The Importance of Global Leadership Development - Case Study Example

Global Leadership Development Introduction As firms are moving their operations across borders, developing capacity for global leadership has become a necessity. Today, organisations are focusing on improving the competencies of their personnel to exploit the international business opportunities. In addition, due to the increasing nature of the globalised business, it is imperative for leaders to acquire the necessary skills for effective management in the global marketplace. As such, the success or failure of global managers depends on how they have developed their capacities for leadership throughout their careers and are conversant with the competitive nature of the global field of play (Ghemawat, 2012). Because of the realities of globalisation, multinational companies need to move from the practice of focusing on a small group of managers from their home countries to provide leadership. In this sense, there is a need for multinational companies also to train leaders from the emerging markets, for instance, and give them corporate positions. This provides multinational corporations with an opportunity to adapt to the cultures of the host countries and market needs (Espedal et al., 2013). Globalisation of the business environment requires multinational corporations to embrace decentralisation and collaborative decision-making rather than centralising the entire operations at the headquarters. Moving business operations across borders means that an organisation is also dealing with a diversified customer base. As such, it is also important to embrace diversity in the top leadership of the organisation. In this regard, effective global leaders need to align their workers to embrace the firm’s mission and values. It is also important for global leaders to empower their employees across borders to lead and collaborate with them horizontally instead of a focus on a vertical management of an organisation. Further, instead of multinational companies focusing on a few top leaders, it is important that they develop the capacity of more leaders to enhance their operations in different cultures or countries (Espedal et al., 2013). This paper examines the importance of global leadership development as more companies embrace the realities of a globalised business environment. The importance of leadership development from a global perspective Social learning theory provides an ideal basis for global leadership development because through observing and learning the trends in the global business environment, for instance, leaders are in a vantage position to learn and adapt to cultural diversity. In addition, the business world is not static and requires constant learning by effective leaders in order to adapt to the changes in the business environment (Bandura, 1977). Since organisations across the world are expanding their global reach, global leadership development is becoming a necessity to achieve success. This is because leaders are required to work in an environment that consist of different cultures and in a different geographical arena. As such, the development of global leaders is necessary because some of these leaders need to prepare to leave their home country and take new assignments in regions with different languages and cultures. In this regard, developing global leaders must start early in their careers to ensure they develop the necessary capacity to undertake an assignment in other regions different from their home countries. In many international organisations, considerations for global leadership entrant age probably stand at 42 years averagely (Terrell & Rosenbusch, 2013). However, due to the complex nature of overseas assignments and the demands associated with acclimatising to different languages and cultures, developing capacity for global leadership needs to start earlier in a leader’s career. In the literature related to global leadership, there is a critical need for the development of cross-cultural leadership. This is because of the need to develop networks and relationships, and to appreciate differences and similarities in a globalised business environment. While leadership competencies tend to remain the same, leaders need to adapt to the changing dynamics of leadership in different geographical regions (Blakeley & Higgs, 2014). Global leadership development allows leaders to think globally and appreciate cultural diversity. This is a necessity for establishing alliances and sharing leadership in different regions around the world. For instance, developing an understanding of national cultures enables organisations to identify and accept differing perceptions related to leadership. Further, global leadership development is about developing an understanding of the wants and the needs of the stakeholders served by the multinational companies. In this regard, the developing capacity for global leaders ensures that leaders can shape organisational culture to tackle the changing needs of their stakeholders (Gagno & Collinson, 2014). Embracing global leadership development enable leaders to acquire cultural intelligence that is necessary for aligning organisational culture in different regions they are assigned. Consequently, aligning organisational culture provides leaders with a vantage point in terms of responding to external environment factors such as culture shifts. In essence, developing capacities for global leadership ensures that leaders prioritise diversity, understand workers and their differences. In addition, global leadership development also helps to enhance rich communication and making accountability a core value of an effective leader in the global marketplace. Operating in a globalised marketplace require leaders to handle cultural differences and situations effectively. As such, preparations for global leadership ensures that leaders develop capacities such as being able to elevate diversity in the regions they are assigned. In addition, understanding the cultural differences plays a role in enhancing innovation and creativity of a multinational company, which is a critical component of developing a competitive edge in the globalised marketplace (Waldman & Balven, 2015). Global leadership development also