Managing Executive Attention in the Global Company

How can executives prioritize their time to ensure that they are focusing on the countries and subsidiaries that need the most attention?

Many companies today are truly global in reach. Shell Oil has operations in more than 140 countries, Coca-Cola sells its products in more than 200 countries, and Nestlé boasts that it has factories or operations in almost every country in the world. For the executives running these companies, the challenge of keeping abreast of events in markets around the world is mind boggling. Interestingly, the biggest problem is not a lack of information: Executives are deluged with monthly reports and market analyses for every country in which they operate. The problem is having the time and energy to process the information. Indeed, executive attention is a scarce resource, one that needs to be carefully managed.1 How should executives prioritize their time to ensure that it is focused on the countries and subsidiaries that need their attention? Which markets should they emphasize, and which can they allow to fall off their radar screen? We have researched executive attention in global companies for the past five years, interviewing 50 executives at 30 corporations. (See “About the Research.”) Despite the best of intentions and irrespective of the exhortation that companies should “think global, act local,” the evidence shows clearly that corporate executives end up prioritizing a handful of markets at the expense of the others. One reason for selective attention is ethnocentric thinking — the tendency to assume that the home market is most important. Of course, no executive would state this directly, but the evidence of a home-country bias is widespread and undisputed.2

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References

1. Several studies have examined the challenges of managing executive attention. See T.H. Davenport and J.C. Beck, “The Attention Economy: Understanding the New Currency of Business” (Boston: Harvard Business School Press, 2001); C. Bouquet, “Building Global Mindsets: An Attention-Based Perspective” (New York: Palgrave Macmillan, 2005); W. Ocasio, “Towards an Attention-Based View of the Firm,” Strategic Management Journal 18, special issue (Dec. 4, 1998): 187–206; and M.T. Hansen and M.R. Haas, “Competing For Attention in Knowledge Markets: Electronic Document Dissemination in a Management Consulting Company,” Administrative Science Quarterly 46, no. 1 (March 2001): 1–28.

2. See A.M. Rugman and A. Verbeke, “Subsidiary-Specific Advantages in Multinational Enterprises,” Strategic Management Journal 22, no. 3 (January 2001): 237–250.

3. U. Spiesshofer, “Managing the Balance: A Global Player’s Perspective On Institutional Change” (keynote address at the 26th Annual Conference of the Strategic Management Society, Vienna, Austria, Oct. 30, 2006).

4. See J.M. Birkinshaw and N. Fry, “Subsidiary Initiative to Develop New Markets,” Sloan Management Review 39, no. 3 (spring 1998): 51–61.

5. Interestingly, a poor track record is also conducive to getting attention, but not the type of attention that subsidiary managers feel is most conducive to creating the right set of conditions for the subsidiary to develop in the future. 3M Co., for instance, recently reacted to the disappointing results of its Canadian subsidiary by almost completely replacing the local management structure. Four out of five VPs were let go; the Canadian CEO who completed our survey was moved to a lesser position in the United States; and a substantial number of middle-level managers ended up being replaced.

6. J. Immelt (untitled presentation at Electrical Products Group conference, Long Boat Keys, Florida, May 24, 2006).

7. See C.A. Bartlett and S. Ghoshal, “Tap Your Subsidiaries For Global Reach,” Harvard Business Review 64, no. 6 (November 1986): 87–94.

Acknowledgments

The authors wish to thank the Advanced Institute of Management Research, the Social Sciences and Humanities Research Council of Canada, York University’s Institute for Social Research and CEO Forum Group (Australia) for their support.