MANAGEMENT DEVELOPMENT AND STRATEGY

Management development programs are designed to increase the overall skill levels of managers through a mix of ongoing management education and rotations of managers through a number of jobs within the firm to give them varied experiences. They are attempts to improve the overall productivity and quality of the firm’s management resources.

International businesses are increasingly using management development as a strategic tool. This is particularly true in firms pursuing a transnational strategy, as increasing numbers are. Such firms need a strong unifying corporate culture and informal management networks to assist in coordination and control. In addition, transnational firm managers need to be able to detect pressures for local responsiveness—and that requires them to understand the culture of a host country.

MANAGEMENT FOCUS Monsanto’s Repatriation Program

Monsanto is a global provider of agricultural products with 10,000 employees. At any one time, the company will have 100 mid- and higher-level managers on extended postings abroad. Two-thirds of these are Americans posted overseas; the remainder are foreign nationals employed in the United States. At Monsanto, managing expatriates and their repatriation begins with a rigorous selection process and intensive cross-cultural training, both for the managers and for their families. As at many other global companies, the idea is to build an internationally minded cadre of highly capable managers who will lead the organization in the future.

One of the strongest features of this program is that employees and their sending and receiving managers, or sponsors, develop an agreement about how this assignment will fit into the firm’s business objectives. The focus is on why employees are going abroad to do the job and what their contribution to Monsanto will be when they return. Sponsoring managers are expected to be explicit about the kind of job opportunities the expatriates will have once they return home.

Once they arrive back in their home country, expatriate managers meet with cross-cultural trainers during debriefing sessions. They are also given the opportunity to showcase their experiences to their peers, subordinates, and superiors in special information exchanges.

However, Monsanto’s repatriation program focuses on more than just business; it also attends to the family’s reentry. Monsanto has found that difficulties with repatriation often have more to do with personal and family-related issues than with work-related issues. But the personal matters obviously affect an employee’s on-the-job performance, so it is important for the company to pay attention to such issues.

This is why Monsanto offers returning employees an opportunity to work through personal difficulties. About three months after they return home, expatriates meet for three hours at work with several colleagues of their choice. The debriefing session is a conversation aided by a trained facilitator who has an outline to help the expatriate cover all the important aspects of the repatriation. The debriefing allows the employee to share important experiences and to enlighten managers, colleagues, and friends about his or her expertise so others within the organization can use some of the global knowledge. According to one participant, “It sounds silly, but it’s such a hectic time in the family’s life, you don’t have time to sit down and take stock of what’s happening. You’re going through the move, transitioning to a new job, a new house, and the children may be going to a new school. This is a kind of oasis; a time to talk and put your feelings on the table.” Apparently it works; since the program was introduced, the attrition rate among returning expatriates has dropped sharply.

Sources: C. M. Solomon, “Repatriation: Up, Down, or Out?” Personnel Journal, January 1995, pp. 28–34; and J. Schaefer, E. Hannibal, and J. O’Neill, “How Strategy, Culture and Improved Service Delivery Reshape Monsanto’s International Assignment Program,” Journal of Organizational Excellence 22, no. 3 (2003), pp. 35–40.

Management development programs help build a unifying corporate culture by socializing new managers into the norms and value systems of the firm. In-house company training programs and intense interaction during off-site training can foster esprit de corps—shared experiences, informal networks, perhaps a company language or jargon—as well as develop technical competencies. These training events often include songs, picnics, and sporting events that promote feelings of togetherness. These rites of integration may include “initiation rites” wherein personal culture is stripped, company uniforms are donned (e.g., T-shirts bearing the company logo), and humiliation is inflicted (e.g., a pie in the face). All these activities aim to strengthen a manager’s identification with the company.48

Bringing managers together in one location for extended periods and rotating them through different jobs in several countries helps the firm build an informal management network. Such a network can then be used as a conduit for exchanging valuable performance-enhancing knowledge within the organization.49 Consider the Swedish telecommunications company Ericsson. Interunit cooperation is extremely important at Ericsson, particularly for transferring know-how and core competencies from the parent to foreign subsidiaries, from foreign subsidiaries to the parent, and between foreign subsidiaries. To facilitate cooperation, Ericsson transfers large numbers of people back and forth between headquarters and subsidiaries. Ericsson sends a team of 50 to 100 engineers and managers from one unit to another for a year or two. This establishes a network of interpersonal contacts. This policy is effective for both solidifying a common culture in the company and coordinating the company’s globally dispersed operations.50

• QUICK STUDY

1. How can training be used to reduce the risks of expatriate failure?

2. How does management development tie in with the strategy of an international business?

Performance Appraisal

LEARNING OBJECTIVE 5

Explain how and why performance appraisal systems might vary across nations.

Performance appraisal systems are used to evaluate the performance of managers against some criteria that the firm judges to be important for the implementation of strategy and the attainment of a competitive advantage. A firm’s performance appraisal systems are an important element of its control systems, which is a central component of organization architecture (see Figure 17.1). A particularly thorny issue in many international businesses is how best to evaluate the performance of expatriate managers.51 This section looks at this issue and considers guidelines for appraising expatriate performance.