global mindset

Global Mindset

Prashant Pansare

Executive Program in Global Business Management 02

IIM-C

Necessity of Global Mindset

• Increasing Liberalization of International trade leading to …..

– Increasingly interconnected and truly global business environments

– Mobility of Talent : – Global Workforce

• To have strategic competitive advantage supply chain is • To have strategic competitive advantage supply chain is diverse and global [ Suppliers , Creditors , Partners ]

• Diversity across Cultures

– > Multinational and Multicultural Workforce

• Increasing market coverage

– > Global and Diverse Customer base …..

But today, companies increasingly need softer people skills….and perhaps

most important, working across cultures with Chinese, Germans, Indians,

Italians, Russians, and a world full of suppliers and partners.Editorial

BusinessWeek

April 18,2005

Do you have such a team ???

Global Leadership defined:

• Global leadership is the process of influencing

individuals, groups, and organizations inside

and outside the boundaries of the global

organization, representing diverse organization, representing diverse

cultural/political/institutional systems to

contribute towards the achievement of the

organization’s goals.

The ability to influence

individuals, groups,

Global Mindset

individuals, groups,

organizations, and

systems that are unlike

the leader’s.

• Global Mindset is a set of individual attributes that enable and

facilitate global leadership.

Global Mindset

• “Global mindset to me means that the individual has

a global passport, but in their head.”

• “It’s the ability to understand the similarities and

differences among cultures and their reasons.”differences among cultures and their reasons.”

Global Mindset

• “understanding and respecting other cultures rather than judging them.”

• “The ability to avoid the simplicity of assuming all cultures are the same, and at the assuming all cultures are the same, and at the same time, not being paralyzed by the complexity of the differences.”

• “Rather than being frustrated and intimidated by the differences, enjoying them and seeking them out because you find them fascinating.”

Global Mindset

• “Someone with a global mindset enters a new

and different situation with many more

questions rather than answers, assumptions

and presumptions.”and presumptions.”

• “It’s being able to make sense of contrasting

frames of reference and the ability to

simultaneously see oneself as American and

German.”

Phases of Globalization

Parameter

Phases of Globalization

Domestic Multi-Domestic Multinational Global

Focus Product/

Service

Market Price/Cost Strategy

Share of World Marginal Important Extremely Important DominantShare of World

Business

Marginal Important Extremely Important Dominant

Cultural Sensitivity Marginal High Low Critical

Beliefs One best way Many good ways One least-cost way Many good ways

Today’s Managers, therefore, need to develop a mindset which will help

them work globally across geographies and diverse cultures.

Mindset in 2 * 2

Parochial

[narrow]

Mindset

Global mindset

INTEGRATION(Ability to integrate diversity across

High

Low High

NA Diffused

DIFFERENTIATIONOpenness to diversity across cultures and markets

diversity across cultures and markets)

Low

The Globalized World of Business

Culture

• Judges you, and makes you a judge• Defining features:

– Shared motives, values, beliefs, identities, and interpretations of significant events

– that result from common experiences of members of collectives– and are transmitted across generations

• Cultural orientation: Attitudes of most people most of the time, • Cultural orientation: Attitudes of most people most of the time, NOT of all people all the time

" Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.“

Prof. Geert Hofstede, Emeritus Professor, Maastricht University.

Cultural Intelligence

• Cultural Intelligence (CQ) is the ability to cope with

national, corporate and vocational cultures.

• CQ is the ability to understand unfamiliar contexts, and

then to adjust.

• One must be aware of cultural diversity and differences

and respect these while interacting with people.

Christopher Earley and Elaine Mosakowski: HBR of October 2004.

http://12manage.com/methods_earley_cultural_intelligence.html

C.Q.

• THREE SOURCES OF CULTURAL INTELLIGENCE

• The Head / Cognitive. Rote learning about the beliefs, habits and taboos of foreign cultures, will not work well.

• The Body / Physical. You will not disarm your foreign hosts, guests, or colleagues simply by showing you understand their culture; your actions and demeanor must prove that you have already to some extent entered their world.

• The Heart / Emotional/motivational. To adjust to a new culture involves • The Heart / Emotional/motivational. To adjust to a new culture involves overcoming obstacles and setbacks. People can do that only if they believe in their own efficacy.

While CQ shares many of the properties of emotional intelligence, Cultural Intelligence goes one step further by equipping a person to distinguish behaviors produced by the culture in question from behaviors that are peculiar to particular individuals and those found in all human beings.

C.Q.

• Why Cultural Intelligence?

In an increasingly diverse business environment, managers must be able to navigate through the thicket of habits, gestures, and assumptions that define their coworkers' differences. Foreign cultures are everywhere. In other differences. Foreign cultures are everywhere. In other countries, certainly, but also in corporations, vocations, and regions. Interacting with individuals within them demands sensitivity and adaptability. And the people who have those traits in abundance, are not necessarily the ones, who enjoy the greatest social success in familiar settings.

Cultural Orientations

• How People See Themselves

• People’s relationships to the world

• Individualism Vs Collectivism

• Activity• Activity

• Time

• Space

Two Major Studies of Cultures

• GLOBE: [Global Leadership and Organizational Behavior Effectiveness]

– 17300 middle managers in 950 organizations

– Importance of local knowledge

– 62 societies (quantitative) and 25 societies (quantitative + qualitative)

– “As is” and “should be” parts of culture and their relationship

– At least two of three industries

• Food processing

• Telecommunications

• Financial services

• Prof Geert Hofstede’s Framework

[http://www.geert-hofstede.com/]

• Managing international business means handling both national and organization

culture differences at the same time. Organization cultures are somewhat culture differences at the same time. Organization cultures are somewhat

manageable while national cultures are given facts for management; common

organization cultures across borders are what holds multinationals together.

