Globalization- The Leadership Challenge

GLOBALIZATION- THE LEADERSHIP CHALLENGE

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.

Challenges

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

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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

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

must be in a position