Global Competancies

8/3/2019 Global Competancies

http://slidepdf.com/reader/full/global-competancies 1/13

Introduction

Traditional business methods are being made redundant by the surge of globalization.Managers who continue to practice their traditional managerial skills long gained in

business schools are finding themselves ineffective in the global environment.Globalisation is a “conceptual situation where political borders become increasinglyirrelevant, economic interdependencies are heightened, and national differences dueto dissimilarities in societal cultures are central issues of business. The world, with itscomplex and dynamic forces, becomes a global marketplace for global managers”(Kedia and Mukherji 1999). In such a world only the ones who understand the impactglobalisation wreaks and thus adapt accordingly will survive. Thus to be competitivein the global marketplace the traditional managers must transcend and become globalmanagers.

A literature review has been undertaken to identify the global mindset, and the skills

and competencies essential to the global managers. From the numerous frameworks,this paper proposes a new framework design consisting of (1) knowledgecompetencies; (2) interpersonal competencies; and (3) personal competencies. Skillsand competencies within these groups are interdependent of each other suggestingthat the development of one group cannot exist without the other.

Global Managers

Prior to framing the skills and competencies necessary to becoming effective globalmanagers, it is essential to understand who and what are global managers. There arenumerous literature and studies available on this topic and yet there appears to be noconsensus towards a unified definition. It is through the roles and functions of theincumbent that competencies are derived from. However, due to the divergence of thedefinition of the global manager, the roles and functions that set them apart fromdomestic managers have also not been clearly clarified and agreed upon. The differentroles ascribed to the global managers offered by Bartlett and Ghoshal (1994, 77-91)and Caligiuri (2006) are outlined in Table 1. Thus emerges the differing frameworksof competencies of the global manager.

Table 1: Two existing sets of roles ascribed to the global manager



Contrary to popular perception, Bartlett and Ghoshal (1994, 77-91) and Baruch(2002) controversially argue that the universal global manager does not exist. Bartlett

and Ghoshal instead identified three groups of specialists (the business managers, thecountry managers, and the functional managers) with different organisational goalsand roles working together in the global market, and being lead and integrated by thecorporate managers. The authors accepted that these roles are not practised by thetraditional managers. Baruch reports that there are no common traits or qualities thatcan assist in identifying the global manager. Barush concluded that the mindset, the“right frame of mind” (characterised by, for examples, openness, awareness, andgenuine appreciation of culture and customs) coupled with the basic qualities essentialto successful managers will enable them to manage successfully abroad. Thisdistinction contradicts their argument of non-existence of the global manager.According to Jokinen (2005) these differentiations do indeed characterise the widely

accepted term of the global manager.

Amongst the numerous definitions, global managers are those who “understanddifferent cultures and lead mixed-nationality teams” (Barnevik 2001, xi-xix) and are“able to unleash human potential and leverage the richness that lies in culturaldiversity” (Whitfield 2003). They are expected to fulfil critical roles such asintegrator, coordinator, innovator, coach, and strategist (Aycan 2001, 119-135). Toimplement these roles effectively, it is critical for the global managers to possess aglobal perspective consisting of a global mindset which is supported by certainknowledge and skills (Kedia and Mukherji 1999). These essential skills andcompetencies will assist in maintaining a competitive advantage thus ensure their continual success in the complex and dynamic global market.

http://www.cleverworkarounds.com/wp-content/uploads/2008/05/image5.png



Essential Competencies of a Global Manager

Various frameworks of global competencies exist, as shown in Table 2, however for the purpose of this paper a new framework will be proposed; one that takes theelements of the ‘global perspective’ into consideration. A literature review wasundertaken to frame the key competencies deemed essential and specific to globalmanagers. The framework integrates competencies that (i) refer to explicit andtangible information and ability necessary to accomplish a task; (ii) refer to thecognitive and behavioural abilities to utilise knowledge gained to successfullycomplete the assignment; and (iii) are fundamental personal characteristics that canimpact on knowledge and skills development and action. These competencies arecategorised into three meta-competency groups: (1) knowledge competencies; (2)interpersonal competencies; and (3) personal competencies.

