Selecting Managers With a Global Mindset

Selecting Managers with a Global Mindset

Jonas Babics

16th December 2009 - [email protected]

Today’s companies find themselves in a very dynamic, changing and challenging

environment. The global economy gets more and more interconnected and provides a lot of

opportunities, but also risks. To be competitive in the global market, companies need to find

the balance between global consistency to save costs and profit from knowledge and

technology transfer and local responsiveness to meet the needs of customers, employees

and suppliers from different countries and cultures, worldwide. Companies need a global

corporate culture. To get this global corporate culture, companies have to define a global

strategy and a corporate vision and values. However, most importantly, they need managers

with a global mindset.

This paper asks the question, how a company can get managers with a global mindset to

find a global response to the issues of the global market. To find answers and to present a

framework to this question, I reviewed current literature and interviewed people from globally

oriented organisations. Concluding, I recommend implementing the concept of global

mindset throughout the whole human resource management, especially in the selection

process.

Jonas Babics Selecting Managers with a Global Mindset Page 2

Table of Contents

Table of Contents ........................................................................................................................2

Boxes, Figures, Tables................................................................................................................3

Abbreviations...............................................................................................................................4

1. Introduction.........................................................................................................................5

1.1. Barry Callebaut .........................................................................................................7

2. Literature / Topic Review ...................................................................................................8

2.1. Definition of Global Mindset ......................................................................................9

2.2. Global Corporate Culture ..........................................................................................9

2.3. Individual Global Mindset ........................................................................................13

2.4. HRM Cycle ..............................................................................................................15

2.5. International Assignment.........................................................................................17

3. Research Results .............................................................................................................19

3.1. Global Mindset and the HRM Cycle ........................................................................20

3.2. Selecting Managers with a Global Mindset .............................................................23

4. Implementation .................................................................................................................29

5. Conclusion ........................................................................................................................31

6. Discussion ........................................................................................................................33

References .................................................................................................................................37

Annexes......................................................................................................................................38


Boxes

Box 1.1. IBM............................................................................................................................5

Box 1.2. Research Methodology .............................................................................................7

Box 2.1. Barry Callebaut .......................................................................................................10

Figures

Figure 2.1. HRM Cycle ..............................................................................................................15

Figure 3.1. HRM Cycle with Activities to Support the Development of a Global Mindset..........20

Tables

Table 3.1. Important Factors for Positions Requiring a Global Mindset...................................26


Abbreviations

CEO Chief Executive Officer

CV Curriculum Vitae

GMI The Global Mindset Inventory

HR Human Resources

HRM Human Resource Management

IA International Assignment

IBM International Business Machines

IHRM International Human Resource Management

IT Information Technology

MNC Multinational Corporation

MNE Multinational Enterprise

SME Small and Medium Enterprise

TNC Transnational Corporation

US United States

USD United States Dollar


1. Introduction

Globalisation is no new phenomenon anymore. The term is mentioned daily in newspapers,

research literature and corporate communication and the world has also become more and

more interconnected in reality. Almost every company is affected by this trend in different

ways, regardless of the location worldwide. Maybe the products meet the consumers’ needs

and wants not only in the home country, but also elsewhere in the world or suppliers from

different places are able to deliver goods with cheaper prices and of better quality than the

long lasting supplier from the neighbour town. The home market of a company is also open

to competitors from foreign countries and human resources can now be found on the global

labour market. Furthermore, the market itself and the consumer needs and behaviours are

changing rapidly. Technology makes products and services possible, which nobody would

ever have thought of some years ago. To be competitive in this global marketplace, there is a

need for companies to have a global response, a global view and a strategy that looks

beyond the borders. However, the question is, how many executives are capable to

comprehend the complexity of this global world, the threats, but also the opportunities? In

addition, how many companies have really a global strategy? Companies, which early

started to adapt to a globalised world, have now a real competitive advantage (Beechler, et

al., 1999). For all others it is still not too late, but they have to think now and prepare

themselves how to react on the influences and the development of globalisation.

Thinking globally does not mean to standardise everything and trying to flatten all differences

between cultures. For companies, there is the challenge to find a balance between global

consistency and local responsiveness. Through global consistency, companies profit from

economies of scale, cost reduction and knowledge transfer. By local responsiveness, they

are able to meet the needs of customers and employees in different countries (Begley and

Boyd, 2003). The heterogeneity across cultures and markets cannot be ignored by

companies, which want to be successful in the global market, but at the same time becoming

its prisoner can be an equal mistake (Gupta and Govindarajan, 2002). To obtain the balance

between global consistency and local responsiveness and therewith being competitive in the

global market, companies need a global corporate culture. Having a global corporate culture

allows a company to understand cultural differences better, adapting faster to global

changes, realizing risks and exploiting the opportunities worldwide.


Box 1.1. IBM

IBM is a good example of a company with a global corporate culture. IBM describes itself as

a service organisation and a globally integrated enterprise. Strategy, management and

operations take place in many different locations and are integrated into production of goods

and services to deliver value to clients worldwide. Sam Palmisano, the CEO of IBM said,

“work flows to the places where it will be done best – that is, most efficiently and with the

highest quality”. IBM does not see itself as a US company, but as a global company solving

the customer’s problems wherever they are located. This is only possible because of shared

technologies, global IT systems and global communication infrastructure, as well as HR

activities like talent management and development, which are also globally integrated.

Source: Briscoe et al. (2009)

There are different possibilities for a company to work towards a global corporate culture. An

important input from the board of directors that has to take place is developing a global

strategy and formulating a global vision. Employees can be trained in courses and university

programmes and today’s very well advanced communication technology can be used to

bring the people around the globe closer and make them work better together. However, to

develop a global corporate culture, the most important and most effective factor for

companies is to have executives and managers with a global mindset (Paul, 2000). The

management of a global company should be able to feel when to favour global consistency

and when local responsiveness. They have to understand differences in cultures and to be

able to identify the advantages of the complex, interrelated and ever changing global market.

They should have the ability to think global and act global, but also to think local and act

local. This task requires knowledge, experience and the feeling how to behave in other

cultures. Furthermore, companies and their managers have to be flexible, as the market

changes very fast. Having managers with a global mindset is crucial for globally operating

companies and gives them a real competitive advantage. This leads us to the question: How

do companies get managers with a global mindset?

By now, quite a lot of literature has dealt with global mindset. Most of the researches are

about the advantage of global mindset and how individuals can develop it. The difference is

made between individual global mindset and global corporate culture, also called global

identity (Beechler, et al., 1999) or corporate global mindset (Begley and Boyd, 2003). Most of

the academic papers are on the search to find definitions and to put global mindset into the

context of international business management. However, few researches exist when it


comes to practice and implementation; researches that ask the question, how to train your

people to develop a global mindset or how a company gets managers with a global mindset.

Barry Callebaut, the company for whom I worked during my research, states on its website:

“We are looking for professionals with international experience and a global mindset to

increase our worldwide reach.” (Barry Callebaut, 2009). Barry Callebaut is not alone with this

request. The demand for globally thinking professionals is high and will most likely grow in

the near future. Already now, these professionals are a rare resource on the labour market

(Carpenter et al., 2000). Therefore, this paper tries to support Barry Callebaut and other

companies to identify these managers with a global mindset and to make them a part of their

global corporate culture.

My first research question is, how companies are able to get managers with a global

mindset. The hypothesis to this question is that the concept of global mindset should be

integrated in the whole HRM cycle from recruitment to selection and to training and

development. Within this HRM cycle, I see the most potential in the selection process.

Selecting the right person for a new job, selecting the best people as leaders for multicultural

teams or selecting candidates for international assignments with the highest potential of

success. It comes all down to choice and companies have to make the right one. This leads

me to the second research question: How can a company select managers with a global

mindset? To answer the second question, this paper will deliver a framework, which could be

used as a guideline in the selection process. Companies will gain a competitive advantage in

the global market, if they select the right people, for the right work assignment at the right

location, worldwide.

