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Competencies of Global Managers

By admin | May 31, 2008 | Finance, Global Managers, Globalisation, Governance, Risk,
Strategy
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Hi everyone. Some light reading for the weekend

This post is not authored by me (Paul). Instead, my one-and-only darling wife. Apart from
being an all-round hottie, she has been studying a post-graduate business course at
University. The content of this post is one of her papers that when I read it, found it to be a
really excellent piece of work. Her lecturer agreed too and awarded it a high distinction.
Now the reason that I am posting this to the CleverWorkarounds blog is she really did some
serious research, and I ended up reading a lot of the material too. In fact, I used a lot of her
reference material when I was writing the global strategy and technology, and "project
fail" series of posts. If you liked that stuff, you may find some stuff here you like also.
So without further adieu, I present to you her paper, examining what skills and competencies
that global managers require to operate in an increasingly complex and dynamic global
environment. Please let me know what you think of it.

Introduction
Traditional business methods are being made redundant by the surge of globalization.
Managers who continue to practice their traditional managerial skills long gained in business
schools are finding themselves ineffective in the global environment. Globalisation is a
conceptual situation where political borders become increasingly irrelevant, economic
interdependencies are heightened, and national differences due to dissimilarities in societal
cultures are central issues of business. The world, with its complex and dynamic forces,
becomes a global marketplace for global managers (Kedia and Mukherji 1999). In such a
world only the ones who understand the impact globalisation wreaks and thus adapt
accordingly will survive. Thus to be competitive in the global marketplace the traditional
managers must transcend and become global managers.
A literature review has been undertaken to identify the global mindset, and the skills and
competencies essential to the global managers. From the numerous frameworks, this paper
proposes a new framework design consisting of (1) knowledge competencies; (2)
interpersonal competencies; and (3) personal competencies. Skills and competencies within
these groups are interdependent of each other suggesting that the development of one group
cannot exist without the other.

Global Managers
Prior to framing the skills and competencies necessary to becoming effective global
managers, it is essential to understand who and what are global managers. There are
numerous literature and studies available on this topic and yet there appears to be no
consensus towards a unified definition. It is through the roles and functions of the incumbent
that competencies are derived from. However, due to the divergence of the definition of the
global manager, the roles and functions that set them apart from domestic managers have also
not been clearly clarified and agreed upon. The different roles ascribed to the global
managers offered by Bartlett and Ghoshal (1994, 77-91) and Caligiuri (2006) are outlined in
Table 1. Thus emerges the differing frameworks of competencies of the global manager.
Table 1: Two existing sets of roles ascribed to the global manager

Contrary to popular perception, Bartlett and Ghoshal (1994, 77-91) and Baruch (2002)
controversially argue that the universal global manager does not exist. Bartlett and Ghoshal
instead identified three groups of specialists (the business managers, the country managers,
and the functional managers) with different organisational goals and roles working together
in the global market, and being lead and integrated by the corporate managers. The authors
accepted that these roles are not practised by the traditional managers. Baruch reports that
there are no common traits or qualities that can assist in identifying the global manager.
Barush concluded that the mindset, the right frame of mind (characterised by, for examples,
openness, awareness, and genuine appreciation of culture and customs) coupled with the

basic qualities essential to successful managers will enable them to manage successfully
abroad. This distinction contradicts their argument of non-existence of the global manager.
According to Jokinen (2005) these differentiations do indeed characterise the widely accepted
term of the global manager.
Amongst the numerous definitions, global managers are those who understand different
cultures and lead mixed-nationality teams (Barnevik 2001, xi-xix) and are able to unleash
human potential and leverage the richness that lies in cultural diversity (Whitfield 2003).
They are expected to fulfil critical roles such as integrator, coordinator, innovator, coach, and
strategist (Aycan 2001, 119-135). To implement these roles effectively, it is critical for the
global managers to possess a global perspective consisting of a global mindset which is
supported by certain knowledge and skills (Kedia and Mukherji 1999). These essential skills
and competencies will assist in maintaining a competitive advantage thus ensure their
continual success in the complex and dynamic global market.

