José Santos

José (Joe) Santos

Kuala Lumpur, 3 December 2015

Managing The Global Enterprise Organizational Integration

José Santos

In a “Global World”, ...

Dispersion of world-class lead user knowledge.

José Santos

Created in the World

In a Global World...

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In a “Global World”...

Leading from the World

Leading from one building

(… in Shenzhen, 2006)

(… in Hong Kong, 2011)

(2009-2013)

(≈1987-2003)

(… in Brussels, 2015)

José Santos

In a “Global World”...

Leading from the World

(Source: Santos, HBR 2007)

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ü  Interconnected, Interdependent, Integrated

ü  International specialization ü  Dispersion of world-class knowledge

ü  A union ... of differences at a distance ü  The performance … of an abstract whole

ü  Uncertainty

ü  High objective uncertainty ü  Very high subjective uncertainty

A Global World: IIIU

(Source: Santos, forthcoming)

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ü  Geography (region / country / site)

ü  Business (industry / company / unit)

ü  Function (activity)

How global is your “world”? Your IIIU?

What and how are the interactions between your “place”

and other countries? And with the “whole”?

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Global Innovation

and Competitive Advantage

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Global Advantage: National or Metanational?

National Metanational

Superior performance depends on the attributes of

national origin

Superior performance depends on the capabilities of the

organisation and management team

(Porter, 1990) (Doz, Santos, & Williamson, 2001)

Projecting to the World Learning from the World

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National or Metanational, that is the question

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Global Integration

Across Companies

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1999

2004

(Source: Renault-Nissan Alliance Report 2014)

2014

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(Source: Renault-Nissan Alliance Report 2014)

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(Source: Renault-Nissan Alliance, 2005)

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(Source: Renault-Nissan Alliance Report 2014)

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Leadership Challenges in a Global World

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Local Performance

Using local knowledge locally!

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Universal Performance

Sharing knowledge across borders!

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Source: Bloom et al, 2012 (worldmanagementsurvey.org)

Universal Performance

Sharing knowledge across borders!

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Global Performance

Integrating knowledge across borders!

(Source: Li & Fung)

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Global Performance

(Source: Santos)

Integrating knowledge across borders (and across companies)!

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The Challenge of Global Integration

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A “Global Organization” is made of “Local Organizations”

… each evolving in its local environment

Country H Country J Country T Country H

HQ

Country J Country W

HO Operations Operations Operations Operations

Local organizations are tangible and feel real, natural.

Global organizations are intangible and feel abstract, artificial. (National allegiance may become a serious issue.)

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(Source: IBM presentation, 2008)

What “Being Global” is about ...

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HQ

Country H Country T

Local Operations

Local Operations

Local

Operations

Local Operations

One Team-at-the-Top*

Global Integration is a Process

How do we (an inclusive “we”) design/decide, coordinate, and control what we do in our units around the world to maximize global

performance? How do we act as a unity and not as a multiplicity?

Global Integration is about collaboration, not centralization. Global Integration is about active local units abroad, not drones.

But it is about “local performance” as a means, not an end.

* The eGLT: “extended Global Leadership Team”

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This is what the top of a “Matrix” may look like …

Source: Santos, forthcoming

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Working/Managing Together

C&C(Collocated

& Confluent )

LOCATIONOne Multiple

PLACE

Same

Diverse D&D(Dispersed & Diverse)

(Community, History)

(Space, Time)

(Source: Santos, 2013)

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Tim Cook, CEO of Apple - Interview, Fast Company, Mar 18, 2015

… or not?

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Your experience of a “global organization”?

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Thank you.

José Santos

Organization Integration

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The Matrix

Country A Country B Country C ...

Project X

Proj

ects

Geography

Project Y

Project Z

(Integration across countries with “project teams”)

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The “Matrix”

Country A Country B Country C ...

R&D

Production

Sales

Finance Fun

ctio

n Geography

Procurement

(One solid-line and one dotted-line reporting organization – a “tilted matrix”)

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New organisation structure (1999)

(Source: Teva case study - INSEAD)

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Global Integration is more about process than structure …

(Source: Teva case study - INSEAD)

NB: This is an example of the generic “ARCI”– for accountable, responsible, consulted, informed – or responsibility assignment matrix.

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The Multi-dimensional organisation (aka “Matrix”)

Country A Country B Country C ...

R&D

Production

Sales

Finance Func

tion

Geography

Procurement

(Example of a double solid-line reporting organization - in a single business company)

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Global Integration at Nissan

(Source: Nissan 2002 case study – HBS)

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President & CEO P. Pistorio

Telecom Periph & Auto

A. Romano

Discrete & STD ICs S. Castorina

Memories C. Bozotti

Consumer & Micro P. Geyres

Subsyst. G. Seragnoli

REGIONS GROUPS/DIVISIONS

Strategic Planning A. Dutheil

CFO C. Ferro

TQEM G. Auguste

Treasurer P. Mosconi

Human Resources A. Dutheil

STAFF FUNCTIONS

Front-end Manuf.

L. Bosson

Back-end Manuf.

G. Seragnoli

Central R&D

J. Monnier

CENTRAL FUNCTIONS

Europe E. Villa

North America R. Pieranunzi

Asia/Pac. J.C. Marquet

Japan T. Onikura

Emerg. Mkts C. Papa

AST A. Cuomo

Communications C.E. Ottaviani

(Source: STMicroelectronics, 2004)

A multidimensional organization in a Manufacturing MNC

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Country A

Country B

Country C

The geography-function hybrid

(aka “front-back”)

CEO

R&D Production Sales

Procurement Service

Sales Service

Sales Service

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(Source: Ikea case study – HBS)

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(Source: Pernod Ricard)

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Fish do not know water, even if they see it!