Global Management Competencies - Essay Example

Running Head: GLOBAL MANAGEMENT COMPETENCIES Global Management Competencies s Global Management Competencies Outline Abstract Introduction Determinants of Expatriate & Global Managers' Success Developing International and Global Managers Rethinking the Essence of Management Global Thinker Network Builder Diplomat Interpreter Management Development in the Global workforce Conclusion Abstract This paper addresses the practical skills needed for global managers. It examines common issues and best practices for managing a global workforce as well as relations with important customers and partners. Managers with keen strategic insights often fall short when it comes to practical implementation because they lack the skills required to inter-face effectively with their counterparts from around the world. Generic cross-border management issues are discussed and then applied to specific skill areas, including establishing credibility, building relationships, obtaining information, evaluating people, giving & receiving feedback, training & development, meeting management, motivation, persuasion, sales & marketing, negotiation, and conflict resolution. Beyond such person-to-person skills, global organization development and consulting skill areas such as multicultural team building, technology transfer, innovation, and change management are also covered in this paper. Generic skill areas are applied and adapted to the specific business practices of different localities. Geographical examples are drawn from Asia, Europe, Latin America, Russia, and the Middle East. Introduction The business manager of today must have diversity principles at the forefront of his thinking. The contemporary catch phrase "think globally, act locally" comes to mind as a recommendation to what the business managers and executives should have for an attitude. The Internet, rapid travel capability, satellite-based communications, and corporate expansion into the level of the transnational have all contributed to making our local realms more globally connected, shrinking our world and folding us all closer together with other people of sometimes very different culture and perspective. It is widely agreed that the critical factor for companies to succeed in global competition is effective development of global managers and executives (Pucik, 2000; Bartlett & Ghoshal, 2000; Evans, 2000; Tichy & Sherman, 2003; Gates, 2001). However, in management development literature, there seems to be a great deal of confusion about the meaning of various terms defining expatriate/international/global managers. In an effort to clarify the differences between the expatriate and the global manager, this article explores the definitions of the two concepts, and explains the differences in behaviors, competencies, and characteristics of the two types of managers. The article also identifies and compares the human resource practices necessary for an effective development of the expatriate and global managers. Building and sustaining organizational capabilities for global operations is a critical challenge for most globalizing firms (Nohria & Ghoshal, 2001). Meeting this challenge requires changes in cognitive processes through which managers frame business problems (Murtha, Lenway & Bagozzi, 2000). Global thinking places high value on sharing information, knowledge, and experience across national, functional, and business boundaries and on balancing competing country, business, and functional priorities that emerge in the globalization process. This set of attitudes is often described as global mindset. The emphasis on the mindset helps to differentiate between expatriate (international) and global managers. The definition of an expatriate/international manager is linked to the location of the assignment whereas the global manager is defined by his or her frame of mind. The term "expatriate (or international) manager" defines an executive who is able to assume a Management position fulfilling international assignments across countries and cultures. In this review, the terms expatriate manager and "international manager" are used as equivalents, as these terms are interchangeable in most of the literature. The term "global manager" (or "transnational manager" as it is sometimes called in the literature) usually refers to an executive assigned to a position with a cross-border responsibility, who has a flexible and open mind, with a well-rounded understanding of international business and an ability to work across cross-cultural and cross-functional boundaries, who perceives global competition as an opportunity, and who is able to balance the simultaneous demands of global integration and national responsiveness (Pucik, 2001; Bartlett & Ghoshal, 2000; 2000). Some global managers may be expatriates; many, if not most, have been expatriates at some point in their career, but probably only few expatriates are global managers. A number of researchers focused on competencies of effective international managers. According to Dulfer (2000), international managers must have clear managerial qualifications, in addition to purely technical and professional skills and competencies. They should be able to perform tasks as members of a team, reflect on complex problems in an appropriate way, improvise and find new solutions in the face of unexpected changes, impart confidence in their own ability to solve problems in difficult situations, and most of all, motivate all members of the organization to cooperate. McCall (2000) has proposed (as an outcome of a research project aimed at developing an assessment instrument to identify Management potential in future international executives) that "individuals who are bound to