Tài liệu Corporate Reputations, Branding and People Management 27 doc

much of German industry, resulted in a relatively peaceful indus- trial relations system for many decades. This state of relatively harmonious industrial relations provided the stability that was necessary for rapid German economic development since 1945 and consensus between management and labour has continued to be a feature of German industry even when economic devel- opment slowed down during the late 1990s. Supporting these industrial relations factors and the effects of the Second World War is the traditional German attitude to education, particularly engineering education, and the beliefs of German managers in expertise and the importance of the task. German managers are noted for not distinguishing tech- nical work from managerial work. Management is necessary to get things done, is not ‘over and above’ technical work and is best done by managers taking action themselves, rather than neces- sarily working, at one remove, through other people (Lawrence, 1992). This attitude, coupled with the much higher technical education of many German managers, meant that they were able to define their jobs less as people managers and more as tech- nical experts. So, given a more harmonious context, higher level of technical capability and the greater respect from workers for this ability, it is not difficult to explain why the German busi- ness system might be quite different, though there are signs that the reputation for technological superiority may be declining and that the education system, as presently constructed and once vaunted, is holding back German progress. According to an Economist survey of Germany published in February 2006, the rigid school system has produced the ‘PISA shock’, named after the OECD programme that produces research on international comparisons of mathematics and other abilities. Germany came 21st out of 31 countries assessed in 2001 in maths and science competences for schoolchildren, though there has been recent improvement (Economist, 2006). Moreover, Germany’s renowned system of producing high quality apprentices by attending a Hauptschule is also under threat, as German firms recruit fewer apprentices and potential students look elsewhere for education and training. Geoffrey Jones, a British-born Harvard Business School Professor, has made an important point about the lessons of his- tory, comparisons with the American business system and, by 244 Corporate Reputations, Branding and People Management implication, the problems that American managers might expe- rience when managing outside of the USA. He has argued that there has never been ‘one best way’ of achieving business success: Historical experience stands as a powerful corrective to over-simplistic management fads and fashions, and to slavish transfers of management systems and practices that might work well in one country but can be disastrous in another … Generations of British business historians explained their country’s economic ‘failure’ by establishing what it did ‘wrong’ compared to US or German business … We maintain that comparisons which use the United States as a benchmark can be misleading. The United States is an idiosyncratic country by virtue of its size and growth, high levels of entrepreneurial energy, legalistic culture, and a number of other unusual features. (Interview with Geoffrey Jones, available online at http://hbswk.hbs.edu/item. jhtml?idϭ4106&tϭbizhistory&nlϭy; accessed 12/5/04) The systemic and enduring nature of business systems A second feature of business systems is the interlocking and endur- ing nature of business-related institutions in any country or region over time. Often we find that new industries develop in a partic- ular country or region, and call for new kinds of skills and work patterns. Good examples of such developments during the latter part of the 20th century include call centres and software development in India, electronics manufacture in Malaysia, China, Taiwan and South Korea, and motor vehicle manufac- turing in the southern states of the USA. These new industries and the typical kinds of employment policies and practices asso- ciated with them were necessarily overlaid on the existing, domi- nant system of older industries and human resource management patterns. Although changes occurred in the business systems of the affected areas of India, China, Malaysia and the southern USA, these changes were constrained by previous institutional frameworks, such as the dominant patterns of worker organiza- tions, including trade unions, legislation and patterns of business Chapter 7 Corporate reputation and branding in global companies 245 ownership (e.g. the importance of family-owned firms in Malaysia and the state ownership of traditional Chinese firms). For example, foreign companies wishing to set up in China were required to form a relationship with a local partner to form a joint venture. Such joint ventures are governed by a system of regula- tions on employment practices regarding contracts, union recog- nition and safety that continue to reinforce the role of national and regional governments and the control of the Communist party on economic development (Zhang and Martin, 2003). Thus, it has often been the case that the rise of new industries and associated employment practices may herald some significant changes in certain aspects of the business system, but because these changes do not fit closely with the previously dominant busi- ness institutions, the interlocking and conservative nature of these previously dominant institutional arrangements means that the existing system remains largely intact, albeit in a modified form. Some companies have understood this problem of institutional inertia only too well when setting up new facilities overseas. For example, most Japanese car manufacturers which entered the US market during the 1980s set up their production facilities