2.2p Global Leadership and Global Mindset (chapter)

Päivö Laine

2.2 Global Leadership and Global Mindset 2.2.1 Global Leadership

As the world of work has become more globalized, a lot of focus has been put on global leadership. But in which ways is global leadership different from traditional leadership? Is there something special about it? Osland and Bird (2006, p. 123) argue that global leadership differs from domestic leadership in degree in issues related to -

connectedness

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boundary spanning

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complexity

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ethical challenges

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dealing with tensions and paradoxes

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pattern recognition

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building learning environments, teams and community

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leading large-scale change efforts across diverse cultures.

Moreover, the global context may create quite new situations in leadership that do not occur domestically, and this requires new leadership skills. Global leaders must have cross-cultural competence to be able to work and lead successfully. They need to learn about foreign cultures and ways of doing business in target areas. They should know how to work in multinational teams and be aware what it requires to adapt to living in a foreign culture. It is also very important to be able to interact with business partners and colleagues from different cultures. Tan and Chua’s (2003) inventory of cross-cultural competencies includes cultural knowledge, personal skills and personal attributes. Cultural knowledge can be divided into general knowledge of cultural differences and culture-specific knowledge, which includes information about particular countries and cultures. Personal skills refer to abilities like language proficiency and stress management while personal attributes include personality traits such as curiosity, perseverance and self-efficacy. (Johnson, Lenartowicz and Apud, 2006, p.531–533)

Figure 1: Constitution of cross-cultural competencies (Johnson, Lenartowicz and Apud, 2006).

Cross-cultural competencies

Cultural knowledge

General knowledge Culture-specific of cultural differences knowledge

Personal skills

e.g. language proficiency, stress management

Personal attributes

e.g. personality traits: curiosity, perseverance etc.

2.2.2 Defining Global Mindset Successful global leadership presupposes a global mindset, in other words, thinking globally.

A lot of different definitions have been proposed for a global mindset. The scope of definitions may vary but they are compatible with each other. According to the Financial Times lexicon a global mindset “combines an openness to and awareness of diversity across cultures and markets with a propensity and ability to see common patterns across countries and markets”. Cabrera and Unruh (2012, p. 33) refer to Mansuan Javidan’s definition of global mindset who describes it as “the ability to perceive, analyse, and decode behaviours and situations in multiple cultural contexts and to use that insight to build productive relationships with individuals and organizations across cultural boundaries.” In practical terms, a person with a global mindset is able to work with people who come from different backgrounds from his/her own. They have an understanding of cultural differences, they can adapt their own behaviour, and even if they do not know cultures they are facing with, they can have successful interactions.

One of the best-known scholars who have been working on cultural issues in management is Geert Hofstede. On the basis of a large world-wide survey conducted between 1978 and 1983, he defined and quantified cultural dimensions such as power distance (extent to which members of organizations and institutions accept an unequal distribution of power) and

uncertainty avoidance (a society’s tolerance for uncertainty and ambiguity). Hofstede’s analysis makes it possible to compare countries and cultures (see https://www.hofstedeinsights.com/product/compare-countries/) and it has been a useful tool for people working in global contexts.

Hofstede’s work was expanded in the GLOBE (Global Leadership and Organizational Behavior Effectiveness) project with a survey among more than 17,000 managers in 62 cultures. The results were published in the publication Culture, Leadership, and Organizations in 2004. The GLOBE research team defined nine cultural dimensions with regard to leadership style:

Dimension

Question that defines the dimension

Performance orientation

Are individuals in the culture rewarded for individual performance and excellence?

Assertiveness

Is assertiveness common and valued?

Future orientation

Do individuals plan for the future, delay gratification, and otherwise engage in future-oriented behaviours?

Humane orientation

Are fairness, altruism, generosity, and caring behaviour valued and encouraged?

Institutional collectivism Is collective distribution of resources throughout the broader society encouraged and rewarded?

In-group collectivism

Do individuals express pride, identification, and loyalty with their families and their close associations (such as loyalty to an employer)?

Gender egalitarianism

Do members of this culture work to minimize gender inequality?

Power distance

Is power distributed equally among participants regardless of social, professional, or financial position?

Uncertainty avoidance

Do individual rely on social norms or rules to alleviate the unpredictability of future events?

(Cabrera & Unruh, 2012, p. 42) In the GLOBE project cultures were rated high, moderate or low on each dimension. In addition, all nations were put into ten cultural clusters based on geography and climate. A particular characteristic may be a benefit in one culture but a disadvantage in another. With regard to this kind of a dimensional approach, one has to be careful not to hold too stereotyped views of people coming from a particular cultural background.

2.2.3 Constitution of Global Mindset In the Global Mindset Initiative Javidan et al. (2012: 43–47) from Thunderbird School of Global Management defined three elements of global mindset (see Figure 2).

GLOBAL MINDSET

Intellectual Capital

Psychological Capital

Social Capital

Global Business Savvy

Passion for Diversity

Intercultural Empathy

Cognitive Complexity

Quest for Adventure

Interpersonal Impact

Cosmopolitan Outlook

Self-Assurance

Diplomacy

Figure 2. Constitution of a global mindset (Javidan & al. 2012).