1.1. Barry Callebaut

Barry Callebaut is a young, dynamic and innovative company. Originated from the merger

between the French Cacao Barry and the Belgian Callebaut, the company Barry Callebaut is

now the world's leading manufacturer of high-quality cocoa and chocolate products. Barry

Callebaut, headquartered in Zurich / Switzerland, has strong roots in Europe, but also has a

global network of around 40 productions sites in Europe, Africa, North and Latin America and

Asia/Pacific. With cocoa the main resource for their products coming from countries around

the equator, employees of the productions sites coming from different cultures and

customers coming from almost all countries worldwide, Barry Callebaut is extremely

confronted with all aspects of globalisation. To be able to face the challenges and profit from

the advantages of a global market, Barry Callebaut needs managers with a global mindset.

I chose the topic of my paper before I started to work at Barry Callebaut and the research is

no direct request from the company. Nevertheless, as Barry Callebaut has grown very fast in

the last ten years and has not been globally integrated for ages, I assumed that they will still


have to develop a strong global corporate culture and will therefore need more globally

thinking employees. Hopefully, my research will support the company to select managers

with a global mindset.

Box 1.2. Research Methodology

To find answers to my research questions, I reviewed current literature about IHRM,

international business and about global mindset itself. Additionally, I conducted semi-

structured interviews with various people from different organisations. I have chosen this

research methodology since the topic has a lot to do with psychology, character and

individual opinion. There are a few quantitative researches, which try to measure global

mindset or to find parameters to indicate global mindset. Howsoever, I believe that a

qualitative research method suits this topic better. The result of my research provides a

framework to help selecting managers with a global a mindset, but it will not be a tool to

categorise people into groups of people with and people without a global mindset. The

results will give suggestions for possible indicators, if someone has a global mindset or if

they possess the potential to develop one.

The interview consisted of a structured part with standardised questions, which I asked to all

the interviewees and a part, where I asked prepared questions suited for the individual

person. Furthermore, it contained open questions, which could develop through the

discussion. The interviews were not tape-recorded. I made notes, which I sent to the

interviewees after the conversation for corrections and extensions.

For my qualitative research I selected 8 people from different backgrounds and who are all

confronted with various cultures in their daily work. Their positions ranged from employee to

CEO, Vice President, HR Specialist and University Professor. They came from companies or

organisations like IBM, Barry Callebaut, University of London, University of Applied Sciences

Northwestern Switzerland, a consulting company for intercultural communication training and

also from smaller companies. The average time of the interviews was around 40 minutes.

2. Literature / Topic Review

The term of global mindset is not new in the international business literature. Also in daily

discussions, global mindset is mentioned, when it comes to cross-cultural project teams,

international assignments or global talent management. There are a lot of newspaper and

scientific articles that mention or deal with global mindset. The current research makes the

distinction between individual global mindset and the characteristics of a global organisation.

The literature of individual global mindset treats topics like psychology, culture and


leadership. The term of global identity or corporate global mindset is mentioned in connection

with organisational theory, strategy and international management. Both of the directions are,

however, linked to HR. Global mindset has always to do with people.

Before I come to the results of my own research, I would like to summarize existing literature,

to understand the term of global mindset better and to be able to connect it with the selection

process. The literature or topic review should enable us to integrate global mindset.

As globalisation and therefore also global mindset is a relatively new phenomenon, the

definitions and views are still different and there is no common opinion, what global mindset

contains and what it does not contain. With the findings of existing research and the results

of my own interviews, I will be able to make a conclusion, what global mindset is and how it

can be defined and used in business practice.

2.1. Definition of Global Mindset

To understand global mindset, we first have to deal with the concept of mindset. According to

Gupta and Govindarajan (2002), mindset is about how people make sense of the world in

which they interact. It refers to cognitive filters that select, what we absorb and how we

interpret something. Every Individual has a mindset and the mindset of each individual is

influenced by the mindsets of others. An individual mindset is more a way of thinking, than a

behaviour (Dekker et al., 2005). Paul (2000) links mindset with experience, he states that

mindset is a set of mental images and assumptions and that an individual develops them in a

process of learning from experience. Global mindset has therefore to do with the way we see

the world, the global market, cultures and people. Global mindset is the ability to see the

world through different eyes. People with a global mindset are open minded. It has to do with

curiosity and interest, but also knowledge; the knowledge of different values and value

dimensions. A global mindset is needed to comprehend the complexity of today’s globally

interconnected world of different beliefs, behaviours and attitudes.

Globalisation is often referred to a process of standardisation. Global mindset, however, is

not seeing everything the same way and trying to standardise everything, but to realize the

differences in the world. The diversity of local markets can be seen as a source of

opportunity and strength (Paul, 2000), but sometimes it makes sense to have a global

consistency in the strategy. Global mindset is the feeling to find the balance between global

consistency and local responsiveness.

2.2. Global Corporate Culture

Companies stand before a great challenge. The global market has a lot of opportunities and

fast growing markets in East Asia and South America offer huge growth potential. However,


a global market brings also global competition. The emerging markets have not only

customers, but also companies that get more and more ready to compete globally. It is not

only the big Multinational Enterprises (MNEs) that are affected by this development. Small

and Medium Enterprises (SMEs) also have to deal with foreign suppliers, foreign customers

and competitors. The success of companies in the global market and how they can profit

from opportunities and tackle challenges, depends on its ability to observe and interpret the

dynamic world in which it operates (Gupta and Govindarajan, 2002). Why some companies

are highly successful in spotting and exploiting the opportunities, while others mismanage

them or miss them entirely, lies in the difference how the company sees the world and how

this affects its actions (Paul, 2000). This ability is called “corporate global mindset” by most of

the literature. Beechler et al. (1999) propose the term of “global identity” to describe the

global mindset on the organisational level. However, as mindset is a way of thinking, a

cognitive approach, I do not believe that it can be used to describe the state of an

organisation. Global mindset refers to the people working in an organisation, but not to the

organisation itself. Therefore, this paper uses the term global corporate culture. Culture is

defined by Jandt (2004) as thoughts, experiences, values and assumptions about life that are

shared by a group of people and that guide behaviour and how those evolve with the contact

with other cultures. Consequently, to get a global corporate culture, companies need

individuals with a global mindset.

Again, global mindset, the way of thinking, is about people. Organisations can be structured

to support the development of an individual’s global mindset. From these structures,

combined with a majority of globally thinking managers, evolve companies with a strong

global corporate culture. The process is two sided, since to achieve a global corporate

culture, companies need globally thinking managers, but the managers with a global mindset

also need a company with a global corporate culture to work and develop effectively.

The following paragraphs describe organisational structures that support global mindset.

Allocation of responsibility

To counterbalance the push for standardization, companies can strengthen the role of their

regional headquarters (Begley and Boyd, 2003). Giving responsibility to these regional

headquarters allows a company to react better to needs of customers and to respond to the

cultural similarities within a group of countries. A very strong headquarters can lead to a

focus of global consistency and an ignorance of cultural diversity. However, greater

localization should not result in greater isolation (Bartlett and Ghoshal, 2002) and companies

need a strong corporate culture to hold all the national and regional units of the organisation

together.


Box 2.1. Barry Callebaut

Barry Callebaut is the result of a merger between Cacao Barry from France and Callebaut

from Belgium, which happened in 1996. Today, the headquarters is in Zurich, Switzerland.