in southern locations to avoid many of the institutional constraints associated with typical US vehicle manufacturing in the northern states of the USA. Indeed, some researchers have pointed out that these Japanese firms tended to locate not in the major cen- tres of population in these southern states but in formerly rural small towns to source employees without previously formed expectations of a manufacturing environment and without a previous history of trade union membership. Such was the case with Toyota, which set up its major American production plants in small towns in Kentucky, Southern Indiana and West Virginia, far removed in distance and ‘mentality’ from the major centres of vehicle manufacture in Michigan and Ohio. The role of critical turning points and changes in systems A third feature of a business systems approach is the impor- tance of aptly named critical turning points in bringing about 246 Corporate Reputations, Branding and People Management radical change (Hollingsworth and Boyer, 1997, p. 267). These turning points include wars, economic crises and political upheavals, often revealing severe problems in previously domi- nant systems and resulting in transformational institutional change. The new institutional frameworks that were imposed following these upheavals often redefined the pre-existing rela- tionship between employers and employees. As a consequence, the changes in management–employee relationships became embedded in institutional arrangements (e.g. laws, bureaucratic systems, lobbying bodies, etc.), which persisted long after the upheavals that gave rise to them. We have already discussed the impact of war on Germany. Another excellent example is from the USA during the New Deal era, which followed the critical turning point of the Great Depression in the 1930s and led to a new industrial relations framework, based on a highly codi- fied system of collective contracts and trade union recognition, which exists to this day in the northern US states. As the inwardly investing Japanese car manufacturers attempted to point out in their location decisions, the New Deal institutional arrangement may have been appropriate during an era of mass production with an emphasis on a standard and limited product range and cost containment, but was not suited to their novel ‘lean pro- duction’ strategy of providing high levels of quality, a wider product range and even lower costs. In the UK, the radical transformation of politics and indus- trial relations brought about by the election of the Thatcher gov- ernment in 1979 put Britain on a road very different from the European corporatist consensus between government, big busi- ness and the trade unions that still forms the ideology of the EU. The legacy of Thatcherism is still at the heart of the divi- sions between Britain and many member states over economic policy. Moreover, the decline in trade union density in the UK, from 52% in 1979 to only 29% of the working population in 2005, is a consequence, in part, of the radical policies pursued by the Thatcher government, and in part of the more sophisti- cated HR strategies designed and implemented in the UK from the mid-1980s. Such strategies include the focus on anti- discrimination, family-friendly policies on job sharing, childcare provision, coupled with performance-related pay, all of which have impacted on the traditional role of the trade union. Chapter 7 Corporate reputation and branding in global companies 247 A more complex basis for comparing and contrasting international business systems A fourth feature of the business systems approach is to allow com- parisons of different national systems on a more complex range of key dimensions than national cultural characteristics and, at the same time, to reveal their unique nature. These key dimen- sions for comparison cover major institutional arrangements such as the nature of product, labour and capital markets, the organiza- tion or clustering of firms, the role of the state and legal regulation, systems of vocational education and training, and industrial relations. However, the unique character of any one system is guaranteed by the particular configuration of what dimensions are important and their interaction over time. For example, in the development of the US business system the ‘path-dependence’ or ‘what came before what’ of each of the key features of the system meant that it turned out to be unique (Jones, 2003), even though it might be possible to compare countries as close as America and Britain on any one of these dimensions by itself. The evolution of the MNEs In the preceding sections we have set out the national cultural, institutional and historical constraints on companies’ attempts to develop strong corporate identities and cultures among those MNEs that seek to become geocentric. This has led some writers to suggest that the truly geocentric organization is more myth than reality or is an ideal rarely achieved in reality. Firms seek- ing geocentrism have been described as moving through four stages related to the life cycle of the firm (Adler and Ghadar, 1990): ■ Stage 1: Managers make brief visits or have short assign- ments to assist the overseas units with any technical or product needs. ■ Stage 2: HQ acknowledges that local markets require a differentiated approach where products and business methods are adapted to local circumstances. Home 248 Corporate Reputations, Branding and People Management country nationals (HCNs) are recruited to sales, mar- keting and HR roles as they are perceived to have a greater understanding of local circumstances. ■ Stage 3: When the company seeks to exploit integra- tion and cost advantages. One of HR’s most important tasks would be to focus on integrating employees through management courses and training and by expanding the same corporate identity, values and norms of behaviour through performance management techniques. Additionally, the use