Table 2: Leadership competencies of global leaders. Examples of some existingframeworks



(The table ‘Leadership Competencies of Global Leaders’ (Parker 2005, 385).

Knowledge competencies

Knowledge competencies are concerned with factual information pertaining to a clear and deep understanding of technology, business, and industry required to completetasks successfully. They are the basic building blocks for global managers’ journeytowards a global perspective (Jokinen, 2005). The competencies in this section

include technology savvy, international knowledge, cultural and cross-cultural




awareness, business and industry savvy, global risk management, and best practicestandards.

Technology savvy

The rapid onslaught of globalisation has been largely due to advances in technologyinterconnecting companies across the world. Goldsmith, Walt, and Doucet (1999) seetechnology savvy as a key competency for global managers as it significantly impactsthe organisation’s core business. Technology is not only vital for communication, andeffective information management, but also greatly impacts the organisation’s

production processes. In the fast pace world of technology certain products, processesand services can be outdated very quickly. It is therefore necessary for globalmanagers to not only be able to use technology, information systems andtelecommunications effectively but also understand its impact by assessing andanalysing the affect it has on the global operations of the firm (Kedia and Mukherji1999). Technology solutions that may be pertinent to the global managers includeBusiness Intelligence tools such as the SQL Server suite (Analysis Services,Reporting Services) and Oracle; and collaborative tools such as Microsoft OfficeSharePoint Server, Skype, Microsoft Groove 2007, Google Apps, and instantmessaging tools such as MSN Messenger (P. Culmsee, personal communication. May3, 2008). Solutions such as those listed above may not be required by all managers asit depends on the type of industry they are in, and the organisation itself.

International knowledge

Competency in this field means an understanding of the different socio-political and

economic policies governing each country. A global organisation operates world-wideabiding by the rules and regulations that govern that particular nation. Therefore it isessential to clearly understand the structure of these systems, their decision-making

processes, and how they impact business operations and those around them (Whitfield2003). Subject matter such as international finance, international law, andcomparative labour relations should be familiar to the global manager (Caligiuri2006). Knowledge in this field not only assists in penetrating foreign marketsdistribution networks (Tan, Erramilli, and Liang 2001) and the smooth running of the

business but it can be a competitive advantage.

Take Procter & Gamble for example. In the early 1980’s, in their fight for higher

margins from the pharmaceutical industry, Indian pharmacists nationwide targeted thecompany by boycotting Vicks products. Gurcharan Das, CEO of Procter & Gamble’sIndian subsidiary realised that the Vicks products contained all natural herbalingredients, found in the age-old Sanskrit texts. Products compliant under thisAyurvedic system of medicine in India could be sold in food shops, general stores,and street kiosks. Das proved this compliance to the Delhi government and the localFDA and had the registration changed from Western medicine to Indian medicine.With the new registration, the company was able to expand its distribution channel

beyond pharmacies and build a new plant for Vicks, enjoying the tax-advantages andlower labour costs (Das 1994, 197-210).

Cultural and cross-cultural awareness



This pertains to the understanding and appreciation of the country and its society’snorms, beliefs, rites, rituals, symbols, behaviours, motivations and stories. Effectiveglobal managers value and manage cultural diversity and consider this diversity anasset not a hindrance (Caligiuri 2006). Nardon and Steers (2008) state that many inter-culture assignments occur on short notice thereby giving managers limited time to

learn about that particular culture, and intimate understanding of the cultural diversitymay be difficult due to geography. In these circumstances cultural and cross-culturalawareness is learnt “on the fly”. Despite the obstacles, understanding this diversitywill be of great benefit to the global managers.

Procter & Gamble will be mentioned again to illustrate this issue in relation to business. Das (1994, 197-210) noticed that the company had trouble selling VicksVaporub to Northern India, whereas sales in the South were high. He decided tocapitalise on the high market sales in the South instead of attempting to correct themarket in the North. The company profited. Das later discovered that the reason for the poor sales in the North was due to the fact that people in this region did not like to

rub things on their body. Had Das ignored the market trend and decided to expendresources attempting to impose the product on the North, poor sales figures wouldlikely have continued as products would remain on the shelves.

Business and Industry Savvy

Coupled with technology savvy, business acumen, a thorough understanding of the business and its industry is critical for achieving organisational goals and objectives(Parker 2005). Global managers must intimately comprehend not only the company’s

business strategies, products, and resources, but also the structure of its global

operations, worldwide market opportunities (Aycan 2001, 119-135; Osland 2001,137-156) and competitive conditions (Osland 2001, 137-156). Bartlett and Ghoshal’s(1994, 77-91) role of the scanner will be required here to achieve this savvy. Theywill need to filter, analyse and interpret the scanned knowledge. This knowledge canthen be communicated across the organisation and actioned. This breadth of understanding will assist the global manager to recognize as well as anticipate change(Parker 2005), stay on strategy, and find and overcome threats (Kedia and Mukherji1999).

Global risk management

Parker (2005, 468) quotes Mihaly Simai’s definition of international risk as“important, potential disturbing and destabilising factors or acts originating with, or generated by, various actors on different structural levels, and having spillover consequences for other members of the international community”. Some of these risksinclude political, currency-exchange, and corruption. Globalisation provides many

potential techniques to allow global managers to improve the organisation’s bottomline, from the productivity gains of operating in lower cost countries to the ability toleverage global position in pricing negotiation with suppliers. Due to the nature of their role, the global manager would need to have a higher risk tolerance level to dealwith uncertainty in the global market. However, there have been cases whereappropriate safeguards have not been taken to assess and minimise risk. An excellent

example of the differences in risk management maturity occurred in early 2000 (SCMn.d).



In Albuquerque, New Mexico, a thunderstorm set fire to a factory at a plant producingmobile phone semiconductors resulted in contamination that destroyed millions of mobile phones worth of chips. This plant was owned by Phillips NV, a major supplier to Nokia. In Finland, Nokia’s computer system indicated delay in the arrival of shipments of phone chips from Phillips. Three days after the fire, Phillips notified

Nokia about the situation and advised them of the one week delay in the shipment.The fire impacted the production of some 4 million handsets. Nokia required the chipsfor their new generation of phones. This delay would mean that more than 5% of thecompany’s annual production might be disrupted during a time of booming phonesales. Strategies were formulated and acted upon. Phillips and Nokia agreed to joinforces temporarily to overcome the crisis. Nokia was able to launch their new phonesto very satisfied customers on schedule. Ericcson, on the other hand, received the callfrom Phillips but did not act. They assumed that the one week delay would not affecttheir business. When they realized the full extent of the problem (three weeks after thefire) it was too late. They could not find suppliers with the available chips for their new generation phones. At the end of 2000, Ericsson reported a loss of US$1.68

billion in the company’s mobile phone division.

Best Practice standards

In a highly competitive global market it is advantageous for the global managers, andthus the organisation, to understand and comply with/implement best practicestandards as those involved in business have higher expectations and standards. Thesestandards exist to provide independently verifiable assurance to a variety of stakeholders, assuring these stakeholders that the organisation is performing inaccordance with the requirements of these standards. Examples of these are legislative

frameworks: SOX and HIPAA (Healthcare) in the USA, and BASEL II (financial risk management) in the European Union; Compliance frameworks such as GAAP(Accounting), COBiT, COSO (control frameworks), ISO9001 (Quality); Frameworksto improve process/visibility such as Six Sigma, LEAN, and Kaizen; Frameworks toimprove specific disciplines such as PMBOK and, Prince II (Project Management) (P.Culmsee, personal communication. May 4, 2008).