However, most of the line managers are located Wieze, Belgium. After several acquisitions

worldwide, Barry Callebaut owns different brands, which are produced in and mostly oriented

to one region. That makes the whole organisation very interesting from a global perspective,

as there is not a strong headquarters that makes all the decisions. The responsibilities are

more allocated to different locations. A weakness is that Barry Callebaut is very much

Europe oriented, which is mostly explained by its original roots. A lot of newly acquired

factories and brands outside Europe are not yet fully integrated into the organisation.

However, if Barry Callebaut follows the same approach than in Europe, there will be most

likely the chance that it becomes a real global company with a strong global corporate

culture. To be global is a key success factor for a food manufacturer like Barry Callebaut.

With raw materials almost exclusively from developing countries, important consumer

markets in Europe and North America and very fast growing markets in Asia and South

America, their business is truly globally interrelated and also affected. Managers with a

global mindset are crucial for Barry Callebaut to be successful worldwide.

Communication technology

The modern communication technology makes it possible to communicate easily with people

around the world. That brings people closer to each other and gives them even more the

feeling to belong to one corporate culture. Project teams with members from different parts of

the world are only possible, if the project team can communicate without great time and

effort. IBM, for example equips all its employees with a laptop and they have access to their

e-mails and documents wherever there is connectivity to the Internet. The offices provide

different possibilities to held meetings like telephone conferences or training courses over the

internal website “blue pages”. To communicate, employees can choose between instant

messaging, writing e-mails or calling each other. IBM has people all over the globe, but with

the communication technology, the people get closer together.

Important is also the transfer of knowledge between the subsidiaries and the head office, as

well as between the subsidiaries (Paul, 2000). To reach this, companies need the right

communication tools. The Internet has made it possible to flatten the world; companies

should now use the modern technology to make their employees communicate with each

other.


Multicultural teams

If people work together with other people from different cultures, it can influence them to

open their minds and to start thinking differently. According to Gregersen et al. (1998)

contrasting views and values can force members of multicultural teams to think globally.

However, they also state that multicultural teams can be quite problematic, if they are not

managed well. Therefore, to make multicultural teams successful and even bring greater

value for the company, they need a leader with a global mindset. A study by van den Bergh

and Lehmann (2004) showed, that multicultural teams are either much more effective than

teams from a single culture or the performance is much worse. The crucial factor is how they

are managed. The development of multicultural teams within companies should be

supported, but team leaders with a global mindset are needed.

Corporate vision and definition of core values

Operational decisions are often made on the basis of internalized beliefs (Bartlett and

Ghoshal, 2002) and these beliefs are strong influenced by the vision of a company. The core

values include also how a company appreciates diversity and cultural differences. According

to a survey of executives from Begley and Boyd (2003), a company’s vision and values must

show global consistency. Strong values and a consistent corporate vision allows employees

worldwide to work within a local culture, but at the same time being part of a corporate

culture, if possible a globally oriented corporate culture. Most importantly, the corporate

vision should value global thinking.

The structural responses to the global market are needed for companies to be competitive.

However, they are inadequate for dealing with the requirements (Beechler et al., 1999).

Companies need managers with a global mindset. The global experience of managers is

difficult to imitate and can create a competitive advantage for a company (Carpenter et al.,

2000). Furthermore, it is a rare resource. Gregersen (et al., 1998:22) interviewed the former

CEO of Brunswick Corporation, who reflected the sentiments of many senior executives:

“Financial resources are not the problem. We have the money, products, and position to be a

dominant global player. What we lack are the human resources. We just don’t have enough

people with the needed global leadership capabilities.”

Therefore, the recruitment and internal development of global leaders is very important. How

companies can select managers with a global mindset to be able to compete in the global

market is the topic of my research, but to understand what the global mindset of managers

contains, we first have to explain the concept of individual global mindset.


2.3. Individual Global Mindset

Global companies need global leaders. But how do companies realize that someone thinks

and feels globally and how are they able to indicate the mindset of an individual? What are

the characteristics of a person with a global mindset?

Beechler et al. (1999) described an interesting approach to differentiate between two kind of

people: Cosmopolitans that are oriented and open towards the outside world and locals that

are more narrowly concerned with the affairs of the community and exclude the world affairs.

The cosmopolitan or the global person is interested in other people; they are open minded

and curious. They are not afraid of experiences that are unfamiliar and they are ready for a

continuous process of learning.

Of course it is difficult to allocate characteristics to global mindset. Nevertheless, there are

some common features or qualities described by the literature. Mansour Javidan, dean of

research at Thunderbird, who invented together with other professors from Thunderbird a

tool to measure global mindset (The Global Mindset Inventory - GMI) states that individuals

with a global mindset share an extensive set of intellectual, psychological and social

characteristics (Swain, 2007). According to the GMI, global mindset is about knowing and

understanding the global business (intellectual capital), to be open for other cultures

(psychological capital) and to be ready to trust people, who are different from yourself (social

capital). Gregersen et al. (1998) mention that successful global leaders are driven by a

sense of adventure and that inquisitiveness allows them to understand people. Furthermore,

this inquisitiveness allows them to maintain integrity and to be able to deal with uncertainty

and to manage tensions.

But why is a global mindset important for companies, or what are the managers with a global

mindset doing differently than others? The mindset shapes the perception of managers and

influences them, which strategy they choose and how the implement it (Paul, 2000). A global

company with a global strategy and a worldwide network of subsidiaries are dependent on

managers, who make the right decisions, who understand the complexity of the global

market and who are able to balance between global consistency and local responsiveness -

managers with a global mindset.

That leads us to my first research question: How does a company get managers with a

global mindset? The literature proposes different approaches to develop an individual global

mindset or to support people, who already have a global view or global thinking. Very simple

formulated is it by Gregersen et al. (1998), who have found four strategies that are effective

to develop global leaders, or leaders with a global mindset: travel, teams, training and

transfers. To have the right effect, travelling requires not staying in western hotels and only

going outside to drive from the hotel to the workplace, but to get in contact with the local

culture. Working in multicultural teams is explained above and is a good way to learn


contrasting views and values. Training is essential before employees are sent abroad or

even before they enter a team with members from different cultures. However, my research

has shown that cross-cultural training is only effective, if it can be linked to experience. When

a company has the possibility, the best way would be to arrange cross-cultural training with

cross-cultural groups. The exposure to different people can teach more than a lot of theory.

The last strategy, transfers, is the most powerful. Eighty percent of global leaders, asked by

Gregersen et al. (1998) identified international assignment as their single most influential

experience in their lives.

These four strategies are all quite expensive. Even multicultural teams can be costly for a

company, as they need more time to form an effective group and the risk is high, that they

fail. Big MNEs are able to finance extensive training and development programmes and they

also have a wide range of young talent to choose from for these programmes. For smaller

companies it is not that easy and they are sometimes dependent on the external labour

market. If SMEs do not have the experience or knowledge to execute international projects,

they have to buy that knowledge either from external consultants or with recruiting managers

with international experience and with a global mindset.

For both ways, choosing internal people or hiring external experts, the most important

element of the process is selection. Which managers are selected as futures executives?

Who do you select for international assignments? Who do you select as project leaders and

who gets extensive training? To answer these questions, I will deal with the selection

process in detail in the next chapter and present the results of my research. However,

selection is not the only critical factor within human resource management to pursue the path

in direction of a global corporate culture. My thesis for the first research question is, that

companies should integrate the concept of global mindset within the whole HRM cycle.


2.4. HRM Cycle

The HRM cycle describes the whole process that all employees go through from entering a

company to the moment they leave and it is managed by the HR department. The HRM cycle

is a cycle, because this process will start over and over again within a career path of the

individual employees. It does not have a start or an end, as this cannot be defined and will

change from case to case. Since my approach is to incorporate the concept of global

mindset within the whole management of human resources, I will use the HRM cycle to

define the different contents. The HRM cycle shown below is adapted from Tichy et al.