1. intellectual capital: having the ability to comprehend and process new information: global business savvy, cognitive complexity, cosmopolitan outlook 2. psychological capital: passion for diversity, quest for adventure, self-assurance 3. social capital: intercultural empathy, interpersonal impact, diplomacy The logic why the elements are referred to as ‘capital’ is based on the idea that they are not consumed in use. Rather they remain and strengthen in an individual when he/she gains international experience. Next, to clarify the content of the concept we will discuss what these three elements of global mindset refer to.

Intellectual capital is about our knowledge of global environments in which we operate.

Global intellectual capital is something that can be learnt: we can increase our knowledge and understanding of political, economic and social systems in different countries or areas as well as their cultural features. A person with strong global intellectual capital knows about business operations and transactions, geography, history and topical issues in target areas.

However, mere knowledge is not enough; you also need to be able to understand and interpret the facts when operating interculturally. Important ways of increasing global intellectual capital are studying world history, geography and economics, reading literature widely and, very essentially, travelling internationally. Personal observations in different environments are more valuable and effective than facts that one can read in books.

Psychological capital is the affective aspect of global mindset. According to Gabrera and Unruh (2012: 43) it refers to personal attributes such as openness to new experience, cognitive flexibility, interest in other cultures and willingness to cooperate with people from other cultures. It is more difficult to develop than intellectual (cognitive) capital because it is strongly linked with personality traits. A person with global psychological capital is able to face cross-cultural situations openly without making too quick interpretations and wrong judgments. The best way of increasing global psychological capital is being in contact with people that come from different cultural backgrounds and experiencing different environments. Although travel is again essential here, there are also other ways. Learning a foreign language, trying to find opportunities to talk to native speakers and reading articles and literature in the new language are also useful ways of building global mindset.

Social capital relates to networks and relationships we have with people who come from different national and cultural backgrounds. Global social capital enables an individual to connect to and work with people from other parts of the world; social savviness is manifested in understanding nonverbal cues, managing to carry on conversations and listen to other people. Gabrera and Unruh (2012: 67) point out that the number of connections is not decisive; the quality and structure of the connections do count instead. The frequency and depth of interactions are essential. Whether you are at the centre or at the periphery of a network must be taken into account. Are you the person that connects other people or are you just a member in a network where everybody knows everybody? Knowing other languages is a very big asset in building global social capital too.

2.2.4 Development of Global Mindset How does a global mindset develop in an individual? It is not an inborn quality but is gradually developed as a person faces other cultures or finds information about them. Cabrera and Unruh (2012: 47), for example, define four stages in the development of a global mindset: cultural illiteracy, awareness, intelligence, and agnosticism. 

Most people grow up in their early years surrounded by their own domestic culture.

At this stage of cultural illiteracy you have no other points of reference to be able to understand behaviours that do not follow the patterns of your own culture.

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When you come into contact with another culture, you start to form a global mindset little by little. This experience, which is often described as culture shock, also develops through stages: honeymoon, frustration, adjustment and acceptance (Global Perspectives 2016). After the first excitement, you notice that you are not able to interpret communication and customs around you correctly. Frustration leads you to a process of adaptation and you will learn to understand which behaviours of your own culture you can keep and which you must get rid of. This is the stage of cultural awareness in the development of a cultural mindset. However, this does not fully prepare you for meeting a third culture. You need to go through the same process again at least to some extent.

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When you have gathered enough cross-cultural experiences, you will start to understand some patterns in the formation of culture-specific behaviours. Cultural intelligence refers to the ability to relate between cultures, see the points of difference and work effectively in cross-cultural environments.

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At the stage of cultural agnosticism a person has developed metacultural behaviours that can transcend culture. (Cabrera & Unruh 2012: 49) Opinions vary if this stage can ever be fully achieved.

The culture in which were born and grow up has a very strong influence on our worldview. It is not easy to adapt and change behaviours that we have become accustomed to in situations where other cultures and faced. A global mindset starts to develop when we meet people coming from other countries and cultures, read about different cultures and have an opportunity of travelling abroad. All these experiences make our global intellectual, psychological and social capital grow and help us reach global citizenship.

SOURCES Cabrera, A. & Unruh, G. (2012) Being global: How to think, act and lead in a transformed world. Boston, Massachusetts: Harvard Business Review Press.

Global Leadership: Research, practice and development (2008) (Eds. Mendenhall, E., Osland, J. S., Bird, A., Oddou, G. R. & Maznevski, M. L.). London and New York: Routledge.

Global Perspectives,(2016, February 19). The 4 stages of culture shock. Retrieved from https://medium.com/global-perspectives/the-4-stages-of-culture-shock-a79957726164).

Johnson, J. P. , Lenartowicz, T. & Apud, S. (2006). “Cross-cultural competence in international businesss: Toward a definition and a model.” In Journal of International Business Studies, 37(4): 525–543.

Meyer, E. (2014). The culture map: Decoding how people think, lead, and get things done across cultures. New York: Public Affairs.

Osland, J. S. & Bird, A. (2006). “Global leaders as experts.” In W. Mobley and E. Weldon (eds.) Advances in Global Leadership, vol. 4. Stamford, CT: JAI Press: 123–142.

Tan, J. S. & Chua, R.Y. J. (2003). “Training and developing cultural intelligence”. In P. C. Earley & S. Ang (Eds.) Cultural Intelligence: Individual Interactions Across Cultures, Stanford Business Books: Stanford CA, p. 258–303.