The examination of the presence of the five global leadership skills in large multinational companies

By | April 11, 2014

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1.        Introduction

 

1.1    Background of research

 

With the increasing expansion of the multinational companies in a global scale from highly developed countries which are usually their market in which they sell their products to developing countries like China from which these large companies management to concentrate low cost resources to produce the products, now leaders of these multinational companies are true global leaders. Dr. Adalat Khan (2007) concluded 5 core skills for the global leadership which describe what knowledge global leaders should have in order to be effective global leaders.

 

1.2    Research problem

 

Even though these five core leadership skills do seems to be necessary for a leader in order to be good leaders. But the problem is that are they really necessary in the practical situations. Does it necessarily means that a leader only has 4 kills out of these five skills will demonstrate some under quality as a global leader, in other words the all presence of the five of them necessary? Or does this theory only applicable to the western firms like US companies? What’s more how is the configuration of the five skills, is one of them more important than the others?

 

1.3    Research objectives

 

To figure out the answers to questions above, the research will focus on the objective

To investigate the ranking of the five global leadership skills

To investigate the configuration of the skills

To investigate the presence of the five skills in each country selected and in all the companies in a whole

1.4    Significant of the research

 

The significant of the research is two folds: firstly, the research will come to some conclusions that will help find out the most needed leadership skills as an effective global leader which set a standard requirement of a good global leader; secondly, the research will together generate average scores that these successful global leaders finally get as a whole. And we will then know whether some of the skills are more critical to the leaders or a balance distribution of the effort in these skills generate better performance.

 

2.        Literature review

 

2.1    Leadership theories

 

Thomas Carlyle’s comment that “the history of the world is but the biography of great men” best describes the “great men theory” that was greatly disputed in the 19th century and early 20th century especially during the term of World War I and World War II. Such leadership theories believe that leadership qualities were inherited particularly among the upper class of the society (Kikpatrick & Locke 1991). In another word, leaders are born and cannot be trained in any way. Then later in the middle of 20th century, some qualitative studies had pushed forward the development of the “great men theory” to the trait theory. Stogdill (1974) through a series of studies found out that there are some common traits and skills that are shared by leaders. These traits include cooperative, decisive, dependable, and tolerant of stress and so on. On the opposite of the “great man” and trait theories are the behavior theories of leadership which uphold that leaders could be trained as they share similar behaviors. Kurt Lewin, Ronald Lipitt and Ralph White (1939) through a study on the influence of leadership styles and performance found out that leaders carry out their work through three styles: authoritarian, democratic and laissez-faire. Another behavioral theory is the managerial grid (Blake & Mouton 1964) which describes the leaders’ behaviors in two dimensions: concern for work and concern for people. There is another type of leadership theory that goes against the trait theory which is the situational theory. The situational theory marked by Fielder’s contingency model insists there are not absolute good leaders; different situations require different kind of leaders. And what’s more there are transactional and transformational theories that try to explain the leadership through the interaction between the leaders and the employees. The transactional theory believes that employees are motivated by rewards and punishments while the transformational theory states that a leader should focus on the big picture of the company and try to yield idea to motivate the employees to be effective and efficient.

 

2.2    Global leadership skills

 

Research has showed that a range of traits and characteristics are critical to the global leaders (Yeung & Ready 1995), and they are also required to possess high skills in three areas: learning and adapting, managing relationships and managing ambiguity. Dr. Adalat Khan (2007) concluded 5 core skills for the global leadership which are not only applicable to the business sector in a global scale but also can be helpful to the governmental sector. They are: cultural sensitivity, diversity management, adaptability and innovation, profitability and productivity management and continuity. Redfield (. 1948) defined culture as “share understanding made manifest in act and artifact”, but as we in many situations, different countries have different cultures in which people would have distinct values, beliefs and customs. As in a business environment for a global leader who has to dealt with cross culture business, culture sensitivity is necessary. Culture sensitivity requires a leader to understand foreign culture that is different from what he or she has been used to, and try to understand and do business in another perspective. According to a survey by Paul W. Beamish (1993) on the characteristics of the joint venture firms in China, Beamish attributed many difficulties that a foreign leader faced in China to the diversified Chinese culture that is different to the western culture. The second skill which is diversity management hits one of the most popular topics in management filed today. Diversity management in the corporate level here according to Dr. Adalat Khan refers to the diversity management in workforce. It accepts that people are different in term of gender, social and economic status, color, ethnics, and religions and so on. And such differences should be contained and respected in a business environment. If not well managed, frictions, discriminations and disputes will be formed and these are usually categorized as ethical issues. So in this point, the skill of diversity management for a global leader will also help make an ethical leader. The third skill, adaptability and innovations, talk about the same thing which is in the area of management of change. In a fast changing world as we have today especially in the business sector, a leader need to do two kind of decisions. On is to adapt to the changes and one is to actively create changes which is through innovation. The forth skills for a global leader is the profitability and productivity management. To put it simple, this skill means that a leader should manage to keep the company earning profit. And last skill which is to keep the company in continuity when the leader steps down in term of consistency of corporate culture and management style and so on.