Prof Hofsted

Prof Geert Hofstede’s Framework

• In international business environment, it is sometimes amazing/shocking how different people in other cultures behave. We tend to have a human instinct that 'deep inside' all people are the same - but they are not. Therefore, if we go into another country and make decisions based on how we operate in our own home country - the chances are we'll make some very bad decisions.decisions.

• Geert Hofstede's research gives us insights into other cultures so that we can be more effective when interacting with people in other countries.

• If understood and applied properly, this information should reduce your level of frustration, anxiety, and concern.

• But most important, this will give you the 'edge of understanding' of cultures which translates to more successful results.

• These ideas were first based on a large research project into

national culture differences across subsidiaries of a multinational

corporation (IBM) in 64 countries. Subsequent studies by others

covered students in 23 countries, elites in 19 countries, commercial

airline pilots in 23 countries, up-market consumers in 15 countries,

and civil service managers in 14 countries.

• These studies together identified and validated

five independent dimensions of national culture differences

1. Power distance


1. Power distance

2. Individualism

3. Masculinity

4. Uncertainty Avoidance

5. Long Term Vs Short Term Orientation

All Sources are from personal Website of Prof Hofsted

[ http://stuwww.uvt.nl/~csmeets/ ] and related linked web pages

Power Distance

• Power Distance is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally.

This represents inequality (more versus less), but defined from below, not from above. It suggests that a


defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others'.

Individualism

• Individualism on the one side versus its opposite, collectivism, that is the degree to which individuals are inte-grated into groups.

On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into


societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word 'collectivism' in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world.

Masculinity

• Masculinity versus its opposite, femininity, refers to the distribution

of roles between the genders which is another fundamental issue

for any society to which a range of solutions are found.


Uncertainty Avoidance

• Uncertainty avoidance deals with a society's tolerance for uncertainty and ambiguity; it ultimately refers to man's search for Truth.

It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in


security measures, and on the philosophical and religious level by a belief in absolute Truth; 'there can only be one Truth and we have it'.

People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions.

Long Term Vs Short Term Orientation

• Long-term versus short-term orientation : Refers to how much

society values long standing as opposed to short term traditions

and values

It can be said to deal with Virtue regardless of Truth. Values


It can be said to deal with Virtue regardless of Truth. Values

associated with Long Term Orientation are thrift and perseverance;

values associated with Short Term Orientation are respect for

tradition, fulfilling social obligations, and protecting one's 'face'.

Both the positively and the negatively rated values of this

dimension are found in the teachings of Confucius, the most

influential Chinese philosopher who lived around 500 B.C.;

however, the dimension also applies to countries without a

Confucian heritage.

France

http://www.geert-hofstede.com/hofstede_france.shtml

http://www.cyborlink.com/besite/france.htm

http://spectrum.troy.edu/~vorism/hofstede.htm

U.K.

http://www.geert-hofstede.com/hofstede_united_kingdom.shtml

http://www.cyborlink.com/besite/united_kingdom.htm


India

http://www.cyborlink.com/besite/india.html


http://www.geert-hofstede.com/hofstede_india.shtml

GLOBE

• GLOBE is the acronym for “Global Leadership

and Organizational Behavior Effectiveness,”

• A cross-cultural research effort that exceeds • A cross-cultural research effort that exceeds

all others (including Geert Hofstede’s

landmark 1980 study) in scope, depth,

duration, and sophistication.

Introductory Overview of the GLOBE Research Effort

• Conceived in 1991 by Robert J. House of the Wharton School of the University of Pennsylvania, and led by Professor House, the GLOBE Project directly involved 170 “country co-investigators” based in 62 of the world’s cultures as well as a 14-member group of coordinators and research associates. This international team collected data from 17,300 middle managers in 951 organizations (for details about the research sample, see Note 1). They used qualitative methods to assist their development of quantitative instruments. In order to accurately and sensitively record the quantitative instruments. In order to accurately and sensitively record the nuances of local meanings, all instruments were developed in consultation with members of each target culture, and instrument translation was done with enormous care. Specific attention also was paid to the effect of "response bias" on data-gathering and -analysis (Note 2). Relevant previous literature was exhaustively reviewed and, as appropriate, applied (making the book being overviewed here a veritable bibiographicgoldmine). Ultimately, 27 research hypotheses were tested.

http://www.grovewell.com/pub-GLOBE-intro.html

GLOBE’s Standards for Measurement:

Nine "Cultural Dimensions"

• Assertiveness

• Future Orientation

• Gender Egalitarianism

• Humane Orientation

• In Group Collectivism

Scale of 1-7 used

Another significant fact about

GLOBE’s nine cultural dimensions

is that each one was • In Group Collectivism

• Institutional Collectivism

• Performance Orientation

• Uncertainty avoidance

• Power Distance

is that each one was

conceptualized in two ways:

practices or “as is,” and values or

“should be.”

Cultural Dimensions (1)

• Assertiveness: The degree to which individuals are assertive, confrontational and aggressive

• Future Orientation: The degree to which individuals plan, invest in future, delay gratification

• Gender Egalitarianism: The degree to which gender role differences are minimizedGender Egalitarianism: The degree to which gender role differences are minimized

• Humane Orientation: The extent to which individuals are rewarded for being fair, kind, and caring

• Institutional Collectivism: The degree to which collective action and distribution is rewarded

Cultural Dimensions (2)

• In-group Collectivism: The degree to which individuals

express pride in and loyalty to small groups such as family and

friends

• Performance Orientation: The degree to which higher level

people reward performance people reward performance

• Power Distance: The degree to which unequal distribution of

power is encouraged

• Uncertainty Avoidance: The degree to which people avoid

uncertainty by relying on norms, procedures, etc.

global mindset

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