How managing with a global mindset adequately addresses some challenges raised by managing in a globalising world. ABSTRACT The globalising world has impacted and raised new challenges for organisations and leaders. Thinking about new perspectives and reframe old paradigms are required and fundamental to leaders succeed in the global competitive environment. This essay will explore how managing with a global mindset are becoming an important competence across boundaries and how it can open doors for thriving businesses worldwide. Table of contents 1.
Challenges of managing in a globalising world …………………………………………………………………………….. 3 2. Competencies of global leaders ……………………………………………………………………………………………………. 4 3. Global versus Local …………………………………………………………………………………………………………………….. 6 4. Global mobility …………………………………………………………………………………………………………………………….. 5. Conclusion…………………………………………………………………………………………………………………………………… 9 6. Bibliography ………………………………………………………………………………………………………………………………. 10 2 Managing with a global mindset 1. Challenges of managing in a globalising world The globalisation process promoted significant changes in the businesses environment.
In this context, global organisations have been the target of constant and intense transformations, which affect and require redefinitions of the leadership style adopted. These companies need global leaders, who are able to face the demands of a competitive and internationalised market (Adler, Brody and Osland 2001). Many multinational companies are facing a common challenge: the development of leaders able to manage global companies and take advantage of strategic opportunities. But do the global leaders require a set of capacities totally different from those required for national companies?
What would be the main difficulties faced by global leaders when they extend their activities outside the domestic market? How does global companies can act in order to promote a global mindset among their leaders and employees? Some key traits of a leader, which can be carried out independently of the position or hierarchical level, has been considered as essential such as integrity, self-confidence, drive, desire to lead, communication, selfconfidence, and the potential to stimulate and capacitate its collaborators in the search for creative solutions and innovative alternatives, besides knowing the business (Kirkpatrick and Locke, 1991).
On the other hand, global leadership, in addition to the above-mentioned characteristics, presents differentiated traits like the capacity to appreciate and deal with different cultures, as it is in direct or indirect contact with subsidiaries in other countries and even with main offices located in the same country, but with cultural differences. Additionally, inquisitiveness, self-awareness, capacity to embrace duality among others has been considered as core characteristics to lead global companies (Gregersen, Morrison and Black, 1998).
The increased diversity that leaders in global roles need to confront and the challenges of operating over long distances and multiple time zones, often remotely, were seen to have particular significance for the leadership approaches and behaviours required. Higher risks, complexity and uncertainty due to constant changes in 3 Managing with a global mindset political and economic conditions are considered additional challenges that global organisations and leaders must deal with in developing their strategy.
They need to maximise the benefits and opportunities of operating globally, manage the increased scale and scope that international operations require, build alliances across boundaries and understand international disciplines such as regulations, finance and human resources management that differ from those who operates only nationally. Furthermore, understand the business as a whole in a global context; the competition and market trends are essential for making well-informed business decisions and to stay ahead of the competitors.
Managing in a globalising world also requires being innovative and having the courage to challenge the status quo (Gregersen, Morrison and Black, 1998). 2. Competencies of Global Leaders According results of a research carried out among global company leaders, successful leaders had a remarkable global mentality and they see and think about the world in a different way from those who let themselves be discouraged and disheartened in the face of global enterprise challenge. And what would be the essential trait that defines that remarkable mentality?
According to Black (2006), it is curiosity and inquisitiveness. “They seek to try the local food and not international food at some five star hotels. They read the local newspaper, talk to the local residents. ” Although this trend in search of new experiences may be an innate trait, and not something that is learnt, nothing prevents the companies from looking for this characteristic at the time of selecting its potential leaders and sending them to an international assignment. Although individual personality traits mould leadership capacities, the company’s culture has an equally vital role.
Black (2006) describes what John Pepper, one of the leaders of Procter & Gamble who helped to make the company a global company in the 80s and 90s, did when he arrived in a country where he had never been before: he visited five local families and learned with them how the families washed their clothes, cleaned the house and dealt with the children’s hygiene in that culture. Pepper believed that the experience and real contact with local cultures makes the difference in becoming a global leader. 4 Managing with a global mindset
According to Manning (2003), most of the companies admit that technical competencies and organizational experience alone are insufficient criteria for the choice of a global leader. Pursuant to the studies developed by Black and Gregersen (1999), the crucial characteristic for leadership is linked to relationship skills and opening of new perspectives. The process of developing global leaders becomes a challenge, because the understanding of this movement experienced by them collides with personality traits that differentiate them from the rest.
And such characteristics directly affect the work relationships and the effectiveness of the cross cultural leadership, the elements of which should be taken into consideration by the organisations for the selection and development of global leadership programs. It is indispensable for the leaders to know that in a scenario of connection and exchange of knowledge and of new management practices, functional and geographic mobility requires a global leader capable of enduring the pressures, constant uncertainties and resisting to the disruption of pre-set standards in order to adapt himself to a new reality.
