Hi everyone. Some light reading for the weekend 😉
This post is not authored by me (Paul). Instead, my one-and-only darling wife. Apart from being an all-round hottie, she has been studying a post-graduate business course at University. The content of this post is one of her papers that when I read it, found it to be a really excellent piece of work. Her lecturer agreed too – and awarded it a high distinction.
Now the reason that I am posting this to the CleverWorkarounds blog is she really did some serious research, and I ended up reading a lot of the material too. In fact, I used a lot of her reference material when I was writing the global strategy and technology, and “project fail…” series of posts. If you liked that stuff, you may find some stuff here you like also.
Note: If you want to see where our thinking has evolved in this area, I suggest you take a look at my book: The Heretics Guide to Management. That really nails the true skills one needs for global managers!
So without further adieu, I present to you her paper, examining what skills and competencies that global managers require to operate in an increasingly complex and dynamic global environment. Please let me know what you think of it.
Traditional business methods are being made redundant by the surge of globalization. Managers who continue to practice their traditional managerial skills long gained in business schools are finding themselves ineffective in the global environment. Globalisation is a “conceptual situation where political borders become increasingly irrelevant, economic interdependencies are heightened, and national differences due to dissimilarities in societal cultures are central issues of business. The world, with its complex and dynamic forces, becomes a global marketplace for global managers” (Kedia and Mukherji 1999). In such a world only the ones who understand the impact globalisation wreaks and thus adapt accordingly will survive. Thus to be competitive in the global marketplace the traditional managers must transcend and become global managers.
A literature review has been undertaken to identify the global mindset, and the skills and competencies essential to the global managers. From the numerous frameworks, this paper proposes a new framework design consisting of (1) knowledge competencies; (2) interpersonal competencies; and (3) personal competencies. Skills and competencies within these groups are interdependent of each other suggesting that the development of one group cannot exist without the other.
Prior to framing the skills and competencies necessary to becoming effective global managers, it is essential to understand who and what are global managers. There are numerous literature and studies available on this topic and yet there appears to be no consensus towards a unified definition. It is through the roles and functions of the incumbent that competencies are derived from. However, due to the divergence of the definition of the global manager, the roles and functions that set them apart from domestic managers have also not been clearly clarified and agreed upon. The different roles ascribed to the global managers offered by Bartlett and Ghoshal (1994, 77-91) and Caligiuri (2006) are outlined in Table 1. Thus emerges the differing frameworks of competencies of the global manager.
Table 1: Two existing sets of roles ascribed to the global manager
Contrary to popular perception, Bartlett and Ghoshal (1994, 77-91) and Baruch (2002) controversially argue that the universal global manager does not exist. Bartlett and Ghoshal instead identified three groups of specialists (the business managers, the country managers, and the functional managers) with different organisational goals and roles working together in the global market, and being lead and integrated by the corporate managers. The authors accepted that these roles are not practised by the traditional managers. Baruch reports that there are no common traits or qualities that can assist in identifying the global manager. Barush concluded that the mindset, the “right frame of mind” (characterised by, for examples, openness, awareness, and genuine appreciation of culture and customs) coupled with the basic qualities essential to successful managers will enable them to manage successfully abroad. This distinction contradicts their argument of non-existence of the global manager. According to Jokinen (2005) these differentiations do indeed characterise the widely accepted term of the global manager.
Amongst the numerous definitions, global managers are those who “understand different cultures and lead mixed-nationality teams” (Barnevik 2001, xi-xix) and are “able to unleash human potential and leverage the richness that lies in cultural diversity” (Whitfield 2003). They are expected to fulfil critical roles such as integrator, coordinator, innovator, coach, and strategist (Aycan 2001, 119-135). To implement these roles effectively, it is critical for the global managers to possess a global perspective consisting of a global mindset which is supported by certain knowledge and skills (Kedia and Mukherji 1999). These essential skills and competencies will assist in maintaining a competitive advantage thus ensure their continual success in the complex and dynamic global market.