enables leaders to promote an environment of trust that is required when working with personnel from different cultural backgrounds. Further, interpersonal relationship with the workers is also enhanced by cultivating an environment of trust. Developing global leadership also ensures that leaders become flexible to intercultural interactions and are ready to share what they know and what they do not know with other employees, and this promotes intercultural dialogue. In an environment where an effective global leader can promote intercultural interactions, workers are more open to help, risk taking is encouraged and everyone is ready to learn and appreciate their differences in terms of skills that they bring to the workplace environment (Waldman & Balven, 2015). In multinational corporations and other large organisations, people have different interests or preferences. As such, global leadership development plays a role in ensuring that leaders can identify these mutual interests, values and beliefs in order to establish a culture of mutual interdependence in the organisation. For leaders operating in a global context, culture intelligence becomes a necessity because leaders are required to provide guidance where employees hold different values. Global leadership development further ensures that leaders develop the capacity to motivate workers in different regions to embrace diversity and cultural intelligence that is imperative for success in a globalised marketplace (Story et al., 2014). Identifying high potential leaders and their recruitment In a globalised business environment, identifying potential leaders and their recruitment require organisations to consider factors such as their ability to embrace cultural differences. In addition, a potential global leader needs to have the skills and experience of operating in different regions around the world. As such, the prospective leader should be in a position to understand the market dynamics in different regions around the world (Niehaus et al., 2012). This involves having knowledge of the customer’s needs from different cultural backgrounds. Knowledge about the political environment and policies of host countries is also an important quality for a potential global leader. Such knowledge would allow the prospective leader to adapt to business operations in the host country. A potential global leader also needs to be open and outgoing which is necessary in a rapidly changing business world (Niehaus et al., 2012). Being open and outgoing ensures that a leader can learn and adapt to changes in the global marketplace. In addition, openness as a quality of a prospective leader ensures that, such a leader can listen to the views of others, which are necessary when working with diverse cultures. Further, a prospective global leader needs to possess an understanding of multiple languages in addition to vast skills and experience. This is because a leader can be assigned to work in a region where the language is different from their home country. As such, leaders with knowledge of multiple languages can adapt quickly to different regions where they are assigned (Masatsugu, 2013). The importance of cross-cultural training and development Because organisations are expanding their global reach, cross-cultural training and development is a necessity to achieve success when operating in a global context. These organisations operate in regions with different cultures and developing an understanding of these cultures is necessary for efficient and effective management of multinationals. For instance, cross-cultural training and development are important in terms of improving communication in a workplace environment with people from different cultural backgrounds or nationalities (VanderPal, 2014). The training, in essence, plays a role in maximising positive outcomes related to intercultural interactions and to minimise cultural conflicts. In different regions, people hold different values and beliefs that may not resonate with the core values and beliefs of a multinational organisation. As such, an understanding of different values and beliefs enable leaders to adapt and shift organisational culture depending on the cultural diversity in the regions that they are assigned. A noticeable challenge for organisations with a global outreach is the language barrier, which hinders effective communication processes. As a result, cross-cultural training and development that targets effective communication in an organisation with a global reach helps in integrating values through group activities and self-assessments. Through cross-cultural training and development, a leader is in a position to develop intercultural competence that is necessary for international business (Canals, 2014). Selection and recruitment of global talent Selection and recruitment of global talent require multinational organisations to consider the current demands in the globalised marketplace. In this regard, the ideal global talent needs to have knowledge of the current market dynamics and how to adapt to the competition and the constant changes in the globalised business environment. Skills and experience working in different regions around the world in a leadership position is also necessary when recruiting a global talent. In addition, creativity and innovativeness are also a necessity when recruiting a global talent. This is because the global competition is heightened, and organisations can only remain relevant through creativity and innovation. A global talent should also be able to embrace teamwork and lead others effectively. In addition, understanding and accommodation of cultural differences are also critical when recruiting a global talent. A global talent should also be in a position to accept criticism as a way of learning and improving their expertise (Conger, 2014). Learning and knowledge in global context Since the global business environment constantly change, new learning and knowledge is a critical factor for global leadership development. For instance, learning and knowledge enable global leaders to adapt to shifts in the global marketplace. In addition, new learning and knowledge enable global leaders to understand the needs of customers from diversified cultural backgrounds. New