WINNING CHALLENGE IN THE ERA OF GLOBALIZATION: THE

MASTERY OF BUSINESS MANAGEMENT AND DEVELOPMENT

Irena Valantinienė1, Ingrida Krikštaponytė2

Lithuanian Academy of Physical Education1
Kaunas University of Technology2
As the speed of knowledge generation and innovation has increased dramatically,
organizations need to engage in external networks to optimize their business and develop
activity. Management in the era of globalization has become a big challenge for the
organizations. Prior research suggests and it has long been recognized that business management
and it’s development competencies are very important factors for success and winning. As
earlier studies have only tangentially touched the construct, our research focuses on analyzing
the mastery of business management and it‘s development in the era of globalization attention
paying to management science of this issue.
Business management, globalization, partnering, competence, development.

Introduction

With the significant emergence of globalization, organisations from all

sectors of the economy are increasingly bringing their forces together to achieve
collaborative advantage and to remain competitive.
The search for the components of successful business management and
development has a long history in the Anglo-Saxon economies. For obvious
economic and business reasons organizations have always been concerned about
the competence of their managers.
Today we are living in the era of globalization when the main resource of
the development is not capital, human power or natural resourses, but knowledge,
in other words – intellectual capital. Such concepts as knowledge, competence,
competitive advantage these days are very often discussed by the theorists and
practionaires. These resourses are characterized as “exceptional competence”,
“intangible resourses”, “main competence“, “main skills”, “internal skills”, “the
accumulation of skills”, “the managerial talent” and so on. Their place in
management science and studies is at the top issues, but still not sufficient for the
mastery of business management and it‘s development.
The goal of this paper is to analyze the mastery of business management and
it‘s development in order to win in the era of globalization by showing the
importance of some management science and studies issues.
Paper is structured as follows: first chapter discusses globalization issues
and it‘s tendencies, second chapter discusses the mastery of business management
and it‘s development for the winning of organization influenced by the
globalization forces, third chapter provides the value of competences as ingredient
for organization winning and it‘s role in the management science. At the end of the
paper conclusions, references and summary are presented.
The following research methods are used in this paper: analysis of scientific
literature, authors work experience.

160
Globalization and It‘s Tendencies

Today the most modern and dynamic industries are transnational in scope
since they are the result of an integrated system of global trade and production
influenced by globalization. By summarising conclusions of various authors on
globalization issues (Chase-Dunn, 1989; Gelernter, 1995; Hirst, 1996; Prokopenko,
2000; Held, 2002; Nath, 2005), it can be defined in several different ways
depending on the choosen level to focus on (Table 1).

Table 1. The Definition of Globalization by the Choosen Level of Analysis

Level Characteristics
Worldwide level Globalization refers to the growing economic interdependence among
countries as reflected in increasing cross-border flows of goods,
services, capital and know how.
Level of a specific Globalization refers to the extent of the interlinkages between a
country country’s economy and the rest of the world.
Specific industry level Globalization refers to the degree to which a organization’s competitive
position within that industry in one country is interdependent with that
in another country. Key indicators of the globalization of an industry
are the extent of cross-border trade within the industry as a ratio of total
worldwide production, the extent of cross-border investment as a ratio
of total capital invested in the industry, and the proportion of industry
revenue accounted for by organizations that compete in all major
regions.
Specific organization Globalization refers to the extent to which a organization has expanded
level its revenue and asset base across countries and engages in cross-border
flows of capital, goods and know how across subsidiaries. Key
indicators of the globalization of a company are international dispersion
of sales revenues and asset base, intra-organization trade in intermediate
and finished goods, and intra-organization flows of technology.
Source: Based on Nath (2005)

In the context of globalization history, it is not a new phenomenon, and

indeed, until the year 1913, trade was gradually free. It is therefore not surprising
that some managers see current trends as a great threat while others view them as a
challenge and an opportunity. Nath (2005) identifies four forces are behind the
increase in global competition:
• changes in consumer expectations of quality, service and price are higher
than ever and still increasing (at the same time, future consumer preferences are
becoming extremely difficult to predict);
• technological change (new information technology allows many
organizations to run their business in a way that was impossible yesterday and at a
fraction of the price);
• deregulation (in recent years, the global trend – with the notable
exception of environmental regulation – has been towards deregulation and less