Essential Competencies of a Global Manager
Various frameworks of global competencies exist, as shown in Table 2, however for the purpose of this paper a new framework will be proposed; one that takes the elements of the ‘global perspective’ into consideration. A literature review was undertaken to frame the key competencies deemed essential and specific to global managers. The framework integrates competencies that (i) refer to explicit and tangible information and ability necessary to accomplish a task; (ii) refer to the cognitive and behavioural abilities to utilise knowledge gained to successfully complete the assignment; and (iii) are fundamental personal characteristics that can impact on knowledge and skills development and action. These competencies are categorised into three meta-competency groups: (1) knowledge competencies; (2) interpersonal competencies; and (3) personal competencies.
Table 2: Leadership competencies of global leaders. Examples of some existing frameworks
(The table ‘Leadership Competencies of Global Leaders’ (Parker 2005, 385).
Knowledge competencies are concerned with factual information pertaining to a clear and deep understanding of technology, business, and industry required to complete tasks successfully. They are the basic building blocks for global managers’ journey towards a global perspective (Jokinen, 2005). The competencies in this section include technology savvy, international knowledge, cultural and cross-cultural awareness, business and industry savvy, global risk management, and best practice standards.
The rapid onslaught of globalisation has been largely due to advances in technology interconnecting companies across the world. Goldsmith, Walt, and Doucet (1999) see technology savvy as a key competency for global managers as it significantly impacts the organisation’s core business. Technology is not only vital for communication, and effective information management, but also greatly impacts the organisation’s production processes. In the fast pace world of technology certain products, processes and services can be outdated very quickly. It is therefore necessary for global managers to not only be able to use technology, information systems and telecommunications effectively but also understand its impact by assessing and analysing the affect it has on the global operations of the firm (Kedia and Mukherji 1999). Technology solutions that may be pertinent to the global managers include Business Intelligence tools such as the SQL Server suite (Analysis Services, Reporting Services) and Oracle; and collaborative tools such as Microsoft Office SharePoint Server, Skype, Microsoft Groove 2007, Google Apps, and instant messaging tools such as MSN Messenger (P. Culmsee, personal communication. May 3, 2008). Solutions such as those listed above may not be required by all managers as it depends on the type of industry they are in, and the organisation itself.
Competency in this field means an understanding of the different socio-political and economic policies governing each country. A global organisation operates world-wide abiding by the rules and regulations that govern that particular nation. Therefore it is essential to clearly understand the structure of these systems, their decision-making processes, and how they impact business operations and those around them (Whitfield 2003). Subject matter such as international finance, international law, and comparative labour relations should be familiar to the global manager (Caligiuri 2006). Knowledge in this field not only assists in penetrating foreign markets distribution networks (Tan, Erramilli, and Liang 2001) and the smooth running of the business but it can be a competitive advantage.
Take Procter & Gamble for example. In the early 1980’s, in their fight for higher margins from the pharmaceutical industry, Indian pharmacists nationwide targeted the company by boycotting Vicks products. Gurcharan Das, CEO of Procter & Gamble’s Indian subsidiary realised that the Vicks products contained all natural herbal ingredients, found in the age-old Sanskrit texts. Products compliant under this Ayurvedic system of medicine in India could be sold in food shops, general stores, and street kiosks. Das proved this compliance to the Delhi government and the local FDA and had the registration changed from Western medicine to Indian medicine. With the new registration, the company was able to expand its distribution channel beyond pharmacies and build a new plant for Vicks, enjoying the tax-advantages and lower labour costs (Das 1994, 197-210).
Cultural and cross-cultural awareness
This pertains to the understanding and appreciation of the country and its society’s norms, beliefs, rites, rituals, symbols, behaviours, motivations and stories. Effective global managers value and manage cultural diversity and consider this diversity an asset not a hindrance (Caligiuri 2006). Nardon and Steers (2008) state that many inter-culture assignments occur on short notice thereby giving managers limited time to learn about that particular culture, and intimate understanding of the cultural diversity may be difficult due to geography. In these circumstances cultural and cross-cultural awareness is learnt “on the fly”. Despite the obstacles, understanding this diversity will be of great benefit to the global managers.
