Social Issues / Globalization- The Leadership Challenge

Globalization- The Leadership Challenge

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Autor:  anton  18 December 2010
Tags:  Globalization,  Leadership,  Challenge
Words: 2279   |   Pages: 10
Views: 704


Globalization is not only inevitable, but also a blessing in disguise. It is something like,

as Ronald Steel (1999) very aptly puts, “You try to shut the door and it [the global

economy] comes in through the window. You try to shut the window and it comes in on

the cable. You cut the cable, it comes in on the internet. And it's not only in the room

with you. You eat it. It gets inside you.”

Globalization refers to a process of increasing economic integration and growing

economic interdependence between countries in the world economy.

In an article titled “The globalization of markets”, Levitt(1983) had predicted a new

commercial reality- the emergence of markets on a previously unimagined scale of

magnitude. He puts forward a theory of globalization where he predicted that one of the

effects of globalization would be the emergence of firms straddling the globe and

providing standard products. Thus being global is not just about where you do business

but how you do business.


Unlike the bounded world, globalized world needs different sets of leadership skills

because the challenges of the globalized world are entirely different. The very word

global intrinsically also connotes diversity. And diversity itself is a big challenge.

Therefore in a globalized world, we need leaders who have worked in more than one

market. Working in markets of different countries helps them to broaden their minds and

they start seeing the world as their oyster that helps them to develop an enveloping

culture(Sinha and Mohanty,2004). An enveloping culture encourages drive, initiative and

skills necessary to operate effectively in diverse communities. However honing these

skills is not an easy task, and therefore is a challenge in itself. A survey(1997) of the US

Fortune 500 firms has revealed that 85% of the firms do not think they have an adequate

number of global leaders. 67% of the firms think that their existing leaders need

additional skills and knowledge before they meet or exceed needed capacities. Many

senior executives today feel that financial resources are not the problem. The firms have


enough money, products and position to be dominant global players. They just lack

enough people with the needed global leadership capabilities.

Another formidable task facing the global firm in the 21st century has perhaps less to do

with how to structure a company or train global managers than with getting a diverse

workforce to pull in the same direction. Jack Welch(2001) had said in his speech to GE

employees, “The Jack Welch(2001) of the future cannot be me. I spent my entire career

in the United States. The next head of the general electric will be somebody who spent

time in Bombay, in Hong Kong, in Buenos Aires.” This clearly implies the growing

importance of acquiring a global enveloping mindset and thus the issue of diversity

management i.e. managing people with differences in gender, ethnicity, race, education,

experience, opinions, beliefs, personalities, value systems, functions, thought processes,

talents, socio-economic status, heritage, perspectives, skills etc. has received a great

attention. Ensuring equal opportunity and equal weight for every employee is another

challenge that the global leaders operating in a culturally diverse global environment will

be facing. For such a task, globalization has to herald a new breed of managers who

would be dealing with diversity through humility. Meaning, leader-managers must

humbly accept that their own perspectives need to be broadened by others. Humility is a

vital quality in a leader. If any company has to continue and prosper, it has to be

externally oriented. Therefore, it must have the kind of humility that makes it listen to the

customers and seek ideas from outside. Specially, in today’s world of competition and the

convergence of mobility, we need to perceive changes as they occur and react to it faster

than the challenges of the change change us. Having humility doesn’t mean that you are

quiet and lack the courage to say what you think. Courage and humility are more

complementary than contradictory.

The next challenge the global leaders will be facing in managing the company is to create

the required energy. By energy we mean a culture of entrepreneurial energy that

facilitates innovation, absorption and adoption. Literature(1983) witness that many

technologically advanced companies that could make it to the Fortune 500 list in the last

ten years do not exist anymore. Therefore, the challenge is not just to innovate but to


absorb the technology to the need and suitability of the environment. And the leaders

must be in a position to take enormous risk and sail the boat through the rough waters

smoothly to achieve the goal.

