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What Is The Geocentric Management?

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Geocentric management involves a global view of the organization's international operations. Rather than orienting themselves toward either the home country or the host country, top managers consider the organization's goals, plans, and performance from a broader, worldwide perspective. The best managers, regardless of their nationality or location, are selected for the assignments that fit their skills and abilities, the various units are connected by a coordinated plan that allows for local needs and actions in the context of overall organizational performance. Although this is the most complex of the three international management approaches, managers who apply geocentric management can make the most effective use of their resources, regardless of origin or location, and achieve the highest possible overall performance.

Asea Brown Boveri (ABB), an organization created by the merger of Sweden's ASEA and Switzerland's Brown Boveri, uses geocentric management to achieve consistently high global performance from more than 1,000 companies operating in 140 countries. ABB produces electrical power equipment, robots, locomotives, antipollution control systems, and other industrial goods, and its local operations around the world act both independently and cooperatively. Local managers are free to react to conditions in their countries, but they must also share information and resources with other units and strive to achieve ABB's overall goals. In this way, top ABB managers can balance local needs with the concerns of reaching global goals.

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