(1981), who described the steps and mentioned the concept for the first time. I will explain

each of the steps in this chapter to be able to integrate the HRM cycle in my research results.

In one of these steps Tichy et al. (1981) speak of development and not of training and

development. For the study of global mindset, training is an important part, as cross-cultural

training and other courses make an important contribution to the development of a global

mindset. Therefore, this step in the HRM cycle below includes also training and not only the

term development. Furthermore, Tichy et al. (1981) do not have a step “recruitment” in their

cycle. The first step, as they indicate it, is selection. I would like to separate recruitment and

selection, as recruitment is a process with a clear interaction with the external labour market,

selecting people can also be a process within the internal labour market, though. Employees,

who already work in a company, are selected for projects, training, international assignments

or jobs on a higher career level.

In the cycle of Tichy et al. (1981) performance and appraisal are two different steps and

appraisal leads then to rewards and to development. This is also a very interesting approach,

which shows that the appraisal of the performance determines, how much someone is

rewarded and if they get the chance for development within a company or not. However, in

the modern corporation I assume that everybody gets the chance for training and

development, which then may lead to performance appraisal. Putting the cycle in connection

with global mindset, this can be different. The costs of the training and development of

people to develop a global mindset are very costly and the selection should be made

carefully. But also in this case, the kind of performance that is measured to make the

decision may be different than in other selection processes. As mentioned before, the HRM

cycle is a cycle because the course of the steps can be different all the time.


Figure 2.1. HRM Cycle

Source: adapted from Tichy et al. (1981)

Recruitment is the process of attracting people from the external labour market to fill an open

position. It includes the advertisement of the job and also the interviews and the

assessments. Companies may execute recruitment by themselves or outsource it to a

recruitment agency. However, at the end the company will make the selection.

The next step within the HRM cycle describes the selection. This can be the selection of

external people within the recruitment process, but also the selection of employees for

different kind of positions or projects within a company itself.

Induction corresponds more to new recruited employees that have to be integrated into the

company. Of course new team members or new employees within a department are also

inducted, but they already are part of the organisation. Furthermore, one can ask the

question, if induction really does have an end or if it is an ongoing process. In the induction

step of the HRM cycle, the new hired employees are confronted with the values and the

strategy of a company. The more effective the induction is, the faster employees get part of

the corporate culture.


Especially in the global marketplace, well trained and educated work force is critical to

success and may be the most important source of competitive advantage for globally

operating companies (Briscoe et al., 2009). Therefore, the training and development

programmes of companies have become a very important part within the HRM cycle. More

and more universities offer management development courses and some big MNEs even

have their own educational institutions. The effectiveness of training is hard to measure, why

it may also be expenses that are cut first within a recession. However, most of the

companies have realized the importance of training and development and are also ready to

invest money. It must be seen as investment, since the output may bring profit with being

more competitive on the market as company with well educated staff.

The performance of employees is usually appraised by their line managers. This process can

be formal with a predetermined standard form or also informal. Often in companies the

performance appraisal takes place annually. Based on the performance, the compensation of

employees can be defined. Compensation and benefits is a challenge for globally operating

MNEs, as cultural, legal and taxation issues are very different from country to country.

With regard to global mindset, selection is the crucial step within the HRM cycle. The

development of global mindset is a long process. Therefore, it is important for companies to

choose the right people in the recruitment, for training or for global positions. The employees

still can further develop their globally oriented mindset, but it is an advantage, if they bring

the preconditions before they enter the company or the position requiring a global mindset.

Selecting managers with a global mindset should get the right attention by globally operating

companies.

2.5. International Assignment

The most effective way to develop a global mindset is international assignment experience

(Gregersen et al., 1998). The experience of living and working in a foreign country for a

longer time brings a lot of advantages that are also important for the global mindset

development process. In my interviews, international assignment experience was often

mentioned regarding the development of a global mindset. Furthermore, many companies

recognised that personal experience was the best way for their managers to develop a broad

international perspective (Bartlett and Ghoshal, 2002).

The examination of other cultures and other values will broaden the mind and bring a

different view of many things. Hopefully, it also arouses interest and supports curiosity. The

knowledge of other cultures and behaviours is of course very important and can be learned

in cross-cultural trainings. However, to be really effective as a global leader, someone has to

feel how to behave in another culture. Immediate reactions cannot be learned in courses,


they have to be internalised. This feeling can only be developed with the ongoing

examination of people from the other culture. To gain a real understanding of a culture or to

be able to adapt to it, someone has to experience the culture first-hand (Briscoe et al., 2009).

If someone lives in a foreign country, they have to deal with power that cannot be changed,

like rules, laws and administrative issues. This will learn them to adapt to a different

environment and is a very worthy experience.

International or expatriate assignments can have two different motives, the demand driven

and the learning driven motive (Scullion and Collings, 2006). The first motive is to fill

positions abroad for control reasons of foreign operations. There has been few empirical

testing of the effectiveness of expatriate managers that control foreign operations. However,

one study of Paik and Sohn (2004) shows that expatriates with significant cultural knowledge

of the host country are more likely to be effective than expatriates with low cultural

knowledge in controlling foreign subsidiaries. In fact, expatriates with low cultural knowledge

may even be harmful. The second motive are learning driven assignments. This is where we

come back to global mindset. The global mindset could be achieved or developed through

learning driven international assignments. According to Scullion and Collings (2006) a lot of

important competencies can be achieved during expatriate assignments, among others

understanding the complexities of management in an international marketplace.

Regarding the growing presence of American and European companies in developing

countries, I would add another motive for international assignments, which is the lack of

educated and experienced personnel in these countries. Finding talents with the competence

of leading teams or even a whole subsidiary are rare and highly demanded in emerging

economies (Briscoe et al., 2009) and therefore, companies have to fill these positions also

with expatriates. A longer, but maybe more effective method is to hire talented locals,

sending them to the headquarters in western countries, educate them at good universities

and sending them back to their local country. They will bring the cultural knowledge of the

host country and the experience and education from the home country of a company.

International assignments are therefore not only important for MNEs to control their foreign

subsidiaries, but also for the career development of managers. However, the chance that an

international assignment is not successful and therefore a loss of the investment for the

company, is quite high. Very often the inability of managers and of their families to adapt to

other cultures lead to failures in international assignments with expatriates returning home

earlier than planned or even being dismissed in the foreign locale (Briscoe et al., 2009). The

failure rate is the highest among American companies with a common failure rate between

30 to 40 percent, with an average cost per failure ranging from USD 500’000 to USD

1’000’000 or even more (Briscoe et al., 2009).


International assignment experience can be very important for companies as well as for

individuals. Since it is rare, valuable and hard to imitate, Carpenter et al. (2000) state, that it

can even create a competitive advantage for companies and increase the market value of

managers in the labour market. Regarding the failure rate and the high cost of international

assignments, the selection process should get high priority. Selecting the right people to

send abroad can make expatriation a success and save the company a lot of money. Most

attention in the selection process should be given to the candidate, but the family of the

international assignee should also be integrated. The inability of the spouse or partner to

adjust to the other culture has been found to be the most important reason for expatriate

failure (Briscoe et al., 2009). Global mindset must be a criterion in the selection process of

international assignees. The ability to adapt to other cultures, the desire to go abroad and get

international experience, the interest for foreign languages will make expatriate assignments

more successful than sending managers abroad that are local oriented and do not really

want to deal with people, who are different than themselves.

3. Research Results

The aim of this report is to suggest a framework for companies to be able to select managers

with a global mindset or to select people with the potential to develop a global mindset. A

question that arises at this point is, if it is really possible to have a global mindset or if it

always will be a development, an ongoing process. It is actually a process that can take

years (Gupta and Govindarajan, 2002), and can also continuously be improved. From a

certain stage on, however, I would speak of having a global mindset. If the person has the

global experience, understands global interconnected issues, thinks globally and is able to

work with or to lead other employees and customers from different cultures, it makes it

easier, if we can talk of a person having a global mindset and give a name to this

competence and way of thinking.

