INB10002

Foundations of International
Business Operations

Lecture 1 Global Manager

 What is the Foundation of IB?
❑ Strong realization that business is no longer local
▪ All aspects of a national economy are linked to the economies of
trading partners (other countries)
▪ Free trade movement
o Goods and services, labor, investment funds and technology,
information

❑ Multinational Enterprise (MNE) as vehicle of international commerce

❑ Deploys resources and capabilities in the procurement, production,
and distribution in at least two countries

❑ Foreign Direct Investment (FDI)

❑ Investment made by a firm or individual in one country into business
interests located in another country.
❑ E.g.: value chain activities abroad
Comparison of the Local, National and
International business
 What is the Foundation of IB?

• In the Foundations of IB, we will explore the resource supporting

international commerce, especially the functioning of the MNEs

❖ Importance of developing effective global managers

❖ The environment that supports IB
❖ The forms of IB
❖ MNE success & failure
❖ International contracts
❖ International human resources management
❖ Global marketing frameworks
❖ Sustainability concepts
 Global effect of COVID 19 pandemic
• What is a pandemic?

▪ Comes from the Greek word pandemos

meaning everybody
▪ Therefore, pandemic means, COVID 19
has the potential of affecting everyone.

• How is it affecting Global trade?

▪ China, the ‘factory of the world’ was slowing

down – affecting companies and livelihoods
across the world
▪ Following a deep slump at the start of the year in
2020, China's economy returned to growth Q2
2020 (GDP rose 3.2% in Q2 from a year earlier)
▪ Businesses all over the world are dealing with
lost revenues and disrupted supply chains

• How is it affecting Malaysia?

Week 1 Lecture
Global Manager
Learning Outcomes
By the end of this session, students will be able to

• Define the concept of Global Manager

• Discuss the need for Global Managers
• Outline the roles and tasks of Global Managers
• Identify the key competencies and attributes of
effective Global Managers
• Describe global managerial competencies
–What are they?
–How can these be developed
 A ‘Global Manager’
• An individual handling multi-dimensional complexities of the global
market and workplace, attempting to reach and maximise their
organisation’s capabilities in an always-changing environment.
• characteristics that shape the global business environment
• A pivotal link between the company’s capabilities and the global
market requirements.

1980s and before 1990s and after

What do you think
Continuity Change has brought about
Planning Coping with the unexpected
Adjustment Transformation these changes?
Diversification Focus & Segmentation
Management Facilitation
Instruction Learning
Individuals Project Groups & Teams
Knowledge Competence
Scale & Security Flexibility, responsiveness, and speed How should global
Uninformed Customers Demanding customers
managers respond
National Boundaries Freedom of movement
to these changes?
Source: Walker & Walker (2003)
 Definition - Global Manager
➢ ‘Global brains’ who have an exceptionally
open-mind to function in culturally different
settings and succeed in the international
marketplace. (Gary Ferraro, 2002)

➢ “Act locally and think and plan globally” and

have “the ability to combine an in-depth
understanding of their own cultural
underpinnings with an openness to foreign
cultures” (Osbaldeston, 1993, p.26).
 Global Manager
• Incisive (intelligently analytical and clear-
thinking) with business in their domestic domains
and also sensitive to global issues. Generous
and patient to adapt to new cultures (Barakat et
al., 2015; Brake et al, 1995; Bartlett, and
Ghoshal, 1995).

• Has relevant professional knowledge and skills as

well as a global perspective and is adaptable
(Zoogah & Abby, 2010; Lenartowics & Johnson,
2007; Lane, DiStefano & Maznevski, 1997).
 Globalization
➢ Globalization is the process by which people,
products, information and money can move freely
across borders

➢ Firms multiplied their presence outside their

country of origin, employing more and more
people and selling and buying technology
internationally
Why do firms globalize?
Markets
• To capture new markets

Resources Competitiveness
• Wider access to resources • Economies of scale
⁻ Labor • Costs
⁻ Raw materials
• Offshoring/Outsourcing
• Knowledge
 The need for Global Managers (1)
➢ Globalization
❖ economic interdependencies
❖ Political, geographical borders and constraints
become progressively more irrelevant
❖ organizations are increasingly competing on
a global basis for resources such as supply
chains and customers.
 The need for Global Managers (2)

❖ The world has becomes a “global marketplace”