161
government intervention; in newly, deregulated industries, competition has
increased dramatically);
• regional forces (There are huge regional differences in cost structure and
growth rates in the world, at the same time, politically motivated regional trade
blocs, such as the European Union and the Association of South East Asian
Nations are being formed.).
Globalization also poses tensions and dilemmas to countries integrated to the
world economy. One tension of it is associated with the fact that in a more
interdependent and inter-linked world economy any adverse global or regional
shock is rapidly propagated to other economies (Nath, 2005). Another – lies in it‘s
social effects. As globalization is often associated with increased instability of
output and employment, this affects job security. As labour income is the main
source of earnings for the majority of population under capitalism, job insecurity is
socially disruptive and brings tension to the fabric of society. In addition,
flexibility in labour markets required to compete, successfully, in international
markets, tends to erode long term work and personal relationships between
organizations and employees, workers and managers that traditionally give a sense
of security to people. Globalization also gives a premium to people with
sophisticated skills, high levels of education and entrepreneurial traits. These are
people better equipped to survive and succeed in the more competitive world
brought by globalization.
In response to globalization, most organizations have adjusted quite rapidly
to the new types of competition. The largest organizations have adopted strategies
that are increasingly global, with two main objectives in mind: to improve
profitability by reducing costs and to strengthen their technological capability
organizations can either continue to internalize activities via mergers or
acquisitions of other innovative organizations, or adopt an external approach and
conclude co-operation and partnering agreements/alliances based on co-operation
between independent organizations.

Winning Challenge in the Era of Globalization: the Mastery of Business

Management and Development

In the era of globalization few organizations have sufficient resources of

their own to achieve an effective presence in all desired markets and product areas.
This is particularly true in industries where new product introduction entails a
massive outlay of funds. Partners variously contribute complementary products,
market presence, distribution networks, production facilities, skills, and
technologies. As network economy becomes increasingly prevalent, traditional
models of strategic thinking, which emphases the integrated organization acting in
isolation to leverage proprietary resources, lose their relevance. New thinking and
new competencies that combine competitive and cooperative strategies are
required.
Since the 1960’s scientists have already addressed the need for organizations
to engage in inter-organizational relationships (Evan, 1966; Warren 1967).

162
According to Contractor and Lorange (1988), Hamel (1989), the first line of inter-
organization partnering was generally undertaken in order to gain access to foreign
markets or to bypass government regulations. In the late 1970’s organizations
gradually started to become aware of the advantages related to
partnerships/alliances. The growth leveled of at the end of the 1980s when
organizations realized the risks and dangers associated with the unstable character
of partnerships while this period was also characterized by a worldwide recession,
which led to a more inward-directed orientation triggered by restructuring
activities (Duysters, 1999). Today the number of partnerships are growing
(Ingham, 1998; Davenport, 1999; Quelin 2000; Krikštaponytė, 2003). Peter F.
Drucker has said that there is not just a surge in alliances but "a worldwide
restructuring" is occurring in the shape of partnerships/alliances (Krikštaponytė,
Pukelienė, 2003; Valantinienė, 2006). Also they create the paradigm of successful
business management and development cause by the increase of globalization
more and more the traditional industrial model transforms to orientated to network
business model.
Henderson (1990) considers two dimensions of partnership-style
relationships – partnership in context and partnership in action. The degree to
which partners believe that the partnership will be sustained over time, include
three major determinants:
• mutual benefits (financial returns, risk-sharing, etc.);
• commitment with its major indicators (shared goals, incentive systems, and
contracts, etc.);
• predisposition (an existing predilection in favour of the partnership,
described by trust and existing attitudes and assumptions).
General process of partnering development consists of initial (strategic
planning stage), intensive (negotiations, commitments, execution stages) and
dissolution (termination stage) phases (Kaasalainen, 2002). Thus managers who
want their business to be strong are urged to (Snow, 1992): maximize returns on all
assets; search globally for opportunities and resources; perform only those
functions for which the organization has, or can develop, expert skills; outsource
those activities that can be performed quicker, more effectively, or at lower cost by
others. It is also important to acknowledge that partnerships can be difficult to
form because of differences in terms of aims, objectives, ideologies, processes and
cultures. These differences can easily lead to reluctance, slowness and resistance to
meet the challenges and complexities of working more closely together. This
“collaborative inertia” can result from factors such as multiple and often hidden
goals, power imbalances, differences in professional language, culture and
procedures, incompatible collaborative capability, tension between autonomy and
accountability and time involved in managing logistics (Huxham, 1996) This is
why there is a great importance of partnering competencies for cooperation success
(Jones, 1998).

