• Is Localisation Always A Good Thing?

    MANAGEMENT AND TRAINER BRIEF

    A friend of mine working for a leading German publisher in London said he never saw a German or heard German spoken. Localisation of the London operation was complete.

    Most firms would agree that localisation of management is a good thing. Localisation means that senior staff are locally hired and not relocated from head office abroad.

    In India a leading international bank relocated hundreds of staff to manage its local operation. A leading international Telco localised its management but had staff from the UK on a plane to India every month to support operations.

    Local manager, local pressures

    Localisation of management for a multinational seems to make sense. The local manager knows the local situation and how to manage local people. But he or she may also be subject to local pressures and ways of doing business. If this conflicts with a multinational’s global ethics, bad publicity from any breaches can impact share prices and global reputation. ‘Going native’ with local managers subject to local pressures may not be the answer.

    Check the cultural fit

    Ticking the local manager box may cause unexpected problems. A corporation may choose the right person in terms of corporate seniority and experience. However, it is easy to overlook the cultural fit. An international corporation appointed a Saudi manager, to be responsible for Saudi and the Gulf. Organisationally, it seemed a good move. Culturally, it was dangerous. It took no account of national and tribal tensions, which can ensure non-co-operation by local partners.

    Consequences of getting the reporting line wrong

    The same thing happened in reverse. A British firm with operations in Italy, replaced the European operations manager, an Italian, with a British one. The new British operations manager was young and very bright. He replaced an older Italian manager. But he faced unexpected opposition from his new Italian report. Although nominally reporting to the British manager, the Italian was quietly sabotaging the operation. Suddenly, the new manager experienced problems with his supply chain at the most basic levels. Local managers were no longer available for meetings, Rooms were not booked. Reporting was late and deadlines slipped, resulting in penalties for late delivery and in one case near contract cancellation. The situation was only resolved by the Italian manager being retired early with a substantial payoff.

    The middle way?

    Maybe the middle way is this one. A leading French multinational with operations around the globe places a trusted French manager in each one of its locations. This person acts as liaison between French operations managers and local management. His job is to know the local operation and culture inside out and to build good llnks with the local managers. He is the ‘go to’ guy for the French when there are problems and a progress chaser and quality monitor for local production. His key value is that he is culturally aware of local conditions.

    Five checks before you select your local manager

    If you are localising your management, before you make your selection, review these issues before you move forward.

    1 Does the area of jurisdiction proposed take account of national, regional and tribal tensions?

    2 Have you taken account of age and seniority issues in appointing local managers?

    3 Could there be tensions in reporting lines which will sabotage supply chains?

    4 Is there a danger that a local manager may become subject to local business practices that are unacceptable to the corporation internationally? Scandals may affect share price and reputation and sales.

    5 Have you sought advice on the issues that local managers might face in achieving co-operation from the workforce and areas he or she is appointed to manage?

    Conclusion

    Localisation of management makes operational and economic sense. It encourages local autonomy and self-worth. Just make sure you don’t overlook cultural issues that could sabotage your operation internationally.

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