❖ Need to consider cultural, economic and societal
environments of different nations
❖ Global managers are sought after in order to gain
competitive advantages in the global marketplace.
❖ Lack of global managers – a challenge for MNCs

The COVID 19 Pandemic and its effect on global supply

chains is an example where knowledge of global
managers is valued. How do you manage global risk?
 Roles and Functions of
Global Manager
• Strategist, • Global planner The integrator
architect, and • Global manager • Integrate skills and
coordinator of people knowledge with a
• A sensor, builder • Communicator global orientation
and contributor • Researcher • Create a flexible
• A scanner, cross- • Networker network of
pollinator and • Negotiator. relationships with
champion (Ferguson 1988) multiple cultural
(Bartlett and Ghoshal perspectives
1992) • Skilfully bridge
national differences
(Baird, 1994 ; Kedia, &
and Global risk management Mukherji 1999).
 Competencies of Global Managers
• Global managers should have basic capabilities to
successfully manage complex challenges (i.e. ability to
manage people, ability to be proactive; ability to cope with
pressure, understand core business knowledge)
• Global managers should have high personal integrity,
emotionally influence others toward the achievement
of organizational objectives, and be competent
negotiators.
• Ability to navigate MNEs through complex and ever-
changing environments

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Competencies of Global Managers
❖ The pivotal capabilities for global managers are (Dalton
et al., 2002)
❑ International business knowledge

❑ cultural adaptability

❑ Perspective-taking, being holistic

❑ Innovation
❖ To achieve effective managerial performance, global
managers should utilize their professional knowledge
based on the understanding of specific situations inside
and beyond domestic boundaries with a strong sense of
global orientation.
 Competencies of Global Managers
➢ Seven professional skills (Hyatt , 2016):
▪ Establishing the feasibility of international trade.
▪ Market expansion planning ability.
▪ Creating effective market entry strategies.
▪ Adaptive product/service production ability.
▪ Understanding International sales and marketing.
▪ Having Intercultural competence - managing people
▪ Understanding International law and ethics.
 Competencies of Global Managers
❑ Situational Mentality
▪ Professional knowledge alone is not adequate,
global managers need the situational mentality
(relational “soft” skills)
▪ Involves adaptability in new situations, sensitivity to
different cultures and ability to adjust to suit different
business contexts
• Skilful consideration, empathy, self-assessment and
flexibility
• Thus, soft skills are very important to manager
Competencies of Global Managers
UK Study China & Hongkong Study

Communication & Interpersonal &

Interpersonal Skills Communication Skills
Teamwork Team management &
Leadership
Time & Self-management Organisational skills
Decision-making & Initiative Language skills
taking
Taking responsibility Soft skills required
by employers in the
Source: Mehdi Tounsi, 2015
UK and in China are
different. Why?
 Developing Global Competencies
❑ Organizational Development interventions
▪ Foreign travel and overseas assignments - exposing potential
global managers to experience critical economic, political and
cultural environments
▪ Purposeful training and working with teams that consist of
individuals from diverse backgrounds and perspectives
▪ Sharpen professional skills through giving opportunities to put
knowledge into practice
▪ Cultural competence can be acquired from a whole range of training
or self- learning activities
❑ Acculturation or cultural adaptation is key when developing
successful global managers.
 Developing Global Competencies (1)
Seven competencies of global managers
(Rosensweig,1998)

1. Education that is both broad and deep to enhance the

ability to think both globally and strategically, combined
with a multifunctional business education.
2. Multiculturalism to enable an understanding and
appreciation of cultures beyond one’s own, with
sensitivity to cultural and political nuances.
3. Integrity to operate from a solid base of ethical values.
Developing Global Competencies (2)
Seven competencies of global managers
(Rosensweig,1998)
4. Flexibility to be responsive to the rapidly changing
nature of our business world, and willingness and
ability to act and move quickly.
5. Personal attributes such as high energy levels and
professional appearance and manners. These
attributes will facilitate doing business in different
culture.
6. Communication and interpersonal skills.
7. Technology, understanding and application
8. Fluency in several key languages.
 Developing Global Competences

Building blocks of a global competency

framework (Bücker and Poutsma 2009)
• Global mindset
• Cross-cultural competence
• Intercultural sensitivity
• Cultural intelligence

Class take away lesson:

The globe is converging – develop
cultural competencies – Cultural
Intelligence (CI) is an IB field
worth exploring.