4.7 Globalization and Principles of Leadership
Learning Objectives
- Why might global trends influence leadership and management principles?
- What is the GLOBE project, and why is it relevant to leadership?
- What is a cultural dimension, and how do cultural dimensions affect business dealings and leadership decisions?
Globalization and Cross-Cultural Lessons
Despite the growing importance of global business, companies find it difficult to recruit mangers with the skills necessary to operate in a global environment (Gregersen et al., 1998). Some experts have argued that most U.S. companies are not positioned to implement global strategies due to a lack of global leadership capabilities (Hollenbeck & McCall, 2003)
It’s easy to understand the problem: communicating and working with people from different countries can be a challenge—not just because of language issues but also because of different cultural norms. For example, in Canada, we tend to be more direct in our communication. If you ask a Canadian manager a question, you’ll tend to get a direct answer. In other cultures, particularly in southern Europe and Japan, the answer to a question begins with background and context—not the bottom line—so that the listener will understand how the person arrived at the conclusion. Similarly, in some cultures, it is considered rude to deliver bad news or say “no” to a request—instead, the speaker would give a noncommittal answer like “we’ll see” or “we’ll try.”
“Diversity” by Oregon Department of Transportation, licensed under CC BY 2.0.
Country-by-country differences are so prevalent that a worldwide team of scholars proposed to create and validate a theory of the relationship between culture and societal, organizational, and leadership effectiveness. Called the GLOBE Project, it included 170 researchers working together for 10 years to collect and analyze data on cultural values and practices and leadership attributes from more than 17,000 managers in 62 societal cultures. In its 2006 report, GLOBE identified the following nine dimensions of culture (Javidan et al., 2006). You will read more about the GLOBE Project in the next chapter.
It is important to remember that cultural differences can exist in different regions of a single country, and between different groups within a single region. We must be cautious about stereotypes as nobody fits neatly into a box that someone else has labeled. Respect and understanding are key to leadership – and you cannot understand a group without learning more about the people who make up that group. Take for example the many different Indigenous groups in Canada. Consult Working with Indigenous Leadership and Indigenous Environments for more information.
Global Ventures Gone Awry
When Corning proposed a joint venture with a Mexican glass manufacturer, Vitro, the match seemed made in heaven. But just two years later, the venture was terminated. What happened? Cultural clashes eroded what could have been a lucrative partnership. To start, American managers were continually frustrated with what they perceived to be slow decision-making by Mexican managers. Mexico ranks higher on the power distance dimension than the United States—company structures are hierarchical, and decisions are made only by top managers. Loyalty to these managers is a high priority in Mexico, and trying to work around them is a big taboo. Mexicans also have a less urgent approach to time. They see time as more abundant than their U.S. counterparts. As a result, Mexicans thought that Americans wanted to move too fast on decisions, and they perceived American directness in communication as aggressive (Brake, 1996, p. 203). Additional vignettes on managing across borders are shared next.
Inclusive Leadership and Potential Barriers
Despite advances in diversity that have occurred in the past, women continue to be excluded from top leadership positions in the corporate environment. Today’s diverse and constantly changing environment requires more than masculinity as the norm and a command and control leadership approach. It needs a leadership style that will advocate for inclusivity of traditionally excluded voices in leadership. It needs a leadership style that will enhance the four critical processes that are mobilized by leadership (setting mission, actualizing goals, sustaining commitment, responding to change) (Raelin, 2003).
Additionally, the representation of leaders is inherently gendered in the current leadership landscape. Leaders are judged based on stereotypes and expectations grounded in “masculinist perspectives about leadership,” (Shea & Renn, 2017, p. 84). This reality shapes leadership opportunities for women and the LGBTQ in general, and women of color in particular. An inclusive leadership style has never been more important to address in will expand the discussion beyond just the gendered idea of inclusion to include other minorities, particularly the newest member of the U.S society, refugee/immigrant leaders.
What is Inclusive Leadership?
Inclusive leadership is about including everyone. This leadership style puts a particular focus on “having the courage to take conscious steps to break down barriers for people at risk of being excluded from society ”(Bortini et al., 2019, p. 19). The inclusive leadership approach appreciates diversity and the contributions of everyone. Furthermore, this model encourages full engagement in all aspects of organizational functioning. The objective the authors added, is “to create, change and innovate whilst balancing everybody’s needs” (p. 9). Essentially, inclusive leadership is centered around relationships and valuing differences.
