Advances in International Management Volume 19 the Global Mindset

LIST OF CONTRIBUTORS

Bruce J. Avolio University of Nebraska-Lincoln, USA

chon Beechler Duke Corporate Education, USA

B. Ram Baliga
Wake Forest University, USA
S

Rabi S. Bhagat
University of Memphis, USA
Tejinder K. Billing
Nakiye A. Boyacigiller
Sabanci University, Turkey
Rachel Clapp-Smith
University of Nebraska-Lincoln, USA
Charlotte A. Davis
P. Christopher Earley
National University of Singapore,Singapore
Michael A. Hitt
Texas A&M University, USA
Mansour Javidan
Thunderbird School of GlobalManagement, USA
Orly Levy
Culture Crossing Consulting, Israel
Fred Luthans
University of Nebraska-Lincoln, USA
Elaine Mosakowski
University of Colorado, Boulder, USA
Charles Murnieks
University of Colorado, Boulder, USA
Luciara Nardon
Vlerick Leuven Gent Management School,Belgium
Gordon Redding
INSEAD, France
Richard M. Steers
University of Oregon, USA
Sully Taylor
Portland State University, USA
Harry C. Triandis
University of Illinois – Urbana Champaign,USA
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PREFACE

In 2006, a cover story in Business Week suggested that global forces arelargely controlling the domestic U.S. economy and that there is little that theU.S. government can do. Currently, the United States imports almost $2.2trillion in foreign goods; in contrast, the U.S. government receivesapproximately $2.4 trillion in revenues. And, in 2007, the costs of importsare expected to exceed government revenues. In the past, the United Stateshas had a major influence on the world’s economy, but this influence iswaning (Mandel & Dunham, 2006). The substantial development of severalcountry economies such as in China and India and growing competition inglobal markets have fueled this change. These changes have heightened theimportance of firms’ international strategies and increased the need for moreand better research to understand how to develop such strategies andimplement them successfully (Nachum & Zaheer, 2005).

The importance of international strategy is shown by the influence ofinternational activity by major multinational companies (MNCs). Accord-ing to the World Investment Report (2005), major MNCs had about 54% oftheir sales outside their domestic market and almost 50% of their assets andemployees reside outside their home country. Furthermore, in 2002, 12% ofthe world’s Foreign direct investment (FDI) was made by firms fromemerging market countries (Hoskisson, Kim, White, & Tihanyi, 2004). Forthese reasons, more research on the underpinnings and outcomes ofinternational strategy is warranted. International strategy is developed,implemented, and managed by top executives and managers in theirrespective companies.

The increasing extent of globalization has heightened the importance ofinternational strategy. These changes require managers to have a ‘‘globalmindset’’ to develop and manage effectively the firm’s international strategy.Thus, the global mindset concept explored in this volume is highlyimportant. We examine this concept with a series of essays written byexcellent scholars with knowledge of the international environment and thecontents and outcomes of a global mindset. We owe a debt of gratitude toeach of these authors.

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PREFACEx

We thank our colleagues and administrators at our respective institutionsfor the support and inspiration for our work on this volume. We also owe adebt of gratitude to Argie Butler for her work on compiling, integrating, andpreparing the final manuscript for this volume. We are pleased to presentthis volume on The Global Mindset to you.

REFERENCES

Hoskisson, R. E., Kim, H., White, R. E., & Tihanyi, L. (2004). A framework for understanding

international diversification by business groups from emerging economies. In: M. A. Hitt

& J. L. Cheng (Eds), Theories of the multinational enterprise: Diversity, complexity and

relevance. Advances in International Management (pp. 137–163). Oxford, UK: Elsevier/

JAI.

Mandel, M., & Dunham, R. S. (2006). Can anyone steer this economy? Business Week,

November 20, 57–62.

Nachum, L., & Zaheer, A. (2005). The persistence of distance? The impact of technology on

MNE motivations for foreign investment. Strategic Management Journal, 26, 747–767.

World Investment Report. (2005). Transnational corporations and the internationalization of

R&D. Geneva, Switzerland: United Nations Conference on Trade and Development

(UNTAD).

Mansour JavidanRichard M. Steers

Michael A.HittVolume Co-Editors

THE GLOBAL MINDSET:

AN INTRODUCTION

Michael A. Hitt, Mansour Javidan and

Richard M. Steers

Limited Brands is a powerhouse in the global fashion industry with brandslike Victoria’s Secret. Founded in 1963, with one women’s apparel store inColumbus, Ohio, it has grown into more than 3,500 stores and seven retailbrands. It was ranked as the ‘‘most admired company’’ in the specialty retailindustry by Fortune Magazine in 2003. The company’s success requires theability to ensure that their items of fashion apparel are constantly appealingto the continuously changing tastes of their female customers. It thus hingeson the company’s agility in identifying fashion trends in a timely fashion andin working with over 300 partners and their over 1,000 factories in 40countries to ensure timely availability of the product and its high quality.

The core of Limited Brands’ agility lies in its systems of interdependen-cies. The company works hard at building strong interdependence systemsamong its fashion experts, its marketing groups, and its global network ofover 300 suppliers in 40 countries based on mutual understanding of needs,expectations, strategies, and capabilities. The company invests much timeand energy in recruiting suppliers from various parts of the world andmanaging and sustaining trusting relationships with them. But this is noeasy task because the suppliers represent many different countries withdiverse sociocultural, institutional, political, legal, and economic systems.

The Global Mindset

Advances in International Management, Volume 19, 1–10

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So what types of managers and executives does a company like LimitedBrands need to nurture such a complex web of global interdependencies? Itneeds managers who can understand and are able to deal with excessivelevels of ambiguity and diversity, managers who have the appropriateknowledge about diverse sociocultural and institutional systems and havethe intellectual capacity to absorb but not be paralyzed by high levels ofcomplexity, managers who have the personal attributes that enable them towork closely and effectively with those from other cultural regions of theworld, managers who can build sustainable trusting relationships withindividuals, groups, and organizations in different countries to ensure thatthey help Limited Brands achieve its global ambitions.

The cadre of managers and executives who can accomplish the abovetasks possesses a very important individual feature. We call it ‘‘globalmindset.’’ Global mindset is a set of individual attributes that, combined,enable the global executive to succeed in influencing those from differentparts of the world to work together to achieve corporate objectives.

As suggested in the example, a global mindset has become increasinglyimportant for managers to manage and compete effectively in globalmarkets. In fact, research has recently shown that having a global mindset isnecessary for successful internationalization (Nummela, Saarenketo,& Puumalainen, 2004). Because of its importance, this book focuses onthe development, content, and implementation of a global mindset inorganizations. Increasing globalization has placed increasing importance onmanagerial global mindsets (Javidan, Dorfman, de Luque, & House, 2006).

According to Friedman (2005), the world has become flatter, with manymore countries and companies competing in global markets. Friedman sug-gests that first countries began to globalize, followed by companies and nowindividuals. He argues that what is going on today is much broader thanwhat we normally refer to as globalization. It is more than communicationamong governments, businesses, and people and it is more than interactionsamong organizations. What is happening today is the emergence of newsocial, political, and business models and impacts deep, ingrained aspectsof global societies (Friedman, 2005). This flattening of the world represents afundamental change and requires that managers of organizations throughoutthe world develop and use a global mindset.

As a relatively new concept, there are varying definitions of a ‘‘globalmindset.’’ This variance is reflected in the multiple chapters included in thisvolume. The definitions vary from quite broad to exceedingly narrow. Yet,none of them conflict with one another. They are either overlapping orcomplementary. For the purposes of this volume, we define global mindset

The Global Mindset: An Introduction 3

as ‘‘a set of individual attributes that enable an individual to influenceindividuals, groups, and organizations from diverse social/cultural/institu-tional systems.’’

The idea for this volume on the global mindset began with a conferenceon the topic held at Thunderbird School of Global Management in the fallof 2005. There were a large number of participants whose ideas helped toprovide a base for this volume. We acknowledge the Thunderbird Conferenceon the Global Mindset and all of the participants. These participants arelisted in the appendix to this volume.

LOGIC FOR THE VOLUME

Because of the importance of a global mindset from both a theoretical and apractical point of view, there is need to examine this construct furtherto understand its contents, how it is developed, when and how it should beapplied, and what its consequences are. Thus, we invited a select group ofscholars to develop chapters on specific aspects of this topic to help builda volume accomplishing these goals. Our aim here was to invite the foremostthinkers and writers on this topic.

Among those invited were Orly Levy, Culture Crossing Consulting; SullyTaylor, Portland State University; Nakiye Boyacigiller, Sabanci University;and Schon Beechler, Duke Corporate Education, who recently published anarticle, ‘‘What We Talk About When We Talk About Global Mindset,’’ inthe Journal of International Business Studies. We asked them to extend theirthinking for the paper appearing in this volume.

Gordon Redding is a highly respected scholar of international organiza-tional behavior, Director of INSEAD’s Euro-Asia and ComparativeResearch Centre, and author of numerous publications, including his callto include the influences of history and culture and emergence of institutionsin developing international business theories in ‘‘The Thick Description andComparison of Societal Systems of Capitalism’’ (Journal of International

Business Studies, 2005) and his classic work in The Spirit of Chinese

Capitalism (Walter de Gruyter, 1993). We asked Gordon to write aboutthe institutional effects on the development and use of a global mindset.Gordon is a prolific author who has recently focused on the effectsof informal institutions (e.g., national culture) on a global mindset. Thus,his chapter sets the stage for understanding the nuances of how a globalmindset develops and its effects in different cultural settings.


Christopher Earley (National University of Singapore) is a noted scholarin the study of individual and organizational behavior in internationalcontexts. His work has focused on the intriguing concept of cultural intel-ligence (CQ: Developing Cultural Intelligence at Work, Stanford UniversityPress, 2006, with Soon Ang and Joo-Seng Tan). We asked Chris to explorethe linkages between cultural intelligence and a global mindset. He workedwith Elaine Mosakowski (University of Colorado), a respected scholarof international strategy and entrepreneurship, and a younger scholar,Charles Murnieks (University of Colorado), to develop his chapter.

Fred Luthans (University of Nebraska) is a highly respected scholar oforganizational behavior who has studied behavior in international contextsfor a number of years. He developed the concept of psychological capital andwe asked him to explicate how psychological capital could be integrated witha global mindset. He worked with noted leadership scholar, Bruce Avolio(University of Nebraska), and a younger scholar, Rachel Clapp-Smith(University of Nebraska), to develop a chapter for this volume. This chapterbuilds on the earlier work of Luthans and Avolio with Carolyn Youssefpublished in Psychological Capital: Developing the Human Competitive Edge

(Oxford University Press, 2006).Schon Beechler, Duke Corporate Education, and Mansour Javidan,

Thunderbird School of Global Management, both noted scholars inthe field, focused their attention on the relationship between leadershipprocesses and the global mindset. This work is based on their previous workpublished in Beechler’s People Strategies in Global Firms (Routledge, 2004)and Javidan’s earlier work in House et al.’s Culture, Leadership, and

Organizations: The GLOBE Study of 62 Societies (Sage, 2004).Luciara Nardon, Vlerick Leuven Gent Management School, and Richard

M. Steers, University of Oregon, both active researchers in the field of cross-cultural management, were invited to write a chapter examining theunderlying learning processes involved in developing a global mindset. Thispaper represents an extension of their previous work published in Managing

in the Global Economy (M. E. Sharpe, 2006) by examining how managerscan learn to adapt quickly to unanticipated realities on the ground in newglobal ventures.

Finally, Rabi Bhagat (University of Memphis), a noted scholar of organ-izational behavior and international management, was asked to explain howmanagers develop a global mindset and thus become global managers. Rabi iscoeditor (with Richard M. Steers) of the forthcoming Handbook of Culture,

Organization, and Work (Cambridge University Press, April, 2008). Workingwith Rabi to develop this chapter was the highly respected industrial


organization psychologist, Harry Triandis, who has made important contri-butions to the field of organizational behavior in an international context,including his classic book, Culture and Social Behavior (McGraw-Hill, 1994).Rabi and Harry were joined by Ram Baliga, a regarded scholar of interna-tional strategy, and two young scholars, Tejinder Billing (University ofMemphis) and Charlotte Davis (University of Memphis).

Along with our own introductory chapters and the ending chapter inwhich we integrate the knowledge contained in the volume to present a newmodel of the global mindset, this volume provides an important advance forthe study and understanding of this critical new concept.

CHAPTER CONTENTS

The first chapter following this introduction, by Levy, Taylor, Boyacigiller,and Beechler, focuses on explicating the global mindset domain. They arguethat the global mindset has become increasingly important to academics andpractitioners because of its criticality to long-term competitive advantage inglobal markets. They suggest that the global mindset reflects the cognitivecapabilities of managers in multinational companies. They review therelevant literature for global mindset to include work on the culturalperspective, the strategic perspective, and the multinational perspective.Their chapter also presents the core properties and dimensions of the globalmindset. Importantly, Levy et al. provide an integrative framework for un-derstanding a global mindset. In this framework, they define a globalmindset as ‘‘a highly complex cognitive structure characterized by an open-ness to and an articulation of multiple cultural and strategic realities on bothglobal and local levels, and the cognitive ability to mediate and integrateacross this multiplicity.’’ A global mindset helps managers to process criticalinformation that allows them to navigate global markets because they areattentive to cultural and strategic dynamics and thus access multiple infor-mation sources to better analyze their global competitive landscape. Finally,they extend their earlier work by examining the importance of a fit betweenmanagers’ global mindset and the strategic capabilities of the firm.

The chapter by Redding examines the challenges involved in developing aglobal mindset. Redding examines the challenges in developing a globalmindset because of the alternative mindsets based on a variety of culturaland institutional contexts one encounters. His work takes a socioeconomicperspective to examine the emergence of different economic and culturalcontexts. He then explores how these contexts affect patterns of cognition


(connecting mindsets to economic actions). His paper uses France as anexample to examine the components of a complex system that serveas antecedents to the development of a global mindset.

The next chapter by Earley, Murnieks, and Mosakowski examines theinterrelationship between cultural intelligence and global mindset. Theyargue that the concept of cultural intelligence helps to extend our under-standing of the global mindset. Earley et al. suggest that a global mindsetis an orientation to the world, a very broad connotation of the construct.Further, they describe a global orientation as having several components,including a curiosity about context, acceptance of complexity, sensitivity todiversity, willingness to seek opportunities in uncertainty, faith in organ-izational processes, emphasis on continuous improvement, an extended timeperspective, and systems thinking.

They then explore this concept through a review of several works focusedon it. Alternatively, cultural intelligence represents ‘‘a person’s capability toadapt effectively to new cultural contextsy .’’ It includes dimensions ofcognitive flexibility, acquired world knowledge and motivation to use thisknowledge, and having or acquiring the capabilities to respond appropri-ately to each different cultural context. Earley et al. compare the globalmindset and cultural intelligence constructs and conclude that culturalintelligence is broader in some ways and narrower in others. Their reviewsuggests that it may be important to integrate cultural intelligence into theglobal mindset construct. We explore this further in the last chapter.

Clapp-Smith, Luthans, and Avolio integrate cultural intelligence in amodel linking psychological capital and global mindset. They interpret therelationship between cultural intelligence and global mindset somewhatdifferently compared to Earley et al. They suggest that cultural intelligenceis a determinant of a global mindset and that the relationship between thetwo constructs is moderated by psychological capital. Their work is focusedat the individual level of analysis as opposed to the organizational level.Luthans et al. use the definition of global mindset resulting from theThunderbird conference, which is ‘‘the cognitive ability that helps individ-uals figure out how to best understand and influence individuals, groups,and organizations from diverse sociocultural systems.’’ Luthans et al. takea sociocognitive approach to a global mindset. They use the constructs ofpositive psychological capital and authentic leadership to explore the modelof global mindset. They end their chapter with an interesting set of impli-cations for the field of international management and for future research.

In their chapter, Beechler and Javidan agree with Friedman (2005) that thenew age of globalization is unique, creating a blurring of national boundaries


and substantially enhancing international trade. As such, they argue thatfirms must be able to think and act globally. Similar to Friedman (2005), theyexplain the complex web of interrelationships that have developed acrosscompanies and country boundaries. Because of these new conditions, theyargue that significant need exists for truly global leaders but that most firmsface leadership shortages. Beechler and Javidan review the research on globalleadership competencies and conclude that the number of separate compe-tencies is almost endless, summarizing them in six categories (traits, cogni-tive, business expertise, vision, relationship skills, and organizing expertise).They define global leadership as ‘‘y the process of influencing individuals,groups, and organizations (inside and outside the boundaries of the globalorganization) representing diverse cultural/political/institutional systems tocontribute toward the achievement of the global organization’s goalsy,’’whereas they define a global mindset ‘‘y as an individual’s stock of knowl-edge, cognitive, and psychological attributes that enable him/her to influenceindividuals, groups, and organizations from diverse sociocultural systems.’’Importantly, Beechler and Javidan do an excellent job of integrating (andcontrasting) the concepts of global leadership and global mindset. In sodoing, they develop an interesting model of this integration.

Nardon and Steers begin their chapter with an interesting example of amanager’s dealings in one day. She is located in Bangalore, India, andinteracts with her business partner in California, a client in Hong Kong,Australian clients, and a partner in Mexico before she prepares for herupcoming trip to Germany. The example highlights the complexity of aninternational manager’s job. Nardon and Steers review the major challengesof working across cultures such as dealing with new cultures without time tolearn about them, a lack of clarity as to which culture a manager shouldadapt to, and the increasing number of virtual intercultural meetings. Usingexperiential theory, they present a model to explore how individuals canlearn quickly about the new cultures they encounter. This learning andadaptation helps managers develop global mindsets.

Bhagat, Triandis, Baliga, Billing, and Davis focus their chapter on what isneeded to become a global manager. They develop a framework to providean understanding of the development of global mindset as a function ofindustry-specific, organization-specific, and person-specific antecedents.They also suggest that the global mindset evolves over time in the contextof the cultural variations in which multinational firms operate. In so doing,they present examples of global managers such as Carlos Ghosn of Nissanand Jorma Ollila of Nokia. They examine the antecedents and outcomes of aglobal mindset. Bhagat et al. recommend a multilevel approach to the


development and understanding of a global mindset. This chapter providesa good overview building on the earlier chapters with a micro-orientation ofa global mindset. As such, it leads effectively into the final chapter.

In the last chapter, the three coeditors of the book, Javidan, Steers, andHitt, attempt to capture and codify, to the extent possible, the new knowl-edge on the global mindset presented in the volume. They compare andcontrast the various definitions of global mindset and present an integrativedefinition to serve as a base for future work on the construct. They developa model of a global mindset that highlights the contributions from the otherchapters in the book. Finally, Javidan et al. present critical research ques-tions to serve as a catalyst to future research and managerial implications ofthe important theme of this book.

This book explores the concept of a global mindset, seeking to clarifyand emphasize its importance for future research and practice. Thus, webelieve this volume breaks new ground on a highly important construct ininternational management.

REFERENCES

Bhagat, R., & Steers, R. M. (April, 2008). Handbook of culture, organization, and work.

Cambridge, UK: Cambridge University Press (Forthcoming).

Earley, C., Ang, S., & Tan, J.-S. (2006). CQ: Developing cultural intelligence at work. Palo Alto,

CA: Stanford University Press.

Friedman, T. L. (2005). The world is flat: A brief history of the twenty-first century. New York:

Farrar, Straus and Giroux.

House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (2004). Culture,

leadership and organizations: The Globe study of 62 societies. Thousand Oaks, CA: Sage.

Javidan, M., Dorfman, P. W., de Luque, M. S., & House, R. J. (2006). In the eye of the

beholder: Cross cultural lessons in leadership from project GLOBE. Academy of

Management Perspectives, 1, 67–90.

Luthans, F., Youssef, C. M., & Avolio, B. (2006). Psychological capital: Developing the human

competitive edge. New York: Oxford University Press.

Nummela, N., Saarenketo, S., & Puumalainen, K. (2004). A global mindset – A prerequisite for

successful internationalization?. Canadian Journal of Administrative Sciences, 21(1),

51–64.

Pucik, V., Beechler, S., & Evans, P. (2004). People strategies in global firms. Oxford, UK:

Routledge.

Redding, G. (1993). The spirit of Chinese capitalism. Berlin: Walter de Gruyter.

Redding, G. (2005). The thick description and comparison of societal systems of capitalism.

Journal of International Business Studies, 36, 123–155.

Steers, R. M., & Nardon, L. (2006). Managing in the global economy. New York: M. E. Sharpe.

Triandis, H. (1994). Culture and social behavior. New York: McGraw-Hill.


APPENDIX

Bruce Avolio U
niversity of Nebraska Olufemi Babarinde T hunderbird School of Global Management Paul Beamish U niversity of Western Ontario Schon Beechler D uke Corporate Education Dharm P. S. Bhawuk U niversity of Hawaii at Manoa David Bowen T hunderbird School of Global Management Angel Cabrera T hunderbird School of Global Management Peter Dorfman N ew Mexico State University Miriam Erez T echnion – Israel Institute of Technology John Frankenstein C enter for Global Affairs, School of Continuing &
Professional Studies, New York University
Hal Gregersen L ondon Business School Deborrah Himsel T hunderbird School of Global Management Robert Hisrich T hunderbird School of Global Management Michael A. Hitt T exas A&M University Nora Hughes I ntel Mansour Javidan T hunderbird School of Global Management Henry W. Lane N ortheastern University Orly Levy C ulture Crossing Consulting Stefanie Lenway U niversity of Illinois at Chicago Fred Luthans U niversity of Nebraska-Lincoln Nandani Lynton T hunderbird School of Gobal Management Thomas Murtha U niversity of Illinois at Chicago Luciara Nardon V lerick Leuven Gent Management School Luke Novelli C enter for Creative Leadership Jone Pearce U niversity of California at Irvine Christine Pearson T hunderbird School of Global Management Margaret Phillips P epperdine Lyman Porter U niversity of California at Irvine Sheila Puffer N ortheastern University Lakeesha Ransom U niversity of Minnesota Gordon Redding I NSEAD Simcha Ronen T el-Aviv University Sim Sitkin D uke University Anne Stringfellow T hunderbird School of Global Management Mary Sully de Luque T hunderbird School of Global Management Stephen Tallman U niversity of Richmond Mary Teagarden T hunderbird School of Global Management

APPENDIX (Continued )


Harry C. Triandis U
niversity of Illinois at Urbana-Champaign Anne Tsui A rizona State University Jutta Ulrich T hunderbird School of Global Management Paul Varella U niversity of Calgary Karen Walch T hunderbird School of Global Management David Waldman A rizona State University John Yang B IMBA-Beijing University

GLOBAL MINDSET: A REVIEW

AND PROPOSED EXTENSIONS

Orly Levy, Sully Taylor, Nakiye A. Boyacigiller and

Schon Beechler

Over the past decade, global mindset surfaced as a major long-term com-petitive advantage for firms competing in the global arena. Increasingly, ac-ademics and practitioners have pointed to global mindset, or the cognitivecapabilities of major decision makers, as critical to organizations because ofits impact on a number of key organizational success factors (Gupta &Govindarajan, 2002; Murtha, Lenway, & Bagozzi, 1998; Harveston, Kedia, &Davis, 2000; Jeannet, 2000; Levy, 2005). In a dynamic, complex world drivenby fierce global competition there has been a shift from structural and ad-ministrative competencies to mindset-based competencies (Bartlett &Ghoshal, 1990). As Govindarajan and Gupta (1998, p. 2) so aptly put it:‘‘Success is all in the [global] mindset.’’

The idea that the cognitive capabilities, or global mindset, of senior man-agers in multinational companies (MNCs) is central to organizational per-formance is not a new one; it dates back to early works by Aharoni (1966) andKindleberger (1969) on foreign direct investment. Perlmutter (1969), however,was the first to focus attention specifically on managerial cognition by for-mally integrating the mindset of senior executives into his typology of MNCs.

The global integration of world economy and the immense complexityinvolved in managing current business realities have strengthened the focuson the cognitive aspects of MNCs (Doz & Prahalad, 1991; Prahalad, 1990).As globalization increases, MNCs are exposed to concurrent and often

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contradictory pressures for global integration and local responsiveness(Doz, Santos, & Williamson, 2001; Prahalad & Doz, 1987; Bartlett &Ghoshal, 1990). Because of this, senior managers must coordinate and in-tegrate geographically distant operations and a culturally diverse workforce(Bartlett & Ghoshal, 1990). Managers are also required to address localneeds and to manage the varied interorganizational relationships with a hostof stakeholders, including customers, suppliers, strategic partners, and host-country governments (Rosenzweig & Singh, 1991). Senior managers ofMNCs must therefore find ways to balance conflicting function, business,and country interests (Murtha et al., 1998; Evans & Doz, 1992). To managethese demands, both practitioners and researchers propose that managerswith a global mindset are better prepared for the complex multiple organ-izational environments, indeterminate structures, and heterogeneous cul-tures that characterize contemporary MNCs (Doz & Prahalad, 1991).

The increasing recognition that the cognitive capabilities of MNCs areimportant to firm competitiveness has generated disparate and at timesconflicting definitions and frameworks but very limited empirical research inthis field. Conceptually, phrases like ‘‘transnational mentality’’ (Bartlett &Ghoshal, 1989), ‘‘global mindset’’ (Rhinesmith, 1992), and ‘‘multinationalmindset’’ (Caproni, Lenway, & Murtha, 1992) have found favor in bothacademic and popular media. However, the characteristics of these conceptsremain relatively ambiguous. Global mindset has come to denote all thingsglobal or transnational, including individual attitudes, skills, competencies,and behaviors, as well as organizational orientations, structures, strategies,policies, and practices.

This chapter analyzes and integrates the current thinking on globalmindset, considering the significance that managerial cognition plays inMNCs’ success. The following section reviews the existing research on glo-bal mindset and identifies two major dimensions that underlie the variouswritings regarding global mindset. Then, we evaluate the global mindsetfield as a whole and present our own conceptual model of global mindsetand propose some illustrative theoretical propositions. To conclude, wesummarize the major contributions of our approach.

LITERATURE REVIEW

In this section, we offer a careful and systematic review of the theoretical andempirical studies relating to global mindset that have been published in booksand peer-reviewed journals. This review includes studies that use differing terms

Global Mindset: A Review and Proposed Extensions 13

to refer to the idea of global mindset but consider the same general concept.At the same time, we exclude studies that do not specifically pertain to globalmindset but concentrate on such areas as global leadership, expatriates, andexpatriation, even though they may focus on similar underlying themes foundin the global mindset literature. We then identify two fundamental themes inthe global mindset literature – cosmopolitanism and cognitive complexity – anduse these concepts to develop a new integrative approach to global mindset.

We have found, in our review of the global mindset literature, that themajority of writers consider global mindset in relation to two salient di-mensions of the global environment, specifically, strategic variety and com-plexity and/or national and cultural diversity. Accordingly, in the nextsection, we initially discuss Perlmutter (1969), whose work on geocentrism(global mindset) instigated subsequent research that focuses on the culturalaspect of global mindset. We label this first approach the cultural perspective,which concentrates on the cultural distance and diversity related to globalmarkets and operations and emphasizes the challenges integral to managingacross national and cultural boundaries. We propose that cosmopolitanism,

as well as the attitudes and perspectives that are associated with it, functionsas the fundamental premise of the cultural approach to global mindset.

Next, we present Bartlett and Ghoshal’s (1989) theoretical approach andthe related research on strategic complexity in international management.We label this approach the strategic perspective, which is derived from re-search on international strategy and concentrates on environmental com-plexity as well as the strategic variety arising from globalization. Thisperspective underscores the challenges inherent in managing multifacetedoperations in geographically distant and strategically varied businesses whileconcurrently reacting to local conditions and needs (Prahalad & Doz, 1987).We suggest that this body of work draws on cognitive complexity and itsrelated capabilities in conceptualizing global mindset.

In the third and final section of our literature review, we present themultidimensional perspective. The work of Rhinesmith (1992, 1993, 1996)acts as the foundation for this body of work and here global mindset isconceptualized in both cultural and strategic terms while incorporating a hostof additional characteristics, as we discuss below.

The Cultural Perspective

Research in the cultural school of thought considers global mindset fromwithin the context of the cultural diversity inherent in the process of

ORLY LEVY ET AL.14

globalization. According to this perspective, senior managers are increas-ingly faced with the challenge of prevailing over domestic myopia and anethnocentric mindset, traversing cultural boundaries, interacting with em-ployees from many countries, and managing culturally divergent interor-ganizational relationships. The cultural perspective suggests that the way tomanage these challenges effectively is to overcome an ethnocentric mindsetand cultivate a global mindset – one that includes cultural self-awareness,openness to and understanding of other cultures, and selective incorpora-tion of foreign values and practices.