163
The Value of Competences – Winning Ingredient‘s Role in Management Science

Regarding the attitudes of various authors (Boyatzis, 1982; Krogh, 1996;

Adamonienė, 2001; Magarinos, 2002; Valantinienė, 2006; Valantinienė, 2007) the
concept of competence is multidimensional, it covers not only knowledge and
skills, but also attitude and personal features. This is not only objective, but also
subjective phenomenon depending on persons singleness, conciousness, social and
economical environment.
New in the competency-based approach in the era of globalization – the
linking of competencies with the strategic objectives, plans and capabilities of the
organization. Thus, competencies will increasingly be used as a basis for
identifying individual and organizational needs and planning for the development
of an organization (Magarinos, 2002).
As competence models and frameworks are regarded as a modern scheme
for business management and development applicable to both managers and those
who are employed. With these models managers and employees can achieve a
better understanding of what is expected from them and how this can be realized.
Based on this approach and grounded on the theoretical research it was identified
that the main busines management – partnering competencies can be grouped into
three categories: managerial, generic and technical.
Managerial competencies are essential for staff with managerial or
supervisory responsibility, they are the 'micro-skills' of managers and are part of
capabilities or assets of business management and development.
Various management scientists differently looked at the management
competence. Kanungo and Misra (1992) defined it as the form of generic cognitive
activities that lead to adaptation to different contexts, rather than being overt
behavioural sequences. Masters and McCurry (1990) indicated that managerial
competence is the capability to appropriately integrate and apply the skills one has
that leads to managerial competency. Yukl, Wall, Leipsinger (1990), Wallace,
Hunt (1996) have provided lists of generic managerial competencies, but
competencies have not been given for managing multicultural workgroups.
Cognitive factors include the management of personal stereotypes (Loden, 1991;
Thiederman, 1991) and cognitive complexity or the ability to look at things from
different perspectives (Gudykunst, 1984; Ronen, 1989; Wills, 1994). Boyatzis
(1982) tried to look at managerial competencies in their effectiveness way, large
attention paying to the organization as itself. He identifies aims and actions,
leadership, management of human resources, management of subordinates,
attention to others, special knowledge as the elements for competence which lets to
implement partnering management functions.
It was identified that there are a set of four broad, overarching characteristics
that business managers should have: functional competencies; earned
competencies; interpersonal competencies; partnering/alliance mindset.
Functional competencies relate directly to the business issues the
organization will face. They are typically gained through experience and formal
training as a manager progresses in his or her career. Earned competencies are

164
developed over time as a manager learns how to use the "informal" channels that
exist inside and outside the organization, the industry, and the profession.
Interpersonal competencies relate directly to the relationship issues that the
partnering will face. They form the set of skills and abilities that allow a manager
to create, cultivate and maintain critical relationships. Partnering/alliance mindset
have been identified as critical to success and winning. They are more difficult to
find and measure, yet they are consistently cited as markers that distinguished truly
excellent partnering managers. ng the world differently, can this person
simultaneously consider multiple points of view.
The main components of managerial competency as stated by
I. Valantinienė and I. Krikštaponytė (2006, 2007) are: strategic thinking and
scenario-building; analysis, problem solving and decision making; planning and
organizing; change management; managing small organizational groups; managing
large organizational groups; team leadership; information management; innovation
and creation; mediation and negotiation; mentoring and coaching; facilitation and
group moderation; presentation and public speaking, interviewing. The internal
development of core managerial competencies include a strong integration of
individual tasks and knowledge within the overall activity of the organization. The
main features of a strategy aimed at developing core competencies includes a
strong reliance on horizontal coordination process, trust, and strategic human
resource management, contribute to a dynamic balance between cooperation and
competition within the organization (Prokopenko, 2000).
Generic competencies are considered to be essential for all staff, regardless
of their function or level, i.e. communication, programme execution, processing
tools, linguistic, etc.
Technical/functional competencies are considered essential to perform any
job in the organization within a defined technical or functional area of work. These
competencies are useful to human resources and managers in assessing self-
development needs and setting performance standards and career plans.
Core competencies are not simply products, services or physical assets, but
include: embedded organizational knowledge, unique capabilities. In order to
become competent in the era of globalization requires hard work, dedication, and a
mindset that embraces the willingness to change. The journey is fraught with
challenges; yet, the prepared organization can adapt and proactively negotiate these
obstacles.