Essential Competencies of a Global Manager

Various frameworks of global competencies exist, as shown in Table 2, however for the
purpose of this paper a new framework will be proposed; one that takes the elements of the
global perspective into consideration. A literature review was undertaken to frame the key
competencies deemed essential and specific to global managers. The framework integrates
competencies that (i) refer to explicit and tangible information and ability necessary to
accomplish a task; (ii) refer to the cognitive and behavioural abilities to utilise knowledge
gained to successfully complete the assignment; and (iii) are fundamental personal
characteristics that can impact on knowledge and skills development and action. These
competencies are categorised into three meta-competency groups: (1) knowledge
competencies; (2) interpersonal competencies; and (3) personal competencies.
Table 2: Leadership competencies of global leaders. Examples of some existing frameworks

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

Knowledge competencies
Knowledge competencies are concerned with factual information pertaining to a clear and
deep understanding of technology, business, and industry required to complete tasks
successfully. They are the basic building blocks for global managers journey towards a
global perspective (Jokinen, 2005). The competencies in this section include technology
savvy, international knowledge, cultural and cross-cultural awareness, business and industry
savvy, global risk management, and best practice standards.

Technology savvy
The rapid onslaught of globalisation has been largely due to advances in technology
interconnecting companies across the world. Goldsmith, Walt, and Doucet (1999) see
technology savvy as a key competency for global managers as it significantly impacts the
organisations core business. Technology is not only vital for communication, and effective
information management, but also greatly impacts the organisations production processes. In
the fast pace world of technology certain products, processes and services can be outdated
very quickly. It is therefore necessary for global managers to not only be able to use
technology, information systems and telecommunications effectively but also understand its
impact by assessing and analysing the affect it has on the global operations of the firm (Kedia
and Mukherji 1999). Technology solutions that may be pertinent to the global managers
include Business Intelligence tools such as the SQL Server suite (Analysis Services,
Reporting Services) and Oracle; and collaborative tools such as Microsoft Office SharePoint
Server, Skype, Microsoft Groove 2007, Google Apps, and instant messaging tools such as
MSN Messenger (P. Culmsee, personal communication. May 3, 2008). Solutions such as
those listed above may not be required by all managers as it depends on the type of industry
they are in, and the organisation itself.

International knowledge
Competency in this field means an understanding of the different socio-political and
economic policies governing each country. A global organisation operates world-wide abiding
by the rules and regulations that govern that particular nation. Therefore it is essential to
clearly understand the structure of these systems, their decision-making processes, and how
they impact business operations and those around them (Whitfield 2003). Subject matter such
as international finance, international law, and comparative labour relations should be
familiar to the global manager (Caligiuri 2006). Knowledge in this field not only assists in
penetrating foreign markets distribution networks (Tan, Erramilli, and Liang 2001) and the
smooth running of the business but it can be a competitive advantage.
Take Procter & Gamble for example. In the early 1980s, in their fight for higher margins
from the pharmaceutical industry, Indian pharmacists nationwide targeted the company by
boycotting Vicks products. Gurcharan Das, CEO of Procter & Gambles Indian subsidiary
realised that the Vicks products contained all natural herbal ingredients, found in the age-old
Sanskrit texts. Products compliant under this Ayurvedic system of medicine in India could be
sold in food shops, general stores, and street kiosks. Das proved this compliance to the Delhi
government and the local FDA and had the registration changed from Western medicine to
Indian medicine. With the new registration, the company was able to expand its distribution
channel beyond pharmacies and build a new plant for Vicks, enjoying the tax-advantages and
lower labour costs (Das 1994, 197-210).

