1.

Global Leadership 2019-2020

Under Guidance from Dr. Sriram Rajagopalan

LDR 6145

Northeastern University

Table of Contents

Global Leadership Success Through Emotional and Cultural Intelligences……………………………….5

The Global Leadership of Carlos Ghosn at Nissan……………………………………………………………….17

Gojo Industries: Aiming for Global Sustainability Leadership…………………………………………………29

Leadership in a Globalizing World……………………………………………………………………………………..41

Regional Strategies for Global Leadership………………………………………………………………………….85

Rising Costs of Bad Leadership………………………………………………………………………………………..99

Learning to Manage Global Innovation Projects…………………………………………………………………103

Global Leadership 2019-2020 LDR 6145

Under Guidance from Dr. Sriram Rajagopalan Northeastern University

2.

Global leadership success through emotional and cultural intelligences

Ilan Alon, James M. Higgins*

Roy E. Crummer Graduate School of Business, Rollins College, 1000 Holt Ave-2722, Winter Park, FL 32789, USA

Abstract Culturally attuned and emotionally sensitive global leaders need to be developed: leaders who can respond to the particular foreign environments of different countries and different interpersonal work situations. Two emerging constructs are especially relevant to the development of successful global leaders: cultural and emotional intelligences. When considered under the traditional view of intelligence as measured by IQ, cultural, and emotional intelligences provide a framework for better understanding cross-cultural leadership and help clarify possible adaptations that need to be implemented in leadership development programs of multinational firms. This article posits that emotional intelligence (EQ), analytical intelligence (IQ), and leadership behaviors are moderated by cultural intelligence (CQ) in the formation of global leadership success. D 2005 Kelley School of Business, Indiana University. All rights reserved.

bBut when a prince acquires the sovereignty of a country differing from his own both in language, manners, and intellectual organization, great dif- ficulties arise; and in order to maintain the possession of it, good fortune must unite with superior talent.Q —Niccolo Machiavelli, The Prince

1. Global interaction and interpersonal relationships

To say that globalization is upon us is axiomatic. Conducting global, international, and cross-cul-

tural business is a mundane reality for most contemporary large organizations. Even if your business is a medium- or small-sized firm, you have probably experienced globalization through interactions with global participants that belong to at least one, or perhaps more, of these four key categories: customers, competitors, suppli- ers, or employees. Global business is already a substantial force in the world’s economy: The World Trade Organization reported that, in 2003, international trade comprised 30% of global GDP. In their book Race for the World, Lowell L. Bryan et al. (1999) predicted that, by the year 2029, 80% of world output would be in global markets. Thus, while globalization has arrived, the full extent of its impact on business has yet to be felt.

0007-6813/$ – see front matter D 2005 Kelley School of Business, Indiana University. All rights reserved. doi:10.1016/j.bushor.2005.04.003

* Corresponding author. E-mail addresses: [email protected] (I. Alon)8

[email protected] (J.M. Higgins).

KEYWORDS Cultural intelligence; Emotional intelligence; Global leadership success

Business Horizons (2005) 48, 501—512

www.elsevier.com/locate/bushor

Copyright 2005 by Indiana University Kelley School of Business. For reprints, call HBS Publishing at (800) 545-7685. BH 177

F or

u se

o nl

y in

th e

co ur

se G

lo ba

l L ea

de rs

hi p

at N

or th

ea st

er n

U ni

ve rs

ity ta

ug ht

b y

U nd

er G

ui da

nc e

fr om

D r.

S rir

am R

aj ag

op al

fr om

S ep

te m

be r

17 , 2

01 9

to D

ec em

be r

31 , 2

02 0.

U

se o

ut si

de th

es e

pa ra

m et

er s

is a

c op

yr ig

ht v

io la

tio n.

5

If growth in international trade continues as expected and predictions for its eventual size hold true, global business will see at least a twofold increase. Such dramatic changes in the conduct of business require leadership from individuals skilled in global aspects of business functions such as marketing, operations, finance, human resource management, information management, and R&D. However, global leaders must also be extremely skilled in the interpersonal conduct of global busi- ness. This requires emotional and cultural intelli- gences, the focal points of this article.