 

Even though such five skills provide a very good perspective on how a good global leader should have known and where to put his or her effort on, there are some issues that need to be fixed before this theory could be widely applicable to the global leaders as a standard. Firstly, about the adaptability and cultural sensitivity, this theory has not pointed out that the extent to which a multinational company should adapt to the change and accept the local culture which is different from the corporate culture. How can a global leader keep the corporate culture in all its branches around the world and meanwhile in accord with the local culture custom? What if there is a dispute, which side to choose? The second issue coming together with the first problem, as a global leader need to keep the company in profitability status, how to deal with the ethical problems that every leader need to address? For example, if a US firm could earn a lot of profit through the employment of under aged labor in an African country which happens to allow this, but the company would fall down if it does not do so, according to the forth skill which is to keep profitability, the leader should do so. But is there should be an ethical requirement for the global leaders? Lastly, even though there are five core skills for a global leader, but the configuration of them is not clear yet, should the leaders put equal effort to achieve these five skills or one is more important than others.

 

3.        Research methodology

 

3.1    Research design

 

Casual research and descriptive will be adopted in this study to find out the presence of the five global leadership skills in the large multinational companies. Due to the lack of information available to from the many multinational companies, the exploratory research could not be used here.

 

3.2    Data collection method

 

This research will cover global business environments in term of the study carried in various industries which makes the samples under different industrial environments in order to generate practical and useful conclusions on the effect of the global leadership skills in a general business environment. And the primary data collection approach will be used to collect data from the selected multinational companies. In detail, this study will adopt self-report close ended questionnaires which will be hand out to the employees and managers in the selected multinational companies to collect the data about their opinion of their leaders in the topic the five global leadership skills. And the researchers will be responsible to collect the questionnaires which will increase the rate of collection of the questionnaires. Close end questions are more specific to the core topic and are more easily to carry out and generate results. What’s more in such a large scale survey, the use of close end question will facilitate the survey as it take less time for an interviewee to fill a questionnaire with close ended questions (Unknown 2009).

 

3.3    Sampling

 

Sampling will cover 50 multinational companies which are from different countries and cultures and they have branches in Malaysia. Indonesia, China, Japan, Germany, United States, UK, Indian, Australia, Korean, Russia are selected as target countries of the study. And totally 50 multinational companies with great influence in a global scale from these 10 countries (strictly 5 companies per country) are chosen to ensure that the sampling are diversified and representing the modern trend of development of the global leaderships. Also broad industries are covered by these 50 sampling companies to reduce the influence of the particular leadership in a similar industrial environment. After selecting the sample companies, the next step is to randomly invite 20 employees from each company to join the survey.

 

3.4    Measurement

 

As shown in the sample questionnaires in appendix 2, there are five answers of each question, and the five scales of answer represent the perception of the employees of the presence of the global leader skills of their CEO. By attaching scores to the answers, calculation will be easily done to measure the five leader skills. Then by calculations the score of each question and the average score of each skill that the leader got or the general score that the 50 companies have could be found out.