A global company does not need to have all employees with global mindsets. For certain

positions it can even be an obstacle, for example a sales representative, who is responsible

for a local market. These employees need the focus on the local market conditions and

customer needs. They should know what the company is doing outside this specific country,

but they do not have to understand all global strategic issues. A global perspective is not

needed and could also bring his focus away from the local country. Furthermore, a person

with a global mindset would soon be unsatisfied with a job only focusing on one country,

rather than different countries and cultures. This could make global mindset as a

disadvantage for some positions, even within globally operating companies.


There is also a difference, if a company selects someone from the internal market or from the

external labour market. Big companies are able to hire a lot of staff for entry positions and

choose afterwards from a pool of people the ones, who have the potential for a global career.

Global mindset would not be a main criterion in the external recruitment process, but only

from a certain career level on within the company. Smaller companies do not have these

resources and are therefore dependent on the external labour market. Either they recruit

managers with a global mindset or they hire consultants, which are able to implement global

strategies or to lead global projects. Therefore, global mindset is not important for all

selections of employees. The company has to decide for which positions a global mindset is

required and when it is not necessary or maybe even hindering. In this paper, I would like to

concentrate on three cases: The selection of managers to be sent on international

assignments, the selection or recruitment of external managers for global positions and the

selection of team leaders of multicultural teams. In these cases, selecting managers with a

global mindset or in certain cases people with the potential to develop a global mindset

would bring an advantage compared to selecting people with a local focus.

3.1. Global Mindset and the HRM Cycle

Before we come to the selection process, I would like to answer the first research question,

how a company gets managers with a global mindset. My thesis is, that the concept of global

mindset should be integrated in the whole HRM cycle. The results of my interviews and also

the results of the literature review have shown that most of the suggestions, how a global

mindset could be developed, can be aligned with the HRM cycle. As it is mentioned in the

earlier chapters, companies can also build structures and develop strategies and a vision to

support global mindset. However, at the end it is a process that happens individually. Each

individual starts themselves the development of a global mindset. Therefore, I would like to

allocate possible “global mindset activities” around the HRM cycle.


Figure 3.1. HRM Cycle with Activities to Support the Development of a Global Mindset

Recruitment

Global mindset should for certain positions be a core element in the recruitment process.

Among other skills and competencies, global mindset could be an integral part of a job

description, which will also be mentioned in the job advertisement or will be a demand for the

recruitment company. For a job that deals with different cultures and different countries,

global mindset should be regarded. A company can advertise in a way to attract the right

people. To attract people with a global mindset, they should advertise in a diverse way.

Furthermore, companies can already include global mindset when recruiting young talent,

although they might not yet have it or need it for their first job. This will fill the pool of potential

employees for global positions and international assignments.


However, not only the candidates have to be open minded, also the ones recruiting should

see the process from a global perspective and open the possibility to apply for the job to

candidates worldwide. If a company recruits employees not only from the host country,

where the position is open, but from different countries, the staff will get much more diverse,

which will positively influence the way towards a global corporate culture.

Selection

In the selection process, global mindset might be one of the core arguments to select

someone for a position. This is the crucial step within the whole HRM cycle. Gregersen et al.

(1998) state that global leaders are born and then made and that not everyone has the ability

to become one. Therefore, they state that companies should not give opportunity and

education to just everyone, but to select the people with the right talent. Based on my

interviews, I would not see it that tight. I believe that intercultural training and cross-cultural

experience does not harm anyone and could support all employees to be more open minded.

However, the chance that someone succeeds in a position or project, where global mindset

is important, is much higher, if global mindset is already part of the selection process.

Otherwise it can be a long way that is costly and consuming for all the involved parties. How

global mindset can be integrated in the selection process will therefore engage us again in

the next chapter.

Induction

At this stage, a new employee is confronted with the corporate culture for the first time. When

a company emphasises diversity, tries to integrate global operations and supports the co-

operational teamwork of people from different cultures, employees entering the organisation

will feel it immediately. If a company has a global corporate culture, the employees will most

likely also develop a positive attitude towards a global approach. They should take over the

corporate vision and become a part of it.

Training and development

Intercultural training, language courses and knowledge regarding other cultures and markets

can also make a worthy contribution to the development of a global mindset. To make the

training most effective, the programmes should be linked to practice with real case studies

and field based business projects. Regarding Gupta and Govindarajan (2002), in-company

programmes have the advantage that the learning occurs on multiple levels, compared to

courses at a university. Training could leave the classroom through interactions with

colleagues from other locations around the world. However, also non-business related


courses, which support the interest and curiosity of people, may influence positively the

mindset of the participants.

Performance appraisal

Measuring the performance of individuals and teams has become an important tool to ensure

the performance of the whole organisations and to be able to identify and close possible

gaps (Briscoe et al., 2009). For companies that are globally integrated, their performance

relies heavily on the ability of individuals to handle global tasks and issues. Therefore, the

success of multicultural teams or the success of someone leading a global project should get

weight in their performance appraisal. This is also an opportunity to identify employees with a

global mindset. Leaders of multicultural teams and projects crossing borders that are highly

successful will most likely have the ability to understand global issues and to work with

people from different cultures.

Compensation management

Should global mindset be rewarded? Carpenter et al. (2000) propose that international

assignment experience should receive substantial benefits. However, how can be measured,

if an international assignment leads to a better understanding of the culture, to an open

mindedness and curiosity? To be able to directly reward global mindset, it should be possible

to measure it. I suggest, that it should not be tried to comprise global mindset into numbers,

as it is highly subjective. However, based on my interviews, I came to the conclusion that

people with a global mindset will get the chance to achieve a higher position within a

company very soon, which also includes higher compensation. Furthermore, giving someone

with a global mindset a globally integrated task can be a greater benefit than a bonus.

Having a global mindset is a condition or a characteristic and should not get a reward.

However, results should be rewarded, which are expected to be higher for managers with a

global mindset. That gives an indirect reward to managers with a global mindset. For some

jobs, global mindset is a precondition and not an additional advantage.

3.2. Selecting Managers with a Global Mindset

Selection is about choice. This choice has consequences; often it has critical consequences.

Therefore, the choice has to be made well reflected and prepared. We will deal with three

choices that arise in different selection processes: Who to send on international assignment,

who to recruit externally for an international oriented management position and who to

choose as team leader for a multicultural team. These three selection processes have in

common, that the companies should choose managers with a global mindset or at least

someone that is thought of being able to develop one. Why is it important to have a global


mindset? Based on my interviews and on the literature review, I suggest that in these

positions, managers with a global mindset perform better, compared to managers without a

global mindset. Managers with a global mindset bring very important competencies that are

needed in these positions, as they are all related with other cultures and with the global

market. The crucial task is therefore to find out the mindset of a person. The GMI from

Thunderbird School of Business measures the intellectual, social and psychological capital of

individuals and can help companies to determine which professionals are most likely to

succeed in global positions (Berdan, 2009). This might be a solution to make a pool of

potential global leaders, as it was done by NEC (Bartlett and Ghoshal, 2002). However, for

the final selection, the choice should not be based on an index. The selection of individuals

for global jobs includes personality, motivation, experience and knowledge and has to be

made individually. Most of the global mindset characteristics can be found out in interviews

and in studying previous workplace descriptions.

International assignments:

As mentioned before, the failure rate of international assignments is high, which costs the

companies a lot of money. It could either be the case, that international assignees return

home earlier than planned or that they even leave the company at all. Until recently, most of

the employees sent abroad were chosen regarding their technical expertise in the home

country (Briscoe et al., 2009). This, however, disregards all the “soft factors” that are

important for the success of international assignments. Employees and also their families

have to be well prepared before they leave their country for the challenging task abroad.

