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Chapter 1 Organizational Behavior and Management 29 ity employees. Managing diversity is an ongoing activity that has important implications for organizations, particularly as diversity is forecast to increase as more and more women and minority employees enter the workforce. ■ ■ ■ CHALLENGE 5: MANAGING THE GLOBAL ENVIRONMENT The challenge of managing a diverse workforce increases as organizations continue to expand their operations internationally. Thus, managing in the global environment is the fifth challenge that we focus on. Global companies like GM, Toyota, PepsiCo, and Sony all face similar problems of effectively managing diversity across countries and national boundaries. 51 In Chapter 17, we discuss the global organization and take an in-depth look at problems of managing behavior in global organizations. Here, we summarize some of the main issues involved in this increasingly important task—issues that we also discuss in most other <strong>chapter</strong>s. First, there are the considerable problems of understanding organizational behavior in global settings. 52 Evidence shows that people in different countries may have different values and views not only of their work settings but also of the world in general. It has been argued, for example, that Americans have an individualistic orientation toward work and the Japanese people have a collectivist orientation. These individual orientations reflect cultural differences that affect people’s behavior in groups, their commitment and loyalty to the organization, and their motivation to perform. 53 Understanding the differences between national cultures is important in any attempt to manage behavior in global organizations to increase performance. Second, the management functions of planning, organizing, leading, and controlling become much more complex as an organization’s activities expand across the globe. On the planning dimension, decision making must be coordinated between managers at home and managers in foreign countries who are likely to have different views about what goals an organization should pursue. The way managers organize the company and decide how to allocate decision-making authority and responsibility between managers at home and abroad is one of the most significant functions of global managers. 54 On the leadership dimension, managers must develop their management skills so that they can learn to understand the forces at work in foreign work settings. They must also tailor their leadership styles to suit differences in the attitudes and values of workforces in different countries. There is considerable evidence that the problems managers have in managing diversity inside their home countries are compounded when they attempt to manage in different national cultures. 55 Finally, controlling involves establishing the evaluation, reward, and promotion policies of the organization and training and developing a globally diverse workforce. All management activities are especially complex at a global level because the attitudes, aspirations, and values of the workforce differ by country. For example, most U.S. workers are astonished to learn that in Europe the average shop-floor worker receives four to six weeks of paid vacation a year. In the United States, a comparable worker receives only one or two weeks. Similarly, in some countries promotion by seniority is the norm, but in others level of performance is the main determinant of promotion and reward. The way in which global organizations attempt to understand and manage these and other problems can be seen in the way managers use different methods, including information technology, to manage organizational behavior. The Global View Insights in this and other <strong>chapter</strong>s, particularly in Chapter 17, examine the topic of managing global organizations. (See Insight 1.7.)
30 Chapter 1 Organizational Behavior and Management INSIGHT A G L O B A L V I E W1.7 IMPROVING GLOBAL COMMUNICATION NEC a Japanese electronics giant, like Hitachi, makes global teleconferencing an everyday part of its managers’ activities. Global managers in all parts of the world join together routinely to plan strategies in the quickly changing telecommunications industry. Integrating and connecting a company’s employees and subunits through electronic means such as video teleconferencing, e-mail, and global intranets is becoming increasingly important in global organizations. Because the success of a global company depends on communication between employees and business units that are likely to be in separate countries, the value of teleconferencing is obvious. It reduces communication problems and allows decisions to be made quickly. Teleconfer-encing allows managers in different countries to meet face-toface through television hookups to coordinate decision making. It facilitates learning when managers in foreign and domestic divisions meet to confront important issues and to solve mutual problems. For example, Hitachi uses an online teleconferencing system to coordinate its 28 research and development (R&D) laboratories worldwide. 56 E-mail and high-speed data-transfer systems are also becoming extremely important ways of quickly sharing information across the globe. U.S. companies, such as Hewlett-Packard and IBM, make extensive use of e-mail and their corporate intranet so that foreign and domestic divisions share information and knowledge. ■ Beyond electronic means to help managers develop a global orientation, more and more organizations are rotating their managers to foreign divisions so that they begin to understand the problems and opportunities present in foreign countries. 57 These “foreign” managers constitute a management network—a set of managers who have developed an array of personal contacts with other managers throughout the world—that helps individual managers to learn from one another and helps to overcome a major obstacle to effective integration: subunit orientations that stymie communication and coordination. Donald Fites, CEO of Caterpillar, rose to his present position because of the knowledge of lean manufacturing techniques that he gained from his experiences as a Caterpillar manager in Japan. 58 Jack Smith, CEO of General Motors, rose to his position because of his successful introduction of lean manufacturing to GM’s European division. Motorola established a new Asian presence by building a factory in Tianjin, a port city near Beijing. Tam Chung Ding, who directs Motorola’s Asian operations, commented that personal connections between managers in the same organization and between organizations are more important in Asia than anywhere else in the world. In Asia, integration inside an organization and the formation of strategic alliances between organizations often depend on the personal connections established through a management network. 59
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