The cultural perspective uses Perlmutter’s (1969) groundbreaking tripar-tite typology of managerial mindsets in MNCs as a conceptual foundation.Diverging from previous work in international business, Perlmutter and hiscolleagues (Perlmutter, 1969; Heenan & Perlmutter, 1979; Chakravarthy &Perlmutter, 1985) suggest a typology of MNCs specifically based on seniorexecutives’ mindsets. Initially, Perlmutter (1969) made a distinction betweenthree principal states of mind, or attitudes, toward managing a multi-national enterprise: ethnocentric (home-country orientation), polycentric

(host-country orientation), and geocentric (world orientation). Perlmutterproposed that these orientations affect and mold various characteristics ofthe multinational enterprise, including structural design, strategy and re-source allocation, and, in particular, management mindset and processes.Managers with a geocentric orientation, or a global mindset, exhibituniversalistic, supranational approaches, deemphasizing the importance ofcultural distinction and nationality when deciding who is capable or reliable(Perlmutter 1969). Superiority and nationality are not considered as equiv-alent since ‘‘good ideas come from any country and go to any countrywithin the firm’’ (Heenan & Perlmutter, 1979, pp. 20–21).

Perlmutter’s description of geocentrism acts as a foundation for many ofthe current conceptualizations of global mindset that concentrate on thechallenge of overcoming embedded ethnocentrism and rising above nation-ally entrenched views (e.g., Maznevski & Lane, 2004; Doz et al., 2001; Adler& Bartholomew, 1992a; Estienne, 1997). For example, Maznevski and Lane(2004) describe global mindset as a metacapability typified by two corre-sponding facets: an inclusive cognitive structure that directs attention andinterpretation of information and a well-developed competence for alteringand revising this cognitive structure with new experiences. They define globalmindset as ‘‘the ability to develop and interpret criteria for personal andbusiness performance that are independent from the assumptions of a singlecountry, culture, or context; and to implement those criteria appropriately indifferent countries, cultures, and contexts’’ (Maznevski & Lane, 2004,


p. 172). The notion that going beyond national borders and developingcomplex cultural knowledge is vital for firm success is also central to Adlerand Bartholomew’s (1992a) discussion of the ‘‘transnational manager.’’ Theyassert that while the traditional international manager views the world froma single-country perspective, the transnational manager has a global per-spective characterized by knowledge of, and appreciation for, many foreigncultures. In addition to focusing on perspectives, research within the culturalperspective stream often discusses global mindset in terms of cross-culturalskills and abilities (Adler & Bartholomew, 1992a; Estienne, 1997).1

Kobrin (1994) conducted the first empirical study that explicitly examinedthe construct of geocentrism, or global mindset, as defined by Heenan andPerlmutter (1979). He examined the popular supposition that firms with aglobal, integrated strategy and/or a global organizational structure will havea geocentric mindset. Kobrin concludes from his research results that whilethere is an association between a geocentric mindset and the geographicscope of the firm, the direction of causality is not clear. He proposes thatglobal mindset should be considered a multidimensional construct ratherthan a unidimensional reflection of firm-level characteristics. Several studies(Beechler, Levy, Taylor, & Boyacigiller, 2004; Taylor, Levy, Boyacigiller, &Beechler, forthcoming) also demonstrate that employees’ perceptions ofgeocentrism are positively related to organizational commitment.

An Underlying Dimension of the Cultural Perspective: Cosmopolitanism

Reviewing the literature on global mindset within the cultural perspective,we find that while most writers do not specifically cite the construct, cos-mopolitanism, and the attitudinal approach coupled with it, serves as anunderlying theme of the cultural stance to global mindset and thereforeshould be considered to be one of the major conceptual dimensions of theglobal mindset construct.

Cosmopolitanism, and the distinction between cosmopolitans and locals,first appeared in the social sciences in the 1950s (Merton, 1957; Gouldner,1957).2 After having fallen out of favor for a period of time, cosmopoli-tanism staged a comeback in the 1990s with the increased developmentand proliferation of global systems and transnational cultures (seeHannerz, 1996; Harvey, 2000; Beck, 2000; Breckenridge, Pollock, Bhabha,& Chakrabarty, 2000; Vertovec & Cohen, 2002a; Archibugi, 2003).3 In theirappraisal of work on cosmopolitanism, Vertovec and Cohen (2002b, p. 4)propose that cosmopolitanism simultaneously: (a) transcends the nation-state model; (b) reconciles actions and ideals that are oriented toward boththe universal and the particular, the global and the local; (c) is against

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cultural essentialism; and (d) embodies a variety of complex repertoires ofidentity, interest, and allegiance.

On a more individual or personal level, cosmopolitanism signifies a‘‘y perspective, a state of mind, or – to take a more process-oriented view –a mode of managing meaning’’ (Hannerz, 1996, p. 102). ‘‘Genuine’’ cos-mopolitans are identified by their ‘‘willingness to engage with the

Othery openness toward divergent cultural experiences, a search for con-trasts rather than uniformity y.’’ (Hannerz, 1996, p. 163; italics added).Simultaneously, however, cosmopolitanism has been defined as ‘‘y a matterof competencey a personal ability to make one’s way into other cultures,through listening, looking, intuiting, and reflecting’’ (Hannerz, 1996, p. 193).Even though cosmopolitans are often travelers by nature and are generallyengaged with global systems and transnational cultures, many writerssuggest that ‘‘y it is not travel that defines cosmopolitans – some widelytraveled people remain hopelessly parochial – it is mindset’’ (Kanter,1995, p. 23).4

In our framework, cosmopolitanism represents a state of mind that isfocused on the outside, the other, and seeks to reconcile the local and theglobal, the familiar and the foreign. A second crucial characteristic of cos-mopolitanism is openness, an eagerness to investigate and learn from others’meaning systems. Together, these two characteristics act as the foundationfor the cultural perspective in the literature on global mindset.

The Strategic Perspective

While the studies reviewed above all highlight the significance of recognizingcultural diversity and transcending national borders, studies framing globalmindset through a strategic lens consider global mindset in terms of theincreased complexity produced by globalization. MNCs are faced with thechallenge of successfully managing environmental and strategic complexityand incorporating geographically distant operations and markets, whileconcurrently acting in response to local demands (Prahalad & Doz, 1987;Prahalad, 1990; Kim & Mauborgne, 1996; Sanders & Carpenter, 1998). Thestrategic perspective on global mindset is founded on international strategyresearch that was conducted at Harvard in the 1970s and 1980s, particularlythe innovative research of Bartlett and Ghoshal (1989, 1990, 1992). Bartlettand Ghoshal classify the transnational organization as the ideal organiza-tion, which is not a distinct strategic posture or a specific organizationalstructure but is rather a new management mentality that ‘‘recognize(s) that


environmental demands and opportunities vary widely from country tocountryy (and) also recognize(s) that different parts of the company pos-sess different capabilities’’ (Bartlett & Ghoshal, 1989, p. 64).

The literature in the strategic perspective is founded on the assertionthat the increased complexity, heterogeneity, and indeterminacy of MNCs(Doz & Prahalad, 1991) can no longer be managed by structural and ad-ministrative mechanisms (Prahalad & Bettis, 1986; Doz & Prahalad, 1991;Evans, Pucik, & Barsoux, 2002). Accordingly, this perspective proposes thatthe key determinant of strategic capabilities of an MNC lies in cultivating acomplex managerial mindset (e.g., Bartlett & Ghoshal, 1989; Caproni et al.,1992; Murtha et al., 1998; Paul, 2000). Thus, the properties of global mind-set are depicted in terms of high cognitive abilities and information-processingcapabilities that allow managers to understand complex global dynamics (e.g.,Jeannet, 2000; Tichy, Brimm, Charan, & Takeuchi, 1992), balance betweencompeting demands and concerns (e.g., Murtha et al., 1998; Begley & Boyd,2003), reconcile the tensions between the local and the global (e.g., Kefalas,1998; Arora, Jaju, Kefalas, & Perenich, 2004), differentiate between andintegrate across cultures and markets (e.g., Govindarajan & Gupta, 2001;Gupta & Govindarajan, 2002), and examine and attend to global issues(e.g., Rhinesmith, 1993; Levy, 2005; Bouquet, 2005).

In defining global mindset, for instance, Jeannet (2000, p. 11) underscoresthe capacity to assimilate across domains: ‘‘[global mindset is]y a state ofmind able to understand a business, an industry sector, or a particularmarket on a global basis. The executive with a global mindset has the abilityto see across multiple territories and focuses on commonalities across manymarkets rather than emphasizing the differences among countries.’’ Jeannetpoints to a number of essential components of global mindset: evaluatingglobal markets, assessing globalization pathways, and offering a sufficientstrategic response. Jeannet suggests that global mindset is not solely a linearextension of the multinational mindset; it diverges significantly in terms ofthinking patterns, responses, and cognitive skills. Jeannet (2000) also em-ploys the notion of global mindset at the corporate level, defining it as‘‘those cultural aspects of a company that define the extent to which the firmhas learned to think, behave, and operate in global terms’’ (Jeannet, 2000,p. 199). He asserts that even having a pool of managers that possess a globalmindset is not sufficient if a company’s structure, processes, and behavior donot also support the same principles.

While some authors (Jeannet, 2000; Tichy et al., 1992) characterize globalmindset in relation to managers’ abilities to appreciate, distinguish, andintegrate across complex global dynamics, a few studies within the strategic

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perspective group focus on effectively balancing global integration with lo-cal responsiveness (e.g., Murtha et al., 1998; Begley & Boyd, 2003) or onreconciling the tension between ‘‘thinking globally’’ and ‘‘acting locally’’(e.g., Kefalas, 1998; Arora et al., 2004). Murtha et al. (1998), for example,depict global mindset as the ‘‘cognitive processes that balance competingcountry, business, and functional concerns’’ and assess the correlation be-tween global mindset and cognitive shift. In their study, Murtha et al. (1998)observe that the transformation in global strategy of a major MNC broughtabout a cognitive shift among managers in the organization toward a moreglobal mindset. Begley and Boyd (2003) similarly focus on mediating thetension between the global and the local, analyzing global mindset at thecorporate level. Echoing Jeannet (2000), Begley and Boyd (2003) contendthat in order to embed global mindset on an organization-wide level, sup-porting policies and practices must be in place to manage tensions relatingto structural (global formalization vs. local flexibility), processual (globalstandardization vs. local customization), and power (global dictates vs. localdelegation) concerns. Likewise, Kefalas (1998) and Arora et al. (2004) focuson the tension between ‘‘thinking globally’’ and ‘‘acting locally.’’ Kefalasmaintains that global mindset is typified by high levels of both conceptu-alization (the expression of fundamental ideas that depict a phenomenonand the identification of the major relationships between these ideas and thewhole) and contextualization (the adaptation of a conceptual framework tothe local environment) abilities (Kefalas, 1998; Arora et al., 2004).

Utilizing Kefalas and colleagues’ approach to global mindset (e.g.,Kefalas, 1998; Kefalas & Neuland, 1997; Kefalas & Weatherly, 1998), Aroraet al. (2004) find that managers are more adept at thinking globally (con-ceptualization) than they are at acting locally (contextualization). Theirstudy also shows that of all demographic characteristics, training in inter-national management, manager’s age, foreign country living experience,family member from a foreign country, and job experience in a foreigncountry have statistically significant effect on managers’ global mindset.

Govindarajan and Gupta (2001) and Gupta and Govindarajan (2002)similarly view the capacity to concurrently consider local cultures and mar-kets and global dynamics when making decisions as the central attribute ofglobal mindset. They define global mindset as a knowledge structure char-acterized by both high differentiation and high integration and ‘‘yone thatcombines an openness to and awareness of diversity across cultures andmarkets with a propensity and ability to synthesize across this diversity’’(Govindarajan & Gupta, 2001, p. 111). These authors characterize globalmindset at the corporate level as the aggregated mindsets of individuals


adjusted for the distribution of power and mutual influence among thegroup. Govindarajan and Gupta (2001) concede that the highest returns oninvestment in developing a global mindset will derive from a stronger focuson senior level managers. Nonetheless, their unequivocal advice is that if acompany’s goal is to secure and maintain global market leadership in itsindustry, it must strive to develop a global mindset in every unit and everyemployee.

Three empirical studies (e.g., Harveston et al., 2000; Nummela,Saarenketo, & Puumalainen, 2004; Bouquet, 2005) investigate the relation-ship between firm strategic position, market characteristics, and globalmindset. Harveston and colleagues observe that managers in firms that are‘‘born global’’ have a stronger global mindset, more international experi-ence, and higher risk tolerance than managers of gradually globalizing firms.Likewise, Nummela et al. (2004) demonstrate that market characteristics –the level of globalization of the market in which the firm operates and theturbulence of the market – are positively related to global mindset; man-agement experience, measured as international work experience, is alsopositively related to global mindset, while international education is not.

Finally, Bouquet (2005) considers the relationship between a firm’s deci-sion environment and top management team (TMT) global mindset.He defines global mindset as attention to global strategic issues and iden-tifies attention as the core element and, therefore, the primary expression ofglobal mindset. He hypothesizes that attention structures such as structuralpositions related to globalization and global meetings, which firms establishto regulate the distribution of attention of managers in the firm, will mediatethe relationship between firms’ decision environments and TMT attention.Bouquet’s (2005) research empirically supports the hypothesized relation-ships. Moreover, the results demonstrate a concave relationship between TMTattention to global issues and firm performance. He (2005) concludes thatboth inadequate and excessive amounts of TMT attention to global strategicissues can have a negative impact on firm performance; in other words,contrary to accepted wisdom, more global mindset is not always better.

In contrast to the above studies that examine the relationship between afirm’s characteristics and global mindset, Levy (2005) analyzes the relation-ship between TMT attention patterns, deemed a primary manifestation ofglobal mindset, and a firm’s global strategic posture. She finds consistentsupport for the proposition linking TMT attention patterns and globalstrategic posture, concluding that firms are more likely to be highly globalwhen their top management focuses on the global environment and takes adiverse set of this environment’s elements into account.

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Other relevant studies at the TMT level used background characteristicsof team members, especially international experience, as a proxy for globalmindset, broadly defined: ‘‘y international experience may be a surrogatefor cultural knowledge or a global mind set which captures the skills nec-essary for successfully formulating and implementing an international strat-egy’’ (Peyrefitte, Fadil, & Thomas, 2002, p. 496). The underlying premise isthat international experience exposes executives to different cultures, valuesystems, languages, and institutional environments (Carpenter, Sanders, &Gregersen, 2001) as well as to diverse information and knowledge sources.This exposure results in superior cross-cultural and cognitive abilities or‘‘new ways of learning and responding to stimuli because of socio-culturaldifferences’’ (Ricks, Toyne, & Martinez, 1990, p. 220). These studies exam-ine the relationship between international experience and a variety oforganizational outcomes, including internationalization (Sambharya,1996; Reuber & Fischer, 1997; Tihanyi, Ellstrand, Daily, & Dalton, 2000;Carpenter & Fredrickson, 2001; Athanassiou & Nigh, 2002; Peyrefitte et al.,2002; Tseng, Tansuhaj, & Rose, 2004; Caligiuri, Lazarova, & Zehetbauer,2004), financial performance (Roth, 1995; Daily, Certo, & Dalton, 2000;Carpenter et al., 2001), choice of entry mode (Herrmann & Datta, 2002),and learning (Yeoh, 2004). For example, Sambharya (1996), Reuber andFischer (1997), Tihanyi et al. (2000), Carpenter et al. (2001), Athanassiouand Nigh (2002), Peyrefitte et al. (2002), and Tseng et al. (2004) find apositive relationship between international experience of top managementand internationalization. However, Athanassiou and Nigh (2002) find thatthe impact of international experience of each individual TMT member oninternationalization is not equal, but rather weighted by his or her centralitywithin the team. As a result, international experience counts for more orless, depending on the structural position of the individual team member(Athanassiou & Nigh, 2002). Similarly, Caligiuri et al. (2004) also focus oninternationalization, but use national diversity of the TMT as an indicatorof international experience rather than individual international experience.They observe a positive relationship between national diversity of the TMTand internationalization. Daily et al. (2000) and Carpenter et al. (2001) finda positive association between international experience of senior executivesand a firm’s financial performance. Daily et al. (2000) also note that thedegree of internationalization of the firm moderates the relationship be-tween international experience and performance. While Roth (1995) ob-serves that international experience measured in terms of managinginternational activities has no direct or interactive effect on performance,international experience measured by overseas assignments has a direct


effect when there is a high degree of internationalization and a negativeeffect when there is a low degree of internationalization.

An Underlying Dimension of the Strategic Perspective: Cognitive Complexity

Although it is rarely overtly mentioned in the literature, cognitive complex-ity and the cognitive capabilities associated with it, serves as an underlyingtheme of the strategic perspective and should therefore be considered asecond major conceptual dimension of global mindset. Research on cog-nitive complexity dates back to the 1950s (e.g., Bieri, 1955; Harvey, Hunt, &Schroder, 1961; Schroder, Driver, & Streufert, 1967; Schroder & Suedfeld,1971; Streufert & Nogami, 1989; Streufert, Pogash, & Piasecki, 1988;Streufert & Streufert, 1978; Streufert & Swezey, 1986). In the realm ofmanagement, the complexity of managerial cognition has been accepted forquite some time as a major factor impacting decision making, strategicchoice, and organizational performance (Weick, 1979; Kiesler & Sproull,1982; Bartunek, Gordon, & Weathersby, 1983; Schwenk, 1984; Duhaime &Schwenk, 1985; Ginsberg, 1990; Miller, 1993).

Cognitive complexity represents the degree of differentiation, articulation,and integration within a cognitive structure (Bartunek et al., 1983; Weick &Bougon, 1986). In other words, a cognitive structure composed of a rela-tively large number of well-integrated and finely articulated components isconsidered relatively complex. Whereas cognitive complexity generallydenotes the structural dimension of a cognitive structure (i.e., the internalorganization of information units), the structural and content (i.e., specificinformation units or knowledge) dimensions become intertwined when con-sidering cognitive complexity in relation to a specific information domain.To be more precise, an individual is unable to form a complex represen-tation of the information domain without sufficient knowledge. Thus, ourconceptualization of cognitive complexity incorporates both the structuraland the knowledge dimensions that are essential to form complex repre-sentation and understanding.

Studies on cognitive complexity have routinely found that cognitivelycomplex individuals have more advanced information-processing capabil-ities. Cognitively complex people seek out more extensive and original in-formation (Dollinger, 1984; Karlins & Lamm, 1967; Streufert & Swezey,1986), spend more time interpreting it (Dollinger, 1984; Sieber & Lanzetta,1964), identify a larger number of dimensions, and concurrently are able topossess and employ a number of opposing and complementary explanations(Bartunek et al., 1983). Cognitive complexity has also been associated with atolerance for ambiguity (Streufert, Streufert, & Castore, 1968), an ability to

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have more well-rounded impressions (Streufert & Swezey, 1986), a capacityto reframe problems (Lepsinger, Mullen, Stumpf, & Wall, 1989; Merron,Fisher, & Torbert, 1987), an ability to balance contradictions, and a con-sideration of more alternative points of view (Chang & McDaniel, 1995).In the multinational context, for instance, cognitive complexity is necessaryto simultaneously balance the often conflicting demands of global integra-tion and local responsiveness. Together, these works confirm the importanceof cognitive complexity and, subsequently, the damaging consequences ofcognitive simplicity in a complex, rapidly changing world.

The Multidimensional Perspective

In addition to the two perspectives described above, a third approach toglobal mindset integrates both the cultural and the strategic dimensions,augmenting them with several additional attributes. The research utilizingthe multidimensional perspective, increasingly manifest in the literature be-ginning in 1994, has been profoundly influenced by the work of Rhinesmith(1992, 1993, 1996), whose description of global mindset blends conceptsfrom both the cultural and the strategic perspectives. Rhinesmith definesmindset as ‘‘a way of being, not a set of skillsy. It is an orientation to theworld that allows you to see certain things that others do not see. A ‘global’mindset means that we scan the world from a broad perspective, alwayslooking for unexpected trends and opportunities’’ (Rhinesmith, 1992, p. 63).Rhinesmith (1992, p. 64) contends that people with global mindsets aremore inclined to search for the broader context, accept life as a balance ofconflicting forces, and have more confidence in organizational processesthan in organizational structure. They hold diversity in high regard, are notthreatened by surprises or uncertainty, and aspire to be open to themselvesand others. According to Rhinesmith, global mindset thus involves highlevels of cognitive capabilities, particularly those involving scanning andinformation processing, in addition to the capacity to integrate competingrealities and demands and the ability to value cultural diversity. Rhine-smith’s approach to global mindset epitomizes a multidimensional perspec-tive, as he not only integrates cultural and strategic dimensions but alsofocuses on individual characteristics, drawn from the literature on globalleadership.

Much of the research in the multidimensional perspective builds directlyon Rhinesmith’s work (Ashkenas, Ulrich, Jick, & Kerr, 1995; Srinivas, 1995;Neff, 1995; Kedia & Mukherji, 1999; Paul, 2000). In addition to describing


global mindset in terms of the capacity to distinguish and comprehendcomplex and often unanticipated business, cultural, and geopolitical dynam-ics, authors employing the multidimensional perspective cite a variety ofcharacteristics when describing global mindset. For example, Kedia andMukherji (1999) assert that global mindset is distinguished by openness anda capacity to identify complex interrelationships. Drawing on Rhinesmith(1993) and Kefalas and Neuland (1997), Kedia and Mukherji (1999) contendthat the three key components that distinguish a global mindset are: (1) aunique time perspective, (2) a unique space perspective, and (3) a generalpredisposition to be open-minded toward other peoples and cultures, tothink of cultural diversity as an asset, to thrive on ambiguity, to balanceconflicting viewpoints and demands, and to reframe boundaries (Kedia &Mukherji, 1999). In addition, Kedia and Mukherji make use of work in theglobal leadership literature, noting that global mindset also consists of anemotional connection, a capacity to balance conflicting tensions, an aptitudefor managing ambiguity, and savvy (Gregersen, Morrison, & Black, 1998).Furthermore, they maintain that managers need both a global mindset and aspecific supportive skill and knowledge set to be globally effective.

DISCUSSION

As demonstrated in the literature review, current views on global mindsetcan be organized into cultural, strategic, and multidimensional perspectives.There are inconsistencies both within and across these perspectives, how-ever, and conceptual opacity in the field as a whole. Definitions and theglobal mindset construct vary extensively throughout the research, as do thelevel of analysis and the operationalization of global mindset. Empiricalstudies additionally have reported inconsistent and conflicting findings. Dueto this multiplicity of results and viewpoints, we present a critical reading ofthe literature as a first step toward creating a thorough and more theoret-ically grounded research agenda.

The Core Properties of Global Mindset

The most significant discrepancy in the current literature involves the coreproperties of global mindset. The above literature review reveals that studiesoffer diverse definitions of global mindset. Its central characteristics aredescribed in three, somewhat discrete, sets of terms. The first set of terms is

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cognitive, where studies describe the core properties of global mindset usingcognitive and information-processing characteristics. Some examples are‘‘knowledge structure,’’ ‘‘cognitive structure,’’ ‘‘ability to develop and in-terpret,’’ ‘‘attention,’’ ‘‘sense making,’’ and ‘‘conceptualization and contex-tualization abilities.’’ The second set of descriptors is existentialist; thesestudies describe global mindset using terms such as a ‘‘way of being,’’ ‘‘stateof mind,’’ ‘‘orientation,’’ ‘‘openness,’’ and ‘‘awareness,’’ although a thor-ough reading of these definitions also reveals a strong cognitive slant. Thethird set of terms is behavioral, where studies describe global mindset inbehavioral, dispositional, and competency-related terms such as ‘‘propensityto engage,’’ ‘‘ability to adapt,’’ ‘‘curiosity,’’ and ‘‘seeking opportunities,’’ toname a few. Clearly, this multiplicity of terms and perspectives on globalmindset, which employ diverse and discrete theoretical and research per-spectives, is a significant challenge for theoretical integration of the field.

Dimensionality of Global Mindset

Global mindset has been defined and measured as both a unidimensionaland a multidimensional construct. The unidimensional conceptualizationsprincipally concentrate on the cross-cultural features of global mindset. Onthe other hand, the multidimensional approaches, which often draw on theinternational strategy literature, consider global mindset in the context oflocalization and integration challenges.5 In this chapter, we maintain thatthere are two principal dimensions – cultural and strategic – that should beincorporated in the conceptualization and measurement of global mindset.Furthermore, the multidimensionality and level of complexity of the globalenvironment indicate that global mindset should be conceptualized as amultidimensional construct.

Level of Analysis

Studies on global mindset have been carried out at several levels of analysis(i.e., individual, group, and organization). Therefore, global mindset asrepresented in the current literature can tentatively be deemed a multilevelconstruct, subsequently involving both conceptual and methodological con-cerns particular to multilevel research (see Rousseau, 1985, for a discussionof methodological issues that arise from multilevel research). While there area variety of perspectives, there is a surprising lack of debate on this issue of


multilevel analysis; one of the fundamental questions emphasized by ourliterature review is therefore whether global mindset can indeed be con-sidered an attribute of individuals, groups, and organizations. An additionalrelated question is whether the global mindset constructs posited and eval-uated at different levels are isomorphic, partially identical, or only weaklyrelated (Rousseau, 1985).6 For instance, researchers often mention individ-ual and organizational global mindsets (Govindarajan & Gupta, 1998;Bartlett & Ghoshal, 1989), but do not answer the question of whether theseconstructs are identical across levels.

Operationalization of Global Mindset

Operationalization of global mindset is yet another area of methodologicalconcern. Global mindset has been operationalized using varied measuresand data sources, from both across and within theoretical levels, in someinstances as a unidimensional construct and in others as a multidimensionalconstruct. Evaluation at the individual level utilizes self-report question-naires assessing two key measures: individual preferences and attitudes(Arora et al., 2004; Gupta & Govindarajan, 2002) and individual expecta-tions about the MNC’s global strategy (Murtha et al., 1998). At the teamlevel, studies employ textual and behavioral measures of TMT global mind-set (Levy, 2005; Bouquet, 2005); and studies at the organizational leveldevelop perceptual data of globalization-related organizational policies andpractices (Kobrin, 1994; Gupta & Govindarajan, 2002).

This range of measures, which reveals the conceptual heterogeneity andambiguity discussed earlier, necessitates a critical evaluation of the contentand construct validity of the various measures at each level of analysis (level-specific validity). Generally, establishing content validity would entail iden-tifying the pertinent content domain of global mindset at each level ofanalysis. Establishing construct validity would involve constructing a the-oretical network of constructs – antecedents and/or outcomes – that relateto global mindset in a consistent, theoretically predicted manner (Carmines& Zeller, 1979).7 These theoretical specifications may prove to be extremelychallenging for an abstract construct such as global mindset. Even so, acritical first step toward ascertaining a level-specific operationalizationof global mindset would be to delineate the pertinent universe of contentthat defines global mindset at each theoretical level and to clarify thetheoretical relationships between global mindset and its antecedents and/oroutcomes.

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Empirical Research

While there have been very few empirical studies of global mindset to date,our literature review indicates that researchers have taken multipleperspectives and approaches. Furthermore, because of this diversity of per-spectives and inconsistent findings, only a handful of conclusions can bederived regarding the empirical relationships between global mindset andother individual- or organizational-level variables. One of the most funda-mental questions, for instance, is whether global mindset precedes strategyand structure or vice versa. Levy (2005) observes a significant relationshipbetween global mindset and global strategy, concluding that TMT globalmindset drives globalization. Research that investigates the relationship be-tween international experience and internationalization has produced com-parable conclusions (e.g., Sambharya, 1996; Reuber & Fischer 1997;Tihanyi et al., 2000; Carpenter & Fredrickson, 2001; Athanassiou & Nigh,2002; Peyrefitte et al., 2002; Tseng et al., 2004). In contrast, works byMurtha et al. (1998), Nummela et al. (2004), and Harveston et al. (2000)demonstrate that managerial global mindset follows strategy, rather thanthe other way around. Another study by Bouquet (2005) proposes that therelationship between TMT global mindset and firm characteristics is me-diated by the firm’s attention structure and that the association betweenthese characteristics and global mindset is complex. Last, and divergentfrom the other findings described above, Kobrin (1994) and Arora et al.(2004) conclude that global mindset is not related to firm characteristics.