European companies are known to better include cultural and personal issues into the

preparation or training of international assignees and therefore do not experience the high

failures rates as their American counterparts (Briscoe et al., 2009).

Training and preparation is one thing, the mindset of the candidate is the other. Conditions

described by Briscoe et al. (2009), which are said to lead to a higher probability of a

successful international assignment, are very similar to the characteristics of a person with a

global mindset. Therefore, I suggest that global mindset should be a criterion in the selection

process of choosing managers, who are sent abroad. However, as stated by Gregersen et al.

(1998), international assignment experience is also the most effective way to develop a

global mindset. Do you now send managers abroad because they have a global mindset or

that they develop one? The determination has to be made with the motive that lies behind

the international assignment. With the motive to control foreign operations or with the motive

to fill in positions that cannot be covered by the local labour market, companies should select

managers with a global mindset and at the same time take into consideration technical skills

and competencies that are needed for the job abroad. With the learning driven motive,


developing a global mindset is the reason to send someone abroad. To make this

international assignment effective, employees, who are most likely to develop a global

mindset, should be selected.

That remains the question how to select managers with a global mindset for international

assignments. The selection process to choose the right person to send abroad has to be

taken seriously and different parties should be involved. The responsible person is

confronted with the choice why to send one employee abroad and why not another. Beside

the candidate, their spouse and family, also the current and the future manager should take

part in the process and someone from the local HR, as well as a representative from global

HR. Briscoe et al. (2009) even suggest to include an interculturalist, who will be able to

assess the candidate’s ability to adjust to the foreign culture.

Before the interview, some available information could give indication of a potential global

mindset. The previous work experience is crucial. As the mindset of individuals is shaped by

mindsets of other individuals (Gupta and Govindarajan, 2002), global mindset is most likely

shaped with the interaction with people from other cultures. In the workplace, these

interactions can be made with staying abroad. Even travels could have the effect that

someone gets more open towards other countries and cultures, but the longer the stay

abroad is, the better. Cultural interactions can also be made in multicultural teams, as well as

in courses with culturally mixed classes. Additional indications could be drawn from the CV,

like the mastery of foreign languages or hobbies, which show that someone is curious about

the world and its people (e.g. interest in history, culture, travel or politics).

The next step is the interview. Personality and mindset may be categorised with

questionnaires by some companies. However, the best way to find out how someone thinks

is in a discussion. As we know now the factors that can indicate the existence of a global

mindset, it should be defined how to ask questions to find them out. Very important,

especially for international assignments, is the motivation of the candidate. Are they

motivated to go abroad? Are they motivated to meet and be confronted with people from

other cultures? Another factor is interest. A person with a global mindset must be interested

in global issues and international relations. The third factor is knowledge. The international

assignee has to know the behaviour of other cultures, the history of the country and of

course knowledge of the local market. They will not be able to know all the details, which can

only be learned in the country itself, but basic information should be known, which also

shows the interest of a person. Kedia and Mukherji (1999) add another knowledge

component, which is technology. To be really effective in a global environment, managers

need the ability to use technology and information systems. This is also the way to stay in

contact with the home country and with other countries to even further extend the global

perspective.


If someone is sent abroad to get the mindset that is required for international assignments or

global positions and to get the experience to become a global leader, the process to select

the candidates is more or less the same. However, focus will be laid on the potential and not

on the existence of a global mindset. The motivation and interest should get more weight, as

they could indicate the possible development of a person. The cost factor for the learning

driven motive for international assignment, might play a more important role, since the

assignment is part of the career development of young talents and could also be seen as

training. It is an investment with the return of developing effective global leaders. Since the

costs for such training is very high, the person should be selected very carefully.

Table 3.1. Important Factors for Positions Requiring a Global Mindset

Previous work experience Work experience abroad

Being part of an international project

Leading multicultural teams

Orientation of the previous department or company

Skills & Competencies Foreign languages

Communications skills

Leadership skills

High developed cognitive complexity

Feeling how to behave in other cultures

Adaptability

Ability to manage uncertainty

Motivation Motivated to work abroad

Motivated to meet people from other cultures

Seeing globalisation as a chance

Flexibility Mobility

Willingness for change

Open mindedness

Interest Curiosity about the world

Interest in other cultures

Knowledge Communication technology

Foreign markets

Other values, attitudes and behaviours

Global political and economic situation


External recruitment

If the internal pool of human resources with the ability to work on global projects is not as big

as required or inexistent, companies are dependent on the external labour market. This

might be especially the case for SMEs that are new in the global market and lack the

international experience. However, also MNEs are often dependent on external expertise

and have to recruit global managers externally. An additional component, compared to the

selection for international assignments, is the interaction with the external environment.

Global talent is a rare resource (Carpenter et al., 2000) and most likely the candidates are

aware of that. If a company does not hire somebody, the candidate will find another job and

will use their talent in another company; maybe even in a company that is a competitor. The

defined and existing recruitment process of companies does not have to be changed, but

completed by integrating global mindset into the process. The previous workplace is

essential, as well as the reason why someone wants to change. If the former company is

local oriented, but the reason for the candidate to change the workplace is to work for a

global company, they will be motivated to expose themselves to people, who are different

and will be interested in global issues.

Globally successful companies have to adapt to the global market. As the market is changing

all the time, global companies also undergo continuous changes. Otherwise, they would not

be able to be competitive on the global market. This could be organisational change,

strategic change or the acquisitions and selling of business units or companies. To feel

comfortable in such an environment, employees should like changes and be able to adapt to

it. Recruiting new employees, they should be asked, if they are motivated to be part of a

changing organisation and if they are flexible enough to still perform in this environment.

People with a global mindset will be willing for change, which also includes the change of the

person itself with being influenced by other people and the change of the external

environment. The complexity, heterogeneity and indeterminacy of the constantly changing

MNEs can only be comprehended by managers with highly developed cognitive complexity

(Beechler et al., 1999). To find out how candidates deal with complex situations, they could

be confronted with situations in the selection process, where they have to show, how they

would react. Furthermore, case studies in groups or alone could show the ability of people to

react on new and intricate interrelations.

Selecting external people has the disadvantage that most of the time, nobody within the

company will know the candidate and could make a statement about their attitude towards

people, who are different. The assessment and decision has to be made with less

information and knowledge about the person. However, the longer global mindset is an

essential part within the selection process, the more specialists from HR and also line

managers are used to feel and recognise the mindset of the candidates. Anyway, the risk will


remain in the definition of global mindset. Although, companies were implementing global

mindset as a standard criterion in the selection process, all the involved parties would maybe

understand the concept differently, as there is no common definition of global mindset.

Therefore, at the end, the person with highest quantity of power will define what global

mindset is. In the case of the selection process, it is the people selecting the candidate. If

global mindset is requested for a position, they have to be able to define the existence of a

global mindset from the candidate. They need the sensitivity to find out, which candidate will

most likely be successful in the global oriented position. This framework should help to find

characteristics of global mindset and support them to select the right people.

Multicultural teams

Being part of a multicultural team may be positive for individuals to develop a global mindset.

However, multicultural teams are not at first training fields for individuals, but a crucial part for

MNEs to be competitive in the global market. Multicultural teams have the ability to achieve

very positive results for complex tasks, where different opinions, views and also creativity are

needed. The broad cultural knowledge within a multicultural team helps making important

and difficult decisions, especially when different markets and countries are involved. The

success of multicultural teams is controversial. In my interviews, I found out that some

companies stop to pursue cross-border projects, as the time and effort is too high. They still

support multicultural teams, but only within the headquarters or in one specific country. The

time difference, geographical distance and the major cultural differences can therefore be

avoided. Foreign employees working in the headquarters may still have some cultural

differences, but they are more or less adjusted to the local culture. A study from van den

Bergh and Lehmann (2004) showed that multicultural teams are either much more

successful than single cultural teams or much less successful. The factor, which makes the

critical difference, is how the team is leaded.

