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The ethnocentric approach is out.

The Ethnocentric Approach Is Out

Any company today can - indeed does - bill itself as a global entity. Touting this capability has become a marketing gimmick for some; for others, a way of saying "we're just as up-to-date as everybody else." For a handful of exceptions it is a firm commitment, an integral part of the company philosophy.

While anyone can jump on the global bandwagon, there are certain factors that differentiate those who merely talk a good game from those who are the serious global contenders. The latter group consists of those who will remain or emerge as world leaders in their industry as the shift to one global market accelerates.

Becoming truly global, like any fundamental cultural change, starts at the top - i.e., with the board and senior management. A company with a serious commitment to better positioning itself to compete in the global arena will want to have multinational representation on its board and within the ranks of its top management.

While few companies yet have this sort of representation, in our work as executive search consultants we see an encouraging trend: that of American corporations seeking well-known international, non-American business leaders and entrepreneurs to serve on their boards. This trend is sure to intensify in the years to come. A more diverse group of directors with in-depth experience with global alliances and multinational operations will constitute the broader framework that boards will need to make decisions in the more complex business environment of the future.

Global companies will want to ensure that they have capable managers to assume leadership roles in the future, so management development is also a key to success. Companies that have so far only paid lip service to international experience must now elevate it to the position of importance it deserves. Too often, going abroad to work for a corporation is viewed by bright, young, ambitious management potential as a one-way ticket to oblion. Companies must reward those who are willing to assume the risk and inconvenience of passing the acid test abroad.

As international on-the-spot experience becomes a more prized commodity, having worked for one or more companies internationally will become the sine qua non for a career with a multinational corporation. In Europe, today, it already is the key criterion for advancing to a top management position.

Any company that is serious about participating in global business in a meaningful and profitable way will find it very much worth its while to reward those executives who are willing to take on an assignment abroad by assuring them in very concrete terms what they can expect after the completion of their foreign mission. In other words, the key is treating foreign assignments as part of the rotation process required to move into a senior management position, rather than sending a person abroad with a "let's wait and see" attitude.

On a related theme, foreign subsidiaries of multinationals, if they are to succeed in a particular market, must make sure to hire, train, and offer an attractive career path to local executives in that country. Having on board those who know the language, the culture, and the business customs is crucial to the success of the subsidiary.

Clearly, the ethnocentric approach to management is not the best suited to the global marketplace, and, gradually, as companies in all countries realize that it does not yield success, it will be abandoned in favor of a more multinational approach.

Companies that are really serious about building in a global perception and orientation - not just talking a good game for PR reasons - must realize that the process may entail some fundamental changes that necessitate long-term planning and thinking. The companies that dare to make these changes - at having top managers and board members who are able to institute a different, perhaps more ambitious and complex set of goals - will have truly earned the right to call themselves "global." But remember, this change of philosophy has to start at the top.

Going global, advises Egon P.S. Zehnder, starts at the top. A company seriously committed to competing in the global arena will want to have multinational representation on its board of directors and within the rank of top management. Dr. Zehnder is Chairman of Egon Zehnder International Inc., a management consulting firm specializing in executive search, management appraisals, and acquisitions and divestments. He founded the firm in 1964, and it has since grown to be the largest international search firm.
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Title Annotation:Special Section: Being a Global Leader; views of Egon P.S. Zehnder, Chairman of Egon Zehnder International Inc.
Publication:Directors & Boards
Date:Sep 22, 1991
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