Feelings of exclusion in leadership are common for women, individuals who identify as LGTBQ+, people of color, Indigenous peoples, immigrants, and refugees – even more so for anyone fitting into more than one of these categories. Many face additional barriers to inclusion, including cultural (language, social life, religious), socio-economic and structural barriers. Those who struggle to fit in for a variety of reasons can feel cut off from involvement in organizations as a result. According to Bortini et al. (2019), “one of the primary needs of individuals at risk of exclusion is to be accepted ‘as they are’ and to be regarded as an equal, able to contribute with all of their abilities” (p. 14).
Inclusive leadership is necessary for all of us, in all sectors of society, and particularly important to those at the head of organizations. Inclusive leadership challenges and empowers people because it is based on everyone’s inherent worth, on human rights, on awareness of interconnectedness, on the recognition that power influences inclusion efforts, and on shared responsibilities, (Bortini et al., 2019). For leaders who want to inspire collaboration, respect and teamwork within their organization, with clients, and in their communities, inclusive leadership is vital.
What Do Inclusive Leaders Do?
Dillon and Bourke (2016) identified six key characteristics that distinguish inclusive leaders. The first characteristic is commitment.
Champions of inclusive leadership are motivated by their values, including a “deep-seated sense of fairness that, for some, is rooted in personal experience” (p. 3). Inclusive leaders hold themselves accountable to create a welcoming culture in their organizations. They devote time, energy, and resources to nurture an inclusive workforce.
Courage is the second characteristic found in inclusive leaders. They demonstrate courage in challenging organizations to think beyond homogeneous attitudes and practices. Another way they show courage is by not being afraid to exhibit humility; courage and humility allow leaders to accept their limitations and seek guidance from others in overcoming them. They admit to not having all the answers, which for some leaders is a very difficult thing to do, (Dillon & Bourke, 2019).
The third characteristic that distinguishes inclusive leaders is cognizance of bias. Inclusive leaders understand that both personal and organizational biases can negatively impact diversity and inclusion. As a result, they implement policies, processes, and structures to prevent infiltration of such biases in the workplace or any organization. The fourth characteristic found in inclusive leaders is curiosity. This includes being open-minded and having a passion for learning and a desire for exposure to diverse perspectives. “Inclusive leaders’ ability to engage in respectful questioning, actively listen to others and synthesize a range of ideas makes the people around them feel valued, respected, and represented” (Dillon & Bourke, 2016, p. 4).
Cultural intelligence is the fifth characteristic identified in inclusive leaders. These leaders understand that knowledge of other cultures is fundamental in fostering inclusiveness. Cultural intelligence allows a leader to better respond to different cultural norms and behaviors and enables leaders to adjust their style accordingly. Additionally, they understand ways in which culture can shape world views and stereotypes. This is very important in setting and communicating expectations in any organization. Lastly, inclusive leaders are collaborative, which is coupled with an ability to willingly share ideas. According to (Raelin, 2003, p. 131), “to create an environment that offers psychological safety is a high task”, especially “when covering up has been the dominant reaction to contrary or contradictory information”. Furthermore, leaders pay attention to team processes to allow a diversity of thinking to take place.
Potential Barriers to Inclusive Leadership
Although the benefits of inclusive leadership are clear, smarter teams, better decision making, effective problem solving, better financial gains, and customer satisfaction, to name a few, there are common barriers that can hinder an organization’s ability/efforts to implement inclusive leadership practices. These barriers can influence companies away from becoming inclusive and prevent them from making the most of any diversity within their organization. According to Gully and Phillips (2012), some of the common obstacles are the “like me” bias, stereotypes, the perceived threat of loss, and ethnocentrism. As described below, these exist in many organizations and can get in the way of organizations’ efforts to maximize their diversity. These barriers can arise from decision-making, psychological factors, and employees’ lack of awareness, the authors noted. Therefore, it is important for organizations to understand and proactively address these barriers to minimize their impact and enhance inclusion.
Although it is human nature to associate with those like ourselves, the “like me” bias tendencies can negatively impact recruitment by focusing solely on people who look like the existing staff. This can contribute to the unwillingness to employ people of different backgrounds, creating a culture of ingroup and outgroup dynamics in an organizational setting. The result is a homogeneous work environment. This can be a disservice to efforts to increase diversity and inclusion.
