Colgate-Palmolive:

How To Manage International Career

Comparative study on Managing International Career

By: Azman Muammar, B.Eng.

 

CP was a leading consumer product company with product brand were offered such as colgate toothpaste, Palmolive dishwashing liquid, Ajax cleanser, Irish spring soap and Hill’s science diet pet food.

 

The company were also recognized as its outstanding approach to manage international career development. By 1993, it had 170 expatriates in key management positions all over the world. International experience was considered as important matter to career development, and virtually a requirement for anyone aspiring to senior management.

 

However, increasing number of talented young manager were becoming reluctant to international assignment, because of their spouse rejected to move outside US as they had careers of their own and couldn’t easily move abroad. Therefore, management at CP were thinking carefully about whether to adjust their approach toward international career development.

 

Why international assignment is important for CP?

 

According to their improvement in sales all over the world, international office contribute significance number of total sales comparing to US market.

 

In 1928, after merger process they started to expand abroad.

By 1930, the firm had subsidiaries in several European countries, as well as in Argentina, Brazil, India, Mexico, south Africa, and Philippines.

By 1961, CP’s product were sold in 85 countries around the world. By that year, they book increasing activity in sales by growing it 53% of total company sales and accpunted for 78% profit.

During 1970s, CP undertook series of acquisitions and became more diversified company, shown by revenues grew up to $4,9 billion until 1984.

During 1970 and 1980’s, it acquired and divested in several companies and continued to find new subsidiaries in latin America, Africa, and asia, including several populous country.

In 1992, CP acquired Mennen, a private firm best known for its line of deodorant product.

However, international sales were more important than ever, and for several market like Europe, it contributed 27%, latin America 21 % and asia-africa 17%. What’s a big number!

 

Managing international Expansion

 

Actually, CP had consistenly taken a measured approach toward entering foreign market. They start by import its product first and then if sales were strong, CP would set up country subsidiary and begin manufacture locally. New subsidiary were runned by experienced manager, sent in from CP headquarter or from other subsidiaries.

 

In earlier, CP initially organized its activities on a country by country basis, with each foreign subsidiary reporting directly to corporate headquarters. But, with increasing global competition in consumer goods and urgen needs on worldwide coordination and shifted away from strictly geographic approach, then CP introduced new unit, called Global Business Development, which was created as global headquarter, gathering consumer and competitive information, developing global strategies, assessing opportunities and risk around the world, and transferring knowledge among countries.

 

As growing business again, CP organizational structure were described geographically, with the president of four major regions, North America, Europe, Latin America, and asia pacific dan they should report to COO (chief of operational officer).

 

The Role of Expatriate Manager

 

CP had its manager dispatched to new market all the world. Their expatriate manager after several times worked in one country then moved to antother country , transferring their expertise and helping to disseminate CP’s management approach.

Once in the foreign country, expatriate manager had to do their best job and adapt to local conditions, and sometimes diet, climate and standard living were often very different from what they were used to.

 

Several problem that they had to face are:

  1. differences in cost of living

In earlier fase, some foreign assignment were not attractive as manager feared financial sacrifice and    conversely, other assignment became attractive as a way to save money rather than for merits of the job.

  1. pension planning

the manager not become fully vested for pension purposes in any one.

 

Then, toward this kind of problem, company decided to establish a single corporate policy regarding international assignment. The aims is to have some consistency in structure and expatriate policy.

 

Colgate-Palmolive’s international assignment policy

 

The policy was developed to provide standardized set of procedures and entitlements for its expatriate managers. The policy itself was intended to be progressive, comprehensive, and sensitive to employee and family needs.

 

The employees were shifted to US status and considered to be an American employees for purposes of pension and benefits.

 

The policy had several important component:

  1. prior accepting an overseas assignment , managers were allowed to take 5-days trip, with expenses paid, to visit assignment location.
  2. Upon acceptance assignment, manager and his spouse were offered  language courses at company expenses
  3. Medical examination also provided
  4. While overseas, CP will reimbursed the cost of private school tuition for the children 4-19 years.
  5. Employees also received annual home leaves so they could return to their home country for an extended visit each year.