An additional significant question at the organizational level involves theeffect of global mindset on firm performance. The evidence regarding thismatter is slight and once again contradictory. Nummela et al. (2004) find apositive relationship between global mindset and financial indicators of theinternational performance of firms and no relationship between globalmindset and managers’ subjective evaluations of performance. Daily et al.(2000) and Carpenter et al. (2001) find a positive relationship between in-ternational experience of senior executives and firm’s financial performance.At the same time, Daily et al. (2000) and Roth (1995) observe that therelationship between international experience and performance is moder-ated by the firm’s degree of internationalization. Bouquet (2005), in con-trast, finds a curvilinear relationship between TMT attention to global issuesand firm performance.

As a final point, surprisingly little is understood regarding the empiricalrelationship between global mindset and individual characteristics. Al-though a small number of writers in the field of global leadership investigate


this matter (e.g., McCall & Hollenbeck, 2002; Maznevski & Lane, 2004),Arora et al. (2004) offer the only evidence that individual characteristicssuch as foreign country job, foreign country living experience, and inter-national management training are related to managers’ global mindset.Nummela et al. (2004) present tangential evidence for this relationship, withtheir finding that TMT international work experience is positively related toglobal mindset, while TMT international education is not related to globalmindset.

GLOBAL MINDSET, INFORMATION PROCESSING,

AND MANAGERIAL PERFORMANCE:

AN INTEGRATIVE FRAMEWORK

In this section of the chapter, we suggest an approach to global mindset thatincorporates concepts from the literature reviewed above, drawing on theconstructs of cosmopolitanism and cognitive complexity. We deliberatelyfocus our discussion on global mindset at the individual level of analysis anddefine it at this level. We additionally, however, discuss global mindset at thegroup and organizational levels and propose that it can be considered acrossmultiple levels. Furthermore, although we recognize that others have in-corporated a number of skills and traits in their characterizations of globalmindset, we focus chiefly on the cognitive properties of global mindset be-cause we consider them to be the construct’s most fundamental elements.

Defining Global Mindset

We view global mindset as an individual-level construct that represents adistinctive multidimensional cognition. We therefore view global mindset asan individual-level cognitive structure or, in more general terms, as aknowledge structure. We define global mindset as a highly complex cognitive

structure characterized by an openness to and articulation of multiple cultural

and strategic realities on both global and local levels, and the cognitive ability

to mediate and integrate across this multiplicity. More specifically, globalmindset is typified by three corresponding aspects: (1) an openness andattentiveness to multiple realms of action and meaning, (2) a complexrepresentation and articulation of cultural and strategic dynamics, and(3) a mediation and integration of ideals and actions oriented toward both

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global and local levels. These three aspects generate a multidimensionalcontinuum along which global mindset can be measured and appraised.Accordingly, individuals with the highest levels of global mindset are con-currently aware of and open to multiple realms of meaning and action andare capable of bridging and synthesizing across these realms.

While we initially define global mindset at the individual level, as a cog-nitive construct, it can also be considered an attribute of groups and or-ganizations and examined across multiple levels (Walsh, 1995; Schneider &Angelmar, 1993). In defining global mindset at the group and organizationallevels, we take the position of methodological individualism that views sys-tem-level phenomenon as the result of orientations, actions, and interactionsof individuals (Elster, 1989). Accordingly, global mindset can be concep-tualized at the group or organizational level as a shared cognitive structure,

which emerges out of actions and interaction among individuals. As Walsh(1995, p. 291) expresses it:

ywhen a group of individuals is brought together, each with their own knowledge

structure about a particular information environment, some kind of emergent collective

knowledge structure is likely to exist. This group-level representation of an information

environment would act just like an individual’s knowledge structure. It too functions as a

mental template that when imposed on an information environment gives it form and

meaning, and in so doing serves as a cognitive foundation for action.

This emergent shared cognition represents an aggregation of individualcognitive structures, which should take into account uneven power andinfluence of certain individuals within the group or organization (Walsh,1995; Govindarajan & Gupta, 2001). However, we do not assume that theemergent cognition consists of nothing more than individuals’ cognitions,orientations and actions taken in the aggregate (Coleman, 1990). Nor do weclaim that the emergent cognition is intended or predicted by the individ-uals. Rather, we suggest that the actions and interactions among individualsare manifested in emergent shared cognition.

Global Mindset and Information Processing

The significance of global mindset hinges on the proposition that cognitivestructures both represent and order an information domain and also ex-tensively influence information processing. We investigate this connectionby analyzing how global mindset shapes the cognitive capabilities of indi-viduals and their decision-making patterns, thus exerting considerableinfluence on managerial action and the firms’ strategic capabilities.


Our framework is founded on the information-processing theory.8

Analytically, we begin with a basic information-processing model compris-ing three stages: attention (or information acquisition), interpretation, andaction (Daft & Weick, 1984). Generally, the information-processing modelis based on three underlying assumptions. First, individuals have limitedinformation-processing capabilities and consequently focus on only certainaspects of the environment while ignoring others (Sproull, 1984). Second,environmental information undergoes an interpretation process that givesstructure and meaning to the data (Daft & Weick, 1984). Third, these in-terpretations affect action (Daft & Weick, 1984; Dutton & Duncan, 1987;Kiesler & Sproull, 1982). Cognitive structures, including global mindset,influence the attention and interpretation processes, subsequently shapingfuture action. Furthermore, the impact of individual cognitive structures isespecially marked in dynamic and complex environment that is character-ized by information overabundance, uncertainty, and ambiguity. Undersuch conditions, when the environment does not supply clear cognitive cues,attention and interpretation patterns tend to reflect individual dispositionsrather than environmental constraints (Abrahamson & Hambrick, 1997).

Drawing on the literature on cosmopolitanism and cognitive complexity,we can describe the effect of global mindset on the process of ‘‘noticing andconstructing meaning’’ (Kiesler & Sproull, 1982) under the conditions ofrapid change, uncertainty, and complexity that characterize the global en-vironment. At the attentional or information-gathering stage, cognitivestructures influence attention patterns by guiding attention toward certainfacets of the environment, while ‘‘blocking’’ others; hence, cognitive struc-tures function as a lens through which individuals observe their environ-ment. Global mindset consequently shapes information-processing patternsby directing attention to diverse sources of information about both globaland local environments. Cosmopolitanism fosters an open-minded andnonjudgmental perception of information, allowing individuals to be opento, and to acquire information from, a number of sources regardless of theirnational or cultural origin. Simultaneously, cognitive complexity enablesindividuals to perceive and articulate more information elements and tointegrate them into more complex schemas. We therefore propose:

P1. Individuals who have a global mindset will pay attention to culturaland strategic dynamics on both global and local levels and will accessmultiple and diverse information sources upon which to base decisions.

However, the impact of cognitive structures goes beyond influencing at-tention and information acquisition to affect interpretative patterns. During

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the interpretation stage, cognitive structures affect the process of ‘‘sensemaking’’ or how information is perceived, interpreted, assimilated, and un-derstood (Daft & Weick, 1984). As described above, global mindset ischaracterized by openness and high levels of differentiation and integrativecapacity. Information is therefore not only perceived, but also evaluatedirrespective of its national or cultural origin. Likewise, individuals with highintegrative abilities can amalgamate information from diverse and improb-able sources and incorporate varied interpretative frameworks into thedecision-making process. Last, reflexive interpretative processes can lead tothe construction of a new and more complex understanding of the envi-ronment (Barr, Stimpert, & Huff, 1992). Consequently, global mindset in-fluences interpretative processes by encouraging the nonprejudicial andnonjudgmental perception and evaluation of information, incorporation ofinformation from various sources, and deliberation on both the interpre-tative process itself and existing mental models. Individuals with a globalmindset are more likely to reach complex, innovative, and unconventionalexplanations that do not simplify global realities, but rather present themin all their complexity, ambiguity, and indeterminacy. Hence, we proposethat:

P2. Individuals who have a global mindset are likely to develop morecomplex and multifaceted conceptualizations of cultural and strategicdynamics on both global and local levels.

Global Mindset and Effective Managerial Action

As suggested earlier, the attention and interpretation processes associatedwith global mindset influence individuals’ effectiveness in a global context.However, going beyond the confines of a single cultural or strategic viewand considering multiple perspectives is insufficient for effective managerialaction. Research in international management suggests that a set of coreskills and competencies is required for effective managerial behavior in theglobal arena (Mendenhall & Osland, 2002; Von Glinow, 2001). For exam-ple, Bird and Osland (2004) develop a framework of global competencies ofwhich global mindset constitutes one of its building blocks. At the base ofthis pyramid-shaped framework, we find global knowledge and a set offour personality traits: integrity, humility, inquisitiveness, and hardiness.According to Bird and Osland (2004), the possession of adequate knowl-edge along with the prerequisite traits allows for the development ofglobal mindset. However, these foundational competencies – knowledge,


traits, and mindset – do not translate into effective managerial behaviorunless the individual has the necessary interpersonal and system skills andabilities. At the interpersonal level, Bird and Osland (2004) specify the fol-lowing two skills: mindful intercultural communication and the ability tobuild and create trust. At the system level, they denote the following skills:the ability to span boundaries, to build community through change, and tomake ethical decisions. Bird and Osland (2004) also note that identifying alist of essential skills as opposed to making a comprehensive list of globalleadership competencies is not an easy task. For the purpose of our dis-cussion, however, we can conclude that while global mindset is a criticalcompetency, effective managerial action in a global context requires addi-tional skills and abilities. Therefore, we suggest the following general prop-osition:

P3a. Individuals who have a global mindset are likely to exhibit effectivemanagerial action in a global context if they also possess the requisite setof skills and abilities.

We should also note, that individuals who possess the requisite set ofinterpersonal and system skills and abilities are not likely to exhibit effectivemanagerial action unless they also possess a global mindset. In this context,an interesting and yet unaddressed question is whether a person can developthe requisite set of skills and abilities without at least concurrently devel-oping a global mindset. Drawing on Earley and Mosakowski (2004), wewould argue that it is in fact difficult to develop the requisite set of inter-personal and system skills and abilities without a fairly high level of globalmindset. These authors call this set of skills and abilities ‘‘cultural intelli-gence,’’ defined generally as when ‘‘y a person grasps what makes us hu-man and at the same time what makes each of us different from oneanother’’ (Earley & Mosakowski, 2004, p. 2) and is able to adjust behavioraccordingly. Cultural intelligence has three sources: cognitive understandingof what makes a culture unique, driven by innate curiosity and a learningattitude; behavioral flexibility, the ability to ‘‘y receive and reciprocategestures that are culturally characteristic’’; and finally high self-efficacy, theconfidence to believe that one can understand people from different cultures(Earley & Mosakowski, 2004, p. 3). Cognitive understanding is necessarybecause it is difficult, given the complexity of the competing cultural factorsthat affect behavior (Osland & Bird, 2000), for a person to simply mimic thebehavior of people in an unfamiliar culture and be appropriate unless s/heunderstands the reasons for the behavior. Moreover, in-depth knowledge ofa culture is necessary to know how to adjust behavior correctly in a myriad

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of unforeseen situations. Earley and Erez (1997) argue that this under-standing begins with self-knowledge before proceeding to building knowl-edge about another culture. A person with high cosmopolitanism is morelikely to exhibit the curiosity and openness that are necessary to accumulatethis depth of knowledge about other cultures. In short, we would argue thata global mindset, especially cosmopolitanism, likely precedes the acquisitionof the set of interpersonal and system skills and abilities that make effectivemanagerial action possible in global settings, although we also recognizethat the two are most likely self-reinforcing.

P3b. The acquisition of the set of interpersonal and system skills andabilities necessary for effective managerial action in a global context ispreceded by the acquisition of a significant level of global mindset, par-ticularly cosmopolitanism.

Global Mindset and Strategic Capabilities of Firms

The ‘‘noticing and constructing meaning’’ processes linked to global mindsetmay have important implications for the strategic capabilities of the firm.Whereas strategic behavior is influenced by a large number of factors, boththe managerial cognition and the upper echelon perspectives suggest thatinformation-processing capabilities of employees, especially those in seniorpositions, have a very strong effect on strategic response (e.g., Hambrick &Mason, 1984; Stubbart, 1989; Barkema & Vermeulen, 1998; Egelhoff, 1991;Finkelstein & Hambrick, 1996; Nystrom & Starbuck, 1984; Ford, 1985;Thomas, Clark, & Gioia, 1993). What is more, these capabilities are par-ticularly significant under conditions of complexity, uncertainty, and rapidchange, when strategic response entails interpreting and ‘‘enacting’’ thebusiness environment (Daft & Weick, 1984; Smircich & Stubbart, 1985;Carpenter & Fredrickson, 2001). Senior managers, therefore, interpret issuesapplicable to strategic decision making and will typically have the statusrequired to execute choices resulting from those interpretations (Hambrick&Mason, 1984). Here we suggest that because senior executives who possessa global mindset are externally focused rather than internally focused, theyare more likely to be exposed to diverse sources of information and developinsights regarding environmental dynamics, threats, and opportunities aswell as changes and trends. This managerial focus is likely to result insuperior and innovative strategies (D’Aveni & MacMillan, 1990; Egelhoff,1993; Geletkanycz & Hambrick, 1997). If, in addition to global mindset,senior executives also possess enough influence within their firm, they can


enact these superior strategies (Athanassiou & Nigh, 2002). Thus, wepropose that:

P4. Senior executives who possess a global mindset and who are suffi-ciently influential within their firm are more likely to formulate and enactsuperior global strategies.

At the same time, some recent evidence suggests that global mindset maynot always translate into superior performance and effectiveness. For ex-ample, Bouquet (2005) finds a curvilinear relationship between TMT globalmindset and firm performance. Beyond intermediate levels of global mind-set, MNCs experience diminishing returns, after which negative returns setin. Roth (1995) also reports a negative relationship between CEOs’ expa-triate experience and performance in the case of companies with low levelsof international interdependence. This evidence suggests that the rela-tionship between global mindset and organizational effectiveness may becontingent on organizational capabilities and strategy and environmen-tal factors. Accordingly, we propose that the impact of global mindseton organizational effectiveness is most likely mediated by strategy imple-mentation capabilities and moderated by environmental and firm charac-teristics.

As we suggested earlier, for firms competing globally, global mindsetresults in superior strategies. Consequently, the competitive advantage offirms whose senior executives possess a global mindset is often largely basedon superior global strategies as opposed to superior strategy implementationcapabilities (Egelhoff, 1993). While at times competing through superiorstrategy may be sufficient, it is often impossible to consistently stay ahead ofthe competition if competitors possess superior strategy implementationcapabilities (Egelhoff, 1993). Moreover, the effects of superior global strat-egies may be short-lived unless significant entry barriers are erected. Thus, inthe absence of significant global implementation capabilities and adequatesupport structures and processes, global mindset may not translate intolong-term competitive advantage. Therefore, we propose that the impact ofglobal mindset on effectiveness is at least partially mediated by global stra-tegic implementation capabilities as follows:

P5. Global strategic implementation capabilities will partially mediatethe relationship between global mindset and organizational effectiveness.

Obviously, strategy implementation capabilities in MNCs is one of themost compelling issues in the field of international management (Kim &Mauborgne, 1996). Developing implementation capabilities may involve a

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host of initiatives (Bartlett & Ghoshal, 1989; Prahalad & Doz, 1987) andrepeated cycles of aligning and fine-tuning. In this context, we would like topoint to two, often neglected, mechanisms that can enhance the impact ofglobal mindset on organizational effectiveness. First, we suggest that MNCsneed to develop a shared understanding of what it means to be a globalcompany (Levy, Boyacigiller, Taylor, & Beechler, 2002). We argue that theways in which the practice of globalization is debated, interpreted, defined,and shared dramatically affect various aspects of organizational life, in-cluding global strategy implementation. Often, senior managers possess aglobal mindset and have broad and deep conceptions of globalization re-alities and dynamics. However, companies as a whole frequently cannoteffectively translate these complex individual understandings into organi-zational policies and actions, and thus, global mindset does not translateinto a complex company-wide interpretation and implementation of globalstrategy. Accordingly, developing a shared understanding of the practice ofglobalization through an ongoing constructive debate can facilitate trans-lating global mindset into a company-wide platform and assist in globalstrategy implementation (Levy et al., 2002).

Second, we suggest that MNCs need to develop flexible structures andprocesses that span organizational boundaries to disseminate global mindsetthroughout the corporation (Bartlett & Ghoshal, 1989; Bartlett & Ghoshal,2000; Ashkenas et al., 1995). As we suggested above, global mindset oftendoes not travel well across geographies, functions, and hierarchies within thecorporation. Hence, establishing boundary-spanning processes and practicessuch as global responsibility designations, global team participation, ad hocproject groups, networks, and shared task groups (Adler & Bartholomew,1992b; Ashkenas et al., 1995; Bartlett & Ghoshal, 1989; Nohria & Ghoshal,1997; Pucik, Tichy, & Barnett, 1992) can influence the promulgation ofglobal mindset, unifying employees around a common understanding and setof objectives. This shared understanding, in turn, can facilitate global strat-egy implementation by promoting communication and cooperation acrossorganizational boundaries.

In addition, we suggest that the effect of global mindset on effectiveness ismost likely moderated by environmental and firm characteristics. We arguethat an optimal fit between global mindset and environmental and firmcharacteristics can positively affect organizational effectiveness better thanglobal mindset by itself. Specifically, we focus on two key considerations,namely, the level of environmental dynamism and complexity and the firm’sinternational strategy.


Senior executives who operate in an environment characterized by rapidchanges, dynamism, and complexity must have a global mindset to under-stand and respond to their environment. Under such conditions, globalmindset is more likely to have a positive influence on a firm’s effectiveness.On the other hand, it is quite possible that when executives operate in arelatively stable environment, global mindset becomes irrelevant or even aliability because it imposes unnecessary complexity where simplicity is calledfor. Therefore, we propose that for global mindset to have a positive impacton effectiveness, there should be a fit between environmental conditions andthe level of global mindset of senior executives:

P6. A fit between environmental conditions and managerial global mind-set will be positively associated with organizational effectiveness.

Similarly, a firm’s international strategy is also likely to affect the rela-tionship between global mindset and effectiveness. High levels of interna-tionalization place high levels of information-processing demands on seniorexecutives and are likely to require significant information-processingcapabilities or a global mindset. On the other hand, Roth (1995) finds thatstrong CEO international experience negatively affects performance wheninternational interdependence is low. Thus, it is quite possible that globalmindset has a positive impact on organizational effectiveness in the case ofhigh levels of internationalization and is irrelevant or even damaging in thecase of low levels of internationalization. This suggests that for globalmindset to have a positive impact on effectiveness, there should be a fitbetween the international strategy of the firm and the level of global mindsetof its senior executives:

P7. A fit between the international strategy of the firm and the mana-gerial global mindset will be positively associated with organizationaleffectiveness.

It should be noted, however, that global mindset entails high levels ofinformation-processing demands, which could overwhelm decision makers,slowing down decision making to unacceptable levels. It is possible that evenwhen higher levels of global mindset among key decision makers are re-quired, global mindset will have a positive impact on a firm’s effectivenessonly when it is accompanied by support structures and processes within thefirm such as modular networks, communities of practice, distributedmanagement, and centers of excellence (Begley & Boyd, 2003).

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SUMMARY AND IMPLICATIONS

The capabilities linked to global mindset are crucial elements in contem-porary MNCs, considerably influencing the global competitiveness of firms.Researchers, however, are faced with the challenge of explaining the com-plex construct of global mindset and further identifying its antecedents andoutcomes. To assist in advancing the field we have suggested a frameworkthat details the core properties of global mindset and creates a link betweenglobal mindset and global competitiveness of firms. In conclusion, we nowdiscuss the implications of our integrative framework and suggest directionsfor future research.

Implications of the Integrative Framework

As our review and analysis of the literature imply, there are still importantunanswered questions concerning global mindset. The integrative frame-work we propose presents a parsimonious conceptualization of globalmindset and focuses on the following major questions:

1.
What are the core properties of global mindset? 2. At what level(s) of analysis should global mindset be studied? 3. Is global mindset a unidimensional or a multidimensional construct? 4. How should global mindset be operationalized and measured at each
level of analysis?
5. What are the possible links between global mindset and effective global
management?

To begin, we define global mindset as a highly complex individual-levelcognitive structure characterized by openness, differentiated articulation ofcultural and strategic dynamics on both local and global scales, and integra-tion across these multiple domains. We therefore define the core properties ofglobal mindset in cognitive terms in place of offering an exhaustive list ofattitudes, dispositions, and skills. Simultaneously, we propose that globalmindset, embodying the cognitive basis of effective global management,should be connected with competencies, skills, and behaviors, so as to developa more complete model of effective management in the global context.

Second, we delineate global mindset at the individual level of analysis. Wethen broaden this classification to describe global mindset at the group andorganization levels of analysis. Consequently, we propose that at the groupand organizational levels, global mindset should be considered a shared


cognitive structure that can be analyzed across multiple levels (Walsh, 1995;Schneider & Angelmar, 1993). One benefit of conceptualizing global mindsetas a cognitive construct is its robustness across levels. Additionally, a cog-nitive approach assists in establishing the causal determinants of globalmindset at different levels of analysis and in elucidating the relationshipsbetween global mindset across levels.

Third, our approach clearly demonstrates that global mindset is a mul-tidimensional construct, integrating both cultural and strategic dimensions,as well as local and global levels. These dimensions offer a preliminarymapping of the pertinent content domain of global mindset. From a cog-nitive perspective, however, content is only one aspect of cognitive struc-tures. Conceptually, cognitive structures can be evaluated in terms of theircontent and/or structure (Walsh, 1995). Hence, in addition to outlining therelevant content domain of global mindset, our definition of global mindsetdescribes its structural properties by proposing that it is a complex cognitivestructure characterized by high differentiation, articulation, and integration.

Fourth, by defining global mindset using a cognitive framework and bystipulating both is structural and content dimensions, we offer an approachthat is conducive to operationalization. It is beyond the scope of this chapterto provide a systematic review of methods to analyze cognition. However,the managerial cognition literature offers several approaches to measuringboth the content and the structure of cognitive structures (see Walsh, 1995,for detailed review; see also Huff, 1990; Barr et al., 1992; Calori, Johnson, &Sarnin, 1994; Lant, Milliken, & Batra, 1992). Calori et al. (1994), for in-stance, used the cognitive mapping technique to assess the complexity ofmanagerial mindset, while Barr et al. (1992) employed textual analysis oforganizational documents to measure the mental models of executives.

As a final point, we investigate the information-processing consequencesof global mindset, suggesting a clear theory-based link between globalmindset and effective global management. We propose that global mindsethas a powerful impact on information-processing patterns that may trans-late into superior managerial capabilities for firms operating in the globalarena. Consequently, grounding global mindset in the cognitive and infor-mation-processing literature can facilitate a more rigorous examination ofthe frequently stated but rarely tested assumption that a global mindset isrequired for the successful management of global firms (Bartlett & Ghoshal,1992; Ohmae, 1989; Doz & Prahalad, 1991). However, we qualify thisproposition and suggest that global mindset in and of itself may be insuffi-cient. Thus, in addition to global mindset a set of core skills and compe-tencies is required for effective managerial behavior in the global arena as

ORLY LEVY ET AL.38

well as supporting organization structures and processes. Moreover, we alsosuggest that the effect of global mindset on effectiveness is most likelymoderated by environmental conditions and the firm’s international strat-egy. Therefore, for global mindset to have a positive impact on effectiveness,there should be a fit between environmental and strategic circumstances andthe level of global mindset of senior executives.

As the literature reviewed in this chapter demonstrates, scholars fromvarious disciplines have endeavored to define global mindset. This has cre-ated a multitude of definitions, which is an indication that global mindset isa relatively young field. In addition, the proliferation of dimensions oftenused to describe global mindset makes it complicated to assess and testpropositions regarding it. We offer an approach that is easier to both un-derstand and operationalize in future research efforts, by defining globalmindset using a cognitive framework. We also underscore managerial cog-nitive capabilities in MNCs in the hope of producing a ‘‘cognitive revolu-tion’’ in international management research. In our appeal for a renewedemphasis on cognition, we follow the lead of Doz and Prahalad (1991), whomaintained that the newly emerging MNC necessitates a paradigmatic shiftto a model in which the mindsets or cognitive orientations of managerscomprise the basic units of analysis.

NOTES

1. Although outside the scope of this chapter, a similar theme can be found in theliterature on global leadership (e.g., McCall & Hollenbeck, 2002).2. Merton (1957) initially conceptualized cosmopolitans as individuals who are

oriented toward the outside world and locals as those who are narrowly concernedwith the affairs of the community to the exclusion of world affairs. Extending thisconcept to university faculty, Gouldner (1957, p. 290) characterized cosmopolitansas ‘‘those lower on loyalty to the employing organization, higher in commitment totheir specialized role skills, and more likely to use outer reference group orientation’’(Gouldner 1957, p. 290). While the cosmopolitan–local distinction was parsimoni-ous, subsequent research (e.g., Gouldner, 1958; Flango & Brumbaugh 1974; Glaser1963; Goldberg, Baker, & Rubenstein 1965; Goldberg 1976) found the construct tobe more complex and multidimensional. For example, Gouldner (1958) dividedcosmopolitans into two groups: outsiders and empire builders. Locals were split intofour groups: dedicated, true bureaucrats, homeguards, and elders. Goldberg et al.(1965) expanded the cosmopolitan–local classification system to include four cate-gories. In addition to the cosmopolitan and local categories, a third category, termed‘‘complex,’’ described those employees who are simultaneously loyal to both theiremploying organization and their profession. The fourth category, termed ‘‘indiffer-ent,’’ described those employees who were loyal to neither.


3. At the beginning of the 21st century, a host of initiatives and publicationsconcerning cosmopolitanism appeared (see Hollinger, 2002, for a review of thesedevelopments). While we draw on this literature, a comprehensive discussion of theconcept of cosmopolitanism is beyond the scope of this brief overview.4. It should be noted that while cosmopolitans are celebrated by some as the new

‘‘cultural heroes’’ of the global economy, they have frequently come under attack asthey are viewed as privileged (Clifford, 1988; Robbins, 1992; Vertovec & Cohen,2002a, 2002b). While considerable debate has focused on the value-laden aspects ofcosmopolitanism, we believe that it is not necessary to overlay the construct withassumptions of superiority (Robbins, 1992).5. The most explicit example of a multidimensional measure is used by Murtha

et al. who draw on the integration-responsiveness framework (Prahalad & Doz,1987). They measure global mindset in terms of managers’ expectations regardingintegration, responsiveness, and coordination. Similarly, Arora (2004) uses a self-report instrument that reflects two drivers of global value (local competencies andglobal coordination) suggested by Govindarajan and Gupta (2001).6. According to Rousseau (1985, p. 8) ‘‘isomorphism exists when the same functional

relationship can be used to represent constructs at more than one levely isomorphismimplies that constructs mean the same thing across levelsy.’’ Partial identity impliesthat constructs, although similar, ‘‘behave’’ somewhat differently across levels. In ad-dition, the same constructs used at different levels may be only weakly related.7. Arora et al. (2004), for example, established the construct validity of their

global mindset measure by testing the relationships between global mindset and a setof individual background characteristics (training in international management, for-eign country living experience and job experience, family member of foreign origin),often considered to be antecedents of global mindset. They found that global mindsetwas significantly positively related to these characteristics. These theoretically pre-dicted relationships tentatively support Arora et al.’s (2004) global mindset measure.8. While information processing theory has been applied at the individual (e.g.,

Hult & Ferrell, 1997; Leonard, Scholl, & Kowalski, 1999; Wang & Chan, 1995), topmanagement team (e.g., Sweet, Roome, & Sweet, 2003), and organizational levels ofanalysis (e.g., Wang, 2003; Egelhoff, 1991), consistent with our approach to globalmindset as an individual-level construct, our primary focus in this discussion is at theindividual level. At the same time, there is an obvious and important overlapbetween the levels of analysis, as the more macro-strategy literature views the topmanagement team of MNCs as the location where a large portion of the strategicinformation processing capacity of the organization lies (Egelhoff, 1991, p. 197).

ACKNOWLEDGMENTS

This chapter draws heavily on our comprehensive review of the literature onglobal mindset, ‘‘What We Talk About When We Talk About ‘‘GlobalMindset’’: Managerial Cognition in Multinational Corporations,’’ in theJournal of International Business Studies (Levy, Beechler, Taylor, &Boyacigiller, 2007). The paper contains material based upon work

ORLY LEVY ET AL.40

supported by the National Science Foundation under Grant 0080703. Anyopinions, findings, and conclusions or recommendations expressed in thismaterial are those of the authors and do not necessarily reflect the views ofthe National Science Foundation. The authors thank Columbia University,Portland State University, Sabanci University, San Jose State University,and the International Consortium for Executive Development Research fortheir support of this research. The authors also gratefully acknowledge theresearch assistance of Elif Cicekli and Pinar Imer and the editorial assistanceof Hester Yorgey.

