security that their tenure cannot be terminated without a due process. Therefore, managers will get funding for business degree increasing their knowledge and contribution to the company.
Closing Under-Performing Business Units
Another guideline to James is to allocate funds for product development and innovation. The outgoing CEO overlooked reinvestment on products and service. This made the competitors’ products and service more appealing that could see customers shifting. James should create policy that allocates funding for product development to ensure that the company products are continually improving to appeal and maintain customers.
Lastly, James should ensure duties are well delegated. This will involve appointing Managing Directors for business them giving them a scope so that they can grow their operations. Managing Directors will therefore be responsible for the key performance ratio. This will enable MDs to be accountable, efficient, and effective in their role in the company.
It is important for Stefan to reflect on his management practice when seeking a new position in a global organization. Stefan style of management and decisions made were the cause of the problems experienced at Modeen Gears. Stefan reflection should include the following;
First, Stefan needs to reflect on his perspective to training managers. Working as a global manager requires the manager to support and invest in training lower level managers (Greenberg, 2014). Training human resource empowers them to perform better that increases the organization value. For instance, Stefan allocated a tight budget for training and did not value paying for managers to pursue business degrees while at Modeen Gears. Failure to invest in training of human resource undermines people’s potential in the organization (Kinicki, Williams, Scott-Ladd, & Perry, 2014). Therefore, Stefan has to change his perspective and attitude toward training of personnel in a global company.
Secondly, Stefan has to understand the role of delegating duties. Delegation is an important aspect of managing large organization. Global manager are required to delegate tasks and responsibility to managers working under them (Lasserre, 2017). Delegation of duties gives other manages a scope to grow and be accountable of their operations. Stefan did not want to appoint managing directors and giving them scope and he ended up acting like a MD instead of a CEO. This led to MDs in the company losing count of the key performance ratios that they were expected to be responsible of. Stefan should change this style of leadership where he acts as both the MD and CEO and delegate duties so that each manager knows scope and who to report to.
Thirdly, Stefan needs to broaden his thinking when making decisions by considering macro environment and appreciating it impacts to businesses. Stefan created business plan that did not consider or appreciate the changing environment. Stefan even hated to talk about macro-environment. He assumed the specialist car market that was changing as a result of change in consumer taste to high value cars and hybrid-green fuel technologies. This fact threatened the company losing its customers. Therefore, Stefan should consider the business environment when leading a global organization.
Monitoring and Control of Financial Performance
Fourth, Stefan should become strategic when making or executing global organization’s decisions. Stefan preferred and used a direct approach when working at Modeen Gears as a CEO. In several cases he made decisions that favor his personal interests. First, Stefan was acquiring other companies in the supply chain by integrating forward and backward without a strategic objective. He thought that by critical mass production he would achieve company’s economies of scale. These integrations did not offer the company any competitive advantage. Fiona, a strategist thought that the acquisitions that Stefan was undertaking were suicidal to the core business of Modeen Gears. Another instance of Stefan failing to be strategic is when he thought of entering the US market without a competitive edge and wanted to compete at the same prices. Stefan therefore, should be strategic when making global decision to enable the company he is leading to attain a competitive edge in the market.
Another aspect that Stefan needs to change is style of leadership. Stefan had directive style of leadership. He commanded his subordinates and suppressed those that seemed to have talents, skills, and knowledge in the company. The MDs had no scope of operations and they received orders from Stefan. In another case, Stefan made the organizational chart of Modeen Gears based on his thinking. He used the organizational chart to execute his strategies. Stefan also never consulted with other executives in the company. He did not want to get different perspectives from different individual on how to formulate or execute a decision. This style of leadership is not appropriate for leading a global organization and therefore, Stefan should change this style of management and adopt a style of leadership that distributes power in the organization.
Lastly, Stefan should understand the importance of investing on product development in an organization and having a replacement policy. Stefan did not understand the importance of setting budget for product development or replacing out-of-date equipments. Failure to reinvest in product development can lead to consumers shifting to competitors’ products because they are more appealing and in line with consumer needs transformation (Contractor, Foss, Kundu, & Lahiri, 2015). Out of date equipments are ineffective and can lead to a business incurring losses (Carlton, & Perloff, 2015). Therefore Stefan should understand the importance of setting budgets for product development and out of date equipments.
Conclusion
Global managers require skills and knowledge to successfully run a global business. The effectiveness of a global company depends on the managers’ ability to make informed decisions and implement strategies. From the write up, James, the chairman requires to lead the Board to formulating strategic plan and policies to be used in the organization to improve the business performance. James also needs to lead the Board in making crucial decisions on which acquisitions to drop and keep for the company to be strategically positioned and attain a competitive advantage. On the other side, Stefan need to reflect on his style of leadership, delegation of responsibilities, human resource training, impact of micro environment to businesses and setting a budget for product development and out to date equipments to effectively run a global organization.
References
Cascio, W. (2018). Managing human resources. McGraw-Hill Education.
Carlton, D. W., & Perloff, J. M. (2015). Modern industrial organization. Pearson Higher Ed.
Contractor, F., Foss, N. J., Kundu, S., & Lahiri, S. (Eds.). (2015). Microfoundations of Global Strategy: Role of Leadership and Manager Characteristics. Global Strategy Journal.
Greenberg, J. (2014). Behavior in Organizations: Global Edition. Pearson Higher Ed.
Henson, R. (2016). The Rise of the Global Manager. In Successful Global Leadership (pp. 1-10). Palgrave Macmillan, New York.
Kinicki, A., Williams, B. K., Scott-Ladd, B., & Perry, M. (2014). Management: A practical introduction. McGraw-Hill Education Australia.
Lasserre, P. (2017). Global strategic management. Palgrave.
Mendenhall, M. E., Osland, J., Bird, A., Oddou, G. R., Stevens, M. J., Maznevski, M. L., & Stahl, G. K. (Eds.). (2017). Global leadership: Research, practice, and development. Routledge.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
Whetten, D., & Cameron, K. (2014). Developing Management Skills: Global Edition. Pearson Higher Ed.
Varela, O. E., & Gatlin-Watts, R. (2014). The development of the global manager: An empirical study on the role of academic international sojourns. Academy of Management Learning & Education, 13(2), 187-207.
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