Procter & Gamble will be mentioned again to illustrate this issue in relation to business. Das (1994, 197-210) noticed that the company had trouble selling Vicks Vaporub to Northern India, whereas sales in the South were high. He decided to capitalise on the high market sales in the South instead of attempting to correct the market in the North. The company profited. Das later discovered that the reason for the poor sales in the North was due to the fact that people in this region did not like to rub things on their body. Had Das ignored the market trend and decided to expend resources attempting to impose the product on the North, poor sales figures would likely have continued as products would remain on the shelves.
Business and Industry Savvy
Coupled with technology savvy, business acumen, a thorough understanding of the business and its industry is critical for achieving organisational goals and objectives (Parker 2005). Global managers must intimately comprehend not only the company’s business strategies, products, and resources, but also the structure of its global operations, worldwide market opportunities (Aycan 2001, 119-135; Osland 2001, 137-156) and competitive conditions (Osland 2001, 137-156). Bartlett and Ghoshal’s (1994, 77-91) role of the scanner will be required here to achieve this savvy. They will need to filter, analyse and interpret the scanned knowledge. This knowledge can then be communicated across the organisation and actioned. This breadth of understanding will assist the global manager to recognize as well as anticipate change (Parker 2005), stay on strategy, and find and overcome threats (Kedia and Mukherji 1999).
Global risk management
Parker (2005, 468) quotes Mihaly Simai’s definition of international risk as “important, potential disturbing and destabilising factors or acts originating with, or generated by, various actors on different structural levels, and having spillover consequences for other members of the international community”. Some of these risks include political, currency-exchange, and corruption. Globalisation provides many potential techniques to allow global managers to improve the organisation’s bottom line, from the productivity gains of operating in lower cost countries to the ability to leverage global position in pricing negotiation with suppliers. Due to the nature of their role, the global manager would need to have a higher risk tolerance level to deal with uncertainty in the global market. However, there have been cases where appropriate safeguards have not been taken to assess and minimise risk. An excellent example of the differences in risk management maturity occurred in early 2000 (SCM n.d).
In Albuquerque, New Mexico, a thunderstorm set fire to a factory at a plant producing mobile phone semiconductors resulted in contamination that destroyed millions of mobile phones worth of chips. This plant was owned by Phillips NV, a major supplier to Nokia. In Finland, Nokia’s computer system indicated delay in the arrival of shipments of phone chips from Phillips. Three days after the fire, Phillips notified Nokia about the situation and advised them of the one week delay in the shipment. The fire impacted the production of some 4 million handsets. Nokia required the chips for their new generation of phones. This delay would mean that more than 5% of the company’s annual production might be disrupted during a time of booming phone sales. Strategies were formulated and acted upon. Phillips and Nokia agreed to join forces temporarily to overcome the crisis. Nokia was able to launch their new phones to very satisfied customers on schedule. Ericcson, on the other hand, received the call from Phillips but did not act. They assumed that the one week delay would not affect their business. When they realized the full extent of the problem (three weeks after the fire) it was too late. They could not find suppliers with the available chips for their new generation phones. At the end of 2000, Ericsson reported a loss of US$1.68 billion in the company’s mobile phone division.
Best Practice standards
In a highly competitive global market it is advantageous for the global managers, and thus the organisation, to understand and comply with/implement best practice standards as those involved in business have higher expectations and standards. These standards exist to provide independently verifiable assurance to a variety of stakeholders, assuring these stakeholders that the organisation is performing in accordance with the requirements of these standards. Examples of these are legislative frameworks: SOX and HIPAA (Healthcare) in the USA, and BASEL II (financial risk management) in the European Union; Compliance frameworks such as GAAP (Accounting), COBiT, COSO (control frameworks), ISO9001 (Quality); Frameworks to improve process/visibility such as Six Sigma, LEAN, and Kaizen; Frameworks to improve specific disciplines such as PMBOK and, Prince II (Project Management) (P. Culmsee, personal communication. May 4, 2008).
