Critical Issues in Business

Mr. Holger Siemons, Ph.D, MNA, Dipl.-Kfm (FH)

Critical Issues in Business (Vietnam) 29 April, 2017

Written by Huynh Ngoc Thao Tran - 17417839

Word count: 2,532

GLOBAL LEADERSHIP COMPETENCIES

In the changing context of globalization, the world has witnessed a dramatic evolution in the nature of leading and managing cross-cultural corporations. Drath et al. (2008) stated that the demands for an extensive development of leadership have become more complicated on the grounds that our organizations, workplaces and challenges in dealing with cross-border business are constantly interrelated and unpredictable. In the past, leaders were not required to acknowledge the issues outside but their own companies. However, as the proliferation of knowledge-based enterprises, the world, together with the context complexities creates a multicultural village for global executives (Kedia and Mukherji, 1999). Accordingly, in order to survive and propel the business forward in the current marketplace, there need to be a specific range of leadership development skills (Amagoh, 2009) which helps global leaders work across regional, national and subnational boundaries. This article aims to identify the definition of global leadership and explore several competencies required for global managers to thrive in a diverse and dynamic environment.

In order to be effective global managers where globalization is a new reality, it is necessary here to clarify exactly what is meant by leadership and global leadership. There are various perspectives and attitudes towards this topic. Leadership, by definition, is not about what position, title or honor one possesses; instead it is an extensive set of skills including observation, understanding and continuous learning that can only be mastered for those who are willing to devote time and effort to acquiring it (Yukl, 1998). In other words, it is also a way of being, described by Cohen (1990, p.9) as the “art of influencing others to their maximum performance to accomplish any task, objective or project”. Globalization, on the other hand, typically refers to the integration of different marketplaces and societies (Nilson, 2010), or the combination of extensive knowledge, innovative technology, and geographical-free communication which creates both new opportunities for every nation and individual to compete without any constraints of globalization (Martinez, 2012).  Therefore, so as to efficiently lead the organization, many scholars put forth the idea that effective leadership skills must be modified according to the particular features of every situation, group and individual (Osborn, Hunt, & Jauch, 2002). From here, the literature of global leadership emerges. Like leadership, there are myriad of literature about global leadership, yet no consensus upon the united definition of it is found. The theory of global leadership may be considered as the integration of individuals and opinions among cultures (Adler, 1999). In the same vein, some scholars also describe its characteristics as the differences in global leader behaviors from one particular country to other countries (Boyacigiller & Adler, 1991).  So who are global leaders?

Global leaders, generally, are those who are cultural literacy, which means they can understand different cultures and guide teams with distinct nationalities (Barnevik, 2001), and must possess the ability to discover each individual potential as well as leverage the benefits that lies in cultural diversity (Rhinesmith, 1992).  Consequently, in order to successfully lead an intercultural team, it is vital for them to understand the roots of different references and should respect the culture’s needs of each individual (Goldsmith, 2003). So what competencies should global leaders adopt to create a flourishing path for their enterprises in this era of globalization?

Before studying the skills required, it is fundamental for all leaders to acknowledge that the foundation of global competency development should be established on the characteristics of different markets and business strategies, as they are the prime factors determining the existence of job opportunities, projects, labour forces and other types of global interactions (McCall and Hollenbeck, 2002).  Among multiple opinions on this issue, Kedia and Muherji (1999) believed that a general global perspective consists of a certain base of international knowledge and a global mindset supported by a wide range of interpersonal skills. These competencies will be of pivotal importance in helping businesses overcome the cultural and organizational boundaries and ensuring the constant achievement for the organization and the individuals involved.

The first component contributing to the success of a global leader is to obtain an international knowledge base which means the leader must have a thorough understanding of different socio-economic issues including the key organizational processes, structures, and remedies (Brake, 1997), as well as the governing of the host and other countries. The reason for that could be simply explained as the openness of the world market, any multinational corporations need to adhere to the regulations enacted by domestic governments. To heighten the significance of having an international knowledge, Caligiuri and Di Santo (2001) also stated that it is essential for managers to not only understand the operation of the system but also their decision-making culture which directly affect every business. Other information such as the international finance, global marketing (Barham & Oates, 1991, Birchall et al., 1996) and labour laws (Caligiuri, 2006) should also be carefully emphasized. Additionally, thanks to its obvious benefits, technological advancement also plays a pivotal role in the global socioeconomic issues and directly affects the formation of the global system (Fritsch, 2011). Therefore, regarding to the knowledge required, global leaders also need to obtain proper computer proficiency (Goldsmith and Walt, 1999) and an ability to use technological advances to promote their interpersonal skills and cross-cultural practices (Roy, 2012). Specifically, cross-cultural leaders could take advantages of these available resources to study and look for appropriate literature, strategies and approaches that can be employed to their organizations (Swanson & Holton, 2009). Tan, et al. (2001) believed that this acknowledgment would be of paramount value in assisting the organizations to smoothly penetrate the multicultural market and foster its potential development in the future.