Unfortunately, while the need for global business leaders has never been so urgent, serious deficien- cies exist in the preparation of corporate managers as they deal with the interpersonal realities of global business. In a comprehensive review of the global leadership literature, Vesa Suutari (2002) came to the following conclusions:

! Leaders need to develop global competencies.

! There is a shortage of global leaders in the corporate world.

! Many companies do not know what it means to develop corporate leaders.

! Only 8% of Fortune 500 firms have comprehen- sive global leadership training programs.

! There is a need to better understand the link between managerial competencies and global leadership.

Similarly, Tracey Manning (2003) summarized the research of many leadership scholars and found that multinational companies’ efforts to develop effective global managers fell far short of the optimum:

! 85% of Fortune 500 firms surveyed did not have an adequate number of leaders.

! 65% felt their leaders needed additional skills.

! One-third of international managers underper- formed in their international assignments based on their superiors’ evaluations.

! Organizations have erroneously promoted lead- ers to international assignments based on tech- nical and organizational skills.

Ultimately, the negative consequences of wrong leadership choices are both expensive and well- publicized. And while the overall picture of global leadership development indicates businesses are not pursuing this matter sufficiently, the outlook is even more bleak regarding the development of global leaders’ emotional and cultural intelligen- ces. Although some firms are endeavoring to enhance the emotional intelligence capabilities of their leaders, very few have moved to grow cultural

intelligence, as awareness of this important con- cept is still at an early stage. In this article, we discuss the concepts of emotional and cultural intelligences, why they are critical to successful global leadership, and how they may be developed in global leaders.

2. A convergence of forces

It is evident that global leadership development should be a priority for companies that interact across cultures. Fortunately, how this develop- ment should proceed is becoming clearer. Several markers of what we term bglobal leadership skillsQ are noteworthy. First, there is increasing agree- ment regarding what it is that good leaders do, even while management flexibility is assumed as a given. Inevitably, leadership is contingent on the factors involved in a particular situation, but we generally know what good leaders should do or consider doing most of the time, at least in the United States. Simply put, leadership is the ability to turn vision into reality. More specifically, Robert House and his colleagues defined leader- ship as bthe ability to influence, motivate, and enable others to contribute toward the effective- ness and success of the organizationQ (House et al., 1999, p. 184). Additionally, in 2002, Gary Yukl, Angela Gordon, and Tom Taber, after reviewing a half-century of leadership behavior research con- ducted primarily in the U.S., concluded that leaders must successfully perform 12 behaviors, which can be grouped into three broad categories: task, relationship, and change/innovation (Yukl et al., 2002). These behaviors are those that leaders/ managers should engage in or consider engaging in to be successful.

A second marker of global leadership skills is an emerging focus on leadership at every level of the organization, which facilitates the creation of a platform from which to launch a global leadership development effort. This recognition of the rela- tionship of system to manager is occurring not just in the management literature, but in numerous corporations, as well. For example, IBM, a company already well known for its strong leadership, revamped its leadership model in 2002, when newly appointed CEO Sam Palmisano realized IBM needed a new model of leadership that was future-focused, where the company’s customers became clients (reflecting long-term relationships, not short-term fixes) and whereby IBM enabled its customers to brespond instantly at whatever got thrown at themQ (Tischler, 2004, p. 112). As Donna Riley, IBM’s Vice President for Global Talent, expressed, bIf leader-

I. Alon, J.M. Higgins502

F or

u se

o nl

y in

th e

co ur

se G

lo ba

l L ea

de rs

hi p

at N

or th

ea st

er n

U ni

ve rs

ity ta

ug ht

b y

U nd

er G

ui da

nc e

fr om

D r.

S rir

am R

aj ag

op al

fr om

S ep

te m

be r

17 , 2

01 9

to D

ec em

be r

31 , 2

02 0.

U

se o

ut si

de th

es e

pa ra

m et

er s

is a

c op

yr ig

ht v

io la

tio n.

6

ship is stuck in the past, we have a problemQ (Tischler, 2004, p. 112). After a thorough examina- tion of the situation and various options, IBM in 2004 identified a set of 11 competencies IBM’s leaders must possess. Among these are being client- centered, innovative, and environmentally aware, all on a global basis. These desired competencies are in addition to, not instead of, more traditional leadership behaviors (Tischler, 2004).