Managers must also incorporate ethics and corporate social responsibility into their business as part of best practice. This voluntary benchmarking can build trust, demonstrate that they possess integrity and honesty, and can be a competitive advantage as it will enhance reputation. Environmental and social ethics and business were once seen as opposite ends of the business spectrum however, with increasing social awareness and empowerment, society and NGOs are leading the way to ensure that industries are respectful of community and the environment. As businesses increasingly come under fire for their lack of environmental and social ethics, it is safe to conclude that embracing ethics and CRS is good business practice.
It is not sufficient for global managers to only gain knowledge but also critical for them to possess the appropriate skills to transfer this knowledge into action effectively. Interpersonal competencies are those that relate to the social/relationship interaction or management of others. Competency in this area will lead to fruitful results when dealing with others. These competencies, acculturation, diversity management, leading and motivating a diverse workforce, cultural networking skills, creation and conveyance of a clear vision, and capacity for managing uncertainty and conflict in the global environment, are described below.
“Acculturation is the process whereby the attitudes and/or behaviours of people from one culture are modified as a result of contact with a different culture” (Maxwell n.d.). Awareness of cross-cultural differences is vital but not enough. The challenge for the global managers, after gaining cross-cultural knowledge, is the willingness and ability to embrace and integrate multiple perspectives (Aycan 2001, 119-135) and use it to their advantage. To achieve this they must learn to let go of their own cultural certainty, unquestioned acceptance of basic assumptions, personal frames of references, unexamined life, accustomed role or status, social reinforcement knowledge, accustomed habits and activities, and known routines (Osland 2001, 137-156), accept that differences do matter (but not inferior), be open and receptive to new ideas, ready to accept another perspective (Rifkin 2006) and be able to master both non-verbal and verbal communications (Jokinen 2005) pertinent to the culture. Caligiuri (2006) recommends fluency in language to assist in effective verbal communication.
An example of how acculturation will benefit the global manager can be demonstrated by the understanding of a brief explanation of the Japanese negotiation style (Adachi n.d.). Japan still maintains a hierarchical business structure. Prior to commencing the negotiation, they ascertain their standing/ranking and that of their organisation in respect to others. Their language is indirect, ambiguous and controlled (agreeable) as harmony and the concept of ‘face-saving’ is important to them. The subject matter is talked around rather than being approached directly. Even if they have strong views or oppose someone else’s view, they will avoid offence preferring to skate around the subject so as to maintain the relationship. They value long-term relationship over short-term monetary gain. If an agreement cannot be reached, they are more likely to change the subject or ignore it all together. Information gathering about the other is important and negotiations will not be commenced until they obtain what is needed. A broad agreement is first made from the negotiation, and detailed agreements later.
Managers who perceive diversity as important and have the ability to manage this diversity can leverage these differences for mutual business gains (Whitfield 2003). Managing diversity pertains to the ability to co-ordinate groups of people from differing backgrounds, characterised by culture, gender, age, religion, etc., working effectively and productively together on the same tasks. To manage diversity effectively, the organisation’s culture must value its diversity. For behaviour and thinking to change this value of diversity must be embedded in processes and structures (Parker 2005). With globalisation comes culture diversity. To be successful, it is crucial for global managers to be competent in this skill.
Leading and motivating a diverse workforce
Leadership skills are essential to all managers however the ability to lead and motivate a diverse workforce in the organisation’s global environment is specific to global managers due to the nature and composition of the workforce. Inspire (Kedia and Mukherji 2001). This can be made more difficult task when the “team’ members are located in different parts of the globe. A critical aspect of an effective global leader is to facilitate integration, lead in a manner consistent with the follower’s cultural expectations while simultaneously helping the members develop a set of norms that allow for differences in social-interaction preferences (Stahl 2001, 197-210). To be effect they must inspire others, go against outdated or ineffective practices, build trust amongst the team, delegate, be a mentor, and demonstrate sensitivity and empathy to those they lead (Tubbs and Shultz 2006).