 

Several policy were made to ensure that expatriate managers had a similar level of  disposable income as their counterpart did at corporate headquarter.

In addition, the company paid for moving and relocation expenses at the beginning and the end of the assignment, provided relocation allowance, paid temporary living expenses upon arrival and protected employees against loses in real estate transaction.

 

Basically, company was trying to address wide range of concern, both personal and financial.

 

Profile of Colgate Palmolive’s Expatriate Managers

 

Manager who were choosen for international policy if they had distinguished themselves in their initial assignment and were judged to be of high potential person.

After they can accomplish their job in three to five years in one expatriate position, the manager might be offered a new positions in antoher country, either as promotion or as rotation.

 

The problem that often occur regarding to the policy was:

  1. common concern had to do with host country’s religion or social practices, its language, or with matters of health and safety.
  2. Family reason

 

Improvement to solve the problem

 

According to survey that had been conducted in order to gain more information why most of talented manager didn’t want to get international assignment, the research shown that:

  1. great majority of of employees found that international assignment policy fair and comprehensive.
  2. They are suggested that more to be done in preparing expatriates and their families prior going abroad.
  3. Many employees put dissatisfaction on the issue of spouse employment, complaining that their spouses were not allowed to work in foreign country or they can’t find suitable employment in their chosen professions.

 According to result, company response to make orientation program to help expatriate and families anticipate cultural differences and personal stresses they might be find when living overseas.

Also, they came out with program, called the spouse assistance program.

 

The spouse assistance program

The program were initiated to help spouses assess and achieve the transition to foreign location.

  1. program endeavor to help informing employees and spouses of the career development opportunities overseas
  2. provide networking assistance through their membership to find new career opportunity.
  3. Spouse reimbursement account

This account were created to assist a spouse in locating job for continuing a career overseas, company will provide reimbursement account equivalent to $7,500 usd

 

  1. Tuition reimbursement

Tuition reimbursement were provided to support spouses who pursue career related skill and competency  development overseas.

 

Instead of giving spouse assistance program, CP also provide another program and facilities, such as:

  1. Tax equalization
  2. Goods and service
  3. Housing
  4. Relocation to the assignment location
  5. Sale or rental the principal residence
  6. Relocation allowance
  7. Children education reimbursement
  8. Vacation and Leave
  9. Home leave
  10. Post allowance
  11. World opportunity

 

 

Critical Point

 

The policy is designed, of course, to support the success of the business by facilitating the placement of skills in the global environment.  It is the employee who takes responsibility for the success of his assignment, but in order to ensure professional success, the policy also seeks to accommodate family interests in consistent and equitable ways.  Employees, who are identified as having high performance and potential, have various opportunities to go beyond the National boundaries and make a mark at the international level.  There are plenty of examples of employees who have moved to Divisional/Global assignments and successfully delivered business results.  Opportunities are available in each and every function.

 

  1. Strong points –

 

This policy is governed by some well-defined principles, of which the following are some of the most important, namely: Fairness: the fair treatment of the family, recognizing their contribution to the success of the assignment. This particularly applies to the educational needs of the children and the disruption of dual careers. In this respect there is a clear “partner assistance program”

 

  1. Weakness –

Picking up the wrong candidate for an international assignment, a costly lesson for both the individual and the company.  So more and more companies turn to test techniques like Overseas Assignment Inventory that allows a company to compare a candidate against a profile of success based on a study of thousands of international managers. Also, Assignment is use to fill the skill gap.

Sometimes, the certain position is designated to expatriate only.  It’ll exclude the  local candidate with a good capacity for that position.

 

When an MNC (Multinational Corporation) designs a policy regarding international career development, they might have the following consideration in advance:

 

  1. make decentralized management style to exercise great autonomy.
  2. Use expatriate managers with functional managing experiences to lead the local employees and operate their subsidiaries.
  3. Provide expatriates with consistent and equitable treatment such as pension, benefits and reimbursement for overseas assignment.
  4. Measure the cost spending on housing, moving, settling in, children education reimbursement, temporary living expenses, home leave, etc.
  5. Consider the expatriates’ spouses’ income replacement in dual-career families.

 

 

Case source: Harvard Business Review

Reviewer: Azman Muammar

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