Managers must also incorporate ethics and corporate social responsibility into their business as part of best practice. This voluntary benchmarking can build trust,demonstrate that they possess integrity and honesty, and can be a competitiveadvantage as it will enhance reputation. Environmental and social ethics and business

were once seen as opposite ends of the business spectrum however, with increasingsocial awareness and empowerment, society and NGOs are leading the way to ensurethat industries are respectful of community and the environment. As businessesincreasingly come under fire for their lack of environmental and social ethics, it issafe to conclude that embracing ethics and CRS is good business practice.

Interpersonal competencies

It is not sufficient for global managers to only gain knowledge but also critical for them to possess the appropriate skills to transfer this knowledge into action



effectively. Interpersonal competencies are those that relate to the social/relationshipinteraction or management of others. Competency in this area will lead to fruitfulresults when dealing with others. These competencies, acculturation, diversitymanagement, leading and motivating a diverse workforce, cultural networking skills,creation and conveyance of a clear vision, and capacity for managing uncertainty and

conflict in the global environment, are described below.

Acculturation

“Acculturation is the process whereby the attitudes and/or behaviours of people fromone culture are modified as a result of contact with a different culture” (Maxwelln.d.). Awareness of cross-cultural differences is vital but not enough. The challengefor the global managers, after gaining cross-cultural knowledge, is the willingness andability to embrace and integrate multiple perspectives (Aycan 2001, 119-135) and useit to their advantage. To achieve this they must learn to let go of their own culturalcertainty, unquestioned acceptance of basic assumptions, personal frames of references, unexamined life, accustomed role or status, social reinforcementknowledge, accustomed habits and activities, and known routines (Osland 2001, 137-156), accept that differences do matter (but not inferior), be open and receptive to newideas, ready to accept another perspective (Rifkin 2006) and be able to master bothnon-verbal and verbal communications (Jokinen 2005) pertinent to the culture.Caligiuri (2006) recommends fluency in language to assist in effective verbalcommunication.

An example of how acculturation will benefit the global manager can be demonstrated by the understanding of a brief explanation of the Japanese negotiation style (Adachi

n.d.). Japan still maintains a hierarchical business structure. Prior to commencing thenegotiation, they ascertain their standing/ranking and that of their organisation inrespect to others. Their language is indirect, ambiguous and controlled (agreeable) asharmony and the concept of ‘face-saving’ is important to them. The subject matter istalked around rather than being approached directly. Even if they have strong views or oppose someone else’s view, they will avoid offence preferring to skate around thesubject so as to maintain the relationship. They value long-term relationship over short-term monetary gain. If an agreement cannot be reached, they are more likely tochange the subject or ignore it all together. Information gathering about the other isimportant and negotiations will not be commenced until they obtain what is needed. A

broad agreement is first made from the negotiation, and detailed agreements later.

Diversity management

Managers who perceive diversity as important and have the ability to manage thisdiversity can leverage these differences for mutual business gains (Whitfield 2003).Managing diversity pertains to the ability to co-ordinate groups of people fromdiffering backgrounds, characterised by culture, gender, age, religion, etc., workingeffectively and productively together on the same tasks. To manage diversityeffectively, the organisation’s culture must value its diversity. For behaviour andthinking to change this value of diversity must be embedded in processes andstructures (Parker 2005). With globalisation comes culture diversity. To be successful,

it is crucial for global managers to be competent in this skill.



Leading and motivating a diverse workforce

Leadership skills are essential to all managers however the ability to lead andmotivate a diverse workforce in the organisation’s global environment is specific toglobal managers due to the nature and composition of the workforce. Inspire (Kedia

and Mukherji 2001). This can be made more difficult task when the “team’ membersare located in different parts of the globe. A critical aspect of an effective globalleader is to facilitate integration, lead in a manner consistent with the follower’scultural expectations while simultaneously helping the members develop a set of norms that allow for differences in social-interaction preferences (Stahl 2001, 197-210). To be effect they must inspire others, go against outdated or ineffective

practices, build trust amongst the team, delegate, be a mentor, and demonstratesensitivity and empathy to those they lead (Tubbs and Shultz 2006).