According to Gully and Phillips (2012), stereotypes, “beliefs about individual or group based on the idea that everyone in that group will behave the same” (p. 52), have the power to diminish inclusion opportunities for minorities, women, individuals with disabilities, and older workers. Stereotypes are extremely harmful due to the judgmental tendencies implied and the lack of consideration of individual uniqueness. In some cases, the results can be subtle racism, sexism, prejudice, and discomfort. These beliefs can determine what makes good/poor employees, can control the distribution of employment opportunities, and can undermine diversity efforts.
Another common setback can come from those who perceive inclusive efforts as a threat to their career opportunities. The authors further noted that this perceived threat of loss can lead members of groups who are traditionally the predominant employees of a particular workforce or occupation to grow anxious or angry. The need to protect their own prospects can impede those of others (Gully & Phillips, 2012). The authors also noted that the perceived threat of loss “influences employees’ willingness to help mentor minority employees, recruit diverse candidates for positions, and support diversity initiatives” (p. 52).
Ethnocentrism, a belief of one’s language, native country, and cultural rules/norms being superior to all others, is similarly impactful in a negative way to an inclusiveness attitude. Every organization is susceptible to these challenges, especially when advocating for inclusive leadership practices. However, the extent to which an organization will succeed in its inclusive efforts is due to consistent efforts to be vigilant about these challenges.
Example: Managing Across Borders
Lines on the Map Miss the Real Story
Diversity is deeper than variations between countries. Sometimes those differences appear in different regions of the same country. For example, some parts of Mexico don’t use Spanish as the primary language. Wal-Mart’s Mexico’s Juchitan store, therefore, conducts business in the local Zapotec tongue, encourages female employees to wear traditional Zapotec skirts, and does the morning company cheer in Zapotec.
Talent Abroad
With so much variation across countries, it’s no surprise that countries vary in level of talent and the supply of managerial, skilled, and unskilled labor. Companies shouldn’t assume that emerging market countries offer inferior labor pools. GM, for instance, found that 50% of its assembly-line workers in India have college degrees—a ratio much higher than in other countries.
Local Solutions by People Who Understand Local Needs
Nokia uses local designers to create country-specific handset models. The models designed in India for Indians are dust resistant and have a built-in flashlight. The models designed in China for the Chinese have a touch screen, stylus, and Chinese character recognition. Local designers are more likely to understand the needs of the local population than headquarters-located designers do.
Strategies in emerging markets conference, held by the MIT Center for Transportation and Logistics (CTL) on March 7, 2007, Cambridge, MA.
Exercises
- You’ve just been made a manager in Sweden, known for its institutional collectivism. What incentives and reward structures would you use to motivate your employees?
- How would you prepare workers for an overseas assignment?
- Your company has 12 branches in the United States and will be opening its first branch in Brazil. Your company prides itself on its self-managed teams. Will you keep this policy in the new country? Why or why not?
- You’re a manager in Japan, and you’ve just discovered that a team leader under your supervision has made a mistake that will result in a quality problem. How will you handle this mistake?
- You work in Hong Kong for a Swiss-owned firm. The Swiss are known for their high uncertainty avoidance. What differences might you expect to see from your Swiss bosses compared with your Hong Kong employees?
Key Takeaways
Because the business environment increasingly depends on collaboration across regional and national borders, a successful global manager needs to be culturally sensitive and have an understanding of how business is done in different cultures. In some countries, loyalty to the group is key. Other countries celebrate mavericks and rule breakers if they can get things done. Knowing how best to communicate with your coworkers and employees—whether to be direct or indirect, whether to follow strict protocol or be more casual, and whom to involve in decisions—are all important considerations.
Inclusive leadership is a promising model for capitalizing on the existing diversity in the modern workforce. This model helps leaders to lead innovative teams and, at the same time, create an environment where people feel they can bring their whole selves to work. Acting inclusively is linked to employees’ increased satisfaction, performance, commitment, motivation, creativity, innovation, engagement, and well-being. These outcomes benefit both employees and organizations.
Additionally, inclusive leadership has the potential to positively contribute to efforts to engage groups that are traditionally excluded from senior leadership. When the organization recognizes the value of its senior leadership team reflecting the diversity in its workforce, principles of inclusivity need to be embedded and implemented throughout the employment environment. For employees of a more diverse workforce to follow and respect an organization’s leadership, the inclusive leadership model is more likely to achieve that result.
“Inclusive Leadership and Potential Barriers” by Bijoux Bahati in Cultivating Your Leadership Capabilities by Granite State College is licensed under CC BY 4.0, except where otherwise noted.
“Globalization and Principles of Management” in Principles of Management by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.