of sophisticated HR tools such as succession planning might be used to integrate employees resulting in subsidiary units com- prising a mixture of parent company nationals (PCNs), HCNs and third country nationals (TCNs). ■ Stage 4: This is reached when there is a balance between global integration with national responsiveness. At this stage, recruitment of managerial staff is based on the best person for the job rather than any consideration of nationality or links to HQ. Extensive use is made of cultural diversity training and programmes. The expatriation of parent company managers is a key ele- ment in this process, especially during stages 1–3. All MNEs exert a degree of control over their subsidiaries to ensure cer- tain patterns of behaviour on the part of local management, workforce representatives and employees. Such control can be either direct or unobtrusive. Direct control is defined as the degree of involvement in local activities, i.e. direct involvement in decision-making; international guidelines on the selection and promotion of employees would be viewed as an overt means by which managers are expected to comply. Unobtrusive con- trol is defined as the way in which HQ shapes and constrains decisions made at subsidiary level through controlling the premises underlying decision-making. Good examples of this process are management training or management exchanges designed to reinforce corporate identities. Expatriating managers to host country subsidiaries is more than a mechanism of direct control, sometimes described as the equivalent of ‘gun-boat’ diplomacy. Expatriate managers bring with them the values, attitudes and ways of doing things Chapter 7 Corporate reputation and branding in global companies 249 that embody the corporate culture and identity. As such, researchers have argued that they are the transmitters of cor- porate culture and identity, boundary spanners, cultural or iden- tity carriers. They also provide a more pervasive means of unobtrusive control through the diffusion of values and attitudes in their day-to-day work practices. Because of this pervasive influ- ence, companies such as Unilever and ABB, which are sometimes described as geocentric, relying heavily on a cadre of international managers to diffuse cultural and identity practices across the com- pany (Martin and Beaumont, 1998). Ferner and Edwards (1995, p. 241) see the physical movement of staff ‘as a key means of dis- seminating cultural understanding and ways of doing things’. The case of the Mars Corporation in Box 7.3 illustrates some of the stages and complexity involved in the evolution of one MNE. 250 Corporate Reputations, Branding and People Management Box 7.3 The evolution of Mars The Mars Corporation has 65 factories in 60 countries worldwide. The company produces sweets, ready to serve meals, pet foods and drinks, as well as electronic payment systems, with a range of household names for brands, including M&Ms, Twix, Mars Bars and Snickers in snackfoods, to Pedigree, Whiskas, Cesar and Sheeba in petcare, and Uncle Ben’s in foods. The annual turnover of the Mars Corporation amounts to over $18 billion with a global workforce of over 28 000 people (http://www. mars.com/About_us/The_Mars_story.asp; 28 February 2006). Mars is an American family-owned company, which began with the invention of the well-known Mars chocolate bar in 1923. According to Brenner (1999), the company’s success has been mainly due to the founder’s son, who moved to England in the 1930s when his father refused to allow him to have one-third control of the company. The son was given the foreign rights to produce a chocolate bar in Europe. He was so successful that he bought out his father’s company in the US soon after the latter’s death. The company began by producing choc- olate bars, later diversifying into producing pet food and other food products in the 1940s. Ownership of the company resides with the Mars family, one of the richest in the United States. The company is still man- aged on a day-to-day basis by the two sons who attempt to visit each Mars unit at least twice a year (Brenner, 1999). Chapter 7 Corporate reputation and branding in global companies 251 The company’s history is of expansion, nationally and globally. This desire is at the heart of its corporate strategy. This is encapsulated by the founder’s somewhat grandiose comments: ‘I wanted to capture the whole goddamn world’ (Brenner, 1999, p. 59). Despite the fact that an American family owns the company and that it is US-based, Britain remains Mars’ leading market. Mars opened a subsidiary in Poland in 1990, largely because confec- tionery is one of the most profitable and competitive industries. It is often said that chocolate and sweets are among the first things people buy when their incomes rise. Poles have long had the highest per capita chocolate consumption in Central and Eastern Europe and figures sug- gest that this consumption has risen five-fold since 1990, to about 2 kg of chocolate and 3 kg of sweets per annum. However this is well below Western European averages of more than 5 kg in chocolate alone, sug- gesting that there is much greater market potential in Poland. To build its company culture and overcome the problems of buying a state-owned factory, with ‘bloated’ workforces, complex distribution systems, huge product ranges and outdated plants scattered arbitrarily around a single city or region, Mars built its factory and market pres- ence from scratch. In 1991 it acquired land about 50 km west of Warsaw and installed machinery to make dry pet food. The market in pet foods was at this time non-existent. The company ensured that it took only a small risk by installing previously used machinery from various European companies and drafting ten expatriate managers to manage this new operation. By December 1992 it was clear that the market was growing. The company employed 120 people and was producing 15 000 tonnes of pet