be successful in international assignments are those who show ability to learn from experience. International managers should show curiosity about how things work, have a sense of adventure, demonstrates readiness/hardiness about learning, be biased toward action, accept responsibility for learning and change, respect differences among people, seek and use feedback, and have shown consistent growth over time". Focusing on one key competency expected of expatriate managers, the "international knowledge," Rothwell (2000) explored its three principal components: general knowledge about the world and global economy; national information about conditions in a specific country; and business understanding of strategy, process, and Management style. Looking toward the future, Howard (2000) has summarized the skills required of the 21st-century expatriate manager. According to Bartlett and Ghoshal (2000; 2000), global managers are individuals that have been selected for, developed by, and co-opted into the broader transnational organization. Their principal characteristic is the ability to resolve complex and potentially contradictory issues embedded in the global environment. Bartlett and Ghoshal refer to these sets of behaviors and competencies as the building of a global matrix in the mind of the global manager, but they add that there is no such thing as a universal global manager. Rather, there are three groups of global specialists - business managers, country managers, and functional managers - that should together lead the organization to achieve global-scale efficiency and integration, national-level responsiveness and flexibility, and cross-market capacity to leverage learning on a worldwide basis. A number of recent contributions to the discussion of globalization of management focused on identification of key competencies of global managers with references to the traditional Management literature. Tichy (2000) refers to global managers/managers as "international business leaders," characterized as individuals who have a global mindset - i.e., those who can conceptualize complex geopolitical and cultural forces as they impact business, and possesses a well-honed set of global Management skills and behaviors, such as an ability to build effective cross-cultural teams; the energy, skills, and talents to be global networkers; and skills as global "change agents." Kets de Vries and Mead (2000) identify global managers as individuals with the capacity of envisioning (indicating future direction in an increasingly complex environment), the ability to instill values and inspire others and build and maintain organizational networks, the capacity for "pattern recognition" (sorting out relevant from irrelevant information), and the ability to cope with stress. Research conducted by the Ashridge Management Research Group led to differentiation within two sides of the global managers' competencies (Barham & Antal, 2001). The first set of competencies is linked to the active roles that the global manager should play in order to manage across a number of countries and cultures simultaneously. The "doing" competencies, as Barham calls them, consist of championing international strategy, operating as cross-border coach and coordinator, acting as intercultural mediator and change agent, and managing personal effectiveness for international business. (The other set of global competencies, or what Barham refers to as the "being" competencies, are presented later in the section on the attributes of successful global managers.) Finally, in a recent study of managers in major global companies, Yeung and Ready (2002) identify six Management capabilities that corporations value in global managers. These capabilities are as follows: to be a catalyst/manager of strategic change; to be a catalyst/manager of cultural change; to articulate a tangible vision, values, and strategies; to exhibit a strong customer orientation; to empower others to do their best; and to get results, or manage strategy to action. Several studies concentrated on global managers' way of thinking, or "global mindset." In a 2003 article, Rhinesmith defined the global manager as an executive with a global mindset, able to scan the world from a broad perspective, always looking for unexpected trends and opportunities to achieve his or her personal, professional, or organizational objectives. Rhinesmith (2003; 2002) defines the mindset 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." In this respect, individuals with a global mindset should be able to drive for the bigger, broader picture, balance paradoxes, trust process over structure, value differences, manage change, and seek lifelong learning. Is global mindset a measurable construct Recently, Murtha, Lenway, and Bagozzi (2000) discussed the application of a survey instrument designed to evaluate individual and organizational progress toward creating a global mindset operationalized as an ability to balance the contradictory pressures of global integration, responsiveness, and coordination. They have created a scale to assess the degree to which managers develop global mindsets, the impact of policy variables on organizational and individual differences concerning globalization, and most important, individual and organizational progress in becoming global and factors that account for variations in the speed of globalization across and within organizations. An interesting question that can be addressed using the global mindset scale is whether one can acquire a global Mindset (to become a global manager) without ever leaving his or her home country as an expatriate. Comparing the Two Sets of Behaviors and Competencies. Reviewing the behaviors and competencies required of expatriate and