Entrepreneurship in a Global Context - Essay Example

Entrepreneurship in a Global Context Traditional models of leadership are challenged in the wake of intensifying globalization and increasing salience of international markets. Critically discuss the causes of the contemporary global leadership crisis and, drawing from both theory and real-life examples, distil the key traits of an effective global leader Valeriia Kats Student ID: 33540993 Word count: 2000 words The life of contemporary global leaders has never been more demanding. The global leader today has to motivate a diverse group of employees, improve their efficiency, work across boundaries of the organisation, and achieve growth. Moreover, they are also faced by an ever more globalised and complex external environment, in which they have to maintain a competitive advantage, adhere to foreign government requirements, and exceed other stakeholder expectations (William, 2012). In addition, the leader has to effectively navigate various cultural considerations within this globalised environment. The challenges faced by the modern-day global leader are difficult, while developing leaders with the capabilities to tackle them needs a comprehensive response (William, 2012). What is clear is that traditional leadership models are being challenged by intensifying globalisation and the increasing salience of international markets. This paper will aim to discuss the causes of contemporary global leadership crisis, as well as to identify the key traits required in an effective global leader. One cause of the contemporary global leadership crisis is increasing complexity, especially as the global leader has to manage virtual teams, deal with employees at a distance, while also forming alliances and networks. Strategies and preferred leadership styles that worked before may not translate effectively into the global setting (William, 2012). These complexities become even more challenging when the leader has to handle cultural conflicts as they work simultaneously across multiple cultural groups. The requirement of any leader to form alliances and networks becomes challenging in the global environment, especially when it comes to creating shared goals, as well as implementing shared work. It is important the leader finds common ground and at the same time honour differences within the virtual team. Creating alignment around the organisation’s mission and work, while also appreciating and understanding different perspectives of employees at a distance, becomes an especially salient challenge (William, 2012). The current global leadership crisis has also been enhanced by the increased distance between businesses, where they no longer work face-to-face with local suppliers, distributors, and producers (William, 2012). While co-location of teams has traditionally helped in building informal relationships across the supply chain, the virtual nature of global organisations makes relationship building challenging. This poses a unique challenge for a global leader whose team-members have a more relationship-oriented work style, rather than a task-oriented style. Caligiuri and Tarique (2012) argue that forming both cognitive and affective trust is a challenge for the global leader in the virtual context. In some cases, misrepresentation of facts and misinformation may hurt cognitive trust, which is built through a dependable track record on task completion over a long period of time. Disparities in working contexts across international locations could mean that team members are not aware of the impact that issues like resourcing, technical, and situational challenges have on other team members in completing their tasks (Caligiuri & Tarique, 2012). Time zone differences are a permanent challenge for any global leader, causing frustrations and delays by generating a constant flow of information across 24 hours. This added requirement of scheduling conference calls between the US and Japan, for example, poses another challenge for the leader in maintaining their work-life balance. However, according to Tworoger et al (2013), these differences in time zone could be turned into an asset if the global leader can use the differences to enable consistent progress of project goals by cycling it between time zones. The 24-hour operation presents the leader with a challenge in streamlining the transition of tasks between virtual teams, as well as in leveraging the brief overlaps of working hours for virtual teams across different time zones fully. Managing this challenge requires the leader to identify and document a process that enables all virtual team members to understand the context of tasks prior to their involvement, while also anticipating their handover of the process to another team member (Tworoger et al, 2013). Finally, the multi-cultural nature of global virtual teams also poses serious challenges for the global leader, for example, when they have to deal with different negotiation styles, which may result in misunderstandings and subsequent frustrations. Indeed, Schwartz (2011) argues that, in global business leadership, the greatest challenge faced by any leader is successful navigation of cultural barriers. As global leaders work across different cultural groups at the same time, they may have to confront incidents or situations where values or priorities could conflict. For example, Americans and the Chinese have different values and priorities when it comes to the negotiating process. Whereas Americans prefer quick, informal, and direct negotiations, the Chinese prefer long, formal, and indirect negotiations. An American leader leading a team with some members in China faces a challenge in adapting their behaviour to match local leading styles used in China. Such a leader has to be aware of how their culture influences their thinking, ensuring that they do not limit their actions and choices to only reflect their culture (Schwartz, 2011). In this case, the ability of global leaders to read situations and people accurately and to accordingly adjust their behaviour will determine how they are able to surmount the current global leadership crisis. Comparing the desired traits and characteristics of future global leaders and those of past leaders, it becomes increasingly clear that there are qualities that remain as important for the latter as for the former, including ensuring customer satisfaction, focusing on results, integrity, and vision (Conger, 2014). However, there are traits that are clearly more critical for the future global leader than for past leaders. One of these traits is the ability to think globally, especially with the trend of globalization set to have a major impact on these leaders. While the focus of global leaders in the past would have been on their domestic markets or their regional markets at best, the impact that the global financial crisis on disparate markets in Europe, North America, and Asia shows that markets and organisations are becoming even more connected. Not only do leaders need to understand globalisation’s implications on their organization’s economic future, they also have to understand its political and legal implications. The integrated nature of global technology and global trade will increase competitive pressures rapidly, which means that the leader has to understand how to manage global sales, marketing, and production teams (Conger, 2014). Moreover, new technology will make global thinking a necessity with computer programmers in India, for example, communicating with Italian designers to develop products manufactured in China and sold in Argentina. Another trait of an effective global leader involves the appreciation of cultural diversity. As globalisation becomes