3. IQ is not the only bintelligenceQ

There is growing recognition that multiple intelli- gences are required for global leadership. For example, Ronald Riggio, Susan Murphy, and Fran- cis Pirozzolo presented a strong case that global leaders need to possess more than high IQs. In 2002, they asserted that intelligence is a multi- dimensional construct, that there are several types of intelligences, and that different kinds of intelligences are needed for effective, situa- tional leadership (Riggio et al., 2002). Based on all evidence available, we suggest at the core of global leadership (and, hence, the development of global leaders) are these three intelligences:

(1) Rational and logic-based verbal and quanti- tative intelligence with which most people are familiar and which is measured by tradi- tional IQ tests;

(2) Emotional intelligence (EI), which has risen to prominence as a determiner of success in the past 10 years and which can be measured by EQ tests; and

(3) The most recent addition to our list of intelligences, cultural intelligence (CI), which can be measured by CQ tests that are only now coming into existence.

With respect to cultural intelligence, it is important to note, as Christopher Earley and Elaine Mosakowski pointed out in 2004, that there are two major types. The first is what we call organizational CI. The second type of awareness, the focus of our CI examination, is related to geographic/ethnic culture (Earley & Mosakowski, 2004). For example, when you do business in Spain, many cultural practices are the same throughout the country, but doing business in Bilbao is not identical to doing business in Madrid or Barcelona because each of these cities has a different operant culture, each of which reflects a major Spanish subculture: Basque, Andalusian, and Catalan, respectively. Even mat- ters such as bappropriateQ hours of work differ among these three cultures. The fact that each

subculture is fiercely proud of its heritage can make for an interesting exercise in cross-cultural cooperation within Spain, itself. Leaders must be able to function across and within these various subcultures.

Robert Rosen and Patricia Digh declared that bglobal literacy is the new leadership competence required for business success. To be globally literate means seeing, thinking, acting, and mobilizing in culturally mindful waysQ (Rosen & Digh, 2001, p. 57). Accordingly, the same authors indicate the two predictors of success in the global market place are leadership development across all levels of business and valuing multi-cultural experiences/ competencies. We suggest that leadership develop- ment should follow a three-part model: assessment, education, and experience. With most if not all aspects of leadership, it is possible to assess a leader’s skill levels, provide the education that matches that person’s needs, and then let the person experience the foreign culture in its organ- izational or geographic/ethnic specificity. As we all know, experience itself is a great teacher, and only in the trenches can a leader begin to fully under- stand another culture and become functional in it. In this article, we focus on the two newest of the three intelligences we believe to be critical to successful global leadership: EI and geographic/ethnic CI.

4. Developing global leadership EQ

According to The EQ Edge, written in 2000 by Steven J. Stein and Howard E. Book, research across 30 mostly professional and managerial career fields reveals that anywhere from 47% to 56% of work/life success is the result of EQ, with the range being related to job type (Stein & Book, 2000). Even stronger evidence linking EQ to the success of leaders within the U.S. was noted by Daniel Goleman, Richard Boyatzis, and Annie McKee in their 2002 book, Primal Leadership. They found that the most critical leadership skills in the U.S. were linked to emotional intelligence (Goleman, Boyatzis, & McKee, 2002). Their research and the research of others (such as the Hay-McBer consult- ing firm) suggest that as much as 79% of leadership success in the U.S. results from high EQ. Based on these and other EQ studies, it would seem that leaders’ levels of emotional intelligence influence their behaviors, making them more or less success- ful. Similarly, organizational CI matters most, at least in the U.S., when leaders move into or work with new organizations. Often, a lack of organiza- tional CI contributes to individual and corporate failures.

Global leadership success through emotional and cultural intelligence 503

F or

u se

o nl

y in

th e

co ur

se G

lo ba

l L ea

de rs

hi p

at N

or th

ea st

er n

U ni

ve rs

ity ta

ug ht

b y

U nd

er G

ui da

nc e

fr om

D r.

S rir

am R

aj ag

op al

fr om

S ep

te m

be r

17 , 2

01 9

to D

ec em

be r

31 , 2

02 0.

U

se o

ut si

de th

es e

pa ra

m et

er s

is a

c op

yr ig

ht v

io la

tio n.

