Pii: s1090-9516(99)00036-x

Staffing Global Marketing
Positions: What We Don’t
Know Can Make A Difference
Michael Harvey
Milorad M. Novicevic
As the global environment for business becomes more volatile and the need to institute frame-breakingchanges in the conventional wisdom of management increases, global organizational ignorance aboutthe usability of its existing knowledge becomes a critical issue. Ignorance in its most simple form is thelack of factual knowledge but unawareness of ignorance is “not knowing what one does not know” (i.e.,being ignorant of what information would be useful in solving global organizational problems). Thefocus of the paper is on the underlying factors that contribute to escalating organizational ignoranceas more firms attempt to globalize their operations. In the paper we examine two types of organizationalignorance: pluralistic and probabilistic which both can be experienced in a global context. In addition,a means to reduce the risk of global organizational ignorance through an innovative global staffingprocess of combining expatriate and inpatriate managers is explored. T he Walt Disney Company has a
goods, and a host of special projects.
“Magic Kingdom.” This is based on its parks, resort hotels, full–length feature ceived park design, location of the parkwas too distant from population centers,pricing too high, inadequate training/ Michael Harvey, Puterbaugh Chair in American Free Enterprise, Michael F. Price College of Busi-ness, University of Oklahoma, Norman, OK “only” atmosphere of the park offended 73019, USA. Tel: ϩ1-405-325-3376; Fax: ϩ1- 405-325-7688 Ͻ[email protected]Ͼ. Milorad M.
Novicevic, Assistant Professor International Busi- ness, University of Wisconsin—La Crosse, LaCrosse, WI, USA.
America), and the list goes on and on. Is “unlearn” the previously acquired do- (McGill & Slocum, 1993). This type ofknowledge restructuring is discontinu- loss of operational certainty is going to the like) are going to account for 7/8’s management’s competencies obsolete.
served as the reliable platform for orga- rance may reveal the areas of rigidity in acquire insight from the organization’s ciency” in qualified global managers ca- Morrison, & Black, 1998). In effect, the portunity for its managers to reflectively cure global organizational ignorance.
zil, documents global ignorance in partdue to its lack of understanding whatproducts were appropriate for the localBrazilian market (no demand for cord- GLOBAL IGNORANCE
footballs), differences in operating sys- with standardized pallets used in Brazil) sonal investiture in the “certainties” of ganization’s stakeholders in a way that complexities and to identify feasible al- rationale for undertaking a global strat- where there is an inordinately high level tion’s business activities. This paper ex- norance as it may arise in the process of in their highly successful organizations.
quences of this ignorance on the vagaries global business environment. This insight fications of the organizational ignorance, ers in two distinct forms: 1) pluralistic fore, their pluralistic ignorance prevents ignorance; and 2) probabilistic ignorance.
ralistic ignorance could be observed atMerck & Co., a world leader in the PLURALISTIC IGNORANCE
a social phenomenon that reflects a “sit- false social world” (Fields & Schuman, beliefs” (O’Gorman, 1986:335) that are Merck’s U.S. patents expire on five big family of psychological states (i.e., such billion in sales on a global basis. Scala salient (Lafane & Darley, 1970; Korte, holders’ pluralistic ignorance spell by that Merck’s product line of new drugs, accurately reflect the others’ individual markets for the organization’s opportu- ated approval for Lipitor, a drug parallel er’s judgment). Availability heuristic is event-related cues. Their resulting igno- judgment, inflated by their use of avail- stakeholders’ loss of confidence in the availability of the growth logic of thedomestic marketplace, which is not ap-plicable to the global market place.
PROBABILISTIC IGNORANCE
reliability of their initial “guesses” and, therefore, bias their subsequent “guess- es” to be consistent with their initial “guesses.” Anchoring explains the man- the perceived similarity of that event to information is relevant for correct inter- pretation of data that are available. In an ucts. Motorola suffered from probabi-listic ignorance and misjudged the rate into the digital mobile phone segment.
generation wireless technology wave.
FOCUSING THE MANAGERIAL ISSUES
SURROUNDING GLOBAL
ORGANIZATIONAL IGNORANCE
Type of Information Error
Ignorance
Type I Error
Type II Error
Type III Error
Type IV Error
Probablistic managers argue that managers not rejecting managers expecting to managers conducting a Ignorance the global market is input from subsidiary not attractive due to management that local marketing efforts to reaching their goals tic strategies to the potentially dramaticenvironmental differences facing orga-nizations in the global context. The role that decisional or interpretative er- rors play in the creation of global orga- sented (see Table 1). Table 1 illustrates “know” that Mexico is south of the U.S.
tions to the marketing and product strat- egies, over 75% of the potential sales in global market is defined as the degree to this situation, the ignorance of the man- global context are ill defined. Therefore, “local” competitors are selling products of contextual insight into the regulatory solving the global business dilemma.
onstrate how operational ignorance oc-curs when decision-makers do not rec-ognize REDUCING GLOBAL ORGANIZATIONAL
IGNORANCE: A STAFFING SOLUTION
tional ignorance necessitates identifying Interactive Decision Matrix: Country/Pool of Candidates
Cultural Distance
Equivocality
of Subsidiary
Peformance
Knowledge
Knowledge
Knowledge
Knowledge
tionally developed, the cultural distance (i.e., the ability to understand and pre- dict “others” general patterns of behav- to provide direction to facilitate organi- needs to be interpreted, the global orga- zational global learning. By locating the has undertaken the first strategic step in tie to the overall global objectives of the pool of candidates. Finally, the specific of greater than $8,356 (World, 1995).
issues surrounding the organizationneeds to be explored. The factors that could directly influence the “nature” of eas and by export product categories.
tive relative to other countries in a re- gion and their exports to the rest of the cation of business infrastructure can bederived. The greater the economic dis-tance between the home and host coun- LEVEL OF ECONOMIC DEVELOPMENT
try, the more difficult it will be for non- EQUIVOCALITY OF SUBSIDIARY
PERFORMANCE GOALS
CULTURAL DISTANCE/NOVELTY
BETWEEN HOST AND HOME COUNTRIES
within the global organization’s network increases. During international and multi- ling resources centrally was preferred to to maximizing usefulness (Caves, 1996).
ers should be provided the opportunity to global entities based upon local condition “acceptable” performance for each net- work unit. The greater the equivocality in host countries, the less difficulty expa- triates have in adjusting to the host cul- turally astute managers is accentuatedin culturally distant countries. There- fore, the inpatriate manager is projected internal context of a global organization: 1) the degree of understanding of the op- portunities facing the unit in its local en- believes that they can be successful in a manager in culturally “tough” environ- market and the resulting competitive pos- present state of affairs; 3) better under- stand the locals’ frame-of-reference rel- helps to insure the most effective utili- zation of resources in a local context.
with corporate goals and strategies. So-cial knowledge accentuates the ratio-nale for building a multicultural man- SOCIAL KNOWLEDGE OF CANDIDATE
can be developed (Tolbert, 1988; Sohn,1994). Social knowledge focuses on the predict host country nationals’ behavior priate to use expatriate staffing. As the THE VALUE OF RECOGNIZING GLOBAL
IGNORANCE
sources and efficiently develop local as- distant environments is in the use of the that are globalizing. The transition from as the majority of future growth andvolume of business will come from zational ignorance will be at its highest, earn the international credentials and do ing global organizational ignorance.
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