The global leader must have strategic worldwide vision in order to promote changes and capture the market opportunities. Additionally, they need to be adaptable, have capacity for managing uncertainty, ability to balance tensions and to understand people and fundamentally have open-mindedness, which is key for them succeed (Gregersen, Morrison and Black 1998). As Jeff Bezos, founder and CEO of Amazon. com, affirmed: “We cannot let short term investors and specialists frighten us and prevent us from experimenting”.
One of the most redeeming features of the culture of Amazon according to its CEO is the fact that it values experimentation. Bezos believes that it is an important attitude to learn and to innovate as a global company (Business Harvard Review, 2007). Experimentation is also a fundamental competence for global leaders that should explore new ideas, products and markets without fear, even when the return is not immediate. In the past, companies entrusted innovation to a few geniuses at the main office and simply appropriated it.
Today, in a globalising world multinationals value and reap the fruits of the inventiveness of their employees wherever they are. 5 Managing with a global mindset 3. Global versus Local Global leadership “is not about doing business abroad. It’s about managing an integrated enterprise across borders where you encounter different cultural, legal, regulatory and economic systems,” says Stephen Kobrin (2007), a Wharton professor of Multinational Management. “It’s about operating in multiple environments trying to achieve a common objective. “
No matter what the challenges may be many observers draw the attention to the fact that managing a global company is something very different from managing a domestic company. A German company that operates solely in Germany can be managed in a certain way. However, those in charge of an international company, depending on where it operates, have to review several of their assumptions regarding many things, from the development of the marketing strategies, regulatory framework to the human resources policies. Despite globalisation, “the world is not flat”.
There are many variations in basic things that require adaptations, when leaders ignore them there is a high risk of compromising the company’s performance (Kobrin, 2007). A very good strategy for the company in Germany, based on an absolute understanding of the German market, may not work in Japan. Organisations and global leaders deal with the challenge of determining when a global and when a local solution is the most effective way to deliver to market. They need to determine where standards, products and processes need to adhere to worldwide frameworks and where local standards are more appropriate.
Kobrin (2007) formulates the question of global leadership and interprets it as a clash with a basic paradigm: the exchange between integration and fragmentation. According his experience it is important to ask: Do the company react in a different way according to the market? Or do they operate the same way no matter where? The way each one reacts to individual markets depends on the common elements to those markets, he adds. In regard to technology, for example, the environment is less important. People use computer chips in the 6 Managing with a global mindset ame way, independently from which culture they belong or the language they speak. Therefore, the problem faced by the global leader is related to the pressure of the balance to be attained when the company has to answer to different markets in a different way, benefiting from the efficiencies of scale. Sometimes tension arouse between the managers from the country of origin and the local professionals. Lack of flexibility in dealing with local demands partly explains why some companies face a series of crisis in their global expansion.
The global leaders need to be able to find a balance between the extremes. Believe that the countries are so different that any type of local intervention is impossible, and leave the management totally in the hands of local professionals is not a global strategy. It is crucial to find a balance and understand that there are differences to be respected, but might there are similarities and possible learning on both sides of the border. Empower local subsidiaries and local teams and at same time implement strategies that are globally effective is a huge challenge for global companies and leaders. . Global Mobility Samsung Electronics, of South Korea, often mentioned as one of the most successful emerging companies, is an example of how a company can transfer world-class resources overseas. The company initially amassed solid experience in the development of products and operations globally. Being one of the most efficient electronics companies in the world used its capacities in large-scale manufacturing and its experience in innovation to launch the brand in new markets like USA and Europe.
Next, Samsung invested heavily in research and development and in the global production, increasing even more its participation within the world marketplace. To make this possible, Samsung recruits people from different nationalities from different universities in the world. The company institutionalised its training and development, when it created an internal training centre and implementing a systematic approach to performance management. Moreover, Samsung encourage 7 Managing with a global mindset transfer of capacities that requires executives who know how to apply tandard practices in diverse countries, contexts and cultures. This integration of markets, resources and talents – an essential element for global growth – does not yet occur in most of the companies, even among those who already do business around the world (McKinsey, 2007). Like Samsung, Shell re-allocates high potential managers placing them in various different positions in distinct sectors of the company, including overseas. To work in various positions overseas during several years is an indispensable part of Shell’s culture, states Mathilde de Boer, consultant of Leadership Development of Shell Learning.
