Global management of business is increasingly important to almost all business firms today as they extent their business operations globally. As the international business of a firm increases, the firms must be managed globally. This confronts managers with many new challenges, including coordinating production, sales, and financial operations on a worldwide basis. As a result, companies today have pressing international HR needs with respect to selecting, training, paying and repatriating global employees. Inter-country differences affect a company’s HR management processes. Cultural factors suggest differences in values, attitudes, and therefore behaviors and reactions of people from country to country also change. Differences in economic and labor cost among countries are also important and will help to determine whether human resources emphasis should be on efficiency, commitment, or some other factors. Industrial relations between the worker, the union, and the employer influence the nature of a company’s specific HR policies from country to country.
A global manager must learn how to design and implement global strategies to conduct effective cross-national interactions and to manage daily operations in foreign subsidiaries. To cope with the challenges in the 21st century, modern managers must be able to address actual management functions and behaviors necessary to develop global vision and management skills at both organizational and interpersonal level. New generation leaders need to understand the complexities of operating in a global business environment, and the critical success factors for the organization and themselves as global leaders. Developing global mindsets and improved leadership skills will increase the effectiveness of global teams and hence, high potential managers are needed to develop global business.
There is the need to identify and use critical skills for effective management of people and processes in a global context. It is necessary to understand the actual management functions and behaviors essential to develop a global vision. A global manager must understand the role of a manager across nationalities, to deal with dynamic management issues in both foreign and diverse host environments. He must be able to exercise competitive strategy in the context of global changes. The global manager must outline the ways in which companies can cross borders to do business with other countries, and the corresponding advantages and disadvantages of each. He must have an understanding of the techniques to effectively manage people and processes in a global context. Lack of understanding of the management techniques may result in the failure of managers abroad-, which is called expatriate failure. The Multinational corporations may react to this and the core reaction to expatriate failure is to use short assignments for most expatriates while downsizing long-term expatriate staff in favor of host country managers. Another reaction by international businesses is to create a separate group of managers who specialize in international assignments. These international specialists are called the international cadre or global management cadre.
The managers of international cadre will have permanent international assignments and they will give a global perspective to the company. These managers are recruited from any country and are sent to worldwide locations to develop cross-cultural skills. Their main job is to promote sharing and learning in all locations and by employees of all nationalities. The global management cadre spends their carriers moving from one overseas assignment to another. They develop their own international organizational culture, differing from their firm’s main culture. The use of the international cadre is more common in European firms than in US MNCs. Along with using the global management cadre, many European firms also seek to give more global experience to managers at all levels and at a much earlier age.