Global business is becoming uncertain owing to blurring cultural, language, political,

social and economic boundaries. The leaders should take up this challenge with a lynx

eyed approach by encouraging continuous learning and thereby, modernizing the minds

of the people- the led and the followers. In this context, to quote Jack Welch(2001),

“When the rate of change on the outside exceeds the rate of change on the inside, the end

is in sight.” Leaders today do not lack intelligence, but inquisitiveness. It helps them to

increase their global savvy, enhance their ability to understand people and maintain

integrity, and augment their capacity for dealing with uncertainty and managing tension.

Challenge of integrity in the business context is another big issue that leaders of the

global era would face. This refers to ethical behaviour and loyalty to the company’s

agreed-on values and strategy. Globalization would continue to highlight conflicts among

various national standards of behaviour. These differences in standards often pose serious

ethical issues and business dilemmas for companies. For example, while working

overseas, both personal and company ethical standards are prone to compromise.

Therefore, in order to appeal to the local values and demands, managers may be inclined

to change themselves and the organization. This is myopic approach needs to be

discouraged. Therefore leaders, in the long run need to consistently maintain high ethical

standards not only in their personal level, but at the organizational level as well.

Global skills

Leading with goodwill will also become an important requirement for global leaders to

operate in a culturally diverse workplace. The challenge would be not what degree you

hold from famous business schools, but what ability you have to connect with the

employees. Without the ability to connect with employees, cultural diversity becomes an

obstacle to leadership. Thus, emotional connectedness as a skill will be the passport for

global leaders to hitch high into the sky in a globally turbulent environment.


Having a global attitude is of utmost importance for global leaders. The ability to imitate

local styles is not the same as having a global attitude. It is equally important for

managers to be themselves. At the heart of a global attitude is being yourself while also

showing interest and openness. That will enable a leader to accept good ideas no matter

where they come from. Plus it will help him to get rid of biases and stereotypes.

One of the most salient qualities of an effective global leader is that he or she should be

free of stereotypes. Usually, stereotyping in organizations is subtle. Manager-leaders

often pick up the impression that the Chinese are good at certain things, the Germans are

good at certain other things and so on. However, they must understand that in every

country, people basically want to do a good job. What they need is the right kind of

training in order to perform a world-class job. But at the same time, it is also true that

there is a need to train employees differently in different parts of the world.

Leading a global company involves understanding of the political and regulatory

environment of different countries. It is necessary to stay in constant contact with senior

government officials, addressing issues like tax holidays and other regulatory policies.

Change(Handy1995), has always been a much discussed issue in management. However,

it assumes greater importance today mainly due to its pace and scope that increase with

the all pervasive globalization. Change today is constant. There is no stopping it and

leaders cannot afford to stand still. Change has a powerful force on leadership, which

must be strong enough to take organizations smoothly through the constant state of

transition. The lack of ability for employees to find equilibrium among this barrage of

constant change wreaks havoc in organizations. Discomfort leads to resistance and

denial. Resistance and denial lead to distrust of management and reduced levels of

satisfaction. Dissatisfaction is demotivational, and it results in decreased productivity and

decreased levels of performance. The leadership imperative is especially strong in this era

of constant change and transition. There are leadership behaviours that make a difference

in providing employees with an increased sense of comfort and stability. The leader

should enable the organization to become adept at shifting resources to meet changing


environmental influences. Regardless of the size, it should operate as a small company,

without bureaucracy. Secondly, speed wins in business today.

Jack Welch(2001), former CEO of General Electric also placed great emphasis on speed.

The leader should ensure that organization is able to move fast to respond to new market

demands. Multiple layers of management should not impede its ability to make quick

decisions and slow it down. Information and resources should flow expeditiously to the

appropriate locations to enable fast response to problems and opportunities. Thirdly, the

leader should foster an environment that supports risk taking and rewards innovation. In

addition to continuous improvement, there should also be a focus on new product

development and process advances. Fourthly, there should be a pervasive leadership style

that focuses on human resource development. The organization should realize that if it

were to accomplish its objectives, it would need people who never stop learning and

enhancing their skills. The company should support a comprehensive portfolio of

learning activities and job rotations to help each associate fully develop his or her talents.