7

Emotional Intelligence is crucial to success in both work and life in general; it is a part of the biological, evolutionary importance of emotions in human beings. As Nigel Nicholson, in a Harvard Business Review article, observed, b. . .for human beings, no less than for any other animal, emotions are the first screen for all information receivedQ (Nicholson, 1998, p. 138). When a person receives a piece of information, it is automatically assessed from an emotional perspective. Emotional assess- ment was necessary for survival when man hunted in small groups, as it initiated bfight-or-flightQ responses; things are no different today. When someone receives information, the older part of the brain still considers a fight-or-flight response. This phenomenon helps explain why, for example, when a performance appraisal is conducted, even if 99% of the appraisal is positive, the bevaluateeQ will fixate upon the negative 1%. To be successful in any interpersonal activity, one must be aware of one’s own emotions and be able to manage them, just as one must also be aware of the emotions of others and be able to manage any interaction. EQ surveys simply measure the ability to perform these tasks across a wide variety of emotional intelligence skills.

4.1. Assessing EQ

There are three primary EQ skill level survey devices on the market today, all of which are paper-and-pencil based. The first two of these are self-report inventories: the bEmotional Quotient InventoryQ or EQi and the bEmotional Competence InventoryQ or ECI, which also has a university student version, the ECI-U. The EQi was created by psychologist Reuven Bar-On, who, in 1980, began a quest to determine what led to work/life success (Bar-On, 1997, 1998). By 1985, he believed he had found a partial, if not a primary, answer in a concept he labeled the emotional quotient, or EQ. Bar-On subsequently developed the EQi survey to measure EQ, a survey which meets the American Psychological Association’s standards of legitimate tests. In The EQ Edge (Stein & Book, 2000), Steven Stein and Howard Book analyzed thousands of EQi surveys given to individuals in more than 30 occupations. Two key findings emerged. First, as noted earlier, their analyses revealed that success in domestic work/life is between 47% and 56% a function of a person’s EQ. Second, their research revealed which 5 of the 15 EQ competencies used in the EQi were most critical to each job classifica- tion. The finding that different jobs require differ- ent competencies has the potential to become a major factor in job selection. Because some of the

job classifications examined were managerial posi- tions, the study has this important implication for leadership: even in the same country, the proper leadership EQ skill set varies to some degree from situation to situation.

The ECI was created by consulting firm Hay- McBer in conjunction with Daniel Goleman. While the EQi is focused on the psychological under- pinnings of EQ, the ECI focuses on EQ’s business applications. In Primal Leadership (Goleman, Boy- atzis, & McKee, 2002), Goleman and his co-authors describe a model of how EQ could be used, especially, by business leaders. One of the major contributions of this book is the identification of 15 specific EQ competencies, which are grouped into four overriding domains: self-awareness, self-man- agement, social awareness, and relationship man- agement. The first two of these sets of skills are intrapersonal; the latter two are interpersonal.

What makes these behaviors so useful is the development of a model that illustrates how each of these four domains of capabilities sequentially drives the next. According to this model, a person must progress from self-awareness to self-manage- ment, from self-management to social awareness, and from social awareness to relationship manage- ment. These domains are essentially hierarchical in nature: a person cannot usually successfully man- age relationships if that person is not first self- aware, successful at self-management, and also socially aware. Similarly, a person cannot usually self-manage if lacking self-awareness, nor be socially aware if self-management is absent.

The third assessment device is the bMayer- Salovey-Caruso Emotional Intelligence TestkQ, or MSCEIT (MSCEIT, 2005; What is the MSCEIT, 2005). The MSCEIT is an emotional problem-solving test, as opposed to a self-reported inventory. Participants are asked to solve a number of EQ problems. David Caruso (2005), co-author of the MSCEIT, indicates the test examines two tasks for each of the four following different but related emotional intelli- gence abilities:

(1) bPerceiving emotions: the ability to accu- rately recognize how you and those around you are feelingQ;

(2) bUsing emotions: the ability to generate emotions and use emotions in cognitive tasks such as problem solving and creativityQ;

(3) bUnderstanding emotions: the ability to understand complex emotions and emotional dchainsT, how emotions transition from one state to anotherQ; and

(4) bManaging emotions: the ability to intelli- gently integrate the data of emotions in

I. Alon, J.M. Higgins504

F or

u se

o nl

y in

th e

co ur

se G

lo ba

l L ea

de rs

hi p

at N

or th

ea st

er n

U ni

ve rs

ity ta

ug ht

b y

U nd

er G

ui da

nc e

fr om

D r.