transnational managers, Adler and Bartholomew (2000) summarize the main differences between the two concepts. The differences in skill characteristics are seen as driven primarily by the degree of cultural and organizational complexity facing managers during their careers. Determinants of Expatriate & Global Managers' Success The research on determinants of expatriate success is also much more developed than research on global managers, with an emphasis on expatriate selection and the expatriation process. The dominant theme of the literature reflects the opinion that expatriate selection and development is still mainly focused on technical competence as the key determinant of an expatriate manager's success, but that stronger efforts should be deployed by organizations to assess other, "softer" factors, such as relational, cross-cultural, and interpersonal abilities as well as adaptability potential of the spouse and other family members (Tung, 2003; Bennett, 2000; Cope, 2000; Scullion, 2001). In one of the earliest studies of the expatriation process, Tung (2003) identified four groups of variables that contribute to expatriate success: technical competence on the job; personality traits or relational abilities; environmental variables; and the family situation. Tung (2003) adds that the importance of these selection criteria varies according to the category of tasks the international manager is expected to perform: chief executive officer; functional head; troubleshooter; and international operative. Mendenhall and Oddou (2000) identified four key dimensions in the expatriate adjustment because they believe that expatriate acculturation is a multidimensional process. The self-oriented dimension is composed of three sub-factors: reinforcement substitution; stress reduction; and technical competence. This dimension measures the expatriate's ability of adjustment. The others-oriented dimension measures the expatriate's ability to interact effectively with host-country nationals and consists of two sub-factors: relationship development and willingness to communicate. The perceptual dimension refers to the ability to understand why foreigners behave the way they do. Expatriate managers should be non-judgmental and non-evaluative in interpreting the behavior of host-country nationals. The cultural-toughness dimension refers to the understanding of differences between countries. Ronen (2000) incorporates the dimensions of expatriate success identified by Tung (2003) and Mendenhall and Oddou (2000) and identifies five categories of attributes of success: job factors; relational dimensions; motivational state; family situation; and language skills. Oddou (2001) states that there are never any guarantees in identifying what constitutes the "right" person for the international assignment. However, a few indicators might be helpful to identify the potential expatriate. The candidate's capacity to adapt to change (new structures, new rules and new faces), his or her open-mindness, sociability, self-confidence, whether or not he or she has a supportive family, and the candidate's capacity to deal with stress are essential elements that enhance a firm's chances of employing a successful expatriate. With respect to global managers, the scope of the literature is much sparser. Kets de Vries and Mead (2000) identified five principal categories of factors contributing to the development of global managers: management development; adaptability factors; Management factors; personal development; and training and education. These five categories are broadly comparable to those identified by Tung (2003), Mendenhall and Oddou (2000), and Ronen (2000), and together can be grouped as professional and technical competence, relational abilities, Management factors, family situation, and cultural awareness. From a psychological perspective, according to Wills and Barham (2000), core competencies of international managers may be described as cognitive complexity, emotional energy, and psychological maturity. The cognitive complexity refers to the ability to see multiple dimensions in a situation, and to identify the relationships between those different dimensions. The emotional energy is the ability to deal with stressful situations. The psychological maturity refers to three additional attributes of global managers: their strong curiosity that drives them to learn; their willingness to apply a great deal of psychological energy to unravel the complexity of a situation; and their strong personal morality (Barham & Antal, 2001). Developing International and Global Managers Not surprisingly, the majority of conceptual and empirical studies in this area have thus far focused mainly on HR practices related to expatriates. Research on global managers is substantially less developed, and still basically in a conceptual stage. The primary emphasis of the empirical studies is on the expatriation process, selection, and training; not much work has been done on performance management and compensation of globalization. Most of the studies are descriptive, although a sophistication of the analysis continues to increase. The key challenge is the operationalization of the outcome variables that are seldom linked to objective measures of individual or organizational performance. To be successful in global competition, companies need both expatriate/international and global managers. We have defined the former, in a narrow sense, as an executive in a Management position that involves international assignments. The global manager is defined, in a broad sense, as an executive who has a hands-on understanding of international business, has an ability to work across cross-cultural, organizational, and functional boundaries, and is able to