Cultural and cross-cultural awareness

This pertains to the understanding and appreciation of the country and its societys norms,
beliefs, rites, rituals, symbols, behaviours, motivations and stories. Effective global managers
value and manage cultural diversity and consider this diversity an asset not a hindrance
(Caligiuri 2006). Nardon and Steers (2008) state that many inter-culture assignments occur on
short notice thereby giving managers limited time to learn about that particular culture, and
intimate understanding of the cultural diversity may be difficult due to geography. In these

circumstances cultural and cross-cultural awareness is learnt on the fly. Despite the
obstacles, understanding this diversity will be of great benefit to the global managers.
Procter & Gamble will be mentioned again to illustrate this issue in relation to business. Das
(1994, 197-210) noticed that the company had trouble selling Vicks Vaporub to Northern
India, whereas sales in the South were high. He decided to capitalise on the high market sales
in the South instead of attempting to correct the market in the North. The company profited.
Das later discovered that the reason for the poor sales in the North was due to the fact that
people in this region did not like to rub things on their body. Had Das ignored the market
trend and decided to expend resources attempting to impose the product on the North, poor
sales figures would likely have continued as products would remain on the shelves.

Business and Industry Savvy

Coupled with technology savvy, business acumen, a thorough understanding of the business
and its industry is critical for achieving organisational goals and objectives (Parker 2005).
Global managers must intimately comprehend not only the companys business strategies,
products, and resources, but also the structure of its global operations, worldwide market
opportunities (Aycan 2001, 119-135; Osland 2001, 137-156) and competitive conditions
(Osland 2001, 137-156). Bartlett and Ghoshals (1994, 77-91) role of the scanner will be
required here to achieve this savvy. They will need to filter, analyse and interpret the scanned
knowledge. This knowledge can then be communicated across the organisation and actioned.
This breadth of understanding will assist the global manager to recognize as well as anticipate
change (Parker 2005), stay on strategy, and find and overcome threats (Kedia and Mukherji
1999).

Global risk management

Parker (2005, 468) quotes Mihaly Simais definition of international risk as important,
potential disturbing and destabilising factors or acts originating with, or generated by, various
actors on different structural levels, and having spillover consequences for other members of
the international community. Some of these risks include political, currency-exchange, and
corruption. Globalisation provides many potential techniques to allow global managers to
improve the organisations bottom line, from the productivity gains of operating in lower cost
countries to the ability to leverage global position in pricing negotiation with suppliers. Due
to the nature of their role, the global manager would need to have a higher risk tolerance level
to deal with uncertainty in the global market. However, there have been cases where
appropriate safeguards have not been taken to assess and minimise risk. An excellent example
of the differences in risk management maturity occurred in early 2000 (SCM n.d).
In Albuquerque, New Mexico, a thunderstorm set fire to a factory at a plant producing mobile
phone semiconductors resulted in contamination that destroyed millions of mobile phones
worth of chips. This plant was owned by Phillips NV, a major supplier to Nokia. In Finland,
Nokias computer system indicated delay in the arrival of shipments of phone chips from
Phillips. Three days after the fire, Phillips notified Nokia about the situation and advised
them of the one week delay in the shipment. The fire impacted the production of some 4
million handsets. Nokia required the chips for their new generation of phones. This delay
would mean that more than 5% of the companys annual production might be disrupted
during a time of booming phone sales. Strategies were formulated and acted upon. Phillips
and Nokia agreed to join forces temporarily to overcome the crisis. Nokia was able to launch

their new phones to very satisfied customers on schedule. Ericcson, on the other hand,
received the call from Phillips but did not act. They assumed that the one week delay would
not affect their business. When they realized the full extent of the problem (three weeks after
the fire) it was too late. They could not find suppliers with the available chips for their new
generation phones. At the end of 2000, Ericsson reported a loss of US$1.68 billion in the
companys mobile phone division.

