1. Introduction
Cross-border trade and travel have been increasing at enhanced rate over the last few decades because business units have identified the necessity of international co-operation in strengthening their financial growth and industry recognition. In this context, multinational companies are striving to improve their competitiveness in the global marketplace by focusing specifically on international expansion. Realising the further growth opportunities in the international market environment, MasterCard went public in May 2008. As a result of this change, the company’s 4,600 employees worldwide became exposed to a new way of doing things. In this circumstance, the firm’s executives wanted to make sure that every employee was informed of what would the change mean and how the organisation would be different after the initial public offering (IPO). In response to this need, the company planned to organise a comprehensive learning programme for its employees worldwide. This learning event was comprised of ‘a series of intensive, 4.5 hour seminars’ conducted in a 36 cities over a period of three weeks.
The MasterCard developed a strategic management process under the leadership of Rebecca Ray, the company’s senior vice president for global learning, so as to implement this largest event in the firm’s history. As James points out, the three learning maps, including ‘Universal Opportunity; How We Make Money; and New Climate, New Culture, New Company’ were central to this learning event (1995, p.2.26). While analysing the corporate culture of the organisation, it seems that the company follows corporate strategies such as aggressive international expansion and employee empowerment to enhance its growth initiatives in the global marketplace. The three-stage theory of international expansion and Kanter’s theory of structural empowerment are applicable to this case. This paper will critically analyse the key strategic management process applied by MasterCard in addition to developing an important strategic plan for holding the planned event. The paper will also discuss the key theories and perspectives of corporate strategies used by MasterCard.
2. Process of strategic management
In order to hold the ‘largest single learning event in the company’s history’, MasterCard applied a comprehensive strategic management process that was developed by Rebecca Ray, the firm’s senior vice president for global learning. The key aspects of the strategic management process adopted by MasterCard to implement the learning event are described below.
2.1 Setting the goal
When MasterCard transformed into a public corporation in 2008, the company’s top management identified the need of keeping every employee informed of what the change would mean. The company executives believed that it would be difficult to maintain the firm’s competitiveness in the new market context unless every employee has understood the change in the organisational culture and values clearly. Hence, the corporation planned to organise the largest learning event in its history to educate employees about their changing roles in the new organisational environment.
2.2 Strategic analysis
Rebecca Ray and the senior HR vice president Mimi Wood were responsible for leading the task of executing this worldwide event. In this phase, the company developed the training programme, characterised with three ‘learning maps’, with the assistance of an external training firm. The top management critically evaluated this training programme to make certain that it is capable of communicating the employees about every detail of the change. In addition, the total costs required to execute this learning event were also estimated.
2.3 Strategy formulation
“Ray wanted the seminars to be conducted with employees gathered at tables seating about 10 people each” (Training, n.d.). Each table was given a well-trained coach or facilitator along with a learning map. The organisation planned to recruit over 200 facilitators worldwide. Ray and Wood were charged with the responsibility of training the company’s 60 global HR managers, who in turn could recruit and train the table facilitators. These 60 HR people were also responsible for managing the logistical challenges associated with conducting this huge event.
2.4 Strategy implementation
As part of executing the strategy; Ray, Wood, and two consultants from the Root Learning Inc flew to the major event hosting cities such as St. Louis, Singapore, Brussels, and back to New York to train the master facilitators. They presented the train-the-trainer sessions in the form of a simulated seminar that guided the HR team how to perform the table-coaching duties that they need to mentor others (NOE, 2012, p.176). An online version of the seminar was also developed to meet the training needs of new hirers and a small population of employees who would miss the live events.
2.5 Evaluation and control
The company maintained separate websites for master facilitators to provide them with “corrections and updates to information presented in the seminars” and to perform live assessments of the ongoing learning event (‘MasterCard's Master Plan’). In the evaluation, over 90 percent of the employees opined that the learning programme assisted them to ameliorate their knowledge base of the firm’s business strategy and financial structure. In addition, the company could make some key changes to the training programme in order to cope with recent market developments and thereby to update the knowledge base of employees.
3. Corporate strategies: Theories and perspectives
While analysing the internal business landscape of MasterCard, it is obvious that currently the company follows corporate strategies such as aggressive international expansion and employee empowerment so as to dominate the financial services industry. The company identified that huge amount of additional investments is needed to fuel its global market expansion activities and to confront competitors effectively. The MasterCard’s top management thought that going public was a potential idea to gather massive amount of working capital required to facilitate international growth and to limit the control of member banks over the company. This option could assist the management team to retain its interests in the company while raising enormous amounts of additional capital. According to the three-stage theory of international expansion proposed by Farok, Sumit and Chin-Chun Hsu (2003), there are three stages in the internationalisation of a business such as early internationalisation, mid-stage internationalisation, and high-level internationalisation. The graphical representation of this theory suggests that the Stage 2 shows a positive slope in terms of performance whereas the Stage 1 and Stage 3 are associated with a negative slope (Ibid). While analysing the business environment of MasterCard, it is clear that the company is currently in Stage 2 but it is yet to reach the saturation point of performance. The Forecast Earnings Growth of MasterCard prepared by NASDAQ (n.d.) indicates that the company’s earnings will be improved by 9.21% this year. The report also says that the company is expected to increase its earnings at an average annual rate of 17% over the next five years (NASDAQ). This projected growth rate reflects that the company has a lot more to achieve in its Stage 2 of internationalisation.
