FBL5010: Managing people and organisations - Globalisation Research Assessment Answer

Introduction

Globalization across the world has made it extremely important for firms to be successful in the global environment because it helps them in not only increasing their market share, but also helps them in leveraging upon resources and expertise from different countries to achieve higher sales (Ferraro and Brody, 2015). This has thus led to the development of the concept of global leadership, which refers to the abilities of an individual to be able to adopt and implement leadership and management practices in the global, cross-cultural environment. Global leaders are hence required to develop and adopt skills like communication, cross-cultural understanding and flexibility as well (Li et al 2013). While it is often argued that a successful leader tends to grow with time and experience within an organisation to be successful in leading the growth, Li et al (2013) argue that leaders need to gain an international and outside experience for being able to understand different cultures and different styles of working. The report thus presents a critical analysis of whether experience outside the organisation is required or not to be successful in a global environment.

Discussions

Caligiuri and Tarique (2012) carried out a comprehensive analysis of around 420 global leaders from the world established that it is important for global leaders to have cross-cultural understanding and knowledge and the same can be obtained from a combination of work related as well non-work related activities. It has been suggested by the findings obtained by Caligiuri and Tarique (2012) that a leader or an organisation as a whole can be successful in a global environment only when the nuances of differences in behaviour in different countries and cultures are understood, which means that individuals leaders or managers need to venture out to be able to succeed in global environment. Similar discussions by Thorn (2012) suggest that leaders or managers are required to manage teams and team members from all over the world and hence they need to gain experience outside and understand the needs, communication style, cultural beliefs so that they are able to manage their team members by maximizing their output. Caligiuri and Tarique (2012) have even established that more the leaders interact with people from different cultures and backgrounds, more they are likely to develop positive attitudes towards them, thus leading to higher growth opportunities.

Another reason that justifies the need of having outside experience for succeeding in the global environment is the fact that a leader or person needs to have or be able to identify and maximize upon opportunities that exist internationally. Peng (2013) explains that the leaders need to be early movers in the market to capture higher market share and also need to identify the new products that are in demand or the technologies and resources that can be leveraged upon in different markets to increase sales. Similar discussions by Samson and Daft (2014) suggest that the managers and leaders of an organization need to identify opportunities that exist in different countries and hence it is necessary for them to gain experience outside their respective organisations The same has been supported by Caligiuri and Tarique (2012) as well, who establish that cross-cultural and outside organisational experiences help people and leaders in developing new skills that are in demand or preferred in the global environment, thus leading to higher sales and growth.

These benefits of having outside experience for higher sales can be explained with the help of example of Jorma Olllila, the CEO of Nokia. Ollila is Finnish and has gained significant experiences in different parts of the world. According to the discussions by Marquardt (2012), the cross-cultural experiences and knowledge of Ollila are what have helped Nokia in developing a non-hierarchical management style. Marquardt (2012) discusses that Ollila had pressure at the time of joining to fire his employees, but instead he travelled across the world to locations where Nokia has its presence and identified challenges faced by its employees in different countries and thus tried to adopt suitable practices to ensure that they were benefitted and their cultural needs were met. This thus shows the importance of outside organisational experience for promoting cross-cultural management of the firms. Klitmøller and Lauring (2013) have presented the example of a president of an Australian company who had not worked with people from any other country and faced major challenges while working with the people of African culture because of their cultural difference and different working style.

However, experts like Blaschke et al (2012) and Crilly and Sloan (2012) have supported the adoption of the inside-out approach, wherein companies tend to leverage upon their internal strengths and weaknesses for developing suitable success strategies. Blaschke et al (2012) argue that it is not the external environment that helps a firm in succeeding but it is the internal strengths and resources that help them in being able to leverage upon external opportunities for increasing their performance and growth. Though it has been argued upon the external opportunities that become simpler to be leveraged upon because of outside and a more global experience of the leaders and managers, Crilly and Sloan (2012) argue that there are lot of skills like education, technical abilities etc. that come with education and working continuously in the same organisation for over a period of time and these skills are more important and crucial for development of new products and services in a firm rather than external knowledge and experience. Thus this presents a strong point regarding the way external experience might not be required for growth in a global environment.

Schneider et al (2013) have supported the earlier discussed inside-out approach as well by focusing and explaining the benefits of internal culture of an organisation. Schneider et al (2013) argue that every company has a set of shared beliefs, values and assumptions and hence the same culture must be focused upon while operating in each country. Some of the key characteristics of a strong organisational culture include shared responsibilities, shared decision making, enhanced communication etc., which cannot be obtained from experience gained from outside the firm. Hence, higher experience and continued focus on strengthening the internal organisational culture is essential for achieving higher success (Hill et al 2014). Though it has been often argued that organisations must alter and change their culture in every country according to the culture of that country, Ferraro and Brody (20154) argue that the basic organisational culture of a firm must remain same globally to establish a distinct image and distinct strengths and benefits. For example, Google is one of the biggest global companies but it focuses on the same cultural aspects of innovation, enhanced communication and teamwork. In addition, Li et al (2013) also discuss that Larry Page and Sergey Brin focused on their knowledge and strengths and capabilities and their technical expertise to make Google succeed. However, at the same time the fact that Google now alters its management strategies in different countries according to needs of the employees suggest that experience outside the firm is essential somewhere or the other.

Conclusion

The study aimed at evaluating if experience outside organisation is essential for leaders and firms to achieve success in the global business environment or not. While the arguments against the idea suggest that the firms need to focus on their internal strengths and weaknesses and internal culture to succeed, the arguments in favour of the idea suggest that the firms need to adopt cross-cultural management and must gain experience outside for being able to identify and leverage upon new opportunities. It can be thus suggested for global firms to strike a balance between internal strengths and external opportunities and combine outside experience with organisational growth for achieving better results.

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