Conclusions

Globalization changes the environment of business management and it‘s

development. It requires new thinking and new competencies that combine
competitive and cooperative strategies. In order to win organizations will have to
enter into partnering more aggressively in the future cause of the reasons to learn,
to take advantage of partners' specialization advantages, to leverage resources, to
create linkages, to leap over existing constraints, to "lock out" the competition by
forming partnerships with the strongest organizations in foreign markets.

165
 Competence is the ingredient for winning and synonym of competitive
advantage in the era of globalization. Main competencies are grouped into
managerial, generic and technical. There are set of four broad characteristics that
alliance managers should have: functional competencies (directly related to the
business issues the alliance will face), earned competencies (developed over time
as a manager learns how to use the “informal” channels), interpersonal
competencies (they form the set of skills and abilities that allow a manager to
create, cultivate and maintain critical relationships for the alliance) and alliance
mindset (critical to the alliance success). To become alliance competent requires
hard work, dedication, and a mindset that embraces the willingness to change.
The main task of development is to grow organization to that level that it
could survive the challenges of competition and globalization. This requires large
attention to competence issue in the management science and studies for the
mastery of business management and it’s development.

References

1. Adamonienė, R. (2001). Profesijos pedagogo veiklos bazinė paradigma. –

Vilnius:Vilniaus pedagoginis universitetas.
2. Boyatzis, R. (1982). The competent manager: A Model for Effective Performance. –
New York: Wiley and Sons.
3. Chase-Dunn, C. K. (1989). Global Formation: Structures of the World Economy. –
Oxford: Blackwell.
4. Contractor, F. J., Lorange, P. (1988). Cooperative Strategies in International Business
// Lexington Books.
5. Davenport, S., Davies, J. and Miller, A. (1999). Framing of International Research
Alliances // Influence on Strategy. R&D Management, Vol. 29:4, p. 329–341.
6. Duysters, G., Kok, G. and Vaandrager, M. (1999). Crafting Successful Strategic
Technology Partnerships // R&D Management, Vol. 29:4, p. 343–351.
7. Evan, W. M. (1966). The Organization-set: toward a theory of interorganizational
relations in Thompson, J. D. Approaches to Organizational Design. – University of Pittsburgh
Press.
8. Gelernter, D. H. (1995). The Lost World of the Fair. – New York: Free Press.
9. Gudykunst, W. B. and Y. Y. – New York: Random House.
10. Hamel, G., Doz, Y. and Prahalad, C. K. (1989). Collaborate with Your Competitors
and Win. Harvard Business Review, Vol. 67:1, p. 133–139.
11. Held, D., McGrew, A., Goldblatt, D., Perraton, J. (2002). Globaliniai pokyčiai:
politika, ekonomika ir kultūra. – Vilnius: Margi raštai.
12. Hirst, P., Thompson, G. (1996). Globalisation in Question: the International Economy
and the Possibilities of Governance. – Cambridge: Policy Press, Vol. 4 (Autumn), p. 47–66.
13. Huxham, C. (Ed.) (1996). Creating Collaborative Advantage. Sage Publications. –
London.
14. Ingham, M., Mothe, C. (1998). How to learn in R&D partnerships? R&D
Management, Vol. 28:4, p. 249–261.
15. Yukl, G., S. Wall, and R. Leipsinger. (1990), Preliminary report on validation of the
Managerial Practices Survey. In Measures of leadership, eds K.E. Clark, and M.B. Clark, – West
Orange, NJ: Leadership Library of America, p. 223–238.
16. Jones, M., Saad, M. (1998). Unlocking Specialist Potential – A More Participative
Role for Specialist Contractors. The Reading Construction Forum.

