Global Scholar Perspective: Globally Integrating

Geocentrism + Horizons Unfolding + Genetic Change → Cooperative Discovery

 

By David Ing

 

In Re-Think: A Path to the Future, Sam Palmisano describes an opportunity to drive organizational transformation with a globally integrated model.  In the decades leading up to the year 2000, the business context evolved in three ways:  (i) economic liberalization eased trade and investment across borders; (ii) the information technology revolution reduced the cost to communicate and operate global businesses at high bandwidth; and (iii) the standardization of technologies and business processes facilitated interlinking work both within and across companies.  This new context presents new opportunities for organizations.

While the reality of globally integrated enterprises is now more salient — examples reviewed in Re-Think include IBM, Cemex, Bharti Airtel, and Geely — the vision has been foreshadowed for some decades by organizational theorists. Globally integrating is in line with three research themes long in development, combining in for a new context with 21st century society and technologies:

 

  1. Geocentrism as the orientation towards internationalization;
  2. Horizons of mature, emerging and embryonic businesses, unfolding in development; and
  3. Genetic change and triple loop learning for the new global environment; leading to …
  4. A new era of cooperative discovery within organizations and across society.

In the last chapter of Re-Think, 12 guiding principles for becoming and being a Globally Integrated Enterprise are provided.  These can be mapped into each of the three themes.

 

Orientation towards internationalization

Four of the guiding principles can be associated with the shift in orientation, from being a national or regional business, to becoming a truly global enterprise:

  • (i) Be globally consistent but locally relevant
  • (viii) Emphasize human capital
  • (ix) See the world as it as — not the way you want it
  • (xii) Create a common culture around common values

Global enterprises stretch for consistency across all customers, while aspiring to satisfy each customer individually.  Maintaining an innovative culture requires hiring, cultivating and retaining highly-skilled professionals around the world.  A steady stream of intelligence from feet-on-the-ground continually updates the appreciation of changing customers wants, competitive threats and evolving technologies.  Operating as a coherent enterprise involves employees, irrespective of their location, engaging and behaving with consistent values.

In the 1970s, Howard Perlmutter advised IBM World Trade president Jacques Maisonrouge on internationalization.  IBM has traditionally operated in a regiocentric mode (e.g. Americas, EMEA and Asia-Pacific), with an aspiration towards potential geocentrism, as described in Table 1.

 

Table 1: Orientations towards internationalization (Wind, Douglas, and Perlmutter, 1973)

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While IBM has had a long and strong reputation as an international company, it has only been in the 21st century that political, technological and organization factors have operating in a globally integrated way has become a reality.  The practicality of real-time, interactive communications — through instant messaging and web conferencing on audio and video media — has made person-to-person interactions around the globe as common as conversations with colleagues down the hall.  The economic liberalization, information technology revolution and standardizations are available to most organizations that choose to use them for advantage.  Towards a shared vision of serving each and every customer, global teams can align to operate seamlessly.

 

Horizons Unfolding

Four of the guiding principles can be associated with simultaneously operating a business and nurturing growth, on multiple cascading time scales:

  • (iv) Encourage thinking and acting outside the company structure and outside the comfort zone
  • (v) Know what you’re good at — not just what you can do
  • (x) Keep moving forward
  • (xi) Explain what you’re doing — and why you’re doing it

Successful companies may get comfortable with ways that have proven fruitful in the past, and have to work against discounting potential opportunities where the potential of higher rewards make greater challenge and bigger risks worthwhile.  Pushing into new frontiers may demand embedded expertise in expert resources, shifting attention away from more mature products and services. Uncertain futures may need persistent vision and courage to see through anticipated disruptive changes.  Buy-in to changes in organizational direction, both for internal and external parties, can be eased with inclusion of both the why and the how.

In the late 1990s, McKinsey & Company conducted research on ways that profitable growth could be sustained.  A framework of three horizons was developed, described in Table 2.

 

Table 2: Three horizons of growth (Baghai, Coley, and White, 1999)

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While a internationalized enterprise is likely to have mature Horizon 1 offerings available worldwide, the emerging Horizon 2 and embryonic Horizon 3 offerings are likely to be focused on selected customer sets and/or regions.  The globally integrated enterprise has a portfolio that balances current, near-term and future initiatives three horizons to ensure both viability today and the potential for regeneration tomorrow.

While an enterprise creates and develops offerings in the time frames of three horizons, customers engage and adopt the offerings at varying paces.  Value is coproduced with a customer and business partners not only at consummation of a transaction, but also over the longer duration when product(s) and service(s) are in use.  The potential of value unfolds as reality, just as a seed becomes a flowering plant or a child becomes an adult, as described in Table 3.

 

Table 3: Unfolding (Alexander, 2006)

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The outcomes coproduced by the customer with a globally integrated enterprise and its business partners can be enduring.   Business relationships are founded on enduring successful histories, and the promise of continuing mutual benefit in the future.  The ability for all parties to coevolve their interests and directions is based on shared appreciation of prior and future interactions.