Best Practice standards

In a highly competitive global market it is advantageous for the global managers, and thus the
organisation, to understand and comply with/implement best practice standards as those
involved in business have higher expectations and standards. These standards exist to provide
independently verifiable assurance to a variety of stakeholders, assuring these stakeholders
that the organisation is performing in accordance with the requirements of these standards.
Examples of these are legislative frameworks: SOX and HIPAA (Healthcare) in the USA, and
BASEL II (financial risk management) in the European Union; Compliance frameworks such
as GAAP (Accounting), COBiT, COSO (control frameworks), ISO9001 (Quality);
Frameworks to improve process/visibility such as Six Sigma, LEAN, and Kaizen;
Frameworks to improve specific disciplines such as PMBOK and, Prince II (Project
Management) (P. Culmsee, personal communication. May 4, 2008).
Managers must also incorporate ethics and corporate social responsibility into their business
as part of best practice. This voluntary benchmarking can build trust, demonstrate that they
possess integrity and honesty, and can be a competitive advantage as it will enhance
reputation. Environmental and social ethics and business were once seen as opposite ends of
the business spectrum however, with increasing social awareness and empowerment, society
and NGOs are leading the way to ensure that industries are respectful of community and the
environment. As businesses increasingly come under fire for their lack of environmental and
social ethics, it is safe to conclude that embracing ethics and CRS is good business practice.

Interpersonal competencies
It is not sufficient for global managers to only gain knowledge but also critical for them to
possess the appropriate skills to transfer this knowledge into action effectively. Interpersonal
competencies are those that relate to the social/relationship interaction or management of
others. Competency in this area will lead to fruitful results when dealing with others. These
competencies, acculturation, diversity management, leading and motivating a diverse
workforce, cultural networking skills, creation and conveyance of a clear vision, and capacity
for managing uncertainty and conflict in the global environment, are described below.

Acculturation
Acculturation is the process whereby the attitudes and/or behaviours of people from one
culture are modified as a result of contact with a different culture (Maxwell n.d.). Awareness
of cross-cultural differences is vital but not enough. The challenge for the global managers,
after gaining cross-cultural knowledge, is the willingness and ability to embrace and integrate
multiple perspectives (Aycan 2001, 119-135) and use it to their advantage. To achieve this

they must learn to let go of their own cultural certainty, unquestioned acceptance of basic
assumptions, personal frames of references, unexamined life, accustomed role or status,
social reinforcement knowledge, accustomed habits and activities, and known routines
(Osland 2001, 137-156), accept that differences do matter (but not inferior), be open and
receptive to new ideas, ready to accept another perspective (Rifkin 2006) and be able to
master both non-verbal and verbal communications (Jokinen 2005) pertinent to the culture.
Caligiuri (2006) recommends fluency in language to assist in effective verbal
communication.
An example of how acculturation will benefit the global manager can be demonstrated by the
understanding of a brief explanation of the Japanese negotiation style (Adachi n.d.). Japan
still maintains a hierarchical business structure. Prior to commencing the negotiation, they
ascertain their standing/ranking and that of their organisation in respect to others. Their
language is indirect, ambiguous and controlled (agreeable) as harmony and the concept of
face-saving is important to them. The subject matter is talked around rather than being
approached directly. Even if they have strong views or oppose someone elses view, they will
avoid offence preferring to skate around the subject so as to maintain the relationship. They
value long-term relationship over short-term monetary gain. If an agreement cannot be
reached, they are more likely to change the subject or ignore it all together. Information
gathering about the other is important and negotiations will not be commenced until they
obtain what is needed. A broad agreement is first made from the negotiation, and detailed
agreements later.

Diversity management
Managers who perceive diversity as important and have the ability to manage this diversity
can leverage these differences for mutual business gains (Whitfield 2003). Managing
diversity pertains to the ability to co-ordinate groups of people from differing backgrounds,
characterised by culture, gender, age, religion, etc., working effectively and productively
together on the same tasks. To manage diversity effectively, the organisations culture must
value its diversity. For behaviour and thinking to change this value of diversity must be
embedded in processes and structures (Parker 2005). With globalisation comes culture
diversity. To be successful, it is crucial for global managers to be competent in this skill.