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THE CHESS MASTER AND THE

10 SIMULTANEOUS OPPONENTS:

BUT WHAT IF THE GAME IS

POKER? IMPLICATIONS FOR THE

GLOBAL MINDSET

Gordon Redding

INTRODUCTION

The metaphor of a poker game suggests the reality of international businessas a competitive field in which players test their wits against each other, oftenusing guile, and play at high levels of uncertainty. The game’s rules areessentially simple but there is extensive room to maneuver. If business wereactually conducted internationally with one set of clear rules used by all, thenit would be like chess. A chess master can play against many others, given thehighly structured nature of the game’s processes. A poker master takes on adifferent kind of complexity, and in that, the reading of others’ minds,characters, behavior patterns, and interactions becomes crucial. The essentialchallenge of the global mindset is that, whereas you might think you areplaying chess against several opponents, you are actually playing poker.

The idea of such a mental competence brings attention to the coredemand at the heart of the globalization process – that of finding, and/or of

The Global Mindset




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GORDON REDDING50

developing, executives capable of working effectively across culturesand therefore across alternative mindsets. The corporate ideal of the post-modern organization, represented in such advice as that of Doz, Santos, andWilliamson (2001), with their notion of the ‘meta-national’ organization,suggests that the inclusion of variety into the organization’s design requiresa form of elasticity within the corporate workings sufficient to achieve themagical mixture of combined loose-tight properties. There is an overarchingdiscipline and a system of control over what is done, but flexibility over howit is done. In this formulation the corporate center is just one star in agalaxy. Local cultural responses are not better or worse but simply different.Diversity stimulates innovation, and unique local contributions are re-spected. Learning from the differences and the flexibility to take advantageof them are highly esteemed. Organizing and coordinating at this level ofcomplexity would not have been possible before the IT revolution. It is nowrequired.

Executives in question need to be capable of (a) coping with such varietyand (b) competitively managing its most efficient use. Very few peopleare naturally equipped to work with multiple mental frameworks and willneed help to match the requirements. This requires that the nature of thechallenge be fully exposed.

ANALYZING SOCIETAL DIFFERENCES

The literature and theory built up in the field of international businessover several decades have proved inadequate to the task of creating under-standing of the managerial challenges of globalization in practice in thecurrent era. Companies, driven to expand geographically by the newcapacity to communicate, have often stumbled against hidden obstacles. Inreaching the limits of their understanding, they come up against two relatedquestions, each still largely unanswered: why do the leading firms in mostsignificant industries come from one or two societies (Porter & Wayland,1995; Haake, 2002), and why do the leading industrial firms find it so diffi-cult to penetrate more than two of the three parts of the Americas/Europe/Asia triad (Rugman & Verbeke, 2004; Rangan & Drummond, 2002)? Theunderlying puzzle is often termed ‘the societal effect’, and its indeterminatebut nonetheless relentless nature remains a torment to both theorists andpractitioners. This is the intellectual challenge against which issues of theglobal mindset are placed, and one might note the formidable nature of thetask of making compelling breakthroughs.

Implications for the Global Mindset 51

In a parallel stream of theorizing – that accounting for variations insocietal progress – the same societal effect is now coming more towardcenter stage. Because of the theoretical significance of such thinking, eventhough it is fairly macro in nature, it will be considered here as part of thereceived wisdom bearing on the topic of societal differences in mentalframeworks and their implications.

Two connected weaknesses exist in the way that research is often donewhen analyzing economic behavior across societies: handling contextadequately and choosing appropriate units of analysis such as the society.In a plenary address to the first annual JIBS conference on EmergingResearch Frontiers in 2003, Bruce Kogut identified the central issue for thefield as the handling of ‘context’. He argued that the study of specific ques-tions, with much of context assumed away, leads to disembedded results orconclusions. He argued for (a) a coming to grips with culture, (b) thebridging of the gap between quantitative and qualitative work, and (c) theinclusion of the political dimension in economic life, if internationalbusiness theory were to avoid charges of continuing ‘policy irresponsibility’.

In the field of development theory three significant studies are worthy ofattention in the context of the wider ‘cultural turn’ in the social sciences(Archer, 1996; Nash, 2001). The first of these is the historical study byLandes of the wealth and poverty of nations, with its global perspective, itshistorical detail, and its conclusion that ‘If we learn anything from thehistory of economic development, it is that culture makes all the difference’(Landes, 1998, p. 516). In a similar vein, North, having earlier identifiedinstitutions as the core of his account of variations in societal progress, hasnow concluded that – along with a genetic heritage – ‘the immense variationin the performance characteristics of societies makes clear that the culturalcomponent of the scaffolding that humans erect is also central to theperformance of economies and polities over time’ (North, 2005, p. ix). Thethird work is that of Greif (2006), who has studied the contrasting long-termperformances of societies founded in the medieval worlds of the IslamicMediterranean and Western Europe and concluded that the founding idealsof collectivism, in the Islamic case, and individualism, in the Europeancase, have worked their way into the formulation of the institutionalfabric, to affect structures of economic behavior and coordination and,eventually, of performance.

In all three cases, the question of culture and its effects is seen as crucialbut is handled indirectly. Landes acknowledges its power but does notspecify its workings. North points toward the central significance of what heterms the ‘intentionality’ within it – that is the perceptions of the actors

GORDON REDDING52

about the consequences of their actions, such being founded in their beliefs –but he does not clearly demonstrate such workings with empirical support.Greif (2006, p. 14) subsumes the cultural features of beliefs and normswithin the category of institutions. This is in contrast to North, whoacknowledges the prior nature of the beliefs and says that the dominantbeliefs, and especially those of political and economic entrepreneurs, ‘overtime result in’ the accretion of an elaborate system of institutions (North,2005, p. 2).

In a critique of the globalization field, Sorge pointed to the confusionover definitions and categories, especially as applied to culture andinstitutions, and the connections between them. He pointed to ‘amountain of theoretical muddle’ (Sorge, 2005, p. 48) blocking the abilityto move forward. He proposed a solution in the form of a theory of actionsystems, a proposal carried further by Redding (2007) and to be returnedto shortly.

Another aspect of the same ‘muddle’ is addressed by North, who chideseconomists for their simplistic use of the rationality assumption and theirignoring of the role of ideas in making choices: ‘Indeed the uncriticalacceptance of the rationality assumption is devastating for most of the issuesconfronting social scientists and is a major stumbling block in the path offuture progress’ (North, 2005, p. 5).

Taking a different tack – that of research frameworks themselves – twopoints of debate are worth attention. The first concerns the unit of analysisand the second the tracing of patterns of determinacy within such a unit. Onthe first issue, the work of Ragin (1987) is significant, as he has attemptedto move the debate beyond the contest between the quantitative and thequalitative and to encourage a synthesis of the two. He argues that theproper comparison should be between ‘wholes’, so that the complex inter-actions occurring within them should not be analyzed out of context.Similarly, one of the founders of comparative industrial analysis, Maurice(1989), has made the following case for analyzing societies as wholes, seenon their own terms. If you study micro interactions in country A, andthen in country B, and try to compare, then the comparisons run into theproblem that continuity in meanings and categories across the societies maynot hold. If you study the effect of culture in country A, compared withcountry B, and assume a strong effect, then inadequate attention gets paidto the significance of other features of local context and to the disconti-nuities between societies in such context. If, on the other hand, you study themicro-macro interactions within one society, so as to understand its internallogics, and then compare the wholes as functioning systems, this avoids the


need for comparability of components between systems and yields richerunderstanding of phenomena in their own contexts. The advice of Bourdieu(1977, p. 238) is relevant here:

As in all comparisons of one system with another, it is possible ad infinitum to contrast

representations of the two systemsy . The only legitimate object of comparison is each

system considered as a system, and this precludes any evaluation other than that implied

in the immanent logic of its evolution.

A number of themes might now be extracted from these arguments.

1.
Culture, seen as the realm of meaning, has a strong effect on the shapingof the institutional fabric and, in turn, on the shaping of behavior in andbetween organizations.
2.
That effect operates within the context of a society and the societyprovides a complex set of other surrounding influences affecting theinteractions.
3.
It is valid and useful to compare societies as complex adaptive systems,evolving under the influence of their particular traditions and histories.
4.
When thinking of the culture effect, such concepts as beliefs, values, andintentions come prominently into the account.
For the purposes of this chapter, the question I now focus on is: how,within the above set of ideas, is it best to think of mindsets and theirconnection with action? To answer this requires an examination of threeapproaches. The first is culture research itself, when it addresses differentmental universes and when it attempts to explain their impact on, andinteraction with, the reality of economic action. The second is the theoryof business systems, or at least those examples of it that accept the influenceof beliefs and values. The third is the Weberian concern with alternativerationalities and ideational logics. In its modern guise this is the theory ofmultiple modernities (Eisenstadt, 2000). Brief note will also be taken of thelikelihood of alternative patterns of cognition. I shall conclude with anexample of what needs to be understood within a global mindset.

CULTURE RESEARCH

As Berger and Luckmann (1966) famously said, reality is sociallyconstructed. How a person makes sense of the world comes from thesurrounding culture of upbringing, and this ensures that what the world

GORDON REDDING54

effectively ‘is’ for that person is perceived in those terms. As Geertz (1973,p. 5) observed,

Believing, with Max Weber, that man is an animal suspended in webs of significance he

himself has spun, I take culture to be those webs, and the analysis of it to be therefore

not an experimental science in search of law but an interpretive one in search of meaning.

The mindset is the repository of meaning, and the primary concerns it ad-dresses are those of what life is about. For people to be able to fit into asociety, they need to have a sense of why they do things, where they belong,whom are they bound to, and what they expect out of life. In a review of theliterature on the psychology of worldviews, Koltko-Rivera (2004, p. 41)concluded that acculturation is central to both perception and behavior,arguing that a worldview is a culture’s expression of the ‘why’ of behavior,with acculturation providing the ‘how’. The latter influence works by lan-guage preferences and by investment in a set of affect-laden associations withbehavior. Within a culture’s meaning system he identifies beliefs about on-tology, agency, and epistemology as superordinate, and because of this theyhave power in determining other aspects of the meaning system. By allo-cating a central place for culture in the functioning of fundamental psycho-logical processes, he clearly anticipates a daunting variety of worldviews.These are what the global mindset has to straddle and encompass.

It is common with other scholars also to analyze such sense making asexisting in two layers. Weber (1964) saw these as value rationality, concernedessentially with the societal purposes or ends, and instrumental rationality,concerned with the ways to achieve those purposes, or means. In a similardivision, Berger and Luckmann separated primary and secondary socializat-ion, seeing the primary as the set of fundamental understandings of how to fitinto society and the secondary as fostering the specialization of meaningsneeded to allow the society to function in complex ways and adapt to change.

An insight into the primary layer has recently been proposed by Bondet al. (2004) and Leung and Bond (2004), in an international study of whatthey term social axioms. These are not values but are instead the making ofsense about how society works, in other words, how the parts fit together,how one thing has implications for another, yielding rules for coping. Thisimportant study takes us below the level of other cross-cultural studies,many of which focus on the layer of secondary meaning, or of specificvariables. The earlier large-scale studies of cultural differences (Hofstede,1980, 1991; House, Hanges, Javidan, Dorfman, & Gupta, 2004; Inglehart,1997; Schwartz, 1994) have provided ample evidence of variation in values.

This new broadening of the conceptual tools takes us into general beliefs, or


generalized expectations, of a kind likely to relate to a wide range of socialbehaviors. Five orthogonal dimensions of such social axioms are identified,measured with a sample of 9,924 subjects across 41 countries, and labeled asfollows:

1.
Cynicism: a negative view of human nature and a mistrust of socialinstitutions.
2.
Social complexity: belief in multiple ways of achieving something, andacceptance of human variability.
3.
Reward for application: belief in effort, knowledge, and careful planning. 4. Spirituality/religiosity: Belief in a supreme being and in the value of
religious practice.
5. Fate control: belief in predetermined events but with ways for people to
influence outcomes.

Data of this kind are invaluable in mapping the world’s variety, but mustbe used with care to avoid what Archer (1996, p. 4) has termed the Myth ofCultural Integration, ‘one of the most deep-seated fallacies in social sci-encey they assumption of a high degree of consistency in the interpre-tations produced by societal units’. She argues for disentangling the mythand proposes that, to do so, two features need to be separated out. The firstis the cultural pattern – the logical consistency, or degree of internal com-patibility between its components. The second is the field of uniform action –the expressing in behavior of the ideals of the former that may or may notdisplay social uniformity. As an illustration of the relevance of these fea-tures, a recent study of mindsets of private sector executives in China hasrevealed a core feature of confusion over the ideals being pursued, causedreportedly by the social upheavals of the past decades and the shifting of thestate’s ideals (Redding & Witt, 2006).

Archer recommends that, in the light of this variability between societiesin the internal coherence of the cultural framework, care be taken toacknowledge the questions of consistencies and connections at both theculture level and the level of societal action and the mutual interpenetrationof the two levels.

Having established empirically that people can be compared on theirfundamental sense making, at both primary and secondary levels of social-ization and acculturation, the subsequent logical challenge is to establishhow such programming of minds interacts with the world of business and ofsocial life more generally. For that I turn to consider the theory of businesssystems, as a prelude to considering the Weberian question of the workingsof the ideational logics.

GORDON REDDING56

BUSINESS SYSTEMS

The epistemological case for the business systems framework is best statedby a pioneer in the field, Richard Whitley (1992, 1999a, 2002), in a responseto the universalist challenge of many economists. It fits with the argumentsI have already noted from Geertz, Bourdieu, Maurice, and Ragin, but is alsoinspired by a tradition of ethnographic work in comparative managementtheory, examples of which are Abegglen (1958), Dore (1973), Rohlen (1974),Stinchcombe (1974), Guillen (1994), and Guthrie (1999).

Whitley’s (1999b) position may be summarized as follows: The econom-ics-based approach uses sparse logics, an assumption of universal relevance,abstract linear causal argument, and highly simplified representation. Itassumes that atomistic behavior and functionalist explanation are valid,although they are highly suspect. There are three features of the social worldthat do not fit into such frameworks: there are multiple, complex, reciprocalconnections between phenomena; the phenomena change through time; andnew external influences constantly penetrate. In addition – and significantly– the social sciences are second-order fields in that they are highly dependenton the interpretation of meaning. There is no external reality independent ofpeoples’ construction of it; and there is competition over meaning, makingvalue-neutral definition impossible. Three other features of the scene cannotbe ignored: the role of language prevents the valid use of universals, pathdependence will be significant, and the state often plays a strong role is thesetting of standards and criteria.

A social science capable of meeting such challenges is likely to be some-what to the side of mainstream, such is the power of quantitative positivismin the academy, but it is nonetheless worthy of pursuit. Its principles arevisible in attempts at synthesis, such as those of socioeconomics (Etzioni,1988), the Chicago interpretivist school (e.g., Sewell, 2005), the fuzzy setsocial science of Ragin (2000), and the multidisciplinary analysis of businesssystems, or systems of capitalism.

There is no inevitability about the choice of the nation-state as the unit ofanalysis for a business system. It would, for instance, be valid to present astudy of Asia’s regional ethnic Chinese across 10 countries (see, e.g., Redding,1990). But in the majority of cases, the role of the state is so strong inestablishing the institutional frameworks, and the role of language is so strongin fixing meanings, that nation-states, more often than not, are the mostappropriate envelopes for containing the complex interactions under analysis.

This is not the place to review the various frameworks in use (for whichsee Whitley, 2002; Coates, 2002; Hall & Soskice, 2001). Instead I present a


synthesis of the key features typically under study in Fig. 1, the more de-tailed use of which is explained in Redding (2005). Here I will introduce itbriefly and then turn to the component labeled Rationale, for further con-sideration of mindsets.

The theory is presented in three layers, but with the prior caveat thatdeterminacy is seen as reciprocal throughout, as well as being multiple and

OWNERSHIP MANAGEMENTNETWORKS

CAPITALSOCIAL

CAPITALHUMAN

CAPITAL

RATIONALE AUTHORITYIDENTITY

The shaping ofpatterns of economicexchange behaviour

The evolution andgrowth of forms of

order

The conditioning ofinstitutions by

values and norms

The adjustment ofvalues and norms

by experience

IDEATIONALLOGICS

(EXTERNAL)

MATERIALLOGICS

Structures and systems for co-ordinating economic behaviourand exchange. Firms and managing

Institutions: the humanly devised constraints that shape socialinteraction, and provide a hospitable environment for

co-operative solutions to complex exchange. Forms of order

Culture: values, norms and socially constructed realitieswhich act as the bases for the society’s forms of order

Impact ofexternal ideas,norms, values,

on featuresand the

interaction offeatures

Impact ofcosts andtechnologyon featuresand theinteraction offeatures

Fig. 1. The Summary Model of Business Systems Analysis.

GORDON REDDING58

with interconnected elements. A society is taken to be a complex adaptivesystem (Holland, 1995), in interaction with the external world. The object ofstudy is the total, seen in its own terms, and comparable with others, thatcomparison being of different configurations of internal parts. In practicemuch analysis follows the search for ‘complementarities’ between the parts, astheir interconnections become clear and patterns of determinacy are identified.

At the base of the model, and with an implication that it is in some sense‘prior’, as North suggests, is the realm of meaning. This is divided into threecomponents. The first, labeled Rationale, is where the mindset is analyzed,seen – following Weber and Berger and Luckmann – as having two aspects,in simple terms the ends and means, as idealized within the society, ofeconomic behavior. Beyond that are two further sets of ideas, those affectingthe principles of horizontal order (Identity) and vertical order (Authority).

The middle layer of the model is the realm of Order, and it is manifest ininstitutions, or rules of conduct. Three main arenas are identified, in whichinstitutions accrete in societies over history and which have direct relevancefor the kind of business system that emerges. The first of these is Capital, theset of ways in which money accumulates, is kept, is allocated, and is soughtand used. The second of these isHuman capital, or the set of ways in which asociety cultivates human talent and allocates and uses it within the economy.The third is Social capital, or the set of ways in which problems of mistrustare solved, with its two key dimensions of personal and institutional trust.

The top layer of the model is the business system itself, seen, followingWhitley (1992), as a set of patterns for the coordination of economic ex-change. The first of these is Ownership, and it represents the establishing ofstructures, such as firms, and the nature of such structures. The second isNetworks, and it represents how such structures connect (or otherwise)across the economy. The third aspect of coordination, entitled Management,explains the way in which resources within an economic unit are broughttogether and used, an example of which is the state of mutual dependence(or otherwise) between managers and workers.

External to the societal system are two sources of influence, distinguishedfrom each other earlier by Weber (1978) and referred to as significant byChild (2000) in his critique of international business theory. The first ofthese are the Material logics of, for instance, price and technology, each ofwhich is capable of exerting great influence on the internal workings of asocietal system. The second are the Ideational logics, for instance, ideas suchas democratization, youth culture, market discipline, that also tend to weavetheir way influentially between systems. The latter, of course, have muchrelevance in the globalizing of mindsets.


In such a complex adaptive system, the focus now needed is on the in-teraction between the Rationale and the three institutional elements of therealm of Order, and for that I turn to the Weberian question. Does eachcapitalism have its own ‘spirit’ and, if so, how do such spirits work? Such aquestion goes to the heart of much social science and is as far from beingtrivial as it is possible to go, so I preface my examination of it with anacknowledgment of its extreme complexity and the limitations of addressingit in a brief space.

THE SPIRIT OF CAPITALISM

Weber’s position is perhaps best summarized by Cohen (1981, p. xxv), asfollows:

The most general characterization of Weber’s comprehensive thematic interest involves

the historically unprecedented penetration into the context of all institutional orders and

cultural ways of life in modern Western civilization of a peculiar type of rationality.

Weber (1930, p. 26) himself, in discussing the ‘specific and peculiar ration-alism’ of Western culture, described the rationalization of mystical contem-plation (specifically the ethics of ascetic Protestantism), as well as of themore obvious components of economic life, technique, scientific research,military training, law, and administration. He acknowledged, at the sametime, the relevance of counterbalancing forces such as the magical, religious,and ethical. What he sought to understand was the ethos of an economicsystem. His (uncompleted) agenda was the comparison of cultural systems,and he clearly saw that mindscapes vary across societies and that theyinfluence the emergence of institutions.

I propose the term rationale to convey the sense of a set of reasons forsomething, such a set of reasons making sense of why a pattern of action ispursued. So people might go to church because they believe a deferentialrelation with a supreme being, and adherence to certain strictures overconduct, are connected with an afterlife. Or a person encourages children tostudy hard because it will lead to qualifications, higher income, and familysecurity. These thoughts ‘make sense’, and they define the reality for thosepeople. I separate this from rationalism in the sense of argued cogent logic,or mathematical evidence in support of a choice, as used, for instance, inscientific rationality, although this latter might form an important subset incertain cultural rationales, as it does, for instance, in much Western thinkingand administration – Weber’s specific and peculiar rationalism.

GORDON REDDING60

Significantly for the global mindset issue, Weber noted that rationaleaccumulated in ‘fields’ and that each would have its own sense making(see Redding, 2007). The rationales in the fields could be different ‘in termsof very different ultimate values and ends, and what is rational from onepoint of view may well be irrational from another’ (Weber, 1930, p. 26). Theorganizational worlds of finance and marketing are notoriously different intheir mindsets, and spending money may be rational in marketing andirrational in finance. Soccer and American football are worlds apart men-tally; soccer fans deride the protection needed by American football players,whereas in reverse, the football players often see soccer as a gamefor women. The Japanese do not see the world in the same way as doAmericans; for the former firing people may be irrational, for the latter itmay be rational. People in each alternative find meaning in that context andmay struggle to appreciate meaning in the other. This question of fields liesat the heart of our dilemma and I will return to it shortly.

In proceeding with his analysis, Weber put to one side the intellectualtools of formal rationality, which exist in the abstract, such as mathematics,algebra, principles of formal logic, and the use of quantitative evidence. Hethen concentrated on the substantive (in German materiale) aspect of beingrational. This is sense making when it is applied to the social world. At thecore of such a collective mindset (when it exists) is a question faced by allsocieties: Who gets what? Who benefits, how, and why? When Americansplace priority on shareholder value, they are choosing to give one set ofpeople priority over others in the allocation of benefits, and there is an entireeconomic and societal philosophy behind that (historically recent) response.When the Japanese do the opposite, and emphasize the rights of employeesto protection, they equally have a philosophy justifying that response. InWeber’s (1922, p. 85) formal definition, substantive rationality is:

y the degree to which the provisioning of given groups of persons with goods is shaped

by economically oriented social action under some criterion (past, present or potential)

of ultimate values, regardless of the nature of those ends.

The criteria in question might be ethical, political, utilitarian, egalitarian,etc., or a combination of such, and the scales on which results are measuredagainst the criteria are endlessly varied. In thinking of them Weber saw thatmuch economic behavior is driven by intentions based in values andthat these often include traditions. Because of that they are ‘value-rational’(wertrational) and are likely to be the unplanned outcome of intuitions. Onthe other hand much behavior is deliberately planned and is driven by ideasstemming from the working out of means for achieving social action – also


inevitably in line with values. This form of rationality involving deliberateplanning he termed instrumental. Thus Weber proposes a values component,concerned with ends, and an instrumental component, concerned withmeans. Such disaggregation of components serves to clarify the processes ofinfluence flow between mindsets and action, but at the same time care mustbe taken to acknowledge that they are in reality mixed up together in theconsciousness of people. As Swedberg (1999, p. 281) has judged the matter,Weber saw them as working in parallel, in different ways, but intertwined.

A graphic representation of the workings of an ideal type Western mind-set, using Weberian categories, in the context of business is given in Fig. 2.Similar graphical analyses of the United States and France, including ra-tionales or mindsets, may be seen in Redding (2005). More detailed discus-sion of Fig. 2 is given in Redding (2002), but a brief note may be made herethat it focuses on the two main components of value and instrumentalrationality, and for the instrumental case – although all elements share thefeature of being carriers of material progress – they exist in primary andsecondary forms. So too does all rationale exist independent of institutions –receiving influence and interacting constantly without doubt, but still havingrelative autonomy (in Weber’s terminology Eigenrecht).

So what is the position of institutions? On this Weber is not specific, buthis position has been interpreted by Schluchter (1981, p. 27) as being thatthe institutional realm mediates between ideas and ‘interests’ (clusters ofclaimants). Here the spiritual and material wants receive socially relevantsolutions. Thus:

Interests (material and ideal) not ideas directly determine man’s action. But the world

views, which were created by ideas, have very often acted as the switches that channelled

the dynamics of the interests. (Weber, 1920, p. 280, cited in Schluchter, 1981, p. 25)

Thus one of the roles of the mindset is to influence the flowing of action incertain channels.

ALTERNATIVE FORMS OF COGNITION

There has long been an interest in alternative forms of cognition, and es-pecially the contrasts between East and West (Northrop, 1944; Nakamura,1964; Maruyama, 1980; Redding, 1980), but it was not until the workof Nisbett (2003) on the ‘geography of thought’ that wide attention wasrenewed and new evidence presented. Against the background of a carica-ture that ‘Americans assume everyone is really an American at heart, or if

The formation of the institutionalfabric of society

VALUE RATIONALITY INSTRUMENTAL RATIONALITY

ENDS

MEANS

FORMAL RATIONALITY

CALCULATIONS

Material progress

Calculation as an ideal

Reason before force

Foresight

The carriers of material progress

Primary SecondaryApplied rationality

Componentiality

Multi-relations

Makeability

Plurality

Progress

Societal view

Bureaucratic order

Legitimate private

sphere

Human rights

Company asinstrument ofownership

Professions plusprofessionalism

Grouping andexpression of interests

Rule of law

Having governmentadministration

The discipline ofmarket

Theories and techniques of calculation

Money-based accountablity

Search for principles of efficient coordination

SUBSTANTIVE RATIONALITY

Impersonal market logics

Fig. 2. The Workings of Western-Style Rationale (an Interpretation of Weber).

GORDON REDDING62


not, it’s only a matter of time until they will be’ (p. 220), Nisbett presentsevidence to suggest that mindsets may vary at a deep and invisible level, afeature that would inhibit any foreseeable converging of ways of thinking.Here the issue is not about the contents of thought, but the ‘mechanics’ ofcognitive processes.

The essential aspects of these differences are as follows:

1.
Eastern thinking (taking the Chinese case as the prototype, but acknowl-edging variations) is essentially holistic, rather than selective, the latterbeing more common in Western modes of thought. In the latter, aspectsof reality are analyzed free of their full context and the relations betweenthem studied in a search for ‘laws’ governing their relations.
2.
In this ‘Western’ process, there is usually a resort to abstract categories,and these are used in a ‘causal chain’ of assumed connections, each cat-egory being a representation of some proposed empirical reality. Muchanalysis is thus decontextualized. In the Asian case the same layerof abstracts is less obvious, reality is perceived directly, and in someaccounts this is related to the structure of language itself and the natureof the representation conveyed by it. Differences in cognitive process arealso brought into account here.
3.
A third contrast is that between the universalism of the laws found inWestern modes of thought, and represented by the canons of naturalscience, and the contingent nature of much Eastern explanation of events.
4.
Western causation, as unidirectional linear Cartesian determinacy, is re-placed in Eastern thinking by complex equilibrium and the balancing ofopposites.
Given the possibility of such differences in cognitive process, the possi-bility also exists of differences in the world as perceived, in the de facto‘reality’. These would be manifest in different kinds of explanation about therelationships between things and different categories for the placement ofthings and events. The fascination of Westerners with alternative percep-tions of business strategy, as seen in the popularity of Sun Tzu’s Art of War

and all its many derivatives, lies largely in its providing a glimpse into aquite different mindset, a quite different ‘take’ on action. Capra’s (1975) TheTao of Physics presents a case for the meeting of Western science with theEastern mindscape, on the latter’s terms. Perceptions of the state, the firm,marriage, society, if they vary, do so in a way that changes the basic buildingblocks used in constructing understanding. This remains a controversial andintriguing area of research, and findings are still tentative. If substantiated,however, the implications are large for those concerned with bridging

GORDON REDDING64

perceptions and finding common mental ground. For those attempting toactually think like others, this really does stretch the elastic.

‘FIELDS’, SEMANTIC SPACES, AND DISEMBEDDING

If culture is a set of meanings, it is logical to ask about the boundaries withinwhich such meanings apply. Perhaps the most obvious of all such boundariesis that of the nation-state, for reasons already noted, but there are other fieldswithin which meanings stabilize and are shared and which may be said tohave their own culture. This is an inevitable outcome of the secondarysocialization underpinning specialization within a society. When a culturecomes to contain such subcultures, it needs to be held together still as anintegrated whole. The role of social axioms is to provide that interlocking setof universals, and the images used to describe that collective mental archi-tecture relate often to the brain. Hofstede’s ‘collective programming of themind’ (1980) or ‘software of the mind’ (1991), Sorge’s (2005, p. 52) view ofsemantic spaces (in his terms, action systems) linked by ‘the neuronalcircuitry that makes effects reverberate throughout society’, all suggest acomplex system in which meanings are spread across a set of social spaces, asif there were a web of communicating wires to foster shared meaning.