Cultural networking skills
These are ‘relationship management’ skills (Jokinen 2005) created and maintained to further the organisation’s interest within the global environment. Global managers will need to understand the culture for effective networking. Goldsmith, Walt and Doucet (2000) report that the ability to negotiate alliances and manage this complex network of relationships is vital to the success of a global venture. Building a positive long-term relationship with others is critical. Khan (2007) believes that the adage “It doesn’t matter what you know, it’s who you know that matters” holds true in most countries. To further themselves and their organisation Khan suggests that it is necessary for global managers to develop good relations with the “influential and effective people” around the world who will impact the business positively.
Creation and conveyance of a clear vision
Part of the global manager’s role is the accomplishment of organisational objectives through the work of others Those who are able to set and pursue the organisation’s goals will assist in the success for the organisation.Effective managers have the ability to, not only set visions, but they also have the ability to articulate these visions effectively for all to understand. Effective communication of the vision in a global environment transcends all organisational, geographical, and cultural barriers and boundaries (Parker 2005). The bility to manage the change process within the organisation is of utmost importance to succeed in the envisioning of goals. The visions set should be clear,measureable, motivating and pertinent to the organisational goals. There must be accountability and ownership throughout the process, thus employee empowerment is critical. Leadership skills such as building trust, inspiring and motivating others in the achievement of the goals, evaluating others and delegation of responsibilies accordingly also required for the achievement of the vision (Tubbs and Shultz 2006).
Capacity for managing uncertainty and conflict in the global environment
This is an ability to function effectively in unfamiliar constantly changing, complex and paradoxical environment (Kedia and Mukherji 1999) while maintaining patience and composure (Stahl 2001, 197-210) demonstrating a high tolerance for ambiguity. Global managers in this environment feel comfortable/at eased with rapid change and corporate forecasting, and have a greater capacity for overcoming adversity (Tubbs and Shultz 2006). This indicates an appreciation of challenge and an ability to deal with situations and crisis directly rather than displaying an avoidance attitude. In order to achieve this, others skills such as sound verbal and non-verbal communication, for examples active listening, negotiation, interviewing, and non-verbal cues), ability to scan the world for information, and an understanding of diversity and its impact are a necessity.
The fundamental personal characteristics or traits of a person will not only affect the attainment of knowledge but also how and if the knowledge will be executed. Knowledge and skills alone do not make a global manager. It is the personal traits of the person that will drive the acquisition of the knowledge and affect how the skills are performed.
To be self-aware, the global managers would have an astute insight of how they are perceived by others, clear insight of themselves, and a clear insight of their own roles with respect to others in the group (Maznevski and Zander 2001). Self-awarenesss will assist towards the development of emotional intelligence, which is “the subset of social intelligence that involves the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them and to use this information to guide one’s thinking and actions” (Salovey and Mayer, 1990). It is this deep understanding and intuitiveness of self and others that will assist the manager to transform and develop.
The inquisitive mind is one that has an insatiable demand for knowledge. It will assist global managers in seeking information and strive for continuous learning (Parker 2005). The inquisitive mind will question and probe until the best course of actions and results are obtained. Global managers with inquisitive minds are adventurous and will always have up-to-date knowledge and skills to achieve their goals.
Honesty and integrity
Global managers who possess and exhibit honesty and integrity demonstrate respect for their peers, value and accept others for who they are. These managers are keen to build and maintain trust. They place the organisation and others’ interest above their own. They are just and fair and will do what is best for others. Global managers with honesty and integrity will ensure that best practice standards are implemented and maintained. Employees working for them will be empowered (Parker 2005). This trait will assist the global managers to lead and motivate their team. The case below, taken from Parker’s (2005, 387) book, demonstrates the ultimate act of integrity through leading by example and trust building, exemplified by the actions of Norbert Reinhart.