Leading and motivating a diverse workforce

Leadership skills are essential to all managers however the ability to lead and motivate a
diverse workforce in the organisations global environment is specific to global managers due
to the nature and composition of the workforce. Inspire (Kedia and Mukherji 2001). This can
be made more difficult task when the team members are located in different parts of the
globe. A critical aspect of an effective global leader is to facilitate integration, lead in a
manner consistent with the followers cultural expectations while simultaneously helping the
members develop a set of norms that allow for differences in social-interaction preferences
(Stahl 2001, 197-210). To be effect they must inspire others, go against outdated or
ineffective practices, build trust amongst the team, delegate, be a mentor, and demonstrate
sensitivity and empathy to those they lead (Tubbs and Shultz 2006).

Cultural networking skills

These are relationship management skills (Jokinen 2005) created and maintained to further
the organisations interest within the global environment. Global managers will need to
understand the culture for effective networking. Goldsmith, Walt and Doucet (2000) report
that the ability to negotiate alliances and manage this complex network of relationships is
vital to the success of a global venture. Building a positive long-term relationship with others
is critical. Khan (2007) believes that the adage It doesnt matter what you know, its who
you know that matters holds true in most countries. To further themselves and their
organisation Khan suggests that it is necessary for global managers to develop good relations
with the influential and effective people around the world who will impact the business
positively.

Creation and conveyance of a clear vision

Part of the global managers role is the accomplishment of organisational objectives through
the work of others Those who are able to set and pursue the organisations goals will assist in
the success for the organisation.Effective managers have the ability to, not only set visions,
but they also have the ability to articulate these visions effectively for all to understand.
Effective communication of the vision in a global environment transcends all organisational,
geographical, and cultural barriers and boundaries (Parker 2005). The bility to manage the
change process within the organisation is of utmost importance to succeed in the envisioning
of goals. The visions set should be clear,measureable, motivating and pertinent to the
organisational goals. There must be accountability and ownership throughout the process,
thus employee empowerment is critical. Leadership skills such as building trust, inspiring and
motivating others in the achievement of the goals, evaluating others and delegation of
responsibilies accordingly also required for the achievement of the vision (Tubbs and Shultz
2006).

Capacity for managing uncertainty and conflict in the global environment

This is an ability to function effectively in unfamiliar constantly changing, complex and
paradoxical environment (Kedia and Mukherji 1999) while maintaining patience and
composure (Stahl 2001, 197-210) demonstrating a high tolerance for ambiguity. Global
managers in this environment feel comfortable/at eased with rapid change and corporate
forecasting, and have a greater capacity for overcoming adversity (Tubbs and Shultz 2006).
This indicates an appreciation of challenge and an ability to deal with situations and crisis
directly rather than displaying an avoidance attitude. In order to achieve this, others skills
such as sound verbal and non-verbal communication, for examples active listening,
negotiation, interviewing, and non-verbal cues), ability to scan the world for information, and
an understanding of diversity and its impact are a necessity.

Personal competencies
The fundamental personal characteristics or traits of a person will not only affect the
attainment of knowledge but also how and if the knowledge will be executed. Knowledge and
skills alone do not make a global manager. It is the personal traits of the person that will drive
the acquisition of the knowledge and affect how the skills are performed.

Self-awareness/Emotional Intelligence
To be self-aware, the global managers would have an astute insight of how they are perceived
by others, clear insight of themselves, and a clear insight of their own roles with respect to
others in the group (Maznevski and Zander 2001). Self-awarenesss will assist towards the
development of emotional intelligence, which is the subset of social intelligence that
involves the ability to monitor ones own and others feelings and emotions, to discriminate
among them and to use this information to guide ones thinking and actions (Salovey and
Mayer, 1990). It is this deep understanding and intuitiveness of self and others that will assist
the manager to transform and develop.

Inquisitiveness
The inquisitive mind is one that has an insatiable demand for knowledge. It will assist global
managers in seeking information and strive for continuous learning (Parker 2005). The
inquisitive mind will question and probe until the best course of actions and results are
obtained. Global managers with inquisitive minds are adventurous and will always have upto-date knowledge and skills to achieve their goals.