In this way, it is possible to envisage a group of overlapping sets. Foran individual there would normally be a core meaning space – that ofupbringing and language – one’s own national culture. In addition to that,for an adult with a career, other spaces would have accreted, to be enteredand left as social life goes on. Within each, there would be a distinct vo-cabulary shared with other members and so too a distinct set of idealsrelating to the action in the space – in most cases being a subset of the widersocietal ideals. It is significant that these spaces are the repository of mean-ing and that the meaning exists – as if it were hanging in the air – inde-pendent of the members. Following Sorge (2005) the institutions are thenincorporated into these spaces but in a state of dependence on the memberswho create and maintain them. This allows an important conceptual dis-tinction to be made between culture and institutions. In short, culture be-longs to everyone and no one; institutions belong to someone (for furtherdevelopment of these ideas see Redding, 2007).

The individual would work in a career space, live in a family space, andspend time in others. If he or she becomes a global executive, then it isconceivable that there is a global executive meaning space, populated by therelatively new ‘tribe’ of itinerant, highly paid, professional executives of the


kind identified as the ‘cosmocrats’ by Micklethwait and Wooldridge (2000).They fill the business class seats, airport lounges, and fine hotels of theworld, and they have their own vocabulary and meanings. It is here that aglobal mindset might find its most distilled and purest form, but only oncondition that certain challenges are met. These are identifiable as follows:

(a)
Does the depth of embeddedness in the home culture space (and itssubset the career space) permit an escape from the meanings absorbed sofar, to a point at which alternative meaning structures can be perceivedand fully understood?
(b)
Can the perception of alternative meaning structures lead to theirincorporation into a new mindset, containing perhaps contrasting anddiscrepant understandings?
(c)
How influential are the surrounding contextual elements in fostering orsuppressing such loosening and enriching of the mind?
(d)
How important is it for an ‘outsider’ to understand the patterns ofcomplex adaptive system evolution in other societies, if a global mindsetis to be acquired?
(e)
In what sense may executives currently operating globally be said tohave constructed a viable new culture based in a global mindset?
Although in caricature form, the description of the cosmocrats byMicklethwait and Wooldridge (Chapter 12) gives the game away. The abovecriteria are not met. The 20 million global executives they refer to ‘are adecidedly Western class’. They are described as superficial: ‘it is too easy toconfuse a business trip with an in-depth study of another culture’; ‘theyseldom meet ordinary people, let alone study their lives in any depth’; ‘hadthe IMF’s bright young economists ventured out of their hotel rooms inSeoul and Jakarta, they might have understood the relationship between

business, politics, and society1 in the economies they were trying to guide’(p. 241). This tendency to stay aloof from the contexts in which their de-cisions are applied is compounded by firms themselves becoming ‘placeless’,by standardized systems that eliminate local features – as for instance inhotels or by life in protected communities. They conclude:

In fact, one could argue that there is no ‘clash of civilizations’, just the growing pains

of one ascendant civilization – that of the cosmocrats – rising against the dozens of

civilizations that seek to constrain it. (p. 244)

If they are right – and the supposed global mindset achieved so far is nomore than a Western, rational, professional, individualist, aggressive version

GORDON REDDING66

of ‘organization man’ gone abroad, then the real challenges would seemimmense.

I propose to complete this review by looking at the nature of the challengeidentified above: that of trying to understand the relationships betweenbusiness, politics, and society in a foreign environment.

ONE OF THE POKER-FACED OPPONENTS

Perhaps the most ‘foreign’ country in Europe, for Americans, is France. Thetwo countries make manifest a number of key opposing philosophies.French government is heavy and deeply interfering; US government is light.French politics is essentially socialist and is largely contemptuous of liber-alism; US politics is essentially liberal and largely contemptuous of social-ism. The French have no word for ‘entrepreneur’, as one US president ispurported to have said, without laughing. The French labor market is rigid:that of the United States is highly mobile. Public ownership of firms isstandard in the United States; private is normal in France. Any attractionbetween these societies is that of opposites.

Let us take it that an American executive needs to come to terms with thebusiness system of France. Expanding on the model given in Fig. 1 is a moredetailed description given as Fig. 3. This is what needs to be understood, atminimum, if the French perspective on things is to be at least acknowledged. Itneed not be approved of in any normative sense (except in a separate contextof debate), but, to deal with it in the conduct of business, its workings need tobe accepted as a viable alternative combination of mindset (i.e., culture), formsof order (i.e., institutions), and forms of economic coordination and control(i.e., organizations). I am more aware than anyone that it looks forbidding. Itbreaks the rules for presentation in the world of bullet points, three-boxdiagrams, and two-by-two matrices. I make no apology for its complexity, butI do recommend certain ground rules for its use, namely: (a) it needs to be

pored over for a long time; (b) it needs to be seen as a picture of a changing

reality in constant motion; (c) it requires a sense of history, as well as a capacity

to project forward; and (d) if you are uncomfortable with accepting the com-

plexity of the real world, then it will not work for you, as it is already a

simplification. Too much simplification is the global mindset problem.The diagram in question is only partially completed, to give an idea of

how it works rather than a full account. Additional specific issues might betraced in addition to those identified and the connections surrounding themmade clearer. There are also strategic implications concerning the likely

Fig. 3. The French Business System.


GORDON REDDING68

success or failure of particular industrial responses, but these are outside thereach of this chapter and are considered in Redding (2005).

Taking just a few of its connections to unravel, as illustrations of itsworkings, let us examine some flows of influence in the field of capital.

Capital. France is in transition, and the dynamics of this are suggested inthe change – beginning in the 1980s – toward reliance on stock marketfunding, as against bank funding. Even so the transition is only partial, andbank funding is still proportionally double that in the United States. Thearrival of foreign investors – now accounting for 35% of equity in the top 40companies – has caused a change in managerial values with the large Frenchcompanies, making them more market-oriented and stimulating their globalexpansion. This has reached a point at which they are now able to obtaininternational capital via the Paris stock market. And yet, the protection ofshareholders’ and creditors’ rights is relatively weak by international stand-ards, and there is a weak market for corporate control.

These trends cannot be understood without seeing their connection with astate policy of deliberately shaped adjustment, in which progress depends onmaintaining a fine balance between the demands of capitalists and of laborand a slow continuing attempt to deregulate labor markets, by encouraginga nonunionized private sector. A heavy welfare state is part of this stabi-lizing formula.

Distinct historical influences affect these policies and, in particular, thetraditions of revolutionary egalitarianism, and left-wing humanism, as wellas a willing acceptance of – and dependence on – a strong state role. Deeperin the culture lie the ideals of a distinctly French definition of civilization.This is strongly guarded and openly celebrated and contains the key com-ponents of (a) progress having a spiritual (i.e., quality of life) as well asmaterial element, (b) a concern with equality and individual rights, (c) de-pendence on centralized order, and (d) belief in rationality. Legitimatemeans of expressing these ideals include strong, involved government, fam-ily business, and defense via protest.

Organizing in France reflects these conditions. Family business domi-nates, and there is a large sector of small and medium enterprises. In thelarge-scale companies, the transition toward market discipline is only partialand the ownership structures remain networked by cross shareholdings,with boards still extensively penetrated by the major elite web of the grad-uates of the ENA (ecole nationale d’administration), bridging governmentand market interests. Industrial concentration remains at high levels. Thewholesale incursion of foreign enterprises is still prevented by the govern-ment. Heavy investment in technology is fostered by the continuing access


to government-supported funding, usually within an elaborate nationalplan, and by the availability of patient capital supplied from large labor-controlled pension funds.

Other connections could be made with different parts of the picture, andexternal influences have been excluded here, but the aim has simply been todemonstrate a process of connecting, of finding context, and of change.Further detail would inevitably accumulate as learning proceeded.

Assuming that such a picture represents, with reasonable completeness,how a society’s economy works, where it came from, where it might be going,and under what conditions, the global mindset would be that of a person ableto understand a number of such heavily contextualized accounts. The degreeof detail of such understanding would clearly vary from case to case with itscontribution to the person’s decisions, but a manager working across(or employing people from), say, 10 countries, would have to build for himor herself a set of such mental pictures and keep them up to date.

There are two ways of achieving this understanding, and they flowtogether. The first is by the conscious search for, and acquisition of, knowl-edge about the other country. This may be done in obvious ways like stud-ying its history, economy, and politics, a quest with no clearly definable endin most cases. The second is by engaging directly with the local society, so asto pick up the nuances of tradition, of attitudes, of the social axioms holdingit together, as well as the debates any society will have. This process requiresa degree of humility and is greatly helped by language fluency. These are, ofcourse, old lessons, but they seem remarkably hard to learn, especially bymembers of cultures that have acquired the confidence of apparent ‘success’.

If the definition is accepted, that a global mindset is a set of attributespossessed by an individual that enable him or her to influence people unlikehim or her effectively, and if, as suggested, a key part of the acquisition ofsuch attributes is an understanding of the full contexts of others, then anumber of considerations arise. Knowing where people ‘are coming from’challenges understanding at three increasingly deep levels.

The first of these levels might be termed the institutional. This deals with thesurroundings in which the other individual is likely to have grown up andworked, insofar as those surroundings are visible on the surface of society inits manifest order. Among the many things included here would be the sys-tems of education, organized religion, law, government administration,and philosophy; social structures such as kinship patterns; and the specifichistorical circumstances likely to have shaped these institutions. Americanscannot help but be affected by their society, with its growth, optimism,legalized order, light government, accessible education, accessible capital, and

GORDON REDDING70

Anglo-Saxon heritage. Many British employees now behave with attitudesformed in the Thatcher revolution, under institutional structures such a freelabor markets and competitive laissez-faire policies. When one of the mostsuccessful companies benefiting from such conditions, Marks and Spencer,expanded into Europe, it ran into such a violent contrast in conditions,especially in labor relations in France and Belgium, that it closed all operationsand withdrew. A global mindset might have fostered greater adaptiveness.

The levels get harder to come to terms with as you go deeper. The secondlevel, the cultural, may be approached in terms of three questions, as notedearlier: Why does the firm exist? Where do peoples’ primary loyalties anddependencies lie? And what are the bases for legitimate authority? If the USfirm exists primarily to give return to shareholders, the German to serve aregional community, the Korean to build the nation, the Japanese to keeppeople employed, and the Chinese to support and give status to a family,then behavior will reflect these priorities. Such behavior may not always beexplained openly, but the effects of such evolved responses are widespread.So too do norms of belonging, and of respect, have a similar impact.

The third level, that of alternative cognitive patterns, is largely invisible toeverybody. Perhaps the best access to it is to keep asking for explanations,not so much for what they convey about a specific issue, but for what theyconvey about the mechanisms of reasoning. But this is fruitless without theself-knowledge that one’s own form of thinking gives no monopoly on thetruth – whatever that might be.

The attitude of cosmopolitanism, the virtue of tolerance, and the acquiredskill of understanding alternatives are all essential initial components in anexecutive capable of operating effectively across cultures and with mixedcultures. In making the process work, the challenge of learning about othersincreases following the same sequence. The real problems lie in the worlds ofalternative meaning, compounded by the competitive pressures of business.When the other poker player’s eye flickers, is he bluffing, or does he havemild conjunctivitis?

NOTE

1. Italics added.

ACKNOWLEDGMENTS

Much gratitude is owed to the organizers of the Thunderbird conference onglobal mindsets held in November 2005, for the stimulating exchanges it


brought to bear on the issue. I would especially like to note conversations onthis topic with Mansour Javidan and the subsequent advice given by himand Michael Hitt in preparing the chapter. I also acknowledge with thanksthe support of INSEAD’s Euro-Asia and Comparative Research Centre andthe technical help of Nathalie Gonord.

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CULTURAL INTELLIGENCE AND

THE GLOBAL MINDSET

P. Christopher Earley, Charles Murnieks and

Elaine Mosakowski

INTRODUCTION AND OVERVIEW

With the globalization of business, a relevant question is how might peopledeal with others from fundamentally different backgrounds (cultural, ethnic,functional, etc.)? Many authors (Rhinesmith, 1992; Paul, 2000; Gupta &Govindarajan, 2002; Kefalas, 1998, just to mention a few) suggest thatmanagers working in international contexts require a specialized way ofthinking about the environment in which they operate, a so-called ‘‘globalmindset.’’ In the current chapter, we discuss the evolving notion of a ‘‘globalmindset’’ and contrast it with extant work on the related concept of ‘‘culturalintelligence’’ (Earley, 2002; Earley & Ang, 2003; Earley &Mosakowski, 2004;Thomas & Inkson, 2004).

The thesis of this chapter is that cultural intelligence (CQ) clarifiesand extends elements associated with the global mindset (GM) concept inspecific directions. In particular, our review of CQ and GM finds commoninterests in cognition, motivation, and behavior. But CQ emphasizes cog-nitive flexibility and metacognition across diverse cross-cultural settings,whereas GM primarily focuses on the collection and processing of context-specific knowledge. CQ stresses cross-cultural self-efficacy and motivation,whereas GM includes somewhat more vague concepts of commitment and

The Global Mindset




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P. CHRISTOPHER EARLEY ET AL.76

willingness to engage. Finally, CQ goes beyond GM’s attention to enactingpolicies tailored to a cultural setting by also focusing on the behavioralability to interact interpersonally.

In the next section, we turn our attention to the definition and clari-fication of culture since this construct forms the basis of a global mindset.

BASICS OF CULTURE

Any discussion of a global mindset and cultural intelligence must begin withthe notion of culture. After all, culture represents the core of society inrelation to its institutions and practices (Berry, 1990; Bond & Smith, 1996;Hofstede, 1991; Lehman, Chiu, & Shaller, 2004; Triandis, 1972, 1994).Whether culture emerged as a by-product of evolution to combat the risk ofisolation (and to help convey adaptive features of social interaction to safe-guard the community) or in reaction to psychological needs of discoveringmeaning in the world around us (Lehman, Chiu, & Schaller, 2004), itremains a central feature of how researchers and practitioners interactacross geographic and sociological boundaries. The human need to formcollectivities and to identify oneself based on definable subgroups makes theformation of culture inevitable (Stryker & Burke, 2000).

Kluckhohn (1954) defines culture as patterned ways of thinking, feeling,and reacting to various situations and actions. It is acquired and transmittedmainly by symbols, including their embodiments in artifacts. The essentialcore of culture consists of historically derived and selected ideas and espe-cially their attached values. Culture can be seen as shaping the nature ofsocial structures as they grow and adapt (Hofstede, 1991). Hofstede (1991)provides a commonly cited definition of culture. His view holds that cultureis best represented as a set of programming for people within a nation: the‘‘software’’ of the mind. Societies shape their collectivities and social ag-gregates according to the rules implied by culture. Rohner (1984) offersuseful distinctions of culture, social system, and society. He defined societyas a territorially bounded, multigenerational population recruited largelythrough sexual reproduction and organized around a common culture and acommon social system (p. 131). He defined a social system as the behavioralinteractions of multiple individuals who exist within a culturally organizedpopulation and culture (p. 119) as ‘‘y the totality of equivalent and com-

plementary learned meanings maintained by a human population, or by identi-

fiable segments of a population, and transmitted from one generation to

the next’’ (italics in the original). He asserts that the cross-generational

Cultural Intelligence and the Global Mindset 77

transmission of cultural meanings within a society is imperfect; over timeindividuals acquire variations on cultural meanings held by their prede-cessors imperfectly shared. Any two individuals from a common culturemay hold slightly different meanings for the same event or construct, andthese two individuals may have shared meanings with other parties in thesociety but not with one another.

Although these definitions seem straightforward, a global mindset re-quires having knowledge of other cultures (and extant practices, institutions,etc.) as well as an overarching mental framework that might integrateseemingly disparate cultures. An additional complication arises, however,when discussing concepts that are unique and idiosyncratic to particularcultures in contrast to those common across cultures. Before we tacklethe specific differences and similarities of these constructs across boundaries,a more general discussion of cultural specificity is warranted.

Emic and Etic Constructs

An important characteristic of human functioning is that some constructsand processes may exist uniquely in one culture. Such a construct or processis referred to as an emic construct, while universals are etic constructs.Briefly, a construct is considered emic if it has its basis within a given culture(or group of cultures) and it is fully appreciated only within this context. Anemic construct gains meaning from its context and it cannot be appreciatedfully absent a contextual interpretation.

For example, the Chinese concept of ‘‘guanxi’’ has received much atten-tion in the literature. Much of this work has ignored the emic nature of thisconstruct and misinterprets the meaning of guanxi (Tsui, 1998). Somescholars describe guanxi as bribes and gift-giving as a form of corruption.Although this certainly may happen with guanxi, it is not an inherent partof the construct. Guanxi refers to the establishment of social relationships(Farh, Tsui, Xin, & Cheng, 1998) by offering gifts as token gestures toestablish and build a relationship across parties. Without these symbolicgestures, the social bond among people is weakened. Thus, the concept ofguanxi must be viewed as an emic construct embedded in the Chinese socialcontext.

Other constructs are etic or universal (Berry, 1990; Earley & Mosakowski,1996). An example of a universal construct is that all people have certaincognitive functions such as memory and recall (with the idiosyncraticexception of people suffering from some physiological or psychological


impairment). Although people’s memories and ability to recall events differ,these cognitive functions are ubiquitous. Some social institutions areetic, such as marriage or mourning of a lost loved one (Berry, 1990;Resaldo, 1989). The identification of a psychological universal is a difficultone to establish and defend.

There are a number of constructs that appear only to be universals. Berryrefers to these constructs as imposed-etics (what Triandis refers to as thepseudo-etic), or constructs that are derived in a limited number of culturalsystems but do not really apply beyond the fringes of these cultures. An eticis imposed if it is developed in one subset of cultures and applied to others,even if inappropriate to do so. Earley and Mosakowski (1996) describeda parallel notion of the pseudo-emic, meaning that some constructs areassumed to be idiosyncratic and unique but, in fact, are not.

An imposed-etic captures some generalizability across cultures while beingrelatively situation specific. Berry suggested that, at the extreme, a pseudo-etic is a form of intellectual colonialism wherein the academic wisdom of oneculture is imposed upon others with exaggerated hubris. A different formof etic/emic construct may be observed – that of the derived-etic. The identi-fication of etics is something that Berry refers to as identifying derived-etics,meaning that a principle or construct is identified in a subset of cultures andthen is examined in other cultures to assess its universality.

Our discussion of culture and the specificity of constructs is a backdropfor elaborating on a core idea within this chapter, namely, a comparison of aglobal mindset with cultural intelligence. As we will discuss, GM has itsfocus on the etic aspects of culture and creating a single frame of mind thatenables a person to work across cultural boundaries, perhaps overlookingnuances of emics. In contrast, CQ emphasizes the discovery of emics as wellas etics through an individual’s own interactions in new cultural situations.We now turn to a discussion of global mindset followed by a discussionof cultural intelligence and its contrast (with global mindset). Finally, wesuggest ways that a study of cultural intelligence can help guide and focusfuture work on global mindsets.

GLOBAL MINDSET – OVERVIEW OF

THE CONSTRUCT

Both macro- and micro-organization scholars, psychologists, sociologists,and organizational strategists seem to agree on several key facets of a global


mindset. A global mindset refers to a psychological construct capturing aframe of reference based on interacting with people from geographicallydistant (from the perceiver) regions. Srinivas (1995) defines a global mindsetas a way of approaching the world and a tendency to scan from a broaderperspective. It includes elements of curiosity, awareness of diversity, andacceptance of complexity and uncertainty (Srinivas, 1995).

In an early proposal concerning a global mindset, Rhinesmith (1992)provides his views on what elements constitute a global mindset and whatpersonal characteristics are associated with those elements. He defines amindset (p. 63) as ‘‘a predisposition to see the world in a particular way thatsets boundaries and provides explanations for why things are the way theyare, while establishing guidance for ways in which we should behave.A mindset is a filter through which we look at the world.’’ A global mindsetinvolves scanning the world from a broad perspective, looking for un-expected trends and opportunities to achieve personal, professional, ororganizational objectives and searching for the broad picture and contextsurrounding situations. It also entails embracing the complexity and con-tradictions inherent in global interactions. People with a global mindsetvalue diversity and multicultural teamwork; they are inclusive rather thanexclusive. They also are comfortable with the ambiguity, surprises, andunpredictability inherent in complex systems. Individuals with global mind-sets continually seek to discover new meanings and to reform boundaries inattempts to improve lives.

Having a global mindset requires possessing six personal characteristics:knowledge – broad as well as deep, conceptualization – ability to deal withcomplexity, flexibility – ability to adjust to global and local demands,sensitivity – for cultural diversity, judgment – ability to intuit decisions withinadequate information, and reflection – seeking continuous improvement.The elements of global mindsets and the associated personal characteristicsmap onto six ‘‘competencies’’ characteristic of global managers: managingcompetition, complexity, adaptability, teamwork, uncertainty, and learning.

According to Srinivas (1995), global thinkers tend to be open to them-selves and others by rethinking boundaries and changing their behavior.A global mindset is the foundation for business competencies such as man-aging competitiveness and managing uncertainty. Srinivas (1995) sees it as ageneral orientation to the world. It represents ‘‘y a certain curiosity aboutthe world, to see goals and objectives against larger backdrops and timeframes’’ (p. 30). He proposes the idea of a global mindset as a broad,cosmopolitan perspective that is linked to actions. Global mindsets result inorganizational consequences through (1) the formulation of a vision, (2) the


crafting of strategy to realize the vision, and (3) mobilizing and empoweringhuman resources. Srinivas describes eight components that compose aglobal mindset:

�
A curiosity and concern with context – involves placing current tasks inboth historical and probable future contexts.
�
Acceptance of complexity and its contradictions – involves feeling com-fortable with inevitable conflict and managing minorities’ concerns.
�
Diversity consciousness and sensitivity – valuing diversity and networks,being able to inspire others.
�
Seeking opportunity in surprises and uncertainties – taking risks andmaking intuitive decisions.
�
Faith in organizational processes – trusting and empowering subordinatesinstead of tightly controlling them.
�
Focus on continuous improvement – focus on both self-improvement andhelping others improve, making adaptive change.
�
Extended time perspective – long-term views associated with long-termplanning and not worrying about short-term perturbations.
�
Systems thinking – looking for interdependencies and cause-effect mech-anisms, involves anticipating impacts and dealing with reactions.
Kefalas (1998) adopts Rhinesmith’s (1992) definition of a mindset as:

‘‘y 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. It is a filter through which we

look at the world. A global mindset means that we scan the world from a broad per-

spective, always looking for unexpected trends and opportunities that may constitute

a threat or an opportunity to achieve our personal, professional, or organizational

objectives’’ (p. 556).

Kefalas argues that global mindsets allow individuals to see the world asa whole and to use knowledge gained from cosmopolitanism to designvalue-maximization strategies for everyone involved. He provides a generalframework involving the ability to think globally (a continuum of concep-tualization) and to act locally (a continuum of contextualization). He sug-gests that the goal of a global mindset is finding/developing individuals whocan understand global points of view and then adapt strategies to fit at locallevels (ideally, managers should be ‘‘glocals,’’ or a global thinker with a localperspective and appreciation).

Bartlett and Ghoshal (1998) introduce the concept of the ‘‘transnational’’organization. They argue that transnational organizations are characterizedby simultaneous commitment to competitiveness, flexibility, and learning on


a global scale. They also contend that managers with globally orientedmindsets are central to transnational organizations. Transnational organi-zations, and by extension their management teams, selectively centralizeor decentralize assets (meaning they do not adopt a ‘‘blanket’’ centralizationor decentralization policy). They achieve competitiveness by being selectivein centralization decisions. This implies that management both accepts andembraces the complexity involved in adapting to local markets in a globaleconomy. Because transnational managers seek to understand and exploitforeign subsidiaries and markets for the focal firm’s benefit, they mustpossess a broad (possibly global) mindset that understands the contributionsinherent from all different functions of the firm and the need to be flexiblein making decisions. Optimization according to the situation, not rigidadherence to company policy, seems to be the general theme.

Kedia and Mukherji (1999) proposed a broad view of a global mindsetin a conceptual paper. They suggest that a global mindset rests largely onthe knowledge and skills of a manager. Global mindsets involve the reali-zation that a firm is dependent on the global economy even when thefirm’s activities are seemingly confined to the domestic environment. Globalmindsets are necessary to handle global competition. To sustain and developa global mindset, a manager needs particular knowledge and skills. Knowl-edge involves understanding of the different aspects of an interdependentworld, while skills involve behavioral abilities that enable effective work in aglobal context. Kedia and Mukherji (1999) also argue that global mindsetsinvolve longer term temporal views and increased tolerance of other peopleand cultures. Individuals with global mindsets thrive on cultural diversity,ambiguity, contradictory forces, and complexity. Global mindsets alsoinvolve emotional connections with people throughout worldwide opera-tions. The knowledge necessary for global mindsets is composed of masteryover relevant technology, knowledge about relevant sociopolitical factors,and knowledge of culture and cross-cultural issues. They argue that globalmindsets are found in a type of manager called the ‘‘integrator.’’ Kedia andMukherji (1999) state:

The integrator holds multiple cultural perspectives and creates a worldwide web of

relationships. The integrator weaves together complex webs of partnerships, alliances,

and relationships that shift and reconfigure over time as new threats and opportunities

appear. The integrator is one who understands, who is aware, and who is competent.

The integrator is able to bridge differences in a meaningful way, and is able to manage

the differences between people, values and cultures (p. 245).

More recently, Gupta and Govindarajan (2002) argue that mindsets arecognitive filters through which we observe and make sense of the world.


They define a global mindset as one that combines an openness to andawareness of diversity across cultures and markets with a propensity andability to synthesize across this diversity. Global mindsets rest upon knowl-edge structures with great diversity combined with an ability to integratediverse viewpoints. A global viewpoint without an integrative capability rele-gates a firm to serving lots of separate markets without realizing any benefitsof combination and integration. Thus, the value of a global mindset lies incombining speed with accurate responses to market opportunities. When acompany has a grasp of the needs of local markets, it can build bridgesbetween the needs of different markets and the firm’s own global experienceand capabilities (thus, the combination of integration and differentiation).

Begley and Boyd (2003) define a global mindset as the ‘‘ability to developand interpret criteria for business performance that are not dependent onthe assumptions of a single country, culture or context and to implementthose criteria appropriately in different cultures and contexts’’ (p. 25–26).They go on to assert that achievement of a global mindset requires elementssimilar to Kefalas’ (1998) model of thinking globally, but acting locally.In their view, this involves balancing the tensions of global consistency andlocal responsiveness. While possession of a global mindset could confercompetitive advantage, Begley and Boyd (2003) caution that the pull ofrapid globalization often overwhelms careful management of customizinglocal actions.

Arora, Jaju, Kefalas, and Perenich (2004) employ the Kefalas frameworkin their empirical analysis of the global mindsets of U.S. textile and apparelindustry managers. They add to the descriptions of conceptualization andcontextualization. They state that a conceptualization is ‘‘y a means ofstructuring the way one looks at the world and is evaluated by the degreeto which it enables one to cope with the complexity of a phenomenon on apractical basis. It refers to a way of thinking and the ability to comprehendoneself as part of a global environment (pp. 399–400).’’ In addition, acontextualization is defined as ‘‘y a process by which a person adapts theconceptual framework to the local environment. It refers to a person’sability to act in a context and adapt his or her ideas to the local environ-ment (p. 400).’’ This provides a useful general conceptualization, but itdoes not explicate what individual-level mechanisms might be involved inenabling a cosmopolitan cognitive approach with an effective, adaptivebehavioral repertoire.

Nummela, Saarenketo, and Puumalainen (2004) provide an empiricalassessment linking global mindset to firm performance. They define aglobal mindset similar to Gupta & Govindarajan (2002), associating it with


openness to and awareness of cultural diversity and the ability to handle it.Global mindsets involve a positive attitude toward international affairs andalso an ability to adjust to different environments and cultures. Thus, globalmindset includes both attitudinal and behavioral elements. Operationally,they measured a global mindset with a seven-item, multidimensional scalemeasuring items of managerial proactiveness in international markets,managerial commitment to internationalization, and possession of aninternational vision. They found a positive and significant relationshipbetween a global mindset and the amount of international businessconducted. A positive and significant relationship was also found betweenthe degree to which a firm’s environment stressed internationalization andthe possession of a global mindset.