Cultural networking skills

These are ‘relationship management’ skills (Jokinen 2005) created and maintained tofurther the organisation’s interest within the global environment. Global managerswill need to understand the culture for effective networking. Goldsmith, Walt andDoucet (2000) report that the ability to negotiate alliances and manage this complexnetwork of relationships is vital to the success of a global venture. Building a positivelong-term relationship with others is critical. Khan (2007) believes that the adage “Itdoesn’t matter what you know, it’s who you know that matters” holds true in mostcountries. To further themselves and their organisation Khan suggests that it isnecessary for global managers to develop good relations with the “influential andeffective people” around the world who will impact the business positively.

Creation and conveyance of a clear vision

Part of the global manager’s role is the accomplishment of organisational objectivesthrough the work of others Those who are able to set and pursue the organisation’sgoals will assist in the success for the organisation.Effective managers have the abilityto, not only set visions, but they also have the ability to articulate these visionseffectively for all to understand. Effective communication of the vision in a globalenvironment transcends all organisational, geographical, and cultural barriers and

boundaries (Parker 2005). The bility to manage the change process within theorganisation is of utmost importance to succeed in the envisioning of goals. The

visions set should be clear,measureable, motivating and pertinent to the organisationalgoals. There must be accountability and ownership throughout the process, thusemployee empowerment is critical. Leadership skills such as building trust, inspiringand motivating others in the achievement of the goals, evaluating others anddelegation of responsibilies accordingly also required for the achievement of thevision (Tubbs and Shultz 2006).

Capacity for managing uncertainty and conflict in the global

environment

This is an ability to function effectively in unfamiliar constantly changing, complexand paradoxical environment (Kedia and Mukherji 1999) while maintaining patience



and composure (Stahl 2001, 197-210) demonstrating a high tolerance for ambiguity.Global managers in this environment feel comfortable/at eased with rapid change andcorporate forecasting, and have a greater capacity for overcoming adversity (Tubbsand Shultz 2006). This indicates an appreciation of challenge and an ability to dealwith situations and crisis directly rather than displaying an avoidance attitude. In

order to achieve this, others skills such as sound verbal and non-verbalcommunication, for examples active listening, negotiation, interviewing, and non-verbal cues), ability to scan the world for information, and an understanding of diversity and its impact are a necessity.

Personal competencies

The fundamental personal characteristics or traits of a person will not only affect the

attainment of knowledge but also how and if the knowledge will be executed.Knowledge and skills alone do not make a global manager. It is the personal traits of the person that will drive the acquisition of the knowledge and affect how the skillsare performed.

Self-awareness/Emotional Intelligence

To be self-aware, the global managers would have an astute insight of how they are perceived by others, clear insight of themselves, and a clear insight of their own roleswith respect to others in the group (Maznevski and Zander 2001). Self-awarenessswill assist towards the development of emotional intelligence, which is “the subset of

social intelligence that involves the ability to monitor one’s own and others’ feelingsand emotions, to discriminate among them and to use this information to guide one’sthinking and actions” (Salovey and Mayer, 1990). It is this deep understanding andintuitiveness of self and others that will assist the manager to transform and develop.

Inquisitiveness

The inquisitive mind is one that has an insatiable demand for knowledge. It will assistglobal managers in seeking information and strive for continuous learning (Parker 2005). The inquisitive mind will question and probe until the best course of actions

and results are obtained. Global managers with inquisitive minds are adventurous andwill always have up-to-date knowledge and skills to achieve their goals.

Honesty and integrity

Global managers who possess and exhibit honesty and integrity demonstrate respectfor their peers, value and accept others for who they are. These managers are keen to

build and maintain trust. They place the organisation and others’ interest above their own. They are just and fair and will do what is best for others. Global managers withhonesty and integrity will ensure that best practice standards are implemented andmaintained. Employees working for them will be empowered (Parker 2005). This trait

will assist the global managers to lead and motivate their team. The case below, taken



from Parker’s (2005, 387) book, demonstrates the ultimate act of integrity throughleading by example and trust building, exemplified by the actions of Norbert Reinhart.