 

 

3.5    Data analysis technique

 

The each question of the questionnaires will generate average score after calculation, and as there are four questions for each part, the average of the score of these four questions will help to measure the total score of a CEO in a particular global leadership skill. Then the leader will have five scores to demonstrate his achievement in the five global leadership skills. For example, a CEO may have the total configuration as a global leadership in this way:

 

 

Chart 1.0 Sample scores of a CEO

 

In this way, comparisons between different CEOs will become possible in term of scores. Let’s say more than 2.5 score will means that there is presence of the particular leadership skills in this CEO, then this CEO A in the chart above will be shown in this way:

Global leadership skills:Presence:

Cultural sensitivity

Diversity management

Profitability and productivity management

×

Adaptability and innovation

Continuity

Figure 1.0 The presence of five global leadership skills of CEO A

 

The total score and situation of the presence of the five leadership skills could also be demonstrated in the way shown above to see the configuration and presence of leadership skills in general.

 

4.        Limitations to this research

 

The limitations of this research are two folds. The first limitation is that the opinions expressed by the employees may be to some extent subjective and cannot truly reflect the possession of the leadership skills of their CEOs. The second limitation is that the research only cover 5 leadership skills, there may be critical leadership skills that are not cover but are necessary in order to be a good global leader.

 

 

Reference list:

Beamish, P. B, 1993, The Characteristics of Joint Ventures in the People’s Republic of China, Journal of International Marketing, Vol. 1, No. 2 (1993), pp. 29-48

 

Blake, R. & Mouton, J. 1964. The Managerial Grid: The Key to Leadership Excellence, Gulf Publishing, Houston

 

Khan, A 2007, Global Leadership Skills, accessed on 23rd May, 2010 [online] available: http://www.greatmanagement.org/articles/40/1/Global-Leadership-Skills/Page1.html

 

Kikpatrick, S.A. & Locke, E.A. 1991, Leadership: do traits matter? Academy of management executive, 1991 Vol. 5 No.2

 

Lewin, K., Lippitt, R., White, R. 1939. Patterns of aggressive behavior in experimentally created social climates. Journal of Social Psychology: 271–301

 

Redfield, R. 1948, Folk Cultures of the Yucatán, University of Chicago Press, Chicago

 

Stogdill, R.M. (1974). Handbook of leadership: A survey of the literature, New York: Free Press

 

Unknown, 2009, Advantages of Closed-Ended Questions, accessed on 23rd May, 2010 [online] available: http://writing.colostate.edu/guides/research/survey/com4a2a1.cfm

 

Yeung A. & Ready, D. 1995, Developing leadership capabilities of global corporations: A comparative study in eight nations. Human Resource Management, 34(4), 529-547

Appendix 1 Hypothesis

 

The Hypothesis that will be developed:

 

H1: Different culture required a global leader to have culture sensitivity

H2: Global leadership skills are common in the global leaders in the multinational companies

H3: Global leadership help create profit

H4: Diversity management help build a harmony working environment

H5: Global leaders possess strong interpersonal capability

H6: Employees feel that leadership continues after a leader steps down

H7: The five skills are all core to the global leadership

 

Appendix 2 Sample Questionnaire for the Research Proposal

 

Part A: Cultural sensitivity

 

Our CEO knows our local cultural customs well.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Our CEO knows many of our dialects.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Our CEO is good at making deal with the local partners.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Our company tries to change our culture to the corporate culture.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

 

Part B: Diversity management

 

Our company likes hire and promote men rather than women.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Our company respect that we have different religious believes.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Everyone is equal in the company.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

We have received diversity trainings.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

 

Part C: Adaptability and innovation

 

I think many of company rules should change.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

The company is too old and is not energetic enough.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

We are encouraged to express fresh idea about anything of the company.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

The management put much effort in the innovation.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

 

Part D: Profitability and productivity management

 

Our company’s profitability is going down all the time.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

I don’t think the company is productive enough.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Our CEO help improve the profitability of the company.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

In the future, I believe the profitability will improve under the CEO’s plan.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

 

Part E: Continuity

 

The current CEO changed too much of the company from how it was before.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Our CEO is so special; I don’t think the coming one could continue his job.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

The current CEO’s work could be easily followed up by the next CEO.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

 

Even without enforcement, some of this CEO’s change done to the company will last for a long time.

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree