How to tame a turf war in a global economy
As corporations become ever more international, carrying out research as well as manufacturing on multiple continents, something else has become global as well: internal power struggles.
Now a study led by Pamela Hinds, a professor of management science and engineering at Stanford, sheds light on the tensions that arise at global technology companies whose talented minds are often scattered among offices in the United States, Europe and Asia.
One key finding: Although video-conferencing and other technologies minimize the barriers of physical separation, companies are less adept at reducing the social and emotional barriers caused by suspicion, insecurity and the fear of being “out of the loop.”
“Although limited access to information is not a condition unique to global work,” the researchers write, “distance and the challenges of building rapport and taking advantage of informal conversations exacerbated these effects to the extent that some team members found it crippling.”
A second key finding: Debilitating power struggles are actually most likely to occur when the levers of power are balanced fairly evenly between two competing locations.
Hinds and her fellow researchers spent 18 months observing and interviewing nine cross-border software development teams at a major German technology company with operations in Germany, the United States and India.
The researchers found that almost half of the software teams experienced severe power struggles, and all of them experienced at least some tension. The bigger surprise was that the anxieties over power flowed in all directions.
Software developers in the United States, for example, felt “out of the loop” from the decision-makers at corporate headquarters in Germany. But German engineers fretted that their U.S. counterparts had a stranglehold over knowledge about customers, most of whom were in the U.S., which allowed the U.S. workers to dominate many basic design decisions.
At the same time, many engineers in India felt nearly invisible and thought their counterparts in Germany and the U.S. were making all the important decisions. One Indian engineer complained of being trapped in a “master-slave relationship.”
Meanwhile, some project participants in Germany and the U.S. worried about losing jobs and career opportunities to Indian engineers. India’s operations were the fastest growing of the three locations, and India had the most engineers on several of the nine teams. On one project, in fact, the bulk of the work shifted to India while the study was underway.
The study highlights a new wave of management challenges tied to globalization. As nations such as India and China ramp up armies of highly skilled tech professionals, multinational companies now carry out some of their most knowledge-intensive work in cities such as Bangalore and Shanghai.
In this new setting, says Hinds, power struggles often revolve around three key issues. The first is being “in the flow,” which entails having access to information and expertise. The second is “being heard,” which means having access to top decision-makers. The third is opportunities for growth.
The challenge with globally distributed technology development is that each location commands different elements of power and leverage, and all the locations are heavily dependent on each other.
That sets the stage for machinations to preserve or enhance one group’s position at the expense of another’s. Indian engineers complained that their U.S. counterparts made it almost impossible for them to talk directly with customers, most of whom were based in the U.S. Indeed, the researchers report that some U.S. software developers described themselves as “enforcers” of a global standard on user-interfaces.
The power struggles were actually lowest when the balance of power was so heavily one-sided that people viewed it as unalterable.
In the case of one team split between India and Germany, the Indian engineers essentially resigned themselves to the fact that all the top decision-makers were in Germany. But the Indian engineers took solace from the fact that their location had more people and offered more opportunities in the long term. The researchers describe the Indian team members as “biding their time.”
How can corporations reduce such power struggles?
Hinds and her colleagues – Daniela Retelny, a doctoral student at Stanford, and Catherine Cramton, a professor of management science at George Mason University – offer three recommendations.
First, they propose corporations should develop a two-way channel to increase visibility between leaders and distant workers. The visibility needs to be in both directions. Workers in a foreign subsidiary need to have more access to strategic information and more opportunity to contribute to big decisions. In a nutshell, corporate headquarters needs to be seen more and foreign workers need to be heard more.
Second, the researchers urge corporations to open up access to career opportunities. Though the researchers concede that immigration restrictions can be difficult, they urge companies to make sure that opportunities for growth and visibility are available to employees at all locations.
Third, the researchers suggest developing new processes and tools that provide leaders and supervisors with more awareness of the power dynamics between different locations. Among other things, they write, the new tools could ensure that the contributions of distant workers are highlighted and that distant workers have a voice in decisions. Such tools, they say, could also help supervisors recognize power struggles and take measures to reduce tensions before they spiral out of control.
Importantly, Hinds says, the study also shows that power struggles are not inevitable. On one India-U.S. team, good leadership fostered strong collaboration even though the distribution of power was fairly equal between locations, which could have produced a power contest as it did in similar teams.
The project manager was in the U.S., but the Indian group had a well-respected leader and ample expertise. Even though India offered more job opportunities because of faster growth, the U.S. team members saw opportunities for advancement because of the project’s high visibility and strategic importance. The U.S. project manager, meanwhile, went to great lengths to be available to team members at both sites and to ensure that everyone felt included.
“Imbalances in power may be inevitable in global work,” says Hinds, “but good leaders can mitigate the effects by ensuring that people have strategic information and feel that their voices are heard.”