166
 17. Kaasalainen T., Mäkinen S., Näsi J. (2002). Looking For Company Small It-
Organizations And Partnership Formation. Frontiers Of E-Business Research.
18. Kanungo, R. N. and Misra, S. (1992). Managerial resourcefulness: A
reconceptualization of management skills. Human Relations 45(12), p. 1311–1332.
19. Krikštaponytė, I., Pukelienė, V. (2003), Strategic Alliances Management in the
Context of Globalization, Organizacijų vadyba: sisteminiai tyrimai. Nr. 25.
20. Krogh, G., Roos, J. (1996). Managing Knowledge. – University Press.
21. Loden, M., Rosener, J. B. (1991), Workforce America! Managing employee
diversity as a vital resource. – Homewood, Ill: Business One Irwin.
22. Magarinos, C. (2002). Strengthening Organizational Core Values and Managerial
Capabilities. Human Resource Management Branch, p. 9–20.
23. Masters, G., D. McCurry. (1990), Competency-based assessment in the professions:
National office of overseas skill recognition. Research Paper No. 2. – Canberra: AGPS.
24. Nath, A. (2005). Globalization, Strategic Alliances And Insurance Sector, referred on
12/02/2007. – http://www.tripurainfo.com/classifieds/advt/ashis.htm [2007 01 20].
25. Prokopenko, J. (2000). Globalization, alliances and networking: A strategy for
competitiveness and productivity, referred on 15/03/2007. – http://www.ilo.org/public/english/
employment/ent/papers/emd21.htm [2007 02 18].
26. Quelin, B. (2000). Core Competencies, R&D Management and Partnerships //
European Management Journal, Vol. 18:5, p. 476–487.
27. Ronen, S. (1989), Training an international assignee. In Training and development in
organizations, ed. I. – Goldstein, San Francisco: Jossey-Bass, p. 417–53.
28. Snow, C., Miles, R. E., Coleman, H. J. Jr. (1992). Managing 21st Century Network
Organizations in Organizational Dynamics – New York American Management Association,
Winter, p. 6.
29. Thiederman, S. (1991), Bridging cultural barriers for corporate success: How to
manage the multicultural work force. – Lexington, MA: Lexington Books.
30. Valantinienė, I., Krikštaponytė, I. (2006). Alliances Management under
Globalization: the Value of Competencies. Acta Universitatis Raksti, Management, Vol. 706.
31. Valantinienė, I., Krikštaponytė, I. (2007). The Dance of Partnering Competences as a
Prerequisite for the Cooperative Success in the Context of Globalization // 1st International and
Interdisciplinary Scientific Conference on Merging Physical Sciences, the Humanities and Social
Sciences, 18–19 May. – Kaunas.
32. Wallace, J. and Hunt, J. (1996). An analysis of managerial competencies across
hierarchical levels and industry sectors: A contemporary Australian perspective // Journal of
Australian and New Zealand Academy of Management 2(1), p. 36–47.
33. Warren, R. L. (1967). The interorganizational field as a focus for investigation //
Administrative Science Quarterly, Vol. 30, p. 103–130.
34. Wills, S. Barham, K. (1994). Being an international manager // European
Management Journal 12(1), p. 49–58.

LAIMĖJIMO IŠŠŪKIS GLOBALIZACIJOS AMŽIUJE: VERSLO VALDYMO IR

PLĖTROS MEISTRIŠKUMAS

Irena Valantinienė1, Ingrida Krikštaponytė2

Lietuvos kūno kultūros akademija1, Kauno technologijos universitetas2
Šiandien aplinka pilna pokyčių dėl globalizacijos procesų. Šiame straipsnyje
analizuojamas verslo valdymas ir plėtra globalizacijos amžiuje, parodant, koks yra laimėjimo
iššūkis organizacijoms. Verslo valdymas ir plėtra globalizacijos amžiuje yra sudėtingesni. Tam,
kad sėkmingai valdytų verslą globalizacijos amžiuje, vadovai turi suprasti ne tik kompetencijos
vertę, bet taip pat turi žinoti pagrindines verslo valdymo kompetencijas ir pastoviai jas tobulinti,
nes šiandieninėje visuomenėje žinių poreikis vis augs ir kompetencijos vertė bus vis svarbesnė
vadybos moksluose ir praktikoje.

167