Though the employees are sometimes reluctant towards this policy of constant relocation — “when it comes to couples with each one having their own career, the challenge is even greater”, notes de Boer —, since willingness to travel and live overseas is a fundamental requirement for someone who wants to progress his career. “When someone decides to move into a higher position, he or she will have to face a job that implies moving to different locations”. The benefits of overseas experience are visible at the time the executives meet for more formal leadership training.
As they have experience in many different situations, they quickly pick up new ways of doing things (McKinsey, 2007). According to McCall and Hollenbeck (2002), although global executives should be flexible people, sensitive to cultural differences, capable of dealing with complexities and willing to think globally, they need to develop or improve these competencies through travelling overseas, uniting with international teams, adhering to training programs focused on globalisation and or transfers to other subsidiaries. Training can contribute to global leader’s development and with the process of opening to the new.
Aiming to extend the boundaries and reframe the actual mental map. Thus, training should confront the participants with the contrasts found in the world that engage most of their senses for a significant period of time (Black, Gregersen, 1999). Meanwhile, the process of global leaders’ training does not consider only their capacities and qualifications, but also the experiences lived and the lessons learn from their practical day-to-day. 8 Managing with a global mindset Diversify and amplify the leader’s cultural backgrounds may be essential for large multinational organisations that aim to keep or develop their competitive advantage.
Manoeuvring across the global environment, spanning diverse countries, cultures and customers’ preferences and expectations, presents significant challenges but also opportunities. For this reason promote global mindset among the leaders through international assignments or rotations through different functions it is important to develop the leaders’ ability to deal with uncertainty and change, gain a greater understanding of the organisation, develop networks and facilitate the transfer of knowledge across the company and beyond the borders. 5. Conclusion
It is not adequate to define a company as global based on the amount of offices it has overseas. The real measurement to define a company as global is the way in which it perceives the world. It is not only a question of the number of employees working around the world. What is important is the extent of their connection and collaboration with people in other countries. In reviewing the literature it becomes clear that there is a greater understanding about the importance of the strategic role that an effective global leadership plays in facilitating organisations’ ability to compete effectively in a very competitive globalising market.
As a consequence many organisations are making particular efforts to tailor development programs to address leaders’ needs, such as encouraging knowledge sharing and mobilising individuals and teams who have experience and expertise around the world to participate on projects where skills and best practice are transferred. Promoting multicultural training and how to manage international and virtual teams and rotating people through different functions.
These methods have been applied to develop leaders’ ability to deal with ambiguity, uncertainty and change. Moreover, develop a global mindset and gain a greater understanding of the organisation to facilitate the transfer of knowledge. 9 Managing with a global mindset As companies are increasingly spreading around the world, it becomes very difficult to build an organisational culture of equally shared knowledge. Organisations need to take a proactive and integrated approach in developing global leaders.
They need to be clear about the capabilities required of their global leaders, ensure that development initiatives are appropriate for their needs through regular evaluation and review, and support effective leadership practices and behaviours through all their human resources processes. On the other hand, leaders also need to focus on building their global mindset through an understanding of their own needs and focusing on self-development efforts. They need constantly practice the watching and listening attitude to able to manage potential dilemmas that arise from cultural differences.
And make efforts to do not stereotype, recognising and valuing the benefits that differences bring through an open-minded approach. Seeking to bring diverging opinions together and make efforts to promote news ways of doing things. 10 Managing with a global mindset 6. Bibliography Adler, NJ, Brody, LW and Osland, JS 2001, Going Beyond Twentieth Century Leadership: A CEO Develops his Company’s Global Competitiveness Cross Cultural Management, Vol 8. Black, JS, Morrison, AJ and Gregersen, HB 1999, Global Explorers: The next Generation of Leaders, Routledge, New York, NY.
Black, JS 2006, The mindset of global leaders: Inquisitiveness and duality. Advances in global leadership, Stamford, CT: JAI Press. Black, JS and Gregersen, HB 1999, The right way to manage expats. Harvard Business Review. Business Harvard Review, 2007, The institutional yes. An interview with Jeff Bezos, viewed on 10/11/11 . Gregersen, HB, Morrison, AJ and Black, JS 1998, Developing leaders for the global frontier, Sloan Management Review. Kirkpatrick, S and Locke, E 1991, Leadership: do Traits Matter, Academy of Management Executive.
Kobrin, SJ 2007, What Makes a Global Leader? , The Wharton School, viewed 09/11/11, . Manning, T 2003, Leadership Across Cultures: Attachment Style Influences. Journal of Leadership an Organizational Studies, Winter. McCall, MW, and Hollenbeck, GP 2002, Developing global executives: The lessons of international experience. Boston: Harvard Business School Press. McKinsey 2007, Developing Global Leaders in Latin America, McKinsey Quarterly, viewed 09/11/11, . 11 Managing with a global mindset