Multicultural teams need a leader, who can deal with people from various cultures, who finds

the balance between the needs of the team members and who is able to get the best results

out of this diverse team. Diversity can be an opportunity and an advantage, but the risk of

dissonance within the team is also high. Some skills how to lead multicultural teams may be

learned in leadership courses. However, the feeling how to deal with different people is much

more important. The leader of a multicultural team needs to have a global mindset. This is

not a guarantee for a positive project result, but the likelihood that the team performs well, is

high. In the selection process of choosing a team leader, global mindset should be

integrated.

One of the most important factors will be previous experience with leading multicultural

teams or with being member of a multicultural team. The opinions of other team members


should be taken into account, as the wellbeing of the members is important for the

performance of the team. Compared to the other two global minded selection processes,

experience, skills and competencies are more important and should be emphasized by

choosing team leaders for multicultural teams. Motivation and interest are of course also

relevant. However, the team has only one chance to perform in a project. The project may

have a short duration and it is not a long time process of development for the team members.

The knowledge about other markets is only crucial, if the project involves these markets. The

knowledge of economic and political interrelations may also be less relevant. The knowledge

about cultures from team members is very important, though. This knowledge will help the

team leader to set timetables, allocate tasks and understand difficulties.

Most of the selection processes will not include interviews, but judgements of line managers.

The people responsible to choose multicultural team leaders have to be aware that leaders

of multicultural teams need other skills than leaders of single cultural teams and should know

the important factors. If the line manager itself is often confronted with cross-cultural issues,

they will know on what the success depends. However, if the line managers have no

experience with working intercultural, they need guidelines provided by the HR department.

The effort may be higher when implementing multicultural teams, especially if they even

cross borders. However, companies have to take into consideration the advantages. In a

globally connected economy, strategically important decisions should be made in teams that

do not exist of members from only one culture. Like this, the team can represent the diversity

of the global market. Furthermore, the team members will start to develop an understanding

for individuals different from themselves and may even start to think globally. Multicultural

teams are an important part for a company to approach a global corporate culture.

4. Implementation

Almost all interviewees I interviewed, have heard or read about the concept of global mindset

before. For some it is a topic in the daily work, others have read about it in journals or

newspapers. Current textbooks of International Human Resource Management dedicate at

least a small chapter to global mindset. However, to make it a part of a company’s culture, it

has to be integrated in HR processes and policies. The world economy gets more and more

interconnected and differences of cultures cannot be ignored anymore. For MNEs, that have

their business allocated on all continents and also make a growing part of their sales in

emerging markets in Asia and South America, global mindset or the global corporate culture

must even be part of the vision. Not every employee within a company needs a global

mindset, but everybody should be aware of the opportunity of diversity. Therefore, global


mindset is not only an HR issue for the steps within the HRM cycle. It is a concept to be part

of the strategy and vision.

Within the globally operating companies more and more jobs require at least an

understanding of the global market. Some jobs even require a global mindset. For these

jobs, global mindset has to be part of the selection process.

Barry Callebaut wants people with a global mindset. The statement on their website (Barry

Callebaut, 2009) was supported in one of my interviews. A lot of positions are connected with

Africa as the most important supplier of raw materials, but also with different people around

Europe or even America and Asia. Barry Callebaut grows very fast and is still an organisation

within an ongoing process of change. Other businesses are acquired or business units are

sold. That requires flexibility and adaptability of its employees. To get these employees, I

suggest implementing global mindset in the whole HRM cycle. That starts with the

communication of the importance of global mindset from the HR department. Line managers

should be aware that global mindset is an issue for the company and should be informed

about its advantages. Furthermore, global mindset should be part of job descriptions, job

advertisements and interviews. Once part of the company, employees should get the chance

to develop their global mindset. The company could offer language courses, intercultural

training or non-business related courses to broaden the interest and perspective of its

employees. Most importantly, employees should be sent on international assignments.

Although, the costs for the companies might be very high, if managed well, international

assignments will also bring a high return. The more employees make experience abroad, get

to know other cultures and other employees from different countries, the more a global

corporate culture will arise.

Managers with a global mindset will most likely get a high position within a company very

soon. Carpenter et al. (2000) state that international assignment experience is a ticket to the

top and that the market value of managers with IA experience is higher than of managers

without it. Hopefully, that will motivate young talents to go abroad and expose themselves to

other cultures.


5. Conclusion

To succeed in today’s interconnected, multipolar and diverse global market, companies need

a global response to global issues. They need a global strategy and vision to meet the needs

of customers, suppliers and employees worldwide. Implementing a global strategy does not

mean doing everything in the same way everywhere in the world. It includes the knowledge

and sensitiveness that there are differences. Bartlett and Ghoshal (2002) wrote about the

transnational corporation (TNC) that draws upon global expertise, technology and resources

and in addition works hard to localise in order to be seen as a local and not only as a global

company. This approach allows companies to save costs and profit from technology transfer

with global consistency and at the same time react to differences of cultures and behaviours

through local responsiveness. Global strategy and global thinking is by no means the

American way, as some people may see it. It is neither to favour global consistency over

local responsiveness. It is rather the balance between global and local. The global market

does not need a “one size fits it all” solution, but instead companies that realize the

differences and which are able to respond to them. Bolgar (2007) suggests to standardise

inside operations and on the other hand to localise outside operations. In general this might

work for companies most of the time. However, in reality a lot of cases also need an

individual judgment.

To be competitive in the global market, companies need a corporate global culture, a culture

that allows and even supports diversity and at the same time profits from common corporate

values. The global market is growing, especially in emerging markets like China, India and

Brazil. These countries are not only attractive consumer markets, but also origin of very

competitive new global players. More and more MNEs from developing countries enter the

market. All companies from developed and from developing countries are confronted with a

new, dynamic and ever changing environment. They have to be able to find solutions to

complex issues.

To find this global response or strategy, companies need managers with a global mindset,

who are capable of finding the balance between global consistency and local

responsiveness. They need global leaders, who can manage employees from different

cultures and who can adapt to these cultures, while working in other countries during

international assignments. These global leaders have to make decisions that influence

different people from various places and therefore they must understand the diversity of

these people worldwide. The global market brings with it a lot of opportunities, but also many

risks. Managers with a global mindset should be able to exploit these opportunities and

simultaneously be aware of the risks and find global solutions to confront them.

Environmental and social issues get a more and more global dimension and are not local


problems anymore. The companies need leaders, who understand the interrelation and

complexity of our global world. Today, the success of individuals and of organisations

depends on the awareness and understanding of cultural differences, economic and political

climates, different laws and rules, as well as the expectations of customers and competitors -

in essence, a global mindset (Swain, 2007).

Not everybody within an organisation needs a global mindset, but for some positions it is

absolutely crucial. Along other important leadership skills and competencies, global mindset

should be a requirement for globally oriented jobs. For jobs, which are only locally oriented,

global mindset is not primarily needed. It might even form an obstacle and could also lead to

dissatisfaction of the employee. People with a global mindset will look for global challenges

and will most likely find a superior career position soon. Furthermore, managers with a global

mindset are a rare resource and with companies realizing the value of global mindset, there

will also be a high demand for these professionals. Therefore, companies have to start to find

these talents. They could employ managers with a global mindset or young talents with the

potential to develop one. In addition, companies should build an environment that supports

global thinking and the communication between employees worldwide. The people within

these organisations should feel that they are part of a global culture. However, at the end it

depends on the individual itself, if they are open for other people and interested in other

cultures.