S rir

am R

aj ag

op al

fr om

S ep

te m

be r

17 , 2

01 9

to D

ec em

be r

31 , 2

02 0.

U

se o

ut si

de th

es e

pa ra

m et

er s

is a

c op

yr ig

ht v

io la

tio n.

8

yourself and in others in order to devise effective strategies that help you achieve positive outcomesQ.

All three of these instruments appear to be viable. The use-values of the three surveys differ, however:

! The EQi has a substantial psychological back- ground, meets APA standards for tests, and has additional supportive research;

! The ECI has a strong, practical business focus; and

! The MSCEIT focuses on problem solving and does not involve self-evaluation, as do the other two tests.

The EQi and ECI surveys allow for evaluations by others, which helps eliminate subjective biases. Limited numbers of comparative studies of these instruments have been performed; in fact, too few to be useful at this point. As well, since these three instruments are all essentially bound to U.S. culture, only limited use of them has been made outside of the United States. The EQi and MSCEIT are available through Multi-Health Systems (among others) and the ECI from the Hay Group.

4.2. Educating global leaders on EQ

Successful leadership development programs incor- porate conceptual knowledge about EQ with role playing, case studies, simulations, experiential exercises, visualization exercises, and practice sessions that assist people in not just understanding what EQ is about, but also giving them practice at the skill. Establishing objectives for change and feedback sessions on progress are also critical ingredients for success. It is best to work on only four or five behavioral changes at a time, focusing on the lowest-scoring skills. If a leader is using the ECI survey, the progression from self-management to relationship management should guide the leader’s choices for development. Some of this evaluation can be self-generated, but external evaluators are very helpful.

4.3. Experiencing improved EQ

There is no substitute for experience when behav- ioral change is desired. As illustrated later in this article, this is as true for CI as it is for EI. EQ improvement logs can be a helpful tool in the change process: in them, leaders can record their efforts at improving their EQ. They can keep track of successes and failures, reporting the actions they have taken to further their skills. In Stein and Books’ The EQ Edge (Stein & Book, 2000) and in the

materials that accompany both the ECI and the MSCEIT, there are suggested exercises, readings, and other aids to help improve EQ. Although definitely worthwhile, this is not an inherently speedy process: it can take up to six months of steady work on one behavior to permanently change it. The keys are to accept that mistakes will occur, have adequate self-efficacy to continue on despite setbacks, take action to correct mis- takes, and, finally, learn from that experience.

4.4. EQ and global leadership

One of the difficulties in changing emotional behavior stems from the dozens of emotional responses humans experience. In 1996, Howard Weiss and Russell Cropanzano identified six emo- tions as basic and universal, at least within the United States: happiness, surprise, fear, sadness, anger, and disgust (Weiss & Cropanzano, 1996). While there can be a high level of agreement within a country or specific national subculture regarding the meaning of commonly accepted emotions, many emotions and their cues (both non-verbal and even some verbal) do not readily translate across borders.

For example, in a 1991 Los Angeles Times report, Emmons (1991) found that, when a group of U.S. citizens was asked to identify six basic emotions using pictures of other U.S. citizens’ facial expres- sions, there was a range of agreement from 86% to 96%. However, when Japanese citizens were asked to identify these emotions from the same set of pictures, their identification registered as accu- rately only for the emotion bsurpriseQ, with 97% in agreement. Among the other five emotions, accu- rate identification levels ranged from 27% to 70%. This example begs the question of how high an EQ someone can have in a culture other than the one they grew up in. Because the cues to emotions across cultures vary from being somewhat different to quite different, CI becomes extremely impor- tant. CI enables leaders to translate the varying EQ behaviors of different cultures, and to then choose a more appropriate EQ action for a specific culture than the leader might otherwise have chosen.

5. Developing a global leader’s cultural intelligence

Given the linkage between emotional intelligence and success, how can one transfer emotional intelligence to other nations/cultures? The

Related Tags