balance the simultaneous demands of short-term profitability and growth. In short, global managers are defined by their state of mind, in contrast to expatriate/international managers who are identified by location as executives in Management positions that involve cross-border assignments (Pucik, 2001). In spite of this major conceptual difference, the review of research seems to indicate that at least some of the attributes of successful expatriate and global managers may be identical. They are related to five fundamental factors: professional and technical competence; relational abilities; Management factors; family situation; and cultural awareness. However, because of the differences between expatriate managers and global managers in their current and future roles in the organization, there are naturally also significant differences in expectations regarding the full set of desired competencies, role behaviors, and way of thinking. The requirements put on global managers are substantially more complex and dynamic, reflecting the ever-changing nature of the global competitive environment. Rethinking the Essence of Management What does all of this mean for Management in the global workforce Consider the following three propositions. First, core competencies, by definition, are knowledge sets and technical skill sets. It stands to reason, then, that until companies master the science of creating knowledge- management systems, core competencies will continue to reside in the minds of the people who are within an organization's network of stakeholders. Second, relationships are owned by people within organizations and not by the organizations themselves. People make the difference with regard to establishing and maintaining relationships. Third, the ability to initiate organizational change requires respect for the past (roots) and enthusiasm for the future (wings). These three propositions suggest why effective Management is so crucial in today's relationship-driven world. Managers must be able to attract stakeholders (customers, employees, investors, partners, etc.), motivate them, keep them networked and connected, keep them engaged in the organization's progress, all while helping the organization to evolve in an effort to stay relevant in a changing world. And that brings Management development to the forefront of business strategy as a key element of an organization's ability to compete in a relationship world. One of the reason why global management positions have been easier to handle is the explosion of computers, technology, and information. In the past, information was difficult to access. One of the significant roles of the middle manager was to collect information and share it with "his" or "her" employees. This is not the case anymore. With the wide development of computer technology, information can be gathered more efficiently and rapidly. Almost every employee is able to access any information they need. Consequently, the need for the traditional middle manager is disappearing. For example, because of the use of on-line services and CD-ROMS, there is not as much need for armies of sales personnel. Hence the need for sales managers has been reduced. Even if you are making their numbers, if a company needs to cut costs you are vulnerable. Global managers can be a master at their craft and still be let go. Almost 30 years ago, Henry Mintzberg outlined the roles of an effective manager in his landmark book The Nature of Managerial Work. Mintzberg noted that successful managers play three sets of roles: interpersonal roles that include serving as an internal manager and external liaison; informational roles that comprise the collection and distribution of information both within the organization and with external constituencies; and decisional roles that include the identification and pursuit of opportunities and resources, the treatment of disturbances, and the allocation of resources. Mintzberg's work has remained extraordinarily relevant over this period of economic transition. Yet, the shift to the network economy has placed these roles into a new context. Managers today do indeed have interpersonal and informational responsibilities, though it may be argued that the informational responsibilities have moved to a position of primacy. And managers indeed retain decisional responsibilities, but those responsibilities increasingly are shared with various stakeholders and network partners. The nature of Management, as defined by Mintzberg's work, may be similar today, but the global workforce places new demands on managers at all levels. And that requires us to consider, perhaps, a different set of roles. Albert A. Vicere has mentioned a few important characteristics which must be present in any global manager of this century. They include: Global Thinker Managers in the global workforce need to think outside of the box and help their organization to do the same. They cannot be bogged down in traditional orthodoxies, but must be open to new ideas. They must help their organization and the people within it to know themselves--their strengths, competencies, and limitations. And they must help them to recognize both the value of new ideas and the strengths and capabilities of potential partners, whether internal or external to the firm, who can be sources of unique synergies and differentiated competitive advantage. Three skill sets seem essential to developing this broad-based mindset: 1. Big picture perspective--the aptitude to rise above details and activities to see a situation in terms of correlations, patterns, and potential. This includes global views of markets, products, services, organizational forms, business models, and the innumerable potential opportunities that face a global manager at any given point in time. 2. Openness to ideas--the capability to appreciate and integrate new ideas and diverse ways of thinking across the organization at all levels and across all functions and processes. 