(“Your shift is over” taken from Barbara Parker’s (2005) book Introduction toGlobalisation & Business, page 387).

Open-mindedness

Global managers with open minds are less likely to be judgemental and view diversityas inferior. They will be more receptive to new experiences and ideas, and be able tosee and accept change more readily (Caligiuri 2006).

Adaptable/flexible

This is the capacity to adjust or vary one’s thoughts and thus behaviour according tothe immediate requirements of the condition or situation. An adaptable or flexible

mind will assess and analyse the foreign culture, compromise, and then findinnovative and creative ways to arrive at a solution (Stahl 2001, 197-210).

Optimism

Optimism is a mindset that looks on the positive side of a given situation. Optimisticmanagers are forward thinkers, will most likely persevere, learn from their mistakes,and encourage and motivate others to succeed. They themselves will be moremotivated and pro-active. This positive outlook will also assist the global managers tocope in unfamiliar and uncertain situations and people (Jokinen 2005).

Empathy

Empathy is a genuine understanding, concern and respect for another’s thoughts,feelings, needs, motives and assumptions and one’s capacity to respond to thosefactors appropriately. Empathetic managers will consider someone else’s situation,“show appropriate discretion”, and “argues from position of the host country” (Stahl2001, 197-210). This trait will assist the global managers in their relationship with

people worldwide as their listening skills will improve, and are able to appreciatediffering viewpoints. This understanding of others will lead to cross-culturalsensitivity and expertise in global human resource management (Jokinen 2005).




Global Mindset

To complete the manager’s global perspective, global managers must possess a globalmindset. It is a way of being, described by Rhinesmith (1992) as “a predisposition tosee 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” acting as a filter.

Rhinesmith sees those with global mindsets to always drive for the bigger, broader picture; accept the balance of contradictions; look towards organisational processesrather than structure when dealing with uncertainty; value and leverage diversity of teamwork and play to their advantage; view change as an opportunity rather than ahindrance; and open to surprises, embracing challenge and uncertainty, and alwaysquestion the status quo. They are proactive and their thoughts and actions are notlimited to boundaries. They have the ability to effectively manage competition,

complexity, adaptability, diverse teams, uncertainty, and learning. Rhinesmith alsocharacterizes them as having astute knowledge in technology, business and theindustry; highly developed conceptual capacity; flexibility to deal with the constantchanging global and local market demands; sensitivity to cultural diversity; judgementin making risky decisions with little information; and the capacity for reflection inseeking continuous improvement.

Conclusion

Despite the abundance of literature on the global manager there is still a lack of unityin defining the global manager. Due to this deficiency for a clear and precisedefinition, the exact roles of the global manager have also not been defined. This hasresulted in the existence of various frameworks of the competencies of the globalmanager. Some of these frameworks, for example Tubbs and Shultz’ (2006)taxonomy of competencies in global leadership, include skills and competencies thatare too broad, and not specific and pertinent only to the global manager.

It is recognised that the standard managerial skills and competencies are also required by the global manager. However there are certain competencies that only the global

manager would require to be effective. This proposed framework, the essentialcompetencies of a global manager, outlined in Table 3 below, contains competenciesthat are unique to the global manager. They are crucial to the function of the globalmanager in the global environment. The design of the framework is important. Itimplies that all the competencies outlined are interdependent of each other. One set of competencies cannot be achieved without possessing the others and no onecompetency has greater weight than the other.

Table 3: Framework of the essential competencies of the global manager



By understanding the global perspective required of global managers to functionsuccessfully in the global market, the Human Resource Department can work towardsthe development of this perspective in their managers. Programs such asDiversity/cross-cultural awareness training, diversity management, emotionalintelligence training, and understanding the global market can assist the domesticmanagers to understand different perspectives. HR plays a very important role in thedevelopment of skills and competencies necessary for global managers.


Documents

Global Competancies