In another empirical study of global mindsets, Murtha, Lenway, andBagozzi (1998) created and verified two five-item, seven-point Likert-typemindset scales measuring the global integration and national responsivenessexpectancies of international managers. Surveying 370 managers of a U.S.-based multinational corporation across a three-year time span, they dem-onstrated that the mindsets of managers can evolve in a globally orienteddirection. In this particular study, the authors were primarily interested inestablishing quantitative measures of global integration and national re-sponsiveness that demonstrated both convergent and discriminant validity.

In summary, research on a global mindset shares an emphasis on thinkingand cognition with a less prominent view of related constructs such asmotivation or behavior.

CULTURAL INTELLIGENCE – OVERVIEW OF

THE CONSTRUCT

Cultural intelligence captures a person’s capability to adapt effectively tonew cultural contexts and it has both process and content features (Earley &Ang, 2003). Its general structure consists of three facets including cognitive,motivational, and behavioral elements. In this section, we describe thesefacets and the underlying processes that link them.

Cognitive and Metacognitive Facet

The first facet refers to cognitive processing aspects of intelligence, and auseful way of conceptualizing it is through self-concept theory. Just as with


global mindset, the cognitive facet can be conceptualized as being embodiedin the mental representations of the self in relation to others. The self is aperson’s mental representation of his or her own personality, social identity,and social roles (Kihlstrom & Cantor, 1984; Stryker & Burke, 2000). Theself is a dynamic interpretive structure that mediates most significant intra-personal and interpersonal processes (Markus & Wurf, 1987; Markus &Kitayama, 1991; Markus, Kitayama, & Heiman, 1996). Intrapersonal pro-cesses include cognitive information processing, affect, and motivation,whereas interpersonal processes reflect interactions with the social milieu,including social perceptions, choices of situation, interaction strategies, andreactions to feedback. The self is formed through experience and thoughtand encoded in memory alongside mental representations of other objects(reflected and imagined) in the physical and social world (Bond & Smith,1996; Stryker & Burke, 2000).

Knowing oneself is insufficient for high CQ. Cognitive flexibility is criticalto CQ (as it is to a global mindset), since new cultural situations require aconstant reshaping and adaptation of self in operating within a new setting.Flexibility of self-concept and ease of integrating new facets into it areassociated with high CQ, since understanding new cultures may requireabandoning preexisting conceptualizations of how and why people functionas they do. High CQ also requires a capability reformulating one’sself-concept (and concept of others) in new complex configurations. Thus,flexibility and a capability to reorganize one’s self-concept inductively arenecessary. An exception to this argument might be someone who is bi- ormulticultural, since self-knowledge in this case implies awareness of morethan a single culture. Such an individual may have a sufficiently complexself-concept to reflect the flexibility needed for CQ.

In addition to cognitive flexibility, high CQ requires strong reasoningskills. Exposure to new cultures often requires detective work to discernsignificant cues in the environment. Inductive reasoning is important for CQas a person attempts to sort out, and make sense of, a multitude of socialand environmental cues.

Take, for example, Hall’s (1976) discussion of his experiences staying inhotels in Japan. After a short time in his hotel (several days of a stay thatwas to last approximately a month), he returned to his room only to findthat he had been moved to another room. After several more days, he foundthat he had been moved again. This room shuffle reoccurred when he stayedin small hotels in other parts of Japan as well and he initially concluded thathe was being moved around because of his low status (gaijin, or foreigner)within the culture. That is, the reason he was moved about was because


higher status patrons wanted his room. At one time in Kyoto, he waseven moved from one hotel to another. His cultural frame and self-conceptsuggested that he was moved around because of low status. As he latersurmised (p. 65):

It was our lack of understanding of the full impact of what it means to belong to a high-

context culture that caused me to misread hotel behavior at the Hakone. I should have

known that I was in the grip of a pattern differencey . The answer to our puzzle was

revealed when a Japanese friend explained what it means to be a guest in a hotel. As soon

as you register at the desk, you are no longer an outsider; instead, for the duration of

your stay you are a member of a large, mobile family. You belong. The fact that I was

moved was tangible evidence that I was being treated as a family member – a relation-

ship in which one can afford to be ‘‘relaxed and informal and not stand on ceremony.’’

This is a very highly prized state in Japan, which offsets the official properness that is so

common in public.

Consistent with an American perspective, Hall interpreted room andhotel shuffling as a sign of low status. Strong inductive skills would havesuggested that, given Japanese culture’s emphasis on politeness to strangers,only a close friend would be imposed upon by a Japanese host. New culturalcontexts provide, at best, ambiguous and, at worst, misleading cues for whatis happening.

An important aspect of cognitive functioning in CQ refers to the meta-level strategies that global managers have for understanding a new culture.These higher level cognitive processes are part of a person’s metacognition(Earley & Ang, 2003). Metacognition refers to thinking about thinking, orknowledge about cognitive objects (Flavell, 1976, 1987). Metacognition canbe further broken down into two complementary elements: metacognitiveknowledge and metacognitive experience.

Metacognitive knowledge refers to one’s acquired world knowledgethat has to do with cognitive matters and it reflects three general categoriesof knowledge (Flavell, 1987). First, it reflects the person aspects of knowl-edge or the cognitions that we hold about people as thinking organisms.Second, it refers to task variables, or the nature of the information acquiredby an individual. A person learns things about how the type of informa-tion encountered influences how it should be dealt with in various contexts.Third, it reflects strategy variables, or the procedures used to achievesome desired goal. Whereas a cognitive strategy might be something suchas adding a set of numbers to attain a total, a metacognitive strategymight be to add the numbers up several times to ensure that the totalis correct. The original addition procedure gives a ‘‘correct’’ answer tothe problem but the successive checks on the total function differently. The


follow-up operations are intended to reassure that the correct answer hasbeen found.

Metacognition is a critical aspect of CQ since much of what is required ina new culture is putting together patterns into a coherent picture even if onedoes not know what this coherent picture might look like. To do so requiresa higher level of cognitive strategy about people, places, and events. It isfor this reason that many cultural training programs fail, since they over-emphasize the specific example at the expense of a more general learningprinciple. Many companies train their expatriates by providing country-specific information. This approach not only is limited by a person’sinvolvement in the training method but also does not adequately prepare anexpatriate for understanding and mastering novel situations. With aneffective metastrategy this problem is overcome.

CQ reflects cognitive processing capabilities in a number of ways. CQcaptures a person’s self-concept and degree of differentiation. Incorporatingnew information and using the self as a complex filter for understandingnew cultural settings is critical. Inductive reasoning is central to CQ sincemany new cultural situations require that a person step beyond his or herexisting knowledge to understand what is going on around him or her. Thisis not merely empathy; cues determining another person’s affective state,relied upon by an empathetic individual, may be absent or conflicting withwhat is expected. Emotional expression may be misleading, since it is theunderlying emotional states that are truly reflective of a person’s feelings. Ahigh-CQ person must inductively create a proper mapping of the socialsituation to function effectively. Finally, CQ captures metacognition andhigher order learning for an individual.

Motivational Facet

Cognitive processing and functioning have long been the limiting domainfor traditional work on intelligence. Scholars working in this field tradi-tionally neglect other aspects of psychological functioning even though theyare obviously critical for successful adaptation. (There are several prominentmodels of motivation that incorporate cognitive functioning, such asBandura’s (1986) self-regulation theory or Locke and Latham’s (1990)goal-setting theory.) Ironically, it appears that motivation theorists haveintegrated cognition into their models more so than the intelligenceresearchers have done with motivation. In this section, we explore the


motivational basis for cultural intelligence, focusing on a person’sself-efficacy and personal motives.

It is not sufficient to have knowledge of another group’s ways of dealingwith the world. One must be able (and motivated) to use this knowledge andproduce a culturally appropriate response. To relate a person’s motivationto cultural intelligence, we return to a person’s self-concept. Cultural intel-ligence reflects self-concept and directs and motivates adaptation to newcultural surroundings. Self-efficacy is a key facet of the self (Bandura, 1986;Erez & Earley, 1993). Perceived self-efficacy is ‘‘a judgment of one’s capa-bility to accomplish a certain level of performance’’ (Bandura, 1986, p. 391).People tend to avoid tasks and situations they believe exceed their capa-bilities. Efficacy judgments promote the choice of situations and tasks withhigh likelihoods of success and eliminate the choice of tasks that exceedone’s capabilities.

Self-efficacy plays an important role in CQ because successful inter-cultural interaction is based on a person’s sense of efficacy for socialdiscourse in a novel setting. A person who does not believe in his or herown capability to understand people from novel cultures is likely todisengage after experiencing early failures (and failure is likely to occur earlyin such encounters). If the motivational facet of cultural intelligenceis weak, adaptation will not occur. A person’s proactive engagementof new cultural circumstances is highly influenced by a sense of self-efficacy.Some individuals are highly efficacious concerning unfamiliar social settingsand how to mix and learn more about people from unfamiliar cultures.Further, high efficacy means that, after individuals confront obstacles,setbacks, or failures, they will reengage with greater vigor rather thanwithdraw (Bandura, 1997). This feature of efficacy is critical for a culturalsojourner because much of discovering and adapting to a new culturemeans overcoming obstacles and setbacks. Highly efficacious people donot require constant rewards to persist in their actions; rewards maynot only be delayed, they may appear in a form that is unfamiliar (andthereby not appearing as a reward). People having low efficacy expecta-tions are unable to maintain commitment to a course of action undersuch duress.

An additional benefit is derived from a heightened sense of efficacy,namely, a strategic way of thinking and problem-solving (Bandura, 1997;Locke & Latham, 1990). Individuals who have a strong sense of efficacyengage in a problem-solving and strategic approach to overcoming obstaclesand this is very important in intercultural encounters since immediate and


obvious answers to dilemmas may be absent. High-CQ people have a strongefficacy with regard to intercultural encounters and so they ‘‘work smart aswell as hard.’’

Norms and values are related to CQ and they are an important aspectof the self as they guide what features of the social environment a personattends to and what he or she values (Glenn & Glenn, 1981; Hofstede,1991; Kluckhohn, 1954; Kluckhohn & Strodtbeck, 1961; Rokeach, 1973;Schwartz, 1992, 1993). From a motivational perspective, values and normsguide our choice of activities and help define our evaluation of them.A person having strong group-based values is likely to avoid situationsrequiring personal actions. Further, such a person is likely to evaluateindividual, idiosyncratic behavior negatively. Thus, cultural adjustment maybe impaired or influenced by one’s motivation energized by cultural valuesand norms.

Behavioral Facet

The third facet of cultural intelligence refers to the behaviors in whicha person engages. The behavioral aspect of CQ suggests that adaptationnot only is knowing what and how to do (cognitive) and having the where-withal to persevere and exert effort (motivational); it also requires havingresponses needed for a given situation in one’s behavioral repertoire.Lacking appropriate responses, a person must have a capability to acquiresuch behaviors.

CQ reflects a person’s capability to acquire or adapt behaviors appro-priate for a new culture. Difficulties in acquiring a new language, suchas accurate pronunciation of tones and phonemes in languages such asMandarin or Thai, can be important to cultural adjustment. Given thatlanguage conveys many subtleties of a person’s culture, it is our argumentthat people who lack an aptitude for acquiring languages, at least at some

reasonable level of proficiency, will have a low CQ. In a sense, languageacquisition is one example of a behavior that one might need to be successfulin an expatriate work context. We are not saying that there is a causalconnection between language acquisition and CQ; we are merely arguingthat the two are related.

A person’s behavior is tied to CQ in more indirect ways. A person mayknow and wish to enact a culturally appropriate behavior, but he or shecannot do so because of some deep-set reservation. For example, imagine anexpatriate who is provided with a plate filled with a local delicacy of fried


grubs and earthworms in the Australian outback but who is unable toovercome his revulsion and eat. This type of response (or lack of it) can bethought of in behavioral terms (Luthans & Kreitner, 1985). That is, thespecific reinforcement history of an individual bears strong relevance to hisor her execution of particular actions in new cultural settings. In an inter-cultural encounter, even if a person is able to produce a desired responseeventually, it remains a problem that the host may detect hesitation andreact negatively.

Behavior properly executed requires a willingness of a person to persistover time. Persistence is necessary for the acquisition of new skills and so isa person’s aptitude to determine these new skills. It is not merely enough tobe willing to try and learn new behaviors; a high-CQ person has an aptitudeto determine where new behaviors are needed and how to execute themeffectively.

Role modeling provides an important contribution to behavioral CQ.A person with high CQ can adapt his or her behavior to any given culturalcontext. This is loosely illustrated by the old adage of ‘‘When in Rome, do asthe Romans do.’’ Displaying behaviors that are consistent with a targetculture is an important aspect of intercultural adjustment and interaction.Mimicry offers a potentially important vehicle to adaptation. A myriad ofcues are provided through observing others and observing their reactions asyou interact with them; a person high in behavioral CQ integrates andmimics these cues and behaviors (Chartrand & Bargh, 1999). Work onmimicry suggests that the effective mimicking of another person’s behavior,even if done unconsciously, results in an increased satisfaction with theinteraction. Mimicry is subtle and even unconscious (Chartrand & Bargh,1999) but it results in generally positive effects in a social encounter. A high-CQ person is a talented mimic, although such mimicry may be largelyunconscious. If mimicry is used purposely then it constitutes a type ofcognitive strategy as well as a behavioral intervention.

It is not just acting the same as others and pretending to be a member ofanother culture, however; it is engaging in actions that put people fromanother culture at ease. To control personal displays and actions, a personmust be able to use the various behavioral cues provided by others tointerpret their actions and underlying motives. What is particularly difficultabout such inferences is that these behaviors often occur in highly un-familiar settings and as part of unfamiliar rituals. In addition to these facetsof CQ, there are a number of processes that underlie how people deal withnew and unfamiliar cultures. In the next section, we turn to a discussion ofthe process aspects of CQ.


Process Aspects of Cultural Intelligence

Cross-cultural knowledge can be differentiated across three levels (universal,mediate, and setting-specific levels) and between two types – declarative, orwhat it is that we know about something, and procedural, or what we knowabout how something operates (Ackerman & Heggestad, 1997; Tulving &Schacter, 1990). The simplest way to think about declarative versus pro-cedural knowledge is that the former is information about the characteristicsof an entity (e.g., a refrigerator keeps objects cold), whereas the latterdescribes the way something functions (e.g., a refrigerator has a coolantcirculating through various heating coils that act to extract the heat from theambient environment and this heat is then given off by the coolant, which isrecirculated). That is, declarative knowledge concerns facts, propositions,and events, whereas procedural knowledge concerns underlying functionand actions. Both types of knowledge exist at the three levels of analysisalthough they differ in general specificity and link to a social setting.

Declarative and procedural knowledge at a universal level does not needto be learned, and reflects basic psychological processes such as storingand recalling memories, sensory encoding, and language (the capacity forlanguage rather than a specific language). Declarative categories includefeatures such as distinguishing animate from inanimate, universal concep-tions of good versus evil (not the definition of each, but the existence ofthese universal categories), and self-concept. Procedural categories includestoring and recalling memories, sensory processing, etc.

At a universal level, declarative and procedural knowledge is highlyabstract and general. Universal knowledge is inherent to the individual andnot merely a product of personal experience. Universal knowledge is notunchangeable, and extreme circumstances (such as physiological damageto the brain) can influence these knowledge categories at a universallevel. Psychological universals represent declarative knowledge at a highlyabstract level. For example, people have abstract categories of person per-ception and self-concept (Epstein, 1973). The dimensions of depth, breadth,and complexity of these categories vary across individuals, but each personhas memory-based schema with these dimensions. Moral values may also beuniversal according to some scholars (Wilson, 1993). If so, these universalvalues would constitute declarative knowledge at a universal level. Propertreatment of self and others, views of justice, fair allocation of resources,and duty to others are possible universal values.

Procedural knowledge at a universal level refers to the routines thatindividuals have for processing the information they receive. Procedural


memory stores sequences of actions; in the case of universal proceduralknowledge, people have routines for processing information such as storingnew memories or categorizing experiences (Wyer & Srull, 1980). This ismuch like what Wyer and Srull (1980) called an executor, or a constructwhose function is to store, move, and retrieve information. Universal de-clarative and procedural knowledge exist for all people but to varyingdegrees. A person with high CQ has a greater capacity to store and cate-gorize new experiences than a person with low CQ (although both possessthis universal capacity).

At a mediate (cultural) level, procedural and declarative knowledge reflectmore culture-specific information and characteristics. For example, on thefirst author’s first trip to Japan’s Narita Airport, he noticed that several ofthe airline personnel were wearing white cotton gloves as they handledbaggage, directed buses, etc. What was the purpose of wearing white gloves?This information is processed so that he might understand the meaning ofwhite gloves. Is there a concern about contamination? Is there a concernabout communicable diseases? Is there a norm of cleanliness? Proceduralknowledge reflects our existing knowledge about how the Japanese workat airports, how other Asian cultures operate at airports, etc., and ourspecific declarative knowledge of the Japanese might emphasize cleanliness,xenophobia, etc. At a mediate level, he is trying to generate an inferenceabout Japanese workers and why they wear white gloves. Our inference willnot necessarily apply outside of this instance, but it applies to more than asingle idiosyncratic individual or experience.

This gives rise to further processing at a specific setting to understand thesignificance of gloves at this airport for a given airline employee in a givensituation. At a mediate level, he draws from his shared experiences withinhis own culture (and across cultures as a sojourner) as a general lens forviewing and understanding this situation. He asks, why do some airlineemployees wear white gloves? To formulate an answer he draws uponsetting-specific procedural and declarative knowledge to deal with theuniqueness of this situation. The specific setting in which the first author isoperating largely influences his use of particular procedural routines anddeclarative knowledge. He seeks collaborating cues to form a hypothesisthat might explain the use of white gloves by airport personnel. For exam-ple, he hypothesizes that the Japanese are fearful of disease and so gloves areworn to fend off biological contamination. To assess this, he turns to pastexperiences at airports, encounters with Japanese students and colleagues,prior visits to other Asian countries, etc., and ultimately forms an impres-sion based on this information combined as a judgment.


One’s specific reaction to and processing of this intercultural encounterare the products of information processing and integration at many differentlevels of processing. At a universal level, people deal with an encounterby processing the events, categorizing the information, and storing it intogeneral person construct categories. These categories include features suchas human versus inanimate object and a general sense making concerningthe nature of people and their functions and roles. At a mediate level, peopleprocess the encounter within the context of what they know (e.g., knowledgeof Japanese culture and norms). They draw from their existing memoryconcerning Japan and the Japanese people. At a proximate level, theyprocess the encounter as to why this particular person is wearing gloves, hisreaction toward others, whether all personnel are wearing gloves, how theyfeel about a person wearing gloves on this given day, the ambient temper-ature, and a multitude of additional setting-specific cues.

In summary, the process aspects of cultural intelligence can best beconceived as operating at different levels of analysis and consisting of de-clarative and procedural knowledge. They operate at three levels: universallevel – processes and knowledge for general processing of a universal con-ception of humanity, mediate level – processes and knowledge that areculture-specific, and setting-specific level – processes and knowledge that arespecifically tied to the context, people, and timing of events.

In the following section we focus on an integration and comparison ofcultural intelligence with global mindset. This analysis focuses on anindividual-level of analysis to align with the CQ construct. Although somedefinitions of global mindset refer to macrophenomena (e.g., Bartlettand Ghoshal’s (1998) transnational organization), the definitions of globalmindset inevitably are tied to an individual-level construct.

COMPARISONS OF GLOBAL MINDSET AND

CULTURAL INTELLIGENCE

To describe and integrate the extant literature on a global mindset, thissection analyzes the most prominent works using the three constituentelements of cultural intelligence: cognition/metacognition, motivation, andbehavior. We focus on whether the construct of a global mindset, as for-mulated in the current literature, considers the aspects of individual psy-chology and behavior that cultural intelligence addresses. Table 1 presentsour comparative review.

Table 1. Analysis of Various Definitions of GM by CQ Components.

Cite Definition of Global Mindset Considerations of the Following CQ Dimensions?

Cognition Meta-

cognition

Motivation Behavior

Rhinesmith

(1992)

Scanning the world from a

broad perspective, looking

for unexpected trends and

opportunities to achieve

personal, professional, or

organizational objectives.

Embraces complexity,

diversity, ambiguity, and

unpredictability.

Yes No Implied Yesa

Srinivas (1995) Tendency to scan the world

from a broad perspective.

Includes elements of

curiosity, flexibility,

continuous improvement,

faith, acceptance of

complexity, diversity, and

uncertainty.

Yes No Implied Yesa

Murtha,

Lenway, and

Bagozzi

(1998)

Balancing national

responsiveness and global

integration simultaneously,

rather than trading one off

against the other.

Yes No No Yesa

Bartlett and

Ghoshal

(1998)

Do not define global mindsets,

but discuss ‘‘transnational’’

organizations. These

organizations are

committed to

competitiveness, flexibility

and learning on a global

scale.

Yes No Implied Yesa

Kefalas (1998) Tendency to scan the world

from a broad perspective,

always looking for threats

or opportunities. Involves

conceptualization (thinking

and perceiving globally)

and contextualization

(adapting actions to local

contexts).

Yes No No Yesa

Kedia and

Mukherji

(1999)


broad perspective, and

realizing interdependence

of global economy.

Includes appropriate

knowledge, skills, and

savvy.

Yes No No Yesa


Table 1. (Continued )

Cite Definition of Global Mindset Considerations of the Following CQ Dimensions?

Cognition Meta-

cognition

Motivation Behavior

Gupta and

Govindarajan

(2002)

Combines an openness to/

awareness of diversity

across cultures and markets

with a propensity and

ability to synthesize across

this diversity. GMs involve

knowledge structures with

great diversity combined

with an ability to integrate

diverse viewpoints.

Yes No Implied Yesa

Arora, Jaju,

Kefalas, and

Perenich

(2004)


broad perspective, being

open-minded, rethinking

boundaries and modifying

behavior. Involves

conceptualization and

contextualization.

Yes No No Yesa

Begley and Boyd

(2003)

Ability to develop and

interpret criteria for

business performance that

are not dependent on the

assumptions of a single

context and to implement

those criteria appropriately

in different contexts.

Balancing global

consistency with local

responsiveness.

Yes No No Yesa

Nummela,

Saarenketo,

and

Puumalainen

(2004)

Openness and awareness of

cultural diversity and the

ability to adjust to different

environments and cultures.

Yes No Implied Yesa

aThe reader should note that ‘‘behavior’’ in terms of the GM definitions depicted in the table is

different than behavior in CQ terms. Behavior in GM definitions involves an ability to translate

cognitive perspectives of cosmopolitanism into effective action strategies that acknowledge the

interests of diverse peoples and exploit differences for gains. It does not involve the individual

ability to adapt to and blend in with diverse cultures, as is stated in CQ.


Cognition

Every definition of global mindset emphasizes cognition, as does cul-tural intelligence. Scholars seem to agree that a global mindset requires an


awareness of context and cultural differences (Gupta & Govindarajan, 2002;Kedia & Mukherji, 1999; Kefalas, 1998; Rhinesmith, 1992; Srinivas, 1995).Obviously, possession of either CQ or a GM implies that a minimum ofmental effort is needed to at least recognize and understand that differencesexist across cultures and these differences influence interpersonal inter-action. Moreover, both CQ and GM involve cognitive flexibility. GMscholars often refer to the ability to change one’s self-concept depending onwhat is needed to interact effectively in a different culture (Rhinesmith,1992; Srinivas, 1995). Similarly, CQ requires individuals’ modifying theirself-representation by incorporating new facets of the focal culture. Last,strong cross-cultural reasoning skills are prerequisites for both the CQand the GM concepts. Where CQ involves inductive reasoning to connectsignificant cues to underlying patterns, GM requires sensitivity to commonpatterns in different contexts and effective synthesis across these differences(Gupta & Govindarajan, 2002; Kefalas, 1998). All in all, it appears thatboth global mindset and cultural intelligence are mindful of basic cognitiveelements that allow for the processing and comprehension of the impact ofcultural diversity on interpersonal interaction.

Metacognition

While the overlap of the cognitive aspects of CQ and GM is evident, GMconceptualizations generally do not involve considerations of metacogni-tion. Even though many global mindset scholars espouse the need forindividuals to reshape their self-concept and think reflectively (Rhinesmith,1992; Srinivas, 1995), they do not describe in detail what higher ordermetacognitive strategies might be useful for analyzing more proximatethought processes. For example, synthesizing disparate cultural informa-tion is mentioned (Gupta & Govindarajan, 2002), but not the possibilityof synthesizing across different cognitive processes to analyze disparatecultural information such as integrating new experiences into existingschema or making these schema more readily accessible for interpreting newsituations. CQ explicitly posits the need to think about how information isprocessed and combined, while GM focuses more on making sure differenttypes of information are represented and processed.

Expansion of the GM concept to incorporate metacognitive elementsdiscussed in CQ may facilitate individual performance in international con-texts. Rhinesmith’s (1992) oft-adopted definition of a global mindset statesthat it is ‘‘a filter through which we look at the world’’ and that this filter is


what allows for the viewing of ‘‘unexpected trends and opportunities toachieve our personal, profession or organizational objectives’’ (p. 63). Thisis a useful conceptualization but arguably a limited one. Using only one filterto view the global business environment will allow an individual to seecertain opportunities but also to miss others because that particular filter isnot attuned to all possible ‘‘trends and opportunities.’’ By definition, a filterremoves certain factors from consideration. Metacognition, as incorporatedin CQ, involves the ability to change cognitive filters and perceive the in-ternational context in a variety of ways, rather than just one. By cyclingthrough different cognitive strategies, an individual can appraise the differ-ent trends and opportunities made available by viewing the internationalenvironment in a variety of contexts. Thus, metacognition could act as aforce multiplier for a GM, enabling the individual to sort through variousdifferent mindsets and pick the one that maximizes exploitation of possible‘‘trends and opportunities.’’

CQ metacognitive strategies allow for the possibility of raising one’sawareness to a higher level. Instead of looking for opportunities based on acontext, as is stated in GM, a high-CQ individual may scan across a varietyof contexts and notice patterns of commonality that have gone unnoticed byothers. Gupta and Govindarajan (2002) talk about the need to synthesizeacross diversity, but do not talk about the cognitive strategies detailing how

this synthesis should occur. The metacognitive element of CQ mentionsfunctions like ‘‘pattern recognition,’’ and thus offers one possible avenuethrough which a GM could integrate knowledge across a broad rangeof contexts. In essence, the conceptualization of GM could become moreactionable by considering the metacognitive element of CQ.

Motivation

In CQ, motivation is an important, explicit consideration. Specifically, CQrefers to the motivation to engage in cross-cultural interaction and the self-efficacy required to persist through the inevitable setbacks. Global mindsetscholars occasionally imply that motivation is an important constituentfacet by referring to terms like ‘‘commitment’’ or ‘‘willingness’’ (Rhinesmith,1992), but never address motivation directly. For instance, GM researcherstalk about the necessity of a commitment to continuous learning (Bartlett &Ghoshal, 1998; Srinivas, 1995), a commitment to understanding andbecoming smarter about global perspectives (Gupta & Govindarajan,2002), or a ‘‘willingness to deal with broad global and foreign issues’’


(Rhinesmith, 1992, p. 63). The mention of commitment or willingness im-plies that individuals with a global mindset will persevere in their attemptsto learn about and adapt to different cultural contexts, but does not explorethis contingency or address the factors that may impact it.

Similar to the discussion about metacognition in the previous section, weargue that the concept of GM would benefit by consideration of motivationfactors discussed in CQ. Even though GM scholars raise the need for in-dividuals to commit to embracing diversity, the lack of motivational con-siderations prevents an understanding of the mechanisms through which aglobal mindset is developed intrapersonally. In turn, this leaves individualsignorant about how to increase their ability to persist through adversity.The extensive work of Bandura (1997) leads us to conjecture that motivationto persist in international engagements can be increased by an elevation ofthe actors’ self-efficacy. Thus, one important subcomponent that all GMscholars should address is the intercultural self-efficacy central to CQ.

Interestingly, the consideration of important constituent antecedents tointercultural motivation like self-efficacy mentioned in CQ may offer prac-tical recommendations not considered under the current conceptualizationof GM. For example, GM authors currently prescribe foreign travel (Kedia& Mukherji, 1999) or foreign job rotation (Gupta & Govindarajan, 2002) asways to build a global mindset. Incorporating self-efficacy concerns, wemight modify these recommendations to stage foreign travel or job rotationin a manner in which the developing manager progressively proceeds fromcultures more similar to one’s own to those more different. Such a graduatedapproach to building a global mindset would incrementally increase theindividual’s knowledge of diverse cultures while simultaneously keepingself-efficacy high. In this program, the developing manager has a lower pro-bability of incurring a damaging shock to his or her intercultural self-efficacy because of the reduced dissimilarity between cultures. This is justone example of how CQ might increase our understanding of the importantmechanisms that underlie development of a GM.