more salient, future global leaders will have to understand legal and economic differences, as well as behavioural and social differences, which form part of managing international virtual organisations (Schirm, 2010). Respect for cultural differences has become one of the most essential qualities of leaders in the global context. As a result, multicultural and international relationships will have to be managed attentively to enable broad success, particularly where foreign expansions and franchising are concerned. Failure to do this may result in a similar situation to that of Walmart in Germany, in which the company failed to respect various German values such as using ‘green’ packaging, preference for small neighbourhood stores, and the anti-American nature of German consumers. On the other hand, if a company is to operate in the Middle East, it is important that the global leader to appreciate the meaning of religion for organisational behaviour. In addition, the global leader has to understand the importance of timeliness and the meaning of gifts. The motivational ability of the global leader across different cultures will gain more importance with globalisation of operations, which means that motivational strategies used in one culture may offend team members in other cultures (Schirm, 2010). Demonstrating technological savvy will be another trait and key competency of effective global leaders. The majority of future leaders have grown around technology, considering it to be an inalienable part of their lives (Javidan et al., 2013). On the other hand, more traditional leaders consider technology savvy as important for the staff but not for those running the business. Technological savvy means that the leader will have to understand how to use new technology intelligently to aid their organizations, how to recruit and develop a network of employees that is technologically competent, and how to be positive role models in leading adoption of new technologies. The effective global leader will need the ability to use adequate technologies, as well as communication capabilities and sensitiveness, where they use technology to boost communication among their virtual teams, for example. The implications of cross-cultural technologies mean that the effective global leader has to identify the best technological solutions, which enhance collaboration and communication internally and with external partners (Javidan et al, 2013). For example, at Cisco Systems, the effective utilisation of online networks championed by its CEO John Chambers has been critical in helping Cisco Systems cope as globalisation makes the company’s structure less hierarchical. The effective global leader will also have to be adept at building partnerships and alliances, which will be more important in an increasingly global context of organisational operations. To understand the importance of this trait for the contemporary global leader, organizations like IBM that rarely formed alliances in the past have been forced to regularly form alliances as markets develop and open up in Asia and Africa (Normore, 2010). Restructuring, reengineering, and downsizing will inevitably lead to a business environment where outsourcing majority of critical activities is increasingly the norm. The ever-changing role of partners, suppliers, and customers will portend significant implications the global leader. In diverse fields like pharmaceuticals, telecommunications, and energy, the organization may be a partner, supplier, customer, or competitor as the roles between competitors and ‘friendly’ companies become more blurred. In such a world, building long-term and positive relationships with numerous companies becomes essential; particularly since defeating, a ‘competitor’ who may end up being a potential client may only prove a short-term win (Normore, 2010). Finally, the global leader will need competencies in sharing leadership. As globalisation makes leadership across fluid networks more important hierarchical leadership, the ability to share leadership effectively will become a central part of leadership (Mendenhall et al, 2012). Where the global leader has to manage partnerships and alliances, he/she has to ensure that they can work together to achieve common goals. The management of knowledge workers will be an essential factor in the success of global leadership. These knowledge workers will most likely know more about what they are doing compared to the leader, making the use of old models to deal with knowledge workers across global operations less successful. Increasingly, telling people in virtual teams from different cultures what to do will become less workable and the global leader has to adopt a mode of sharing information (Mendenhall et al., 2012). Jose Antonio Justino, the manager of JJCB, faced a similar challenge, which he confronted by adopting a global mindset that combined intellectual, psychological, and social capital to connect with employees and enhance organisational performance. To conclude, various challenges that face the contemporary global leader were identified and noted to be quite different to those faced by leaders in the 20th century. A global leader is faced by numerous challenges, which can be condensed into five main issues. These are time zone issues that lead to frustration and delay, issues of technology that could lead to problems if too much is collected in the absence of control and knowledge capabilities, and cultural challenges that may result in misunderstandings and frustration. Moreover, the global leader also faces distance issues related to collaboration, communication, and trust, as well as complexity issues that may cause problems in management of project and individuals. To overcome these challenges, the contemporary global leader has to develop competencies in appreciating cultural diversity, technological savvy, building partnerships and alliances, and sharing leadership. Overall, the management of the virtual organization will become increasingly challenging and the global leader must gain these competencies to effectively lead virtual teams. References 1. Caligiuri, P., & Tarique, I. (October 01, 2012). Dynamic cross-cultural competencies and global leadership effectiveness. Journal of World Business, 47, 4, 612-622. 2. Clapp-Smith, R., & Lester, G. V. (January 01, 2014). Defining the mindset in global mindset: Modeling the dualities of global leadership. Advances in Global Leadership, 8, 205-228. 3. Conger, J. A. (January 01, 2014). Addressing the organizational barriers to developing global leadership talent. Organizational Dynamics, 43, 3, 198-204. 4. Javidan, M., Walker, J. L., & Najafi Global Mindset Institute. (2013). Developing your global mindset: The handbook for successful global leaders. 5. Mendenhall, M. E., Osland, J., Bird, A., Oddou, G. R., Maznevski, M. L., Stevens, M., & Stahl, G. K. (2012). Global Leadership: Research, Practice, and Development. Hoboken: Taylor and Francis. 6. Normore, A. H. (2010). Global perspectives on educational leadership reform: The development and preparation of leaders of learning and learners of leadership. Bingley: Emerald. 7. Schirm, S. A. (January 01, 2010). Leaders in need of followers: Emerging powers in global governance. European Journal of International Relations, 16, 2, 197-221 8. Schwartz, A. (February 01, 2011). Leadership development in a global environment: lessons learned from one of the worlds largest employers. Industrial and Commercial Training, 43, 1, 13-16. 9. Tworoger, L. C., Ruppel, C. P., Gong, B., & Pohlman, R. A. (April 01, 2013). Leadership constraints: Leading global virtual teams through environmental complexity. 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