3. Willingness to look beyond oneself for capabilities and resources--the understanding that no one entity or institute can possess all the capabilities and capital necessary for success in today's environment and that partnerships and linkages, both internal and external to the firm, are essential to the future. This includes a perspective in which customer relationships are seen as partnerships that engage the sharing of resources, information, and capabilities. Network Builder Managers who think in a global manner are more likely to have a relationship mindset, one focused on helping the people around them to share ideas, information, knowledge, resources, and capabilities. Organizational effectiveness in the global workforce is rooted in relationships and networking on both a personal and technological level. Complementary partners must be identified and linked together in a knowledge-sharing culture in focused pursuit of organizational success. Four skill sets are essential to developing a network-oriented mindset: 1. Relationship mindset--openness to finding and linking with complementary partners across the value chain, including viewing customers as partners in the execution of a business proposition. 2. Knowledge of own uniqueness--the ability to identify and clearly articulate the core competencies and capabilities of oneself and one's organization. 3. Ability to recognize others' uniqueness--the ability to recognize, identifies, and appreciates the core competencies, capabilities, and capacities of potential partners. 4. Searching for synergies--the ability to recognize and articulate how one's own competencies, capabilities, and capacities, when combined with those of a prospective partner, can create potential that extends well beyond the potential that exists for the stand alone entities. Diplomat To develop and maintain the effectiveness of networks, today's global managers must be able not only to bring constituencies together, but also to help them work together and appreciate that by working together they can achieve more than they could on their own. Three critical skill sets comprise this dimension: (Albert,2002) 1. Ability to relate--the ability to identify and connect with others, to be seen as credible and trustworthy. 2. Ability to communicate--the ability to communicate and interact effectively with others, both on an interpersonal basis and via information networks. 3. Ability to negotiate--the ability to create connections and commitments among potential partners, both internal and external to the firm and including customer networks. This particular dimension requires a little more reflection. In the traditional "tall pyramid" organization of the Industrial Age, the most senior managers had the luxury of "outsourcing" the preceding requirements to professional functionaries (the public relations department, the human resource management department, the legal department, the IT department, etc.). Often, the specialists did all the heavy lifting around these skill sets with the manager as the advisor. In the global workforce, these requirements have emerged as hands-on, roll-up-the-sleeves, and get-in-there-and-do-it imperatives for global managers. They are absolutely essential Management skills in the global workforce. Interpreter To complement their skills of diplomacy, global managers must have the ability to interpret the nature of business opportunities to the network, the perspective to help partners understand each other, and the skills to coach, facilitate, and provide feedback to an organization that is no longer a collection of lines and boxes, but a living, growing, expanding ecosystem. Three skill sets seem essential to this role: 1. Solid knowledge of the organization--the ability to explain and articulate the value and uniqueness of the network and delineate its capabilities and cultural characteristics across stakeholder groups. 2. Broad knowledge of the marketplace--an awareness of market trends and developments, knowledge of competitors and their capabilities, and knowledge of the needs and capabilities of potential partners and customers. 3. Ability to influence others--the ability to inspire, communicate, and connect with others, to convince stakeholder groups and constituents to work together to address challenges and capitalize on opportunities. Management Development in the Global workforce This list of capabilities makes it easy to conclude that developing effective 21st Century global managers is a daunting task for any organization and a considerable challenge for any individual. Not because the perspectives outlined are new; individually they are not. Not because they have heretofore been disassociated with effective Management; they have not. In the global workforce, Management will be the telling factor. Boundary-less thinking, network building, diplomacy, and interpretation are critical skill sets that need to be cultivated, practiced, and developed among managers at all levels. And they are skill sets that require both organizations and individuals to understand the evolving essence of Management in our ever-changing world. All of that suggests that Management development initiatives must be reconsidered from a new perspective, one that reflects the critical role they play in helping organizations to transition to the global workforce. Some reflections to consider: * Make Management development a strategic priority. Developing managers who are able to get results and be global thinkers, network builders, diplomats, and