(“Your shift is over” taken from Barbara Parker’s (2005) book Introduction to Globalisation & Business, page 387).
Global managers with open minds are less likely to be judgemental and view diversity as inferior. They will be more receptive to new experiences and ideas, and be able to see and accept change more readily (Caligiuri 2006).
This is the capacity to adjust or vary one’s thoughts and thus behaviour according to the immediate requirements of the condition or situation. An adaptable or flexible mind will assess and analyse the foreign culture, compromise, and then find innovative and creative ways to arrive at a solution (Stahl 2001, 197-210).
Optimism is a mindset that looks on the positive side of a given situation. Optimistic managers are forward thinkers, will most likely persevere, learn from their mistakes, and encourage and motivate others to succeed. They themselves will be more motivated and pro-active. This positive outlook will also assist the global managers to cope in unfamiliar and uncertain situations and people (Jokinen 2005).
Empathy is a genuine understanding, concern and respect for another’s thoughts, feelings, needs, motives and assumptions and one’s capacity to respond to those factors appropriately. Empathetic managers will consider someone else’s situation, “show appropriate discretion”, and “argues from position of the host country” (Stahl 2001, 197-210). This trait will assist the global managers in their relationship with people worldwide as their listening skills will improve, and are able to appreciate differing viewpoints. This understanding of others will lead to cross-cultural sensitivity and expertise in global human resource management (Jokinen 2005).
To complete the manager’s global perspective, global managers must possess a global mindset. It is a way of being, described by Rhinesmith (1992) as “a predisposition to see the world in a particular way that sets boundaries and provides explanations for why things are the way they are, while at the same time establishing guidance for ways in which we should behave” acting as a filter.
Rhinesmith sees those with global mindsets to always drive for the bigger, broader picture; accept the balance of contradictions; look towards organisational processes rather than structure when dealing with uncertainty; value and leverage diversity of teamwork and play to their advantage; view change as an opportunity rather than a hindrance; and open to surprises, embracing challenge and uncertainty, and always question the status quo. They are proactive and their thoughts and actions are not limited to boundaries. They have the ability to effectively manage competition, complexity, adaptability, diverse teams, uncertainty, and learning. Rhinesmith also characterises them as having astute knowledge in technology, business and the industry; highly developed conceptual capacity; flexibility to deal with the constant changing global and local market demands; sensitivity to cultural diversity; judgement in making risky decisions with little information; and the capacity for reflection in seeking continuous improvement.
Despite the abundance of literature on the global manager there is still a lack of unity in defining the global manager. Due to this deficiency for a clear and precise definition, the exact roles of the global manager have also not been defined. This has resulted in the existence of various frameworks of the competencies of the global manager. Some of these frameworks, for example Tubbs and Shultz’ (2006) taxonomy of competencies in global leadership, include skills and competencies that are too broad, and not specific and pertinent only to the global manager.
It is recognised that the standard managerial skills and competencies are also required by the global manager. However there are certain competencies that only the global manager would require to be effective. This proposed framework, the essential competencies of a global manager, outlined in Table 3 below, contains competencies that are unique to the global manager. They are crucial to the function of the global manager in the global environment. The design of the framework is important. It implies that all the competencies outlined are interdependent of each other. One set of competencies cannot be achieved without possessing the others and no one competency has greater weight than the other.
Table 3: Framework of the essential competencies of the global manager
By understanding the global perspective required of global managers to function successfully in the global market, the Human Resource Department can work towards the development of this perspective in their managers. Programs such as Diversity/cross-cultural awareness training, diversity management, emotional intelligence training, and understanding the global market can assist the domestic managers to understand different perspectives. HR plays a very important role in the development of skills and competencies necessary for global managers.
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