Behavior

Every treatment of global mindset refers to some type of behavior, but thisbehavior differs from what is discussed in CQ. In the extant GM literature,behavior often alludes to the ability to turn the cognitive understanding ofcultural differences into some type of effective policy (Arora et al., 2004;Gupta & Govindarajan, 2002; Kefalas, 1998), where effectiveness is usually


defined as an increase in the welfare of all parties involved. GM scholarsdiscuss behavior and adaptation as profitably applying the knowledge ofcultural diversity. This includes the ability to craft policy, but not necessarilythe ability to interact effectively on an interpersonal basis. While craftingand implementing strategy is one type of behavior, CQ takes adaptationfurther than does GM. In CQ, behavior refers to the ability of indivi-duals interacting with others on a personal basis, sometimes simulating ormimicking other cultural practices. Behavior in CQ involves more thandeveloping new plans that incorporate diversity; it also involves acquiringthe behaviors necessary for interpersonal interaction. At the extreme, aperson may possess a high level of GM (being able to understand and createeffective cross-cultural strategy) but have a low level of CQ (being unable toadapt his or her behavior to interact individually with other cultures).

Given the numerous technologies available in today’s global environment,interpersonal interaction is not necessarily a requirement for effectiveinternational policy. That said, GM’s failure to consider the behaviorsinvolved in interpersonal interaction invites possible hazards. CQ explicitlyacknowledges that certain behavioral repertoires may be required for inter-cultural interaction. Even if an individual cognitively understands andaccepts diversity, and can cognitively synthesize across differences, he or shemay be unable to interact effectively because of physical limitations. Theselimitations are not considered by the GM construct;1 GM makes theassumption that all people are behaviorally homogeneous. On one level, it issomewhat ironic that a construct like GM, which is dedicated to embracingcultural heterogeneity, assumes behavioral homogeneity. By ignoring pos-sible behavioral limitations to cross-cultural interaction, GM overlooks thepossibility that certain individuals may cognitively embrace diversity, but beunable to communicate that stance sincerely. Such individuals will be unableto craft effective global policies because certain international parties will nottrust or be willing to engage the focal individual. In this instance, the physi-cal component of behavior considered by CQ directly affects the policy-crafting behavior of GM. Said otherwise, the behaviors considered by GMare only cognitively driven behavior and the GM construct may be under-specified without considering the physical elements of CQ.

CONCLUSIONS AND FUTURE DIRECTIONS

This chapter attempted to compare global mindset and cultural intelligence.In particular, we reviewed extant literature on global mindset and argued


that the three dimensions of cultural intelligence – namely, cognitive (andmetacognitive), motivational, and behavioral – extend the ongoing discus-sions around what constitutes a global mindset, how managers can developone, and how they can perform better in international contexts. We believethat cultural intelligence is, in some ways, a broader and, in other ways, anarrower construct than global mindset.

Cultural intelligence is a broader construct than a global mindset in itsattention to higher order metacognitive processes that facilitate problem-solving and pattern recognition across cultures. Without consideration ofthe processes underlying cognitive flexibility, global mindset may be steeringmanagers toward thinking that is overly contextually based and that doesnot incorporate learning across contexts. The cognitive processes associatedwith a global mindset may be purely reactive to situational cues, whereas,drawing upon metacognitive resources and strategies, individuals withhigh CQ will dynamically adapt and adjust their existing ‘‘mindset’’(schema, memory, etc.) as they encounter new cultural contexts. Thisadaptation leads to development of novel behavior and action provided ahigh-CQ manager is sufficiently motivated.

Because of its singular focus on cultural differences across intercul-tural and international contexts, CQ is in some ways narrower than a GM.Global mindset refers more broadly to a psychological construct capturing aframe of reference used when interacting with people from geographicallydistant regions. The diversity and complexity associated with these inter-actions may or may not be limited to cultural differences. While social andreligious differences may be closely intertwined with cultural differences,other differences may be relatively independent of culture, possibly derivingfrom the unique economic or political histories of the regions. Certainly therelatively general component elements of CQ may apply to interactionsacross distinct economic or political systems. Like cross-cultural inter-actions, the success of other types of cross-border interactions may dependupon an individual’s cognitive and metacognitive processing, motivationaldrivers, and behavioral abilities. Nonetheless, CQ is grounded in research onthe psychological processes and physical manifestations associated withdifferent meaning systems for different cultures.

What is promising when imagining further integration of global mindsetand cultural intelligence is their joint focus on a multiplexity of psychologi-cal processes that direct cognition, motivation, and behavior. One parti-cular promising avenue is presented by an individual’s self-concept andidentity (Burke & Reitzes, 1991) as core elements driving these psychologicalprocesses. Managers with global mindsets and high cultural intelligence are


likely to emphasize their identity as a global manager and global citizenabove other identities. As multinational corporations become increasinglypowerful relative to nation-states, one may observe global roles being de-fined by interactions among an elite group of managers operating acrossborders and the adoption of global identities by these managers.

Unlike typical roles that are defined within relatively homogeneous socialunits (Stryker & Serpe, 1982), these emerging global roles and global iden-tities may span social and cultural boundaries. In addition, holding globalidentities may influence the social psychological construction of individuals’other identities. People who place great importance on their identity as aglobal citizen may develop pancultural views of what activities and mean-ings are associated with being a leader or manager. While little is knownabout global identities, research on who becomes a successful global man-ager can investigate the nature of and development of global identitiescreated through interacting both within heterogeneous social units andacross multiple homogeneous social units. By studying the underlying driv-ers of global mindset and cultural intelligence, scholars may better under-stand what elicits these psychological orientations and processes, how theyfunction, and when they contribute to an individual’s effectiveness ordetract from it in a particular context. This knowledge will be useful forhelping managers align their self-concepts and identities with their chosengoals and positions within global corporations and globalizing societies.

NOTE

1. The lack of consideration of behaviors by the global mindset construct is notmeant to be perceived as an indictment. As a ‘‘mindset,’’ GM is obviously focusedmore intently on cognitive rather than behavioral elements. Nevertheless, in thispaper, it is our intent to point out benefits to all involved by considering theintegration of factors acknowledged by CQ, but ignored or overlooked by GM.

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THE ROLE OF PSYCHOLOGICAL

CAPITAL IN GLOBAL

MINDSET DEVELOPMENT

Rachel Clapp-Smith, Fred Luthans and

Bruce J. Avolio

In a hypothetical exchange of letters regarding the state of global leadershipresearch, Scandura and Dorfman (2004) state that the advent of the mul-tinational corporation has challenged our mindsets. Indeed, the dizzyingrate of globalization has led many international management scholars toquestion how existing theories and research findings may be applied toimprove multinational success (Peng, 2004).

Popular columnists such as Thomas Friedman (2005) have also made noteof the drastic changes resulting from accelerated globalization in the earlypart of the 21st century. He describes global forces that have served as‘‘flatteners’’ or events that have hastened the rate of globalization andchanged the environment from one in which countries compete for resourcesto one in which any individual in any part of the world may compete on alevel playing field. For example, Friedman indicates that your tax returns,while submitted to an accounting agency in the United States, may actuallybe processed somewhere in India (Friedman, 2005). This awakening to thenew global environment has led to new thinking about global leadership andhow today’s and tomorrow’s corporations can gain competitive advantage.

The Global Mindset




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RACHEL CLAPP-SMITH ET AL.106

One result of this new thinking in international management has been theemergence of the somewhat atheoretical, yet ubiquitous, concept of globalmindset. Levy, Beechler, Taylor, and Boyacigiller (in press, p. 4) providea comprehensive review of the concept of global mindset and note that it‘‘has come to stand for everything supposedly global or transnational, fromindividual attitudes, skills, competencies and behaviors, to organizationalorientations, structures and strategies, to policies and practices.’’ To helpnarrow and operationalize this catch-all concept for meaningful theorybuilding, research, and application, an invited group of internationalmanagement scholars gathered in Glendale, Arizona, at Thunderbird, theGarvin School of International Management, to discuss the concept ofa global mindset. After a couple of days of intense dialogue and review ofposition papers, this group came to an initial consensus about the generalmeaning of a global mindset as being the cognitive ability that helps indivi-

duals figure out how to best understand and influence individuals, groups, and

organizations from diverse social/cultural systems. Using this definition ofglobal mindset as the point of departure, in this chapter we propose that thecore constructs that inform this influence process are cognitive complexity,cultural intelligence, and positive psychological capital.

AT WHAT LEVEL DOES GLOBAL MINDSET EXIST?

Inherent in the meaning of global mindset is the dilemma of an appropriatelevel of analysis at which we define, measure, and research this construct.This chapter addresses the individual level of analysis using social cognition,which explains how the development process of global mindset helps indivi-duals make sense of unfamiliar stimuli, broaden their cognitive capacities,adjust their behavior accordingly, and have a positive influence on others.Our recently developed core construct of positive psychological capital,or PsyCap (Luthans, Youssef, & Avolio, 2007), and the overarching processof authentic leadership development (Avolio & Luthans, 2006) are usedto explicate the theoretical social cognitive framework. The ‘‘influence onothers’’ implies a leadership process, and that is why we address the role thatglobal mindset may have in the authentic leadership development process(Avolio & Luthans, 2006).

Using an individual level of analysis to frame our definition and sub-sequent discussion, we propose that global mindset can be characterized asa worldview or capacity for sense making that takes multiple, diverseperspectives into account in formulating attitudes, opinions, judgments,

The Role of Psychological Capital in Global Mindset Development 107

decisions, and other actions and behaviors. More simply, we propose thata global mindset allows an individual to view an event or occurrencethrough a variety of different lenses or, one might say, cognitive templates/categories. Such perspective-taking capacities enable an individual to seequickly a broad array of potential cognitive categories against which toevaluate observations, while recognizing essential nuances that differentiateglobal cultural groups.

An example of our proposed sense-making perspective of global mindsetwould be the meaning behind the variety of smiles of a business person fromThailand. To an outsider, such Thai smiles are not readily transparent.However, an outsider with a global mindset would have the wherewithalto develop strategies to adjust to such nuances, demonstrating a keenawareness and understanding of cultural differences, and know how to actaccordingly. Once encoded into the individual’s global mindset, this infor-mation could be readily accessed when dealing with different cultural groupsin which nonverbal expressions carry greater weight when interpretinghow people are thinking, feeling, and ultimately behaving. Thus, the initialencoding of such information becomes a template for more efficientlystoring new information or cues accumulated by individuals as they enterinto new cultural experiences and challenges.

The opposite of the above example is an international manager who has arelatively underdeveloped global mindset. In situations in which the weightof information concerning nonverbal cues varies, this manager from anotherculture would interpret a ‘‘smile as just being a smile.’’ Thus, the ability ofthis manager with an underdeveloped global mindset to assimilate new anddiverse information into more integrated categories is quite limited andthe result could be poor interpersonal relationships with Thai contactsand resulting ineffective performance.

Fig. 1 shows our proposed individual-level model or process to explainwhat constitutes global mindset development. As shown, we suggest that theconcept of positive psychological capital is central in developing one’s globalmindset, as it mediates the relationship between cognitive complexity andcultural intelligence. Specifically, we propose a process model of develop-ment that begins with a trigger moment that induces an individual to enactvarying levels of cognitive complexity. In other words, the trigger momentprovides a cue and the individual enacts a process of either fitting the cueinto an existing cognitive category or building a new category to accom-modate an unknown cue. Therefore, unknown cues provide informationthat expands cognitive complexity. The positive state-like capacities of hope,optimism, resiliency, and self-efficacy provide the psychological resources

• Efficacy • Resiliency • Optimism• Hope

PsyCap

• Motivational CQ• Behavioral CQ• Cognitive CQ • Meta-Cognitive CQ Cultural Intelligence

• Integration • Differentiation

Cognitive Complexity

Moments Trigger Global/Cultural

Readiness • Developmental• Promotion focus

Individual Characteristics

Fig. 1. An Individual-Level Model of Global Mindset Development.


for an individual to bridge the relationship of greater cognitive complexityto higher levels of cultural intelligence. Certain individual characteristics,as the model depicts, strengthen the role of positive psychological resourcecapacities, or PsyCap, on influencing cultural intelligence. The relation-ship of these three core elements of our proposed global mindset (cogni-tive complexity, psychological capital, and cultural intelligence) providesa process model by which the development of global mindset may beunderstood.

Importantly, Fig. 1 shows our proposed process depicting global mindsetdevelopment and is not intended to be a sequential, causal model. As fullydiscussed next, this process model is grounded in Bandura’s (1986, 2001)social cognitive theory, which would suggest that the relationships couldbe reciprocal in some cases. For example, culturally intelligent individualsmay seek out trigger moments by, for example, attending a multiculturalsocial event. In addition to possible reciprocal relationships, Gupta andGovindarajan (2004) discuss global mindset in terms of an iterative processand we would say that our microprocesses or relationships shown in themodel could also occur in an iterative manner. In any event, a central tenantof the model is that positive PsyCap may accelerate the process of globalmindset development. Therefore, while the relationships may be causal,reciprocal, or iterative, the process model indicates that PsyCap may helpindividuals reconcile the external cues (trigger moments) with their cognitiveframe of reference (cognitive complexity either shifting their frame ofreference or integrating cues into current frames of reference) and to bridgethe relationship (mediate) to translating such cognitive processing intoappropriate behavior (cultural intelligence).

After first providing the social cognitive theoretical foundation, weexamine in turn the role of cognitive complexity, PsyCap, and cultural


intelligence in understanding the development of a global mindset. Thenwe discuss how our model can contribute to researchable propositionsand initial guidelines for developing the capability of authentically leadingacross global/cultural contexts.

SOCIAL COGNITIVE THEORETICAL FOUNDATION

FOR GLOBAL MINDSET

Social cognitive theory can provide a foundation and supporting frameworkfor examining global mindset because it takes into consideration the inter-action between the individual, the contextual factors, and the behavior itself.This triangular reciprocal interaction produces, and is a product of, theperson, the context, and the behavior (Bandura, 1986). In essence, this socialcognitive theory may provide insight and understanding into the interactionof the individual with a multicultural context and the resulting behavior.

Social cognitive theory involves the notion of human agency. Unlikeagency theory derived from economic models of behavior, human agencyseeks to understand how people develop, adapt, and change (Bandura,2002). In social cognitive theory, human agency has four major proper-ties: intentionality, forethought, self-reactiveness, and self-reflectiveness(Bandura, 2001). We use each of these components of agency to establishthe theoretical grounding for integrating our proposed model of the rela-tionships between cognitive complexity, positive psychological capital, andcultural intelligence.

The Role of Intentionality

Intentionality describes agency simply as planned behavior. As such, inten-tions are the power to originate actions for given purposes (Bandura, 2001).These actions may produce unintended consequences. In other words, in-tentions are not outcomes, but produce consequences that may have beenunforeseen. In the context of cross-cultural interactions, countless examplesexist in which a home office manager’s or expatriate’s intentions led tounintended consequences. For example, for a manager in North America,not receiving any challenges from his Asian employees about a new initiativemay be viewed as acceptance by his followers. However, while implementingthe new idea or concept the North American manager might discover thathis Asian counterpart is dragging his feet because he never really committed


to the new idea, but was unwilling to challenge his superior in deference tohis authority. Thus, our global mindset model suggests that a level of cog-nitive complexity in which intentionality may be exercised in a culturallyappropriate manner is necessary.

The Role of Forethought

The social cognitive framework provides guidance in analyzing the self-regulatory aspects of agency (Bandura, 2001). Individuals anticipateconsequences through forethought, and this in turn motivates actionsto reach intended outcomes. Therefore, forethought provides direction,coherence, and meaning (Bandura, 2001). Forethought enables peopleto transcend the dictates of their immediate environment and to shapeand regulate the present to fit a desired outcome. In a global mindset, suchforethought capacities allow individuals to try out possible selves (Markus& Wurf, 1987) that may be culturally relevant and produce positiveoutcomes.

We know from research in cognitive/social psychology that individualsmaintain an ‘‘actual self’’ that represents an understanding of the currentstate of who one is, one’s values, beliefs, ways of thinking, and so forth. Theconcept of ‘‘possible self’’ is the self you can become over time, via devel-opment, which in the context of leadership Avolio and Luthans (2006) havetermed as authentic or genuine leadership development. With respect to ourmodel of global mindset development, we would expect individuals withhigh cognitive complexity, PsyCap, and cultural intelligence to be positionedto move to a new possible self as they entertain, encode, and interpret cross-cultural experiences. In essence, we never come back the same self we left tothe extent our global cultural experiences move us from our actual to ourpossible self.

In the context of leadership development, one Air Force officer recentlyindicated that after spending a year in a football-field-sized community with30 other nations’ forces in Afghanistan, he realized how limited his view wasof the U.S. position in the world and his own position in terms of workingwith people of diverse cultural backgrounds. This global cultural triggerevent moved his thinking regarding his actual self to a possible self thatrepresented a more culturally diverse view of the world that encompassedmany of the commonalities and differences that he discovered existed acrosscultures.


The Role of Self-Reactiveness

The third component of agency identified by Bandura (2001) is self-reactiveness, in which individuals react to the plans (intentions) and fore-thought of such planned behavior. Thus, self-reactiveness is the motivationthat links thought to action and sets plans and forethought into behavior.Self-regulation occurs through self-reactiveness with the subfunctions ofself-monitoring, awareness of personal standards, and corrective self-reactions (Bandura, 2001). Thus, self-reactiveness provides an iterativeprocess that may help individuals to build upward spirals (when utilizingpositive psychological capacities) to achieve efficacy in multicultural set-tings. We will later discuss in detail how positive PsyCap enables upwardspirals of positivity and the role this has on broadening mindsets in generaland a global mindset in particular.

The Role of Self-Reflectiveness

Finally, the fourth component of agency derived from social cognitive theoryis one’s self-reflectiveness. This is the ‘‘meta-cognitive capacity to reflectupon oneself and the adequacy of one’s thoughts and actions’’ (Bandura,2001, p. 10). Thus, people reflect on their behavior, motives, and values andthe meaning of events in their personal self-concepts. Following intentions,forethought, and self-reactiveness, individuals reflect on the accuracy oftheir thinking for planning and executing behavior to achieve intended out-comes. This process becomes critical in global mindset development becauseself-reflection enables individuals to understand what behaviors correspondappropriately to certain cultural contexts and help contribute to buildingmetacognitive abilities and in turn strategies of cultural intelligence.

These four dimensions of social cognition provide theoretical groundingfor our proposed process model of global mindset development (see Fig. 1).We now give attention to the core variables of this model: cognitive com-plexity, positive psychological capital, and cultural intelligence.

COGNITIVE COMPLEXITY

Cognitive complexity has had a rich history of research in many differentdisciplines, including developmental psychology, communications, political


science, organizational behavior, strategy, and leadership. Resulting fromsuch conceptually diverse attention to the construct, multiple definitionsof cognitive complexity have existed for many years. For example, Vannoy(1965) summarized the varying perspectives of the time and noted that somescholars viewed cognitive complexity as a disposition, while others viewedthe construct as a ‘‘less enduring state’’ that applies to specific contentdomains (Vannoy, 1965, p. 385). In search of a general construct, he foundno evidence that cognitive complexity is a general personality trait. Morerecent reviews of the literature confirm Vannoy’s findings as well as pro-viding evidence that cognitive complexity may depend on a situation orcontent domain (Burleson & Caplan, 1998; Levy et al., in press). This viewindicates that the construct is more state-like and malleable than trait-likeand dispositional. For example, empirical studies have shown that MiddleEastern leaders experienced changes in levels of cognitive complexity beforethe 9/11 attacks, immediately after, and again after the U.S. entry intoAfghanistan (Conway, Suedfeld, & Clements, 2003).

This conceptual and empirical work supports cognitive complexity asbeing a state-like capacity. Thus, we align our definition of cognitive com-plexity with that of Burleson and Caplan (1998) and Levy et al. (in press), inthat it represents the degree of differentiation and integration within a cog-nitive system. Such a cognitive system comprises both structural andknowledge dimensions (Walsh, 1995; Levy et al., in press).

Gupta and Govindarajan (2004) describe cognitive complexity as an in-dividual’s selection of what information and environmental cues to absorb,as well as the biases used to interpret such information. This cognitiveprocessing helps individuals build an implicit theory of what the world islike and contributes to their process of sense making. Lewis and Jacobs(1992) suggest that, as opposed to reacting to an ‘‘objective’’ real world,people react to the meaning they have attached to that world as they per-ceive it, categorize it, and ultimately interpret it. As such, cognitive com-plexity explains this meaning-making process, which, from a global mindsetperspective, may be influenced by cultural context as well as individualcognitive capacities.

Walsh (1995) points out that an omnipresent global economy leads tovery challenging levels of complexity and ambiguity for leaders of multi-national organizations. One aspect of this complex global economy is hownuanced it becomes as it spans multiple social, cultural, and nationalgroups. Oftentimes who one meets first, how much time is allocated forinteractions, and how seemingly inconsequential decisions are actually madecan all become extremely important cues in terms of the cultural context in


which one is embedded and trying to operate. For example, an Americanprofessor teaching in Vienna, Austria, found that he had to invite studentsto join him on the elevator. They would not presume to ride down with himunless given permission. The first time he was in front of the elevator, he wastalking to a student and did not see the doors open. By the time he turnedaround, the elevator had left and no one had stepped on. He realized aftersome reflection that the status of a professor was much higher there thanback home and that status alone dictated some of the reactions he observedin students. We are discovering that cognitive complexity not only aidsleaders in coming to terms with ambiguity and complexity, but also enablesthem to recognize, understand, and utilize the nuanced nature of a globali-zing environment.

Differentiation and Integration

Work on examining cognitive complexity has two components that can helpexplain this process: differentiation and integration. Differentiation de-scribes the number of elements within categories and the categories them-selves that individuals use or apply to interpret events in a particularenvironment. A very narrow view of the world is characteristic of lowdifferentiation. With low differentiation, individuals tend to see events interms of black and white or by applying one category across a multitude ofcontexts. An example of such thinking would be anyone who is in a lead-ership role must not be questioned. High levels of differentiation, on theother hand, promote individuals to use potentially multiple categories tointerpret and understand events. Thus, a broader perspective is taken underhigh differentiation, suggesting that the power distance and status accordedto leaders may vary from culture to culture. Indeed, the actual meaning ofwhat constitutes being a ‘‘devoted follower’’ may change across cultures andwould be identified, interpreted, and processed in a very different way bysomeone exhibiting high levels of differentiation.

On the surface, high differentiation would seem vital for developingglobal mindset. However, without the second component of integration,high differentiation could become overwhelming for an individual. Thismeans that one may have many categories, but an inability to integrate themacross cultural contexts may lead to considerable confusion. Those high inintegration not only have multiple categories they can utilize, but also areable to draw connections across categories and make sense of informationwithin each category. Therefore, individuals high in cognitive complexity


(i.e., high in both differentiation and integration) may be described asreaching Kegan’s (1983) highest level of cognitive development, i.e., a moresystems view of the world or, at the risk of being redundant, what we couldcall a ‘‘universal’’ global mindset.

Strategic Implications of Cognitive Complexity

Strategy scholars such as Bartlett and Ghoshal (1998) and Doz andPrahalad (1987) highlight the competing demands of a firm that charac-terize the paradox of operating in a global capacity. Multinational businessleaders are faced with the widely recognized dilemma of adopting a strategyof global integration or local responsiveness. In many instances, satisfyingelements of one demand (global integration) results in a trade-off of theother demand (local responsiveness) and vice versa. Globalization, however,places leaders in a paradoxical situation of satisfying both demands, whichmight represent a global trigger event as noted in our global mindsetdevelopment model (see Fig. 1). Specifically, there are certain aspects of theglobal context that may trigger in individuals a way of processing infor-mation and events that would be unlikely to ever occur in a single, highlyhomogeneous culture. This is perhaps why Bartlett and Ghoshal (1998) haverecommended a transnational mindset, or global mindset, to balance thisparadoxical demand of the global competitive environment.

These strategic implications from cognitive complexity also impactoperational issues (Where should my company produce what products forwhich market?), financial issues (What sources of capital are most beneficialto my company’s operations?), marketing issues (Should my company brandon a global level or local level?), human resource issues (What type ofreward system will optimize employee performance?), and global politicalissues (Could political instability in this or another country impact mybusiness?). Cognitive complexity would seem to help international managerstake the first step toward needed global mindset development.

The two components of cognitive complexity, differentiation and in-tegration, can enable international managers to go to a broader set ofpotential cognitive categories that can challenge their own cultural lenses.The goal would be ultimately integrating seemingly disparate or paradoxicalinformation to come to terms with unfamiliar or new settings. Thus, interms of basic processes of global mindset development, internationalmanagers should have a sufficient level of cognitive complexity to engage intrying to understand ambiguous, paradoxical, and conflicting information.


The international manager who is low in cognitive complexity will simply fitthe events into a simple set of categories. Additionally, those with low cog-nitive complexity neither adapt nor change over time as they accumulatedifferent cultural experiences.

Although important in developing global mindset, we propose that cog-nitive complexity is certainly necessary, but not sufficient. From our recentwork on taking positive psychology to the workplace (Luthans et al., 2007),we propose that psychological capital may play an important mediating rolebetween cognitive complexity and cultural intelligence in global mindsetdevelopment.

POSITIVE PSYCHOLOGICAL CAPITAL

We define psychological capital, or simply PsyCap, as:

An individual’s positive psychological state of development that is characterized by:

(1) having confidence (self-efficacy) to take on and put in the necessary effort to succeed

at challenging tasks; (2) making a positive attribution (optimism) about succeeding now

and in the future; (3) persevering toward goals and, when necessary, redirecting paths to

goals (hope) in order to succeed; and (4) when beset by problems and adversity, sus-

taining and bouncing back and even beyond (resiliency) to attain success (Luthans et al.,

2007, p. 3).

Although the factors of PsyCap are commonly used terms in everyday lan-guage and have even been used in reference to the development of globalleaders (Mendenhall, 2001), we use very precise meanings based on theory,measurement, and research support from positive psychology (Seligman &Csikszentmihalyi, 2000; Snyder & Lopez, 2002) and positive organizationalbehavior (Luthans, 2002a, 2002b, 2003; Luthans & Youssef, in press;Wright, 2003). For a positive psychological capacity to be included aspart of PsyCap, it must meet the criteria of being based on theory, research,and valid measurement; be state-like (somewhat malleable and open todevelopment); and have performance impact (Luthans, 2002a, 2002b;Luthans et al., 2007).

The positive psychological capacities that have been determined thusfar to meet these inclusion criteria for PsyCap best include self-efficacy,resilience, optimism, and hope (Luthans, 2002a; Luthans, Luthans, &Luthans, 2004; Luthans & Youssef, 2004; Luthans et al., 2007). Because ofcommon usage, on the surface these four constructs appear very similar andinterchangeable, but there is considerab‘le evidence that is both theoretical(Bandura, 1997; Luthans, Avolio, Avey, & Norman, in press; Luthans et al.,


2007; Snyder, 2000, 2002) and empirically based demonstrating discriminatevalidity between them (Bryant & Cvengros, 2004; Carifio & Rhodes, 2002;Luthans, Avolio et al., in press; Magaletta & Oliver, 1999). To gain insightand understanding into these four capacities that constitute PsyCap andtheir potential implications for global mindset, the following brief overviewis provided.

Self-Efficacy in PsyCap

Self-efficacy is the belief in one’s ability to succeed at a specific task in aspecific context (Bandura, 1997). It can be simply thought of as confidenceand appears in cross-cultural discussions ranging from global leadershipeffectiveness to cultural adjustment (Mendenhall, 2001) to cultural intelli-gence (Earley & Ang, 2003). Self-efficacy effects on work attitudes have beenfound across cultures (Luthans, Zhu, & Avolio, 2006) and have been shownto be developable through vicarious learning, social persuasion, and masteryexperiences (Bandura, 2002; Earley, 1994). Black and Mendenhall (1991)specifically note that high levels of efficacy will impact the willingnessof individuals to learn new ways of thinking and behaving in a host country.In addition, Earley and Ang (2003) suggest that efficacy contributes toindividuals’ motivation to understand and adapt to a new environment.

Resiliency in PsyCap

Resiliency is defined as the ability to bounce back from adversity, stress, oreven positive events (Luthans, 2002a). Positive psychologists Masten andReed (2002) note that resiliency is ‘‘a class of phenomena characterizedby patterns of positive adaptation in the context of significant adversityor risk.’’ Luthans et al. (2007) describe how resiliency enables individualsnot only to overcome adversity, but also to flourish or build broader copingand adaptation capacities.