interpreters is no easy task. It cannot be left to chance, nor can it be left to consultants. Rather, it must become a strategic priority, championed and driven by an organization's senior managers who must be the spokespersons, teachers, mentors, and sponsors for the process. Now is the time for global managers to address the dilemma of the networked organization and take on the real responsibility of Management --generating results today while developing global managers for the next generation * Get global managers to lead. Albert A. Vicere stated that in the old economy, managers were often auditors. They watched over things, approved things, and kept things running smoothly. Today, that is not enough. Today's global managers must facilitate, interpret, coach, teach, mentor, and develop both people and relationships. They cannot do those things unless they have the right skills and mindsets, and they will not develop those capabilities until they are educated in them and held accountable for demonstrating them. Management development, in this sense, becomes a strategic imperative for all organizations. Global managers must be helped to master the shift from the old control-oriented management philosophies of the industrial age to the new relationship philosophies of the information age. No company will continue to grow and succeed until it addresses this challenge, until it ensures that its managers can not only get short-term results, but that they can do so while demonstrating the ability to be global thinkers, network builders, diplomats, and interpreters. * Expand the definition of diversity. In the global workforce, diversity takes on a whole new meaning and becomes even more critical. Diversity is no longer an individual or personal issue; it is a strategic issue that requires a new view of people, structures, and strategies. The relationship imperative of the global workforce demands that global managers be able to appreciate, respect, and synergize differences. They must recognize value in unique perspectives and capabilities across both individuals and organizations. They must appreciate the best of what is along with the potential of what can be. They must cultivate roots and at the same time develop wings across their partner networks. Understanding and embracing diversity in this broader context is the order of the day and a critical strategic imperative. * Facilitate networks. A networked-economy organization is made up of talented people who work together, share resources and information, and are committed to both personal and organizational success. By seeking out the best minds in the organization regardless of where they reside, putting those minds to work on challenging opportunities, and creating mechanisms to share the knowledge they possess across the organization, resources are generated that can be allocated to pursue even more opportunities. The networked-economy organization must keep people challenged and connected, help them to learn from and with each other, and support their continued growth and development. * Never doubt the power of purpose. What is the difference between a job and a calling It is a sense of purpose, a feeling of making a contribution, making a difference. Human beings long for a sense of purpose and identity. They want to be part of something bigger than they are. For further information, read Jim Collins' Good to Great or, better yet, Viktor Frankl's Man's Search for Meaning. The only way to create a network of committed, enthusiastic stakeholders is to create an organization with a purpose, a cause, a sense of passion. That cannot be done by analysts. It must be done by global managers. * Champion learning. Critical to an organization's ability to make the transition to the global workforce is its ability continuously to seek out sources of information and ideas, and to learn from them. Real-time, just-in-time enterprise learning platforms through which organizations can catalog and disseminate the wisdom gained through experience as well as the ideas gained through futuristic, long-range, lateral thinking are the next big challenge. Knowledge management is not a fad, but rather an essential capability. Organizations that lead the way in the effort to unlock the secrets of effective knowledge management systems development will be the global managers in the coming decades in the business environment. * Make Management development hands-on, real-time. Ongoing, relevant opportunities for Management development are essential in the global workforce. These experiences should be less classroom-oriented, and more linked to real-time learning from hands-on experiences. Action learning, manager -led development, and just-in-time education are the watchwords of the day for strategic Management development in the global workforce. Dare to be creative when structuring the work environment. Use project and task force assignments to keep the workplace enriched and vibrant, but make sure project team members get the coaching and feedback they desire and the development plans they need to move ahead. Conclusion The global workforce requires that companies rethink and refocus their Management development practices to accommodate the shift to new, relationship-oriented business models. To make that shift, organizations must redefine requirements for Management effectiveness, refine practices and policies for Management development, and hold managers accountable for real Management in the global workforce. Perhaps most importantly in this era of transition, managers themselves must understand that their real legacy will not be the past performance of their organization, but its sustainable success. 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