 

Types of Learning

Four of the guiding principles can be associated with types of learning embodied both by the organizations as a whole, and by individuals as parts, in a global arena:

  • (ii) Learn to operate in many different kinds of environments
  • (iii) See your enterprise through a different lens
  • (vi) Lower the center of gravity
  • (vii) Learn from below

Both the organization, and the individuals contained within, should have the capability to adapt to changing conditions.  Individuals with experiences across a variety of situations and cultures have greater insight into feasible and preferred paths to move the business forward. The authority and intelligence to deal with diverse markets and conditions involves decision-making devolved to the local, and rewards and trust distributed throughout the organization.  Reflections on both wins and losses should be welcomed as organizational actions, so that, in the future, positive behaviours can be replicated, and negative results precluded.

At the birth of organization science in 1970s, Gregory Bateson categorized five types of learning, listed in Table 4.  While single loop learning and double loop learning are relatively well-known by management practitioners, operating globally resurfaces the potential for triple loop learning (Learning III) and genetic learning (Learning IV).

 

Table 4: Logical types of learning (Bateson, 1972)

GSP Winner Tables.004

Individuals working in a variety of roles in global teams are more successful with capacities for triple loop learning, i.e. responding with different sets of behaviours in each of the cultures in which they engage.  While individual human beings are not consciously capable of genetic change, an organization may rise the challenge of becoming a different species.  Triple loop and genetic learning may be beyond the reach of either an organization and/or its members.  Operating as a global integrated enterprise in a dynamic world may test such capacities.

If an organization is able to (i) orient as geocentric, (ii) balance multiple horizons unfolding and (iii) change with triple loop and/or genetic learning, it may become a new species of globally integrated enterprise.

 

Cooperative Discovery

The last chapter of Re-Think sees the globally integrated enterprise as a feasible form, and describes the 21st century as an age of discovery.  Redoubling on the three driving forces that will “get work and investment to flow to me”, the 21st century could be portrayed as an age for cooperative discovery.

  • Openness — as open standards, open trade, open innovation — means that discoveries are not first found in private and then disclosed externally.  Openness enables joint pursuits of value that are collaboratively uncovered. Openness of ideas enables innovations to move faster.  Globalization of ideas accelerates adoption around the world.
  • Expertise — in developing unique value propositions — rises beyond the common means of production and distribution available across the industry.  Expertise developed by a few experts can be scaled up to greater volumes, or scoped out across a broader range of opportunities.  In coproductive relationships, customers and/or business partners contribute their distinctive competences leading to outcomes otherwise infeasible.
  • Economics of differentiation — through uncommon capabilities not readily replicable — provide innovators with a leadership advantage where others have to play catch-up.  With the whole world as a playing field, front runners who continue to invest to stay ahead of competitors will have customers and partners coming to them.

The globally integrated enterprise has the option to cooperate with other leaders in regions and market segments from around the world. With other organizations that are able to rise to become peers, the globally integrated enterprise can collaborate.  When industry leaders can work together, they can change the world.


References

[1]Alexander, Christopher. 2006. “What Is an Unfolding?” Building Living Neighborhoods.(http://www.livingneighborhoods.org/ht-0/whatisanunfolding.htm).
[2] Baghai, Mehrdad, Stephen Coley, and David White. 1999. The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise. Perseus.(http://books.google.ca/books?id=xI_8AF29R-UC).
[3] Bateson, Gregory. 1972. “The Logical Categories of Learning and Communication.” In Steps to an Ecology of Mind, 279–308. Northvale, NJ: Jason Aronson.(http://books.google.ca/books?id=Wfe2t_qzaHEC&pg=PA279).
[4] Wind, Yoram, Susan P. Douglas, and Howard V. Perlmutter. 1973. “Guidelines for Developing International Marketing Strategies.” Journal of Marketing, 14–23.(http://www.jstor.org/stable/1250046″>http://www.jstor.org/stable/1250046).

Author Bio

davidingDavid Ing aims to complete his Ph.D. in the Department of Industrial Engineering and Management at Aalto University (Finland) in 2015.  His dissertation topic is on Open sourcing with private sourcing, an inductive study of seven cases involving IBM in the decade 2001-2010.

In 2012, after 28 years of service, David retired from IBM Canada.  He had significant assignments in IBM Consulting Group / Business Consulting Services / Global Business Services; the Advanced Business Institute (Palisades); Industry Solutions; and IBM Canada Plans & Controls.

In 2011-2012, David served as president of the International Society for the Systems Sciences.  Most recently, he has been encouraging Service Systems Thinking across the communities of service science (ISSIP), systems engineering (INCOSE) and pattern languages (HIllside Group PLoP).

On the Internet, David is an avid blogger at http://coevolving.com.  In real life, he resides in Toronto, Canada.

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