food, with a turnover of around $US 30m. Other product lines were added to production: snack foods (e.g. Mars bars) in 1995; and wet pet foods (e.g. canned dog food) in 1996. In 1995 a new factory was opened, producing confectionery prod- ucts such as Mars bars, Milky Way and Galaxy. By this time there were 1000 people employed by the company with 700 on-site and the rest operating as a national sales force. By the end of 1997 the turnover had reached circa $US 200m with expectations of continued substantial growth over the next 4–5 years, with a total number of 1400 employees. By 2001, Mars had around 90% of the pet foods market and around 12% of confectionery. Mars defines its culture explicitly in the form of five principles: qual- ity for customers and value for money, individual responsibility and 252 Corporate Reputations, Branding and People Management responsibility for others, mutuality in sharing benefits, efficiency in using resources and doing only what can be done efficiently, and freedom to shape the future with profits to remain free. These were developed 20 years ago by the Mars family, who desired global expansion but wanted to maintain unity and integration. The founder, by explicitly stating his vision and values, and contin- ual reinforcement through regular visits and active participation, is central to Mars culture. As one British manager commented: ‘Culture is strictly defined by members of the family, who have a very, very direct influence.’ The central tenets of the culture are reinforced through the artefacts, atmosphere and office layout. Brenner (1999) succinctly encapsulates the working culture at Mars: Everyone has the same size desk, everyone answers his own telephone and everyone is awarded a 10 per cent bonus for punctuality. To encourage communication, managers sit in a wagon wheel fashion in the centre of a large room, encircled by junior associates. The sales dept is right next to the marketing dept, which is right next to manufacturing and accounting. There are no offices, no partitions and no privacy. That way, the founder reasoned, everybody in the company would know what everyone else was doing … (Brenner, 1999, p. 189) At Mars there is little regard for status and formality is frowned upon; everyone is referred to by his or her first name. Personal communica- tion is the normal state of affairs. Global companies use the corporate identity and culture as a unifying force to overcome issues of nationality, with Mars being a classic example. Most workers are dressed in their starched whites, uniforms provided by the company and laundered daily. Some are wearing hard hats and everyone has their first name emblazoned on their coats. There is no way to tell who is in charge – who is an executive and who is a janitor. There is no way to tell you that you are in a factory located in the former Soviet Union, just 120 km outside Moscow. (Brenner, 1999, p. 284) I often used to say that I didn’t really live in Poland as the Mars unit was just like any other. (Former expatriate British manager working in Poland) Mars also has a policy of using the informal aspect of any language irre- spective of culture or country. In Poland, traditionally the formal means of Chapter 7 Corporate reputation and branding in global companies 253 addressing a colleague is used as a sign of respect. The usage of the infor- mal means of address meant that the culture often had to be explained to outsiders such as suppliers. Yet Mars encountered significant problems in transferring its values to Poland. The company communicated the Mars values in the first few years through training workshops. Competitions were held to reward employees who could demonstrate that they were able to demonstrate the Mars values at work or home. However, as the responses from the local managers demonstrate, the Mars values were perceived negatively and as a form of brandwashing. The communist legacy meant that the five Mars principles were perceived as anachronistic propaganda. The five values were used as fundamental truths, which Polish managers viewed uncomfortably. For instance, one respondent recounted that at a meeting in the UK one of the attendees had quoted the ‘principle’ of responsibility as a way of supporting a particular business strategy. The respondent said that this action was reminiscent of management activ- ities in the former communist era. For this reason, the emphasis of the Mars Company on its stated values was perceived to be anachronistic propaganda by Polish respondents. Polish people don’t want to hear five principles … People still remember the communist times and the propaganda. The values do not need to be made explicit in Poland because it is a different environment. In the West there is greater stability, so managers can concentrate on maintaining relationships. But we need to improvise and be more spontaneous. Therefore the values are seen as limiting, perhaps suffocating and need to be adapted. (Interview with a Polish manager) Consequently, in 1998 the management team decided to adapt the five principles to the Polish culture. The adapted values, whilst different from the original values, share similar ambitions. They are now far more pre- scriptive, with a greater range of examples aimed at assisting meaning and understanding. For example, the value of ‘mutual respect’ itemises six meanings or codes of conduct. These include: We are fair and sensitive. This should not be confused with unthinking generosity but rather refers to the concept of understanding different point/requirements and making decisions, which are mutually beneficial. (Company Handbook) . and 252 Corporate Reputations, Branding and People Management responsibility for others, mutuality in sharing benefits, efficiency in using resources and. turning points in bringing about 246 Corporate Reputations, Branding and People Management radical change (Hollingsworth and Boyer, 1997, p. 267). These turning