Similarly, the MasterCard management increasingly fosters employee empowerment as the company strongly believes that a potential workforce is the most valuable asset of the organisation. In this highly competitive modern market environment, the company cannot improve its market share unless its employees are really informed of the organisational values and their roles in the supply chain. This is the reason why MasterCard implemented the largest learning event for its employees when the company went public. Although this learning programme had cost the company huge amounts, the management believed that the long-term benefits of this programme would outweigh the costs involved. Kanter’s theory of structural empowerment is a good theoretical framework to explain the factors influencing employee attitude toward work (Orgambidez-Ramos & Borrego-Ales, 2014). As Nedd (2006) points out, this theory states that “the structure of the work environment is an important correlate of employee attitude and behaviours in organizations and that perceived access to power and opportunity structures relate to the behaviours and attitudes of employees in organizations”. While analysing MasterCard’s workplace environment in the light of the structural empowerment theory, it is clear that the structure of the firm’s worksite is effective to influence employee attitude and behaviours positively. In addition, the structure of the company’s worksite environment also justifies its anticipated growth rate.
4. Importance of strategic plans
Since MasterCard’s planned learning programme is the largest event in the company’s history, there should be more comprehensive short-term and long-term strategic plans in place to hold this event effectively. First, the fast changing business landscape and regulatory environment would appear to be a challenge to the ongoing learning programme. In this circumstance, the top management may be forced to make some key changes to address the recent developments occurred in the global business or regulatory environments. In order to manage this situation, the organisation may use proper problem solving techniques such as brainstorming and lateral thinking. As DuBrin (2011, p.179) says, brainstorming is a potential problem solving technique where a group tries to find a solution for a particular problem by gathering and analysing a list of potential alternatives suggested by its members. This technique may be used for supporting short-term as well as long-term decision making. Since MasterCard is an organisation promoting employee engagement and empowerment significantly, it would be better for the company to practice the brainstorming technique. As it is a combined effort to develop potential solution to a specific problem, the solution would be more feasible than the one formed by individual managers. Likewise, Proctor (2005, p. 138), reflects that lateral thinking is also a creative problem solving technique that enhances the generation of ideas that may not be obtainable under a traditional step by step logic approach.
Employee resistance to change may be a crucial issue when the MasterCard plans to go public. As it is a short-term issue, it is advisable for the organisation to employ critical thinking technique to convince employees about the necessity of change and thereby ensure their active participation. Furthermore, a short-term as well as a long-term strategic plan is vital for the organisation to conduct the learning event with greater efficiency and appropriateness. Referring to Bryson (2011, p. 362), a well-structured strategic plan can assist the company to ensure that short-term goals are achieved in a timely manner and the programme is progressing as planned. In addition, the management must be able to communicate the strategic plan properly to the employees so that they can understand what the firm would expect from them. The most important thing is that if there is any change needed to the learning programme after its implementation, then the management must ensure that the table coaches/facilitators understand the necessity of the change, and they are willing to respond to the situation accordingly.
5. Conclusion
A well-developed short-term as well as long-term strategic plan is necessary for the MasterCard to conduct the learning programmes timely and to respond to various challenges effectively. Brainstorming and lateral thinking are two great problem solving techniques advisable for the company to address the challenges arising from unexpected changes in the business and/or regulatory landscapes. The technique of critical thinking may be used effectively to deal with the issue of employee resistance to change and to ensure their active participation in implementing the planned change.
References
Bryson,, J. M., 2011. Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement. John Wiley & Sons.
DuBrin, A., 2011. Essentials of Management. Cengage Learning.
Farok, J. C., Sumit, K. K & Chin-Chun, Hsu. 2003. A three-stage theory of international expansion: the link between multinationality and performance in the service sector, Journal of International Business Studies. [online] available at: http://ejournal.narotama.ac.id/files/a%20three%20stage%20theory,%20by%20contractor%20et%20al,%202003.pdf
James, S., 1995. Principles of Management. Pearson Education India.
NASDAQ. Mastercard Incorporated Analyst Forecasts Earnings Growth. [online] available at: http://www.nasdaq.com/symbol/ma/earnings-growth [accessed 22 June 2015]
NOE. 2012. Employee Training and Development . Tata McGraw-Hill Education.
Orgambidez-Ramos, A & Borrego-Ales ,Y., 2014. Empowering Employees: Structural Empowerment as Antecedent of Job Satisfaction in University Settings. Psychological Thought 7 (1): available at: http://psyct.psychopen.eu/article/view/88/html#d2e177 [accessed 22 June 2015]
Proctor, T. 2005. Creative Problem Solving for Managers: Developing Skills for Decision Making and Innovation. Psychology Press.
Training. ‘MasterCard's Master Plan’. [online] available at: http://ip-50-63-221-144.ip.secureserver.net/article/mastercards-master-plan [accessed 22 June 2015]
