Within the wealth nations, product performance and features matter most. The introduction of the low-cost product in the developed nations might weaken a high-priced and high-quality products designed for hospitals in the wealthy countries.
Case analysis of an Article tiled "Building a Company without Borders." (Becht, 2010).
The goal of the author is to reveal the global operation of RB (Reckitt Benckiser). The RB's global version is to allow company top managers to hold managerial positions uniquely in other countries rather than their countries of origin. The company managers do not hold managerial positions in their country of origin making the company top managers to view themselves as global citizens.
Key Arguments
The company operates in more than 60 countries and its top 400 managers are from 60 different nationalities. The company has developed culture of global mobility to create global entrepreneurships in order to develop new ideas.
Importance of RB Global Citizenship Model
The author demonstrates how the company global mobility has paid off because the company has been able to generate between 35% and 40% of the net revenue from the global cross-fertilization that the company implements. For example, RB has been able to develop all-in-one dishwater tablet with Finish idea, which has now become leader in the market category making the company to outpace all its competitors.
RB Global Business Design Strategy
RB business design is based on using postmerger technique where the company uses mixed national cultures into the company operations. Typically, the company moves managers from one side of the merger to another country. For example, an Italian is the head of the UK business. An American is in charge of German business. A Frenchman in the Russian business a Dutch is running a U.S. business, a Belgian in the...
The company uses the performances oriented pay system to foster a strong growth. The company pay system consists of "base salary, short-term incentives, and long-term incentives." (Becht 2010, P 106). The real benefit is from bonus where managers who meet the target set by the company receive 40% of the base salary. However, a manager who blows out the targets could earn a bonus reaching 144%.
Conflict Implemented in RB
The author reveals how the company allows employee to express their opinion about the product development. However, the company expects people to come with facts about their proposal as well as getting 80% alignment and 100% agreement to allow company to make positive decision about the proposal.
Critic/Comments
The global citizenship model that RB implements is good because it allows top managers to develop global entrepreneurship skills. Downside of this strategy is that the global transfer could create the relocation problem for spouse consequently leading to a divorce. RB creates an environment where its top managers could relocate as little as three days, however, the company does not think of a spouse who is working in another company and has assumed a top position in that company. It would be challenging for a spouse to move with his/her husband/wife to another country and resigning from his or her job position.
References
Immelt, J.R. Govindarajan, V. And Trimble, C. (2009). How GE is Disrupting itself. Harvard Business Review. 7(10):56-65.
Becht, B. (2010). Building a Company Without Borders. Harvard Business Review. 88 (4): 103-106.
