Each discussion needs to be responded to with half a page in response, 12 font and double spaced.
Partnering in Developing Markets
Overall opinion of the article-
I found this article very interesting and I think the author does a great job of explaining both the positives and negatives of partnering in developing countries. Steven J. Thompson was a good person to write this article and hear his knowledge and opinion on this subject because he has experienced it first hand due to the fact that he is the CEO at Hopkins Medicine International. I think that his example of Hopkins joining with Anadolu, a Turkish charitable foundation was very effective. We always wonder why the United States does not do more to help the health of people across the globe because our medicine is so advanced but we do not realize how many rules and regulations that the US has to go through and follow in order to do so. This article does a good job of explaining the steps that need to be followed in order to globalize medicine practices.
What I learned from the article-
One thing that I learned from this article is that Turkish law prohibits noncitizens from running hospitals, and finding qualified Turkish executives is a very difficult task. Also that culture clashes are very common and that you have to decide whether to challenge the culture or conform to it. Finally, I learned the checklist that Hopkins uses to size up international risk, and what they do it there are any signs of trouble. Some of these include looking for cultural mismatches and adapt your processes, expand support to local managers, and if problems are severe, consider scaling back or killing the project.
- How important is it for investing partner to have some management control?
It is very important for investing partners to have some management control because without it local business leaders would not have the expertise to provide the finance, media, information technology, and other services required. Basically, it gives the business some control and the ability to make sure that the money and time that they are investing will be used correctly and for the good and success of the company.
- What could cause a multinational company to be willing to give up managerial control?
Some factors that could cause a multinational company to be willing to give up managerial control are that they have trained and mentored local managers so that they will be able to take over within two to five years. Also you can bring the local managers to the US to see how the facilities there are ran. Finally, you can establish local training programs to make sure that the local managers are prepared to have all of the managerial control of the business or organization.
- What are the dangers of not being able to put home country based managers into the joint venture leadership positions?
Some dangers of not being able to put home country based managers into the joint venture leadership positions are that it could jeopardize your company’s reputation. Also you lose control of the situation and then have to deal with quality problems, and in this instance safety procedures were not consistent, operating rooms were over or under-booked and some physicians failed to adopt accepted evidence-based diagnostic and treatment procedures. Finally, correct practices collide and challenge the culture of the country, and by not having a home based manager you do not have the ability to determine if you need to challenge the culture in order to do run the business the correct way.
How important is it for the investing partner to have some management control?
It is extremely crucial that the investing partners have some management control within any organization. Investors are what can make or break a company, especially the major investors that have huge capital strategies within. We learned all about this in our last forum – Investors today are not acting like the owners that they are. In order to enforce company goals and expectations, investing partners must be included within management positions. This is especially true within multinational companies that also work within several cultures where management influences are needed even more so to properly react to challenges.
What could cause a multinational company (GM for example) to be willing to give up managerial control?
A multinational company, like Hopkins, could be willing to give up their managerial control to local citizens within the country. This could be caused by the country’s laws and regulations, like we could see in this article. However, if proper training could be given to the local partners in those positions, then the company would be willing to give up this control in the future. They would (of course) also be willing to give up this control if there appears to already be experienced and qualified local partners in those managerial positions in the first place.
What are the dangers of not being able to put home country based managers into the joint venture leadership positions?
There are several dangers to not putting home country-based managers in these leadership positions. First of all, it would be very difficult, if not impossible, to enforce company goals, regulations, and aspirations without having managers from the home country of the company. Also, in the article we could see that the major issue was that local partners many times do not have the experience and innovative influence that’s needed to fulfill the positions. It can really hurt a company’s reputation when this happens, and it can be frustrating because this really limits the employee possibilities and positions within your own company! However, Hopkins did a great job combating this by partnering the local partners with their own advisers temporarily (two to five years) to properly train them and establish proper management.
Opinion & What I Learned
This article was very insightful! It was very interesting to see how Hopkins went about the Turkey situation that requires Turkish citizens to run their hospitals and prohibited non-citizens from taking over these crucial leadership roles. This left Hopkins without much control, and the hospital quickly ran into quality problems! It caused the Turkish managers to run into operational and clinical challenges that they could not properly react to due to their lack of experience. While this left Hopkins without much control, they made it work by teaming these local, top managers with Hopkins advisers to properly influence and train them. This actually helped the local partners realize that they couldn’t give that innovation and culture change, so they decided to move up the home country’s managers and ended up dissolving that top position! Hopkin’s also did a great job in this article explaining how they have improved in deciding whether or not to pursue potential projects, and how they decide this.
I also learned several things from this article. I never realized that some countries require the top management positions to be obtained by citizens within their country, forcing companies to follow this law. I also never really thought about how much of an issue it could be for companies that never question a doctor’s judgement. This can really bring the quality of care down, but I really like how Hopkin’s handled this situation in Singapore. Thirdly, I also learned that it is good to include a clause within contracts that allows the company to kill a project that is already underway in case the partner isn’t honoring its commitments or too many other obstacles emerge. For example, Hopkins has a “termination at convenience” clause in their contracts.