Honesty and integrity

Global managers who possess and exhibit honesty and integrity demonstrate respect for their
peers, value and accept others for who they are. These managers are keen to build and
maintain trust. They place the organisation and others interest above their own. They are just
and fair and will do what is best for others. Global managers with honesty and integrity will
ensure that best practice standards are implemented and maintained. Employees working for
them will be empowered (Parker 2005). This trait will assist the global managers to lead and
motivate their team. The case below, taken from Parkers (2005, 387) book, demonstrates the
ultimate act of integrity through leading by example and trust building, exemplified by the
actions of Norbert Reinhart.

(Your shift is over taken from Barbara Parkers (2005) book Introduction to Globalisation
& Business, page 387).

Open-mindedness
Global managers with open minds are less likely to be judgemental and view diversity as
inferior. They will be more receptive to new experiences and ideas, and be able to see and
accept change more readily (Caligiuri 2006).

Adaptable/flexible
This is the capacity to adjust or vary ones thoughts and thus behaviour according to the
immediate requirements of the condition or situation. An adaptable or flexible mind will
assess and analyse the foreign culture, compromise, and then find innovative and creative
ways to arrive at a solution (Stahl 2001, 197-210).

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

Empathy
Empathy is a genuine understanding, concern and respect for anothers thoughts, feelings,
needs, motives and assumptions and ones capacity to respond to those factors appropriately.
Empathetic managers will consider someone elses situation, show appropriate discretion,
and argues from position of the host country (Stahl 2001, 197-210). This trait will assist the
global managers in their relationship with people worldwide as their listening skills will
improve, and are able to appreciate differing viewpoints. This understanding of others will
lead to cross-cultural sensitivity and expertise in global human resource management
(Jokinen 2005).

Global Mindset
To complete the managers global perspective, global managers must possess a global
mindset. It is a way of being, described by Rhinesmith (1992) as a predisposition to see the
world in a particular way that sets boundaries and provides explanations for why things are
the way they are, while at the same time establishing guidance for ways in which we should
behave acting as a filter.
Rhinesmith sees those with global mindsets to always drive for the bigger, broader picture;
accept the balance of contradictions; look towards organisational processes rather than
structure when dealing with uncertainty; value and leverage diversity of teamwork and play
to their advantage; view change as an opportunity rather than a hindrance; and open to
surprises, embracing challenge and uncertainty, and always question the status quo. They are
proactive and their thoughts and actions are not limited to boundaries. They have the ability
to effectively manage competition, complexity, adaptability, diverse teams, uncertainty, and
learning. Rhinesmith also characterises them as having astute knowledge in technology,
business and the industry; highly developed conceptual capacity; flexibility to deal with the
constant changing global and local market demands; sensitivity to cultural diversity;
judgement in making risky decisions with little information; and the capacity for reflection in
seeking continuous improvement.

Conclusion
Despite the abundance of literature on the global manager there is still a lack of unity in
defining the global manager. Due to this deficiency for a clear and precise definition, the
exact roles of the global manager have also not been defined. This has resulted in the
existence of various frameworks of the competencies of the global manager. Some of these
frameworks, for example Tubbs and Shultz (2006) taxonomy of competencies in global
leadership, include skills and competencies that are too broad, and not specific and pertinent
only to the global manager.
It is recognised that the standard managerial skills and competencies are also required by the
global manager. However there are certain competencies that only the global manager would
require to be effective. This proposed framework, the essential competencies of a global
manager, outlined in Table 3 below, contains competencies that are unique to the global
manager. They are crucial to the function of the global manager in the global environment.
The design of the framework is important. It implies that all the competencies outlined are
interdependent of each other. One set of competencies cannot be achieved without possessing
the others and no one competency has greater weight than the other.
Table 3: Framework of the essential competencies of the global manager

By understanding the global perspective required of global managers to function successfully

in the global market, the Human Resource Department can work towards the development of
this perspective in their managers. Programs such as Diversity/cross-cultural awareness
training, diversity management, emotional intelligence training, and understanding the global
market can assist the domestic managers to understand different perspectives. HR plays a
very important role in the development of skills and competencies necessary for global
managers.

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