learning and knowledge also ensures that the leaders can change organisational culture to resonate with the cultural diversity in the regions they are assigned. Learning and knowledge are also critical in developing a differentiation strategy. For instance, developing an understanding of the market dynamics in different regions allows global leaders to implement strategies that provide an advantage over the competition in a globalised business environment. Through learning and knowledge, leaders can improve their skills and experience necessary to lead employees from different cultural backgrounds (Barzantny, 2013). Preparation for international assignments The preparation for international assignments requires multinational organisations to identify the right person from the outset. In addition, it is important that the employee selected for the international assignment possess skills and experience necessary to align the organisation’s needs in the host country. Other competencies that are needed for adequate preparation and delivery in international assignments include the expatriate’s ability to tackle uncertainties in the host country (Morrison, 2012). In most cases, ambiguity often emerges in international assignments due to differences in how business operations are conducted in the home and host country respectively. In addition, it is often difficult to outline in advance, what needs to be done due to differences such as employee’s interests, values and beliefs in the host country (Morrison, 2012). Preparation for international assignments also requires global leaders to embrace effective communication skills. The communication barrier is a major challenge for expatriates operating in different regions around the globe. As such, possessing adept communication skills ensures global leaders achieve success in terms of sharing information with both the headquarters and employees in the host location. In essence, achieving success in international assignments require the assignees to possess the core competencies necessary to work in a new environment. In this sense, their effective delivery will depend on how they can adapt and work with the personnel in the host country (Tomson & Jody, 2013). Strategic IHRM practices for international organisations As organisations embrace the global economy, there is need to rethink the traditional practices of managing employees in a global context. This is because what is normal in one country might be considered illegal in another country. As such, routine decisions regarding career development, for instance, may appear complex for a multinational corporation. Challenges can emerge in terms of selecting potential employees and the leadership style adopted in different regions across the globe. In any international organisation, the human resource activities are coordinated between the headquarters and the subsidiaries in other countries (Caldwell, 2013). As such, importance needs to be given to the PCNs (parent country nationals), HCNs (host country nationals) and the TCNs (third country nationals). However, a challenge for the human resource management is how to implement appropriate policy choices. Initially, international organisations embraced an ethnocentric approach to recruiting their staff, however; control remains with the parent company. Currently, there is more emphasis on a transnational approach. As such, issues continue to emerge regarding the cost effectiveness of using expatriates when organisations can localise senior posts. In terms of saving the costs incurred securing the services of expatriates, an international organisation can develop local management talent. This is necessary because these organisations need personnel who can understand the local market and the political environment of the host country. In this regard, decisions regarding the standardisation and localisation of development and training of personnel should form part of the strategic IHRM approach (Caldwell, 2013). Case study: Training and employing locals as an IHRM strategy As a result of the competitive nature of the global business environment, soliciting the services of expatriates no longer make sense for international organisations. This is because multinationals incur huge costs by enlisting the services of expatriates (Thorn, 2012). As a result, international organisations can cut on the extra costs of employing expatriates by training the locals to take senior posts in the HCNs. In this sense, multinationals can improve their business strategy in the host countries by seeking f the services of the local personal with knowledge of the market and political environment in the host country. Most multinational companies such Adidas Group or Samsung, rather than sending expatriates for international assignments are relying more on locals for delivery of services in the host countries (Dunnagan et al., 2014). Challenges facing global leadership development The major challenge for MNCs, today involves developing their capabilities in a global context. Studies on leadership development show that programmes developed by MNCs, to improve leadership capacities are still ineffective. This is evident in the bottom line of most organisations where results are still weak despite an emphasis on leadership development programmes. It is not an easy task for most multinational organisations to deploy leadership development in a global context. As such, most of these corporations only leverage a patchwork of leadership programmes that are used randomly in different regions across the world (Kayes et al., 2005). On the other hand, the development of local leadership means that MNCs have to contend with a process that can create inconsistencies in terms of leadership. While MNCs concentrate on talent development, this to an extent can slow down a firm’s strategic agenda due to an inability to scale leadership talent on a global context. Other challenges to global leadership development involve the desire by local leaders, for instance, to have more autonomy in terms of doing their own things (Kayes et al., 2005). Conclusion In a world where businesses are embracing a global reach, there is a need to focus on global leadership development. 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