Global mindset is about people; it is about character and personality. Therefore, Human

Resource Management will play the most important part within the search for these globally

thinking managers. The way to a global corporate culture involves the training of individuals,

building multicultural teams, sending people on international assignments and recruiting

external managers. All these processes are about choices. HRM is responsible to choose the

right people; they have to select managers with a global mindset. Selecting these managers

is not an easy task. Global mindset is difficult to measure and also to define. To be able to

single out managers with a global mindset effectively, companies need indications of global

mindset factors. This paper will help to find these indications to choose the person with a

global mindset and favour them over someone else. Furthermore, the framework introduced

in this paper should serve to implement global mindset within the HRM cycle, especially

within the selection process.

Once the managers with a global mindset are selected, the personal development should not

stop. Global mindset is an ongoing process and a continuous examination of other cultures,

people and behaviours. This is needed to better perform in positions that are confronted with

global issues and which need a global response. Companies have to support the

development of global mindset through training, interaction with other employees and with

the possibility to move within an organisation. These different actions can improve employee


commitment, financial performance and receptivity to organisational change (Begley and

Boyd, 2003) and will also open the minds of other employees and hopefully motivate even

more people to aspire after a global way of thinking. As global mindset is an opportunity for

richer experience and better performance.

6. Discussion

This report addresses globally operating companies independent of their size. Both, small

MNEs and big MNEs need managers with a global mindset and they should gain an

advantage by reaching towards a global corporate culture. However, whether a global

corporate culture and the individual global mindset of the company’s managers is really a

competitive advantage, depends on the objective a company wants to achieve. Small

companies that serve only the local market do not have to think globally. Of course, they will

be affected by globalisation and at least the top management should be aware of that, but

they do not need a global strategy. It could even be a disadvantage as many local customers

are very happy to be served by a local company. Although, the global risks of a changing

market and new competitors should be taken into account, managers should particularly

focus on the needs and opportunities of the local market. On the other hand, internationally

operating companies cannot come around to concern themselves with the differences in the

world.

Global mindset has to be seen in a context. In the selection process, global mindset could be

an integrated part, but other factors are also important like business experience, leadership

competence, technical skills and knowledge of the products and markets. Only focusing on

global mindset might be the same mistake as ignoring global mindset. However, as the

development of global mindset includes a lot of the above mentioned factors, managers with

a global mindset will most likely bring the other skills and competencies with them.

As already mentioned, not all positions within a company require a global mindset. A lot of

job profiles need other mindsets. However, a globally oriented workplace demands an

understanding of globally connected issues. These positions are quite numerous in big

MNEs. The selection processes to find people to fill these positions should include the

consideration of global mindset. In this paper I concentrated on three selection processes:

The selection of international assignees, the selection of leaders of multicultural teams and

the selection of external candidates for global positions. Global mindset might be equally or

even more important for other selections as for example the selection of executives,

members of the board of directors or selecting managers to be promoted. These selection

processes are interesting to be dealt with by further research.


The view of what exactly is needed to have a global mindset could be as different as cultures

are differing. Various people may emphasize different aspects and see them as the most

important ones for being successful in the global market. The importance of knowledge of

foreign languages for example is controversial. The English native speaking people I

interviewed did not rate foreign languages as important as German native speaking people. It

is true that one might come along in the business world with only being able to speak

English. However, if someone is not interested in foreign languages at all, they are most

likely not interested in the culture. It is very difficult to understand a culture without dealing

with the local language. The knowledge of a foreign language helps to understand how

people think and behave. Therefore, on international assignments it should be a minimum

requirement that the assignee at least learns the basics of the local language. The better

they speak the language, the better they understand their colleagues and customers. Briscoe

et al. (2009) even state that international assignees have to speak their customers’

languages for successful business relationships.

To define the global company is also difficult. When do you speak of a global company? The

UNCTAD (2002) defines the Transnational Corporation (TNC) as an enterprise that locates

production or controls assets of other entities in economies outside their home economy.

Other authors speak of Multinational Corporation (MNC) or Multinational Enterprise (MNE).

However, is a company with subsidiaries in two other countries already a global company?

Going abroad has also a different meaning for an American company than for a Swiss

company, because for the Swiss company to open an operation in a foreign country like

Germany or France is already done by only crossing the close-by border. Asking

interviewees, which company is really a global company, I received different results. Some

emphasized on the global locations worldwide, regardless of how the company is organised.

Others focused more on the structure, the allocation of responsibilities or the consideration of

diversity as a sign for a global company. Very significant is how a company presents itself.

There are companies, which want to be seen as global organisations like Lenovo, which calls

itself a global company without really having a headquarters and with an intrinsic global

culture. On the other hand, there are companies, which want to be perceived as local in

every respective country. A Brazilian exchange student thought Nestlé to be a Brazilian

company before he came to Switzerland. In Hong Kong people also believe that Nestlé is a

Chinese company. Which of these examples is now the more global company?

Global mindset and global corporate culture is a long-term development and also a long-term

investment for companies. Thinking in short-term goals would be counterproductive.

Developing a corporate culture and shaping an individual’s mindset cannot be reached within

a year. The sooner companies realize the importance for it, the better they are prepared for

the challenges of the global market. Furthermore, companies have to leave behavioural and


thought pattern behind them, because the world has started to be very dynamic. Facebook

and Internet Blogs may seem a time consuming activity, distracting people from work.

However, these instruments could be used as communication platforms to get in touch with

people from other cultures within or outside the organisation. Consumer trends may have

their roots in Internet forums. Companies should be open to new technology and new life

styles as long as it fits their corporate values.

With this paper I present a model or framework and I suggest specific factors to be a sign of

global mindset. Is it truly possible to reduce the complexity of global mindset to a model?

Would this not ignore the diversity and differences, which I mentioned all the time? Models

are always a simplification of a complex situation, but companies need a simplification to be

better able to implement it. Otherwise it could not be part of a defined process. Therefore, I

tried to bring the concept of global mindset into a framework, but I would like to emphasize

that by using this framework, people will still have to be aware of the complexity of the

subject. Selecting managers with a global mindset needs sensitiveness and feeling for other

people.


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Annexes

Annex 1 Structured Interview Part - Global Mindset .............................................................39


Annex 1 Structured Interview Part - Global Mindset

1. How often have you come across the term / concept of global mindset? � very often � sometimes � rarely � never 2. Where have you read or heard about global mindset? ______________________________________________ 3. a. How strong is the relation for the following areas with global mindset? (1 weak / 5 very strong) b. How important are the following areas to be competitive in a global market? (1 not important / very important) a b

cross cultural teams 1 2 3 4 5 1 2 3 4 5

international marketing 1 2 3 4 5 1 2 3 4 5

global strategies 1 2 3 4 5 1 2 3 4 5

HR policies 1 2 3 4 5 1 2 3 4 5

cross boarder mergers & acquisitions 1 2 3 4 5 1 2 3 4 5

global environmental and social issues 1 2 3 4 5 1 2 3 4 5

international finance 1 2 3 4 5 1 2 3 4 5

foreign languages 1 2 3 4 5 1 2 3 4 5

cross cultural leadership 1 2 3 4 5 1 2 3 4 5

global social network 1 2 3 4 5 1 2 3 4 5

macro environment 1 2 3 4 5 1 2 3 4 5

foreign markets and consumer behaviour 1 2 3 4 5 1 2 3 4 5

global talent management 1 2 3 4 5 1 2 3 4 5

4. How important is a global mindset for your position? (1 not important / 5 very important) 1 2 3 4 5 5. List the three most global enterprises? ____________________________________________________________________ 6. Short definition of global mindset or keywords.


Personal Information Surname:___________________________ Name:______________________________ Organisation:_________________________ Position:_____________________________ E-mail:______________________________

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Selecting Managers With a Global Mindset