The leader should build the company’s activities around performance. Success in the

marketplace should be the associates’ best assurance of job security. All employees

should be accountable to produce to their fullest potential. Winning should be

concentrated fully on external competition rather than on internal battles fighting for

resources and recognition.

Along with a focus on performance, the organization should incorporate a strong set of

values to provide stability and consistency for all associates while they operate in a

highly dynamic business environment. Hitting the numbers would not be sufficient for

reward and promotion. Managers and executives would have to “live the values”, as well

as achieve results, in order to be recognized for their overall contributions. To quote Jack

Welch(2001), “People are removed for having the wrong values. We don’t even talk

about the numbers.” Leaders should make this more reality than ideal by using it as their

organizational vision for the part of the company that is within their sphere of influence.

They have to find ways to build a culture in their corner of the organization that is more

flexible, empowered, development- focused, innovative, and learning- oriented. And it is

certainly better to operate under a strong set of values with which everyone can identify

as the unit focuses on performance.


An important need for present and future leaders is that of managing cross

cultural workforce. Such a leader must be open in its communication with the employees

of every community and culture. Leadership in the emerging global civilization will

involve developing three major management capabilities- a global civilization mindset,

global business literacy and global cross-cultural competencies. The leader has to nurture

the culture of the organization like that of a garden where variety of flowers and plants

grow together given the right kind of exposure, light and temperature. The garden can be

developed only according to the soil and environment of the place. In an organization

also the leader needs to grow a garden with different varieties of flora and fauna and

nurture the employees likewise inculcating the values.


To summarize, the present trends indicate that if a firm expects to survive and grow in the

global marketplace, its leaders must:

1. Learn to operate in multiple cultures.

2. Learn to access capital, human resources and materials from the best sources

across the globe.

3. Learn to manage a very high diversity within and outside the organization

4. Understand all important factors and trends that will impact business in the year

ahead, including technology, new organizational approaches and the political and

economic conditions everywhere.

5. Learn to be more innovative and inquisitive

6. Recruit and retain the right talent from across the globe.

7. Understand markets and customers everywhere, including opportunities, risks and

obstacles they face now and in the future.

Notwithstanding, the key to succeed in the globalized world is to strike a balance

between fierce competition and sensitivity to the needs of customers. Instead of focusing

on outperforming each other, companies must realize the value of the dictum “Customer

is king”. The leader’s job to inculcate customer centric values in the organization, while


managing competition. The leader should first demonstrate himself as a role model for

the employees of the organization. A strong focus on satisfying the customer is what will

ultimately set the truly global organization apart from the rest. This is exemplified by the

following incident that took place in Japan:

“I was waiting for my taxi outside my hotel in Japan. I was getting late.

It was 5AM in the morning and my flight was at 7.45AM. Outside it was drizzling.

And not a single taxi was seen on the road. My heart was pounding faster on every

minute I was delayed. It was unbecoming on the part of JTS (Japan Taxi Service). No

body was picking up the phone. I left the message that I am leaving, call me on my cell

phone. I started walking on the road to hitch hike up to the airport. I was completely

drenched. And the breeze of December had almost frozen me to death….I was almost

mad…suddenly a car stopped next to me…and the man got down, said “ Mr…?I am

sorry, please get into …he helped me to…I was scolding him…we reached the

airport…he refused to accept the fare; on the contrary he said, “I am sorry for the

inconvenience, I am the GM of JTS, here is a gift from our side. Please forgive us…and

be our guest next time, give us the chance to serve you again,”He bowed down to say

Goodbye! In the plane, as I settled and opened the newspaper, the headline read - “Taxi

strike hits Tokyo.”(Source: Reader Digest, 1999)


Acknowledgements: This paper would not have been completed without the intellectual

and moral support of Professor (Dr.) Swarup Mohanty, Institute of Management Technology, Nagpur

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