Fredrickson’s broaden-and-build model gives evidence for positivepsychological states undoing the negative effects of events and buildinglong-lasting capabilities for thinking more globally (Fredrickson, 2000,2001; Fredrickson & Joiner, 2002). As such, resiliency seems to contribute toglobal mindset development in that individuals who experience stress from alack of familiarity in new cultural settings could potentially overcome suchstress not only to find a level of behavior they are comfortable with, but also


to expand their perspective-taking capacities and to build broader cognitivestrategies for sense making. Resiliency may also induce individuals tofind comfort outside of their typical comfort zone and challenge their ownassumptions about the way they view the world (Luthans et al., 2007).

Optimism in PsyCap

Optimism, or the realistic belief in positive outcomes (Luthans, 2002a;Seligman & Csikszentmihalyi, 2000), will help individuals have a more pos-itive expectancy of stressful or unfamiliar events and allow for greaterlearning opportunities from such events. Optimism is based on the explan-atory style individuals adopt. Optimists attribute negative events to externalfactors and internalize positive events. In the case of global mindset,optimists will tend to attribute failed cross-cultural interactions to under-lying cultural dynamics and will use such an attribution to seek strategies forsuccessfully navigating this cultural encounter in the future. Dweck (2006)provides evidence of such an explanation by noting that a growth mindset,as opposed to a fixed mindset, adopts an optimistic explanatory style. InDweck’s definition, individuals with fixed mindsets view unfavorable eventsas indicators of their self-worth, while individuals with growth mindsets seesuch events as opportunities to learn. Such modes of thinking enable themetacognitive component of cultural intelligence, therefore, to expand andto build strategies for future cross-cultural interactions.

A positive explanatory style may increase resiliency. This is because anexternal attribution of negative events enables bouncing back and beyond.A positive explanatory style also increases beliefs about how efficacious onewill be in future tasks. Thus, while optimism alone is a powerful constructfor understanding how psychological capacities contribute to global mind-set, a far clearer picture may emerge by considering how efficacy, resiliency,and optimism interact with each other as higher order PsyCap (Luthans,Avolio et al., in press). The fourth capacity of hope provides even more tothe PsyCap core construct.

Hope in PsyCap

Hope is defined in positive psychology as the will to achieve certain goals aswell as the ability to find pathways to achieve the goals successfully (Snyder,2000). Often international exposure creates moments in which people


discover that their mental models are narrow, culturally biased, and in-sufficient for making sense of paradoxical cues. Hope can help determinewhat individuals do with this awareness. With high willpower, or motiva-tion, to adjust and high way-power, or the capacity to find alternativeresponses, individuals would be expected to incorporate more pathwaysinto their metacognitive strategy and broaden their capacity for perspectivetaking. The two components of hope create an iterative process in whichan upward spiral of hope is supported (Luthans et al., 2007). In otherwords, the agency of hope builds the way-power of hope and vice versa.While hope builds capacities for agency and pathways to achieving goals,the psychological growth that hope induces also builds capacities for resili-ence, optimism, and efficacy (i.e., PsyCap) to accomplish tasks in certainsituations/cultures.

PSYCAP AS A HIGHER ORDER CORE CONSTRUCT

In combination and when interacting, the four positive capacities of efficacy,resilience, optimism, and hope have been demonstrated to represent thehigher order core factor of PsyCap (Luthans, Avolio et al., in press). Inother words, there seems to be an underlying common thread runningthrough the psychological resource capacities (i.e., efficacy, resilience, op-timism, and hope) not only of positivity, but also of striving to flourish andsucceed. Law, Wong, and Mobley (1998) have described how multidimen-sional constructs may relate to such an underlying core construct, andour research indicates this is the case with efficacy, resilience, optimism, andhope making up the core construct of PsyCap (Luthans, Avolio et al., inpress). Specifically, overall PsyCap has been found to be a stronger predictorof performance and job satisfaction across diverse samples than each of theindividual capacities that make it up (Luthans, Avolio et al., in press). Thus,we propose that PsyCap may be a mediator between cognitive complexityand cultural intelligence in the development of global mindset.

To date, PsyCap or its individual capacities have been found to have arelationship with performance outcomes not only in U.S. samples, but alsoin those from various cultures such as China (Luthans, Avolio, Walumbwa,& Li, 2005), Central Asia (Luthans & Ibrayeva, 2006), Southeast Asia(Luthans, Zhu et al., 2006), and India (Luthans, Combs, Clapp-Smith, &Nadkarni, 2006). In addition, Luthans and Avolio (2003) have presentedPsyCap as an antecedent to such authentic leadership developmental statesas self-awareness and self-regulation. Also, Avolio and Luthans (2006) have


noted the importance of PsyCap in accelerating the development ofauthentic leadership processes, and laboratory and field experimental re-search has demonstrated that PsyCap can be developed (Luthans, Avey,Avolio, Norman, & Combs, 2006).

Again, relying in part on Fredrickson’s broaden and build theory, in-dividuals who are more positive and flourishing will have greater psycho-logical resources to explore things that are new to them. For example,Fredrickson and her colleagues have found that positive emotions and statescan ‘‘spark dynamic processes with downstream repercussions for growthand resilience’’ (Fredrickson & Losada, 2005). In this regard, upwardspirals of positivity contribute to individuals’ abilities to broaden theirsense-making capacities and remain open to new stimuli (i.e., new anddifferent cultures) by adopting a state of inquiry (as opposed to advocacy)(Fredrickson & Losada, 2005). Upward spirals also help draw the inter-relatedness of the four positive PsyCap components. Thus, the developmentof the four components and, in turn, overall PsyCap may broaden people’smindsets (Fredrickson & Losada, 2005). We would propose that suchbroadening would provide individuals with the psychological resources andenergy (i.e., contribute to their global mindset) to flourish in ‘‘different’’cultural contexts to a much greater extent than those individuals who arelow in PsyCap.

As shown in Fig. 1, the broadening of mindsets explicates the mediatingeffect of the positive psychological resources of hope, optimism, resiliency,self-efficacy and overall PsyCap on the four attributes of cultural intelli-gence. Namely, not only do such positive resources widen ‘‘the array ofthoughts’’ (Fredrickson & Losada, 2005), which is the expansion of meta-cognitive and cognitive abilities, but they also broaden behavioral reper-toires (Fredrickson & Branigan, 2005). The evidence thus far suggests thatpositivity and higher energy sources would lead individuals to greater levelsof inquiry, which would be essential in resolving paradoxical informationthat one would confront in vastly different cultural contexts.

Drawing from the social cognitive framework, the construct of hopeexplains how appropriate intentionality is derived from greater cognitivecomplexity. In other words, as individuals gain greater awareness of them-selves and their environment, hope initiates the future-directed plans andenables individuals to see more pathways to reaching desired outcomes ofthese plans and desired possible selves. Behavior is then realigned to makeintended consequences more probable than unintended outcomes.

In addition to intentionality, both hope and resiliency give greater mean-ing to how forethought from social cognitive theory is enacted in global


mindset development. Not only do the intentions of individuals become goaloriented, or the willpower enacted through hope, but also the direction thatBandura (2001) describes in his conceptualization of forethought manifestsitself in the recognition of multiple pathways to intended outcomes. Inaddition, resiliency is the psychological state that enables individuals toovercome contextual and personal constraints and regulate behavior to beculturally relevant. In the occurrence of a successful cross-cultural experi-ence, self-reflection recognizes the formation of mastery experiences andthus builds self-efficacy. Such self-reflectiveness capacity will also enhanceexplanatory styles and build greater optimism for future cross-culturalinteractions.

Given the role of the four psychological capital constructs within socialcognitive theory, we can help bridge the gap to understanding how higherlevels of cognitive complexity may lead to greater cultural intelligencecapacities with the intervening latent, core construct of PsyCap. Individualsinteract with unfamiliar environments and begin the process of sense mak-ing by differentiating stimuli according to different categories and thenworking to integrate the information in some way within and betweenthose categories (cognitive complexity). This often-overwhelming experiencebecomes developmental when individuals reflect on their self-conceptsembedded in unfamiliar settings and regulate their behavior accordingly,as described in social cognitive theory. Each of the positive psychologicalresource capacities of resiliency, hope, optimism, and efficacy enhancesthe reflective and regulatory aspect of human agency and thus, combined asPsyCap, they explain how greater cognitive complexity leads individuals todevelop metacognitive strategies, absorbing nuanced cognitions, motivatingto adapt to new stimuli, and finally behaving in a culturally appropriatemanner. These outcomes are the components of cultural intelligence, towhich we now turn our attention.

CULTURAL INTELLIGENCE

Earley and Ang (2003, p. 97) have observed that ‘‘cultural meanings aretypically not shared uniformly by an entire society, and they are not sharedprecisely.’’ The construct of cultural intelligence has emerged to accountfor one’s ability to recognize, reconcile, and enact appropriate behaviorsaccording to these imprecise indicators of cultural norms. Derived from thework on general components of intelligence by Sternberg (1996), culturalintelligence contributes to the notion of multiple intelligences by combining


culture and intelligence to understand the ability to adapt to diverseenvironments (Ng & Earley, 2006).

As shown in Fig. 1, cultural intelligence, or simply CQ, has four criticalcomponents – metacognition, cognition, motivation, and behavior (Ang,Van Dyne, Koh, & Ng, 2004). The metacognitive strategies are particularlyrelevant in developing a global mindset. Our proposed model of globalmindset development predicts that higher levels of cognitive complexity,mediated by PsyCap, will enhance individuals’ CQ, their capacity to ‘‘thinkabout thinking’’ or to gain awareness of their own mental models, andintegrate the information from potentially paradoxical paradigms. Differentcultural situations individuals face while working abroad frequently presentopportunities for them to enact each component of CQ in terms of theirdevelopment. As a result, such experiences may accelerate the developmentof cultural intelligence, global mindset, and a change in the actual self.

Metacognitive CQ

Earley and Ang (2003) draw from a number of cognitive theories to developtheir metacognitive component of CQ. They use ‘‘social cognitive, self, andschema theory to describe how self-knowledge and schema of an individualshapes how he or she faces the social world’’ (Earley & Ang, 2003, p. 100).Metacognitive CQ is defined as ‘‘an individual’s cultural consciousness andawareness during interactions with those who have different cultural back-grounds’’ (Ang et al., 2004, p. 5). Metacognition can be thought of asstrategies for processing information. It is been described as ‘‘thinking aboutthinking’’ or ‘‘learning to learn’’ (Earley & Ang, 2003). Individuals withglobal mindsets often describe moments in which they became aware of theirown mental models or paradigms of Western thought, like that describedearlier for the Air Force officer, which instances we have labeled in ourmodel as global trigger moments. Often, these impactful experiences leadthese individuals to develop strategies for collecting information in newenvironments, integrating new and unfamiliar stimuli, and adapting theirbehavior to be congruent with the new environment.

In a study that included three experiments, Kelemen, Frost, and Weaver(2000) found that metacognitive abilities differ across time and task andthey are not stable across settings. Their findings give evidence that meta-cognitive ability is not a general capacity; it varies across tasks and settings.In other words, metacognitive ability may be considered state-like. Similarto the previous discussion of the state-like nature of PsyCap, metacognitive


ability is relatively situation-specific and developable. In this regard, aglobal mindset may consist of metacognitive ability that applies to situationspresented by the global economy and, importantly, can be developed.

Cognitive CQ

As opposed to metacognitive CQ, which deals with knowledge of cognitiveprocesses, cognitive CQ is defined as ‘‘an individual’s knowledge of specificnorms, practices, and conventions in different cultural settings’’ (Ang et al.,2004). Several studies have shown that specific cultural knowledge leads todesirable outcomes such as higher performance and greater understandingof other cultural perspectives (Ang et al., 2004).

Although this cognitive component of cultural intelligence may seem toapply to only those cultures for which individuals have knowledge of norms,values, and practices, it actually also helps explain how individuals gain suchknowledge in unfamiliar cultural contexts. In other words, Earley and Ang(2003) describe cognitive CQ as the ability to understand a context withoutbeing fully constrained by past experiences, in which individuals may cometo terms with ambiguous and misleading cues. This ability also contributesto developing metacognitive strategies that may be useful in other culturesabout which less prior knowledge exists. As depicted in our proposed model(see Fig. 1), the components of positive PsyCap contribute to this process ofdeveloping metacognitive cultural capacities based on trigger moments thatbuild the cognitive component, or cultural knowledge base.

Motivational CQ

The motivational component of CQ is conceptualized by Ang et al. (2004) asembracing self-efficacy and intrinsic interests. In other words, individualshigh in motivational CQ will feel confident about their ability to interact inculturally diverse groups and experience personal satisfaction from suchsettings. As shown in the model, there is a link between PsyCap andthe motivational component of CQ. Much of what Earley and Ang (2003)describe in the motivation layer of cultural intelligence can largely beattributed to efficacy and perhaps resiliency. For example, they discuss aneed to ‘‘persevere in the face of adversity’’ (Earley & Ang, 2003) as animportant aspect of motivational CQ, which is PsyCap resiliency.


The motivation component may also help explain why individuals whoare more curious about other cultures may be able to recognize differencesand similarities more quickly, may ask more questions, and may placethemselves in more novel or boundary-testing situations to expand theirown understanding about a culture. Self-efficacy and intrinsic interest, then,describe not only why individuals may seek out novel situations (intrinsicinterest) but also how they come to terms with confusing and paradoxicalstimuli (PsyCap efficacy and resiliency). Their confidence in their ability tolearn from such environments helps them cognitively process incongruentinformation, rather than simply ignore it or discount it at the outset asirrelevant to one’s way of thinking.

Behavioral CQ

The metacognitive awareness, knowledge of a culture, and motivation tounderstand culturally diverse settings (i.e., the three components of CQ) allhelp individuals to enact the final identified component of CQ: behavioralCQ. In essence, individuals with high behavioral CQ have the ability toself-regulate or adjust their behavior to exhibit contextually appropriategestures, languages, and/or facial expressions. As a component of the pro-cess of global mindset development, behavioral CQ helps explain how cog-nitive complexity and the other three components of CQ allow individualswith global mindsets to observe and understand behavior within unfamiliarenvironments and adjust their own behavior to develop culturally appro-priate interactions and responses. This process incorporates the social cog-nitive framework (Bandura, 2002) and describes how individuals learn fromothers (modeling and vicarious learning) and how they interact with theenvironment. Positive psychological capital again plays a mediating role inthis process by helping bridge the gap between cognitive complexity andself-reactiveness and behavioral CQ.

THE ROLE OF GLOBAL MINDSET DEVELOPMENT

IN AUTHENTIC LEADERSHIP DEVELOPMENT

Our starting definition of a global mindset derived from the Thunderbirdconference which described it an influence process characterizing indivi-duals, groups, and organizations that must operate in diverse social/culturalsystems. Our proposed model and discussion of global mindset development


describe a process in which individuals become more aware of theirself-concepts and cognitive categories/processes and adapt their behavioraccording to an integration of personal and cultural values. We now use thisprocess of global mindset development as a point of departure for deve-loping authentic global leaders, those that can genuinely and successfullyoperate in a global cultural context.

Authentic leadership development takes not only leaders into account butalso followers and the context in which they are embedded to understandhow the leadership process develops. Gardner, Avolio, Luthans, May,and Walumbwa (2005) have advanced a theory of authentic leadershipdevelopment in which leaders and followers are true to their own valuesby achieving greater self-awareness, balanced processing, relational trans-parency, and a moral/ethical perspective. Fostering this process are lifetrigger moments, planned and unplanned, that may accelerate the develop-ment of both authentic leaders and followers. Avolio and Luthans (2006)describe how these trigger moments become more meaningful to one’sdevelopment of self-awareness and balanced processing by drawing fromone’s positive psychological capital. In our global mindset model, we pro-pose that such life trigger moments serve as antecedents to cognitivecomplexity in the developmental process of one’s global mindset.

In addition to trigger moments, we also propose that individual charac-teristics such as developmental readiness and a promotion focus (as opposedto a prevention focus) may moderate the relationship between individuals’positive PsyCap and their cultural intelligence. When individuals have theinternal readiness to develop their own capacities, the relationship betweenPsyCap and cultural intelligence will be strengthened.

A promotion focus is a self-regulation system that is concerned withattaining the ‘‘ideal self,’’ which encompasses wishes, aspirations, and ac-complishments. In contrast, a prevention focus concerns the avoidanceof punishments and strives for the ‘‘ought self,’’ which is described byobligations and duties. A promotion focus leads individuals to be morecreative in problem solving and have a greater willingness to take risks(Kark & Van-Dijk, 2007). In the event that individuals have a promotionfocus, they will be more likely to utilize positive psychological capacitiesto foster metacognitive strategies, be open to unfamiliar stimuli, exhibitmotivation to react to and reflect on such stimuli, and adjust their behaviorfor the purpose of learning and responding in a more culturally appropriateand advantageous manner. The opposite is the individual who is not able tochange and therefore applies existing ways of thinking to all new experi-ences. A lack of adaptation and learning from these new experiences might


characterize the legions of expatriates who found overseas assignmentsso difficult to understand that they returned early (Kraimer, Wayne, &Jaworski, 2001).

In addition to the antecedent of global/cultural trigger events and themoderator of individual characteristics, the proposed global mindsetdevelopment process more generally overlaps with authentic leadershipdevelopment in the conceptualizations of self-awareness and balancedprocessing. Cognitive complexity enables individuals to have balancedprocessing, as they may look at events from multiple perspectives beforechoosing to decide. The sense-making process of global mindset also aidsindividuals in gaining greater self-awareness and articulation of their currentmindsets (Gupta & Govindarajan, 2004).

Global mindset as proposed here would seem to contribute to the au-thentic development of truly (or authentic) global leaders, as it would helpthem reconcile norms that may be incongruent with their personal values. Inaddition, development of a global mindset for authentic global leaderswould assist them and followers to more effectively recognize opportunitiesembedded in the cultural context in which they find themselves. As such,leaders come to understand who they are and that understanding will reflecta more culturally rich global mindset.

IMPLICATIONS FOR INTERNATIONAL

MANAGEMENT AND FUTURE RESEARCH

While this chapter discusses the individual level of analysis for under-standing global mindset and its development, implications for internationalmanagement span many levels of the multinational firm, especially if ourtarget of focus is the most senior leaders. By considering how individualsdevelop capacities for recognizing nuances, gaining positive psychologicalcapacities for leveraging such awareness, and building metacognitive strate-gies for future success in dealing with new and nuanced cultural environ-ments, we may begin to understand how some global organizationssee future opportunities in new markets today that others are unable torecognize. In other words, the individual level of analysis in global mindsethelps us to understand how international managers and employees of multi-national firms build culturally relevant and future-oriented strategies thatprovide them with sustainable growth.

Without understanding the individual level of analysis, we are hardpressed to gain insight into the ways that top management teams and their


multinational companies successfully plan and execute sustainable and veri-table strategies. We can therefore see over time an escalation of the globalmindset construct as defined here to larger collectives such as teams, divi-sions, organizations, and entire nations who exemplify a culturally rich anddiverse global mindset.

From a global leadership perspective, it is important for internationalmanagers to understand the value of developing their own capacities ofhope, optimism, efficacy, resiliency, i.e., their PsyCap, as well as developingthose of their followers. How would such global-mindset leaders be able tomove their followers forward and flourish, if their followers’ mindsets arerooted in simplistic cultural stereotypes?

Obviously, for larger entities to be led successfully in a global culturalcontext, all members will ultimately have to develop higher levels of cog-nitive complexity, PsyCap, and CQ to enhance a global mindset. Globalauthentic leaders will need to build a workforce with global mindsets forinternational competitiveness. Such PsyCap capacities enhance leaders’ andfollowers’ abilities to take broader perspectives (i.e., global mindsets) and toflourish in a global context. Therefore, as we noted above, the individuallevel of analysis discussed in this chapter provides a starting point to un-derstanding how multinational companies may initiate change internally tobecome a more globally minded collective.

The proposed model of global mindset development also provides op-portunities for future research. Most often, international management re-search considers a company level of analysis. By theorizing and testing theindividual or small group/team level of analysis, we may gain new insightsinto the interfirm microprocesses that represent successful internationaliza-tion and cross-border trade. We have also presented a model that is testable,and future research directions entail not only testing the model, butalso extending it to consider the impact of global mindset development onperformance, trust, and understanding with the general context of humanrelations, as well as the more specific context of authentic leadershipdevelopment.

Some specific future research questions that we propose would advancethe theoretical understanding of global mindset are: what are the conditions(context) that enable a global mindset to develop? For example, can a globalmindset develop without international work experience or exposure to newnational cultures? In the same vein, are there varying degrees of culturaldistance that either accelerate or hinder global mindset development?For example, may an individual gain an appropriate level of cognitivecomplexity and cultural intelligence by traversing multiple subcultures of


the United States or of China? What characterizes the trigger moments thataccelerate development of a global mindset? Can these trigger moments beplanned and what would go into such planning? Each of these researchquestions directly or indirectly deals with the issue of context. Context iscritical to any theory development process and is particularly important inunderstanding the conditions that accelerate global mindset developmentand to a large extent authentic leadership development as well.

We have proposed a process of global mindset development that con-siders how individuals make sense of unfamiliar stimuli and regulate andreflect on their behavior. Within the context of globalization, such perpetualself-regulation and reflection, we would argue, allows for greater levels ofperspective taking and development of cultural intelligence. Using a socialcognitive framework, we may understand how positive psychological capitalis central to mediating sense-making processes and allowing for successfulcross-border interactions.

To date, global mindset theories have presented a number of constructsthat are believed to comprise a global mindset, but have not shown andconceptually supported how these various constructs relate to each otherand interact (causally, reciprocally, or iteratively) to develop a global mind-set. We conclude that our proposed model can provide a foundation forfurther theory-building and researchable propositions for the developmentof global mindset starting at the individual level of analysis. We also suggestthat in a world that has entered into numerous conflicts throughout humanhistory, oftentimes due to a poor understanding of one culture by another,rapidly developing global mindsets in leaders and followers not onlymay generate organizational growth and competitiveness, it could indeedsave lives.

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LEADING WITH

A GLOBAL MINDSET

Schon Beechler and Mansour Javidan

THE STRATEGIC IMPERATIVE

While there is strong agreement that globalization is spreading rapidly, thereis no agreement on what globalization actually means and how it is meas-ured. Giddens (1999) defines globalization as ‘‘the worldwide interconnec-tion at the cultural, political, and economic level resulting from theelimination of communication and trade barriers.’’ He further defines it as‘‘y a process of convergence of cultural, political, and economic aspects oflife’’ (reported in Inkpen & Ramaswamy, 2006, p. 13). Govindarajan andGupta (2001) define globalization as ‘‘growing economic interdependenceamong countries as reflected in increasing cross-border flows of three typesof entities: goods and services, capital, and know-how’’ (p. 4).

Globalization has been occurring for centuries but the new age of glo-balization is not merely a continuation of a centuries-old trend. There areseveral unprecedented features of globalization that emerged around thedawn of the 21st century (Friedman, 2005). First, globalization has beenenabled and characterized by erosion of boundaries. Trade liberalizationhas opened borders across which capital moves easily and foreign directinvestment (FDI) restrictions have been relaxed considerably.

In addition, while the telegraph shrank the world a century ago for in-stitutions, in the 1990s the Internet empowered individuals, as well as

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governments and corporations, to gain unprecedented access to informa-tion, increasing their consumption possibilities as well as their ability toaffect social and political spheres outside the borders of their own countries(Friedman, 2005). Simultaneously, advances in technology increased theopportunities for international travel while the costs of international traveland transport declined dramatically and, along with the opening of politicalborders, spurred an increase in the international movement of people.Electronic communication, declining transportation costs, more flexibleforms of economic organization, and the growing importance of mobileassets such as finance and knowledge establish an increasingly uniformhorizon of production possibilities across national borders, integratingmarkets around the world and internationalizing decisions about investmentand jobs (Palmisano, 2006).

As traditional boundaries disappear and competition springs from everycorner of the earth, companies have rapidly tried to globalize to takeadvantage of the growth opportunities in international markets. Theinternational business environment provides firms with unprecedented op-portunities but also formidable challenges because globalization is a man-ifestation of complexity (Lane, Maznevski, & Mendenhall, 2004). As willbe explained below, this complexity results from conditions of multiplicity,interdependence, and ambiguity – all of which are interrelated and in astate of constant flux (Lane et al., 2004). In complex environments, pre-dicting the future is impossible and rigid control unadvisable. Managingcomplexity requires a new way of thinking and a new way of organizing.

Lasserre (2003) suggests that to exploit global opportunities, corporationsneed to develop effective global strategies using the following framework:

�
Global ambition: defining the relative importance of various regions andcountries.
�
Global positioning: choice of countries, customer segments, and valuepropositions.
�
Global business systems: investments in resources, assets, and competenceto create a global value chain and global capabilities through alliances andacquisitions.
�
Global organizations: global structure, processes, coordination, and hu-man resources management.
To think and act globally, corporations must become adept at collabo-rating, discovering, ‘‘architecting,’’ and systems thinking (Lane et al., 2004).For example, Samuel J. Palmisano, the Chair of the Board, President, and

Leading with a Global Mindset 133

CEO of IBM, in a recent article (2006), reviewed the challenges and op-portunities facing global corporations and concluded that the key to theirsuccess lies in their ability to integrate every aspect of their global organ-ization. He suggested that today’s global corporations are ‘‘shifting theirfocus from products to production – from what things companies choose tomake to how they choose to make them, from what services they offer tohow they choose to deliver them. Simply put, the emerging globally inte-grated enterprise is a company that fashions its strategy, its management,and its operations in pursuit of a new goal: the integration of productionand value delivery worldwide. State borders define less and less the bound-aries of corporate thinking or practice’’ (Palmisano, 2006, p. 129). That iswhy in making overseas investments, corporations are increasingly lookingbeyond the local market and are focusing on how to supply the entire globalmarket.

But corporations are not just interested in integrating their internal or-ganizational units and functions. They are also focused on outsourcingmany of their internal activities, such as back-office support work, to out-side specialists who can perform them better and cheaper. As a result, theglobal corporation is evolving as a global network of interconnected andtightly integrated internal and external activities designed to satisfy theirvaried customer markets in different parts of the world (Palmisano, 2006;Friedman, 2005).

Another important benefit of such a complex web of interconnections isthe increased ability of the corporation to encourage and support corporate-wide innovativeness that can result in new global products, services, mar-kets, or business processes. Eaton Corporation is an example of Palmisano’sview of a global corporation. Eaton is headquartered in Cleveland, Ohio, inthe industrial heartland of the United States. It has an extensive productportfolio ranging from automotive parts to aircraft components to golfclubs. It has over $12 billion in sales, more than half of which is generatedoutside the United States, in scores of countries on all continents. It has 210manufacturing plants in 32 countries and its global supply chain consists ofpartners in 86 countries. The company’s growth plans call for severalfoldincreases in their sales in Asia, especially China, and their manufacturingand supply chain strategy is focused on producing high-quality products atefficient cost using a highly integrated network of internal and externalsuppliers.

To summarize, globalization creates unique and unprecedented opportu-nities for corporations. But leveraging such opportunities is not easy.Palmisano (2006) suggests that to succeed in the new global arena,


corporations need significant changes in their organizational cultures toenable them to form trusting relationships with their partners, relationshipsthat would lead to higher quality products and services, more efficient pro-duction systems, and effective transfer of knowledge and learning, alongwith other outcomes.

To achieve all this, corporations need a new and different breed of globalleaders who can take decisions and actions that facilitate the development ofthe complex network of internal and external connections with individuals,teams, and organizations from many different political, social, and culturalsystems. They require leaders who do not rely on traditional hierarchicalapproaches because they would impede fluid and collaborative work rela-tions and would reduce trust and speed of decision making and actiontaking throughout the global network. As Morrison (2000) suggests:

As companies rely more and more on global strategies, they require a greater number of

global leaders. This tie between strategy and leadership is essentially a two-way street:

the more companies pursue global strategies, the more global leaders they need; and the

more global leaders companies have, the more they pursue global strategies. That the

world has an ever-greater need for global leaders is consistent with the increased glo-

balization of competition over the past two decades. (p. 119)

Despite the need for an increasing supply of global leaders, companies arehaving a difficult time filling these positions. For example, in the early 1990sAdler and Bartholomew (1992), in their study of international companies,suggested that most companies are unable to implement their global strat-egies due to a lack of global leadership. In 2006, despite the increasing needfor global leaders, the situation had not improved. A global survey byMercer Delta of 223 senior executives from large corporations across17 industrial sectors in 44 countries found that a majority of businessexecutives believe their companies face leadership shortages to meet thefuture global business risks that are threatening their corporate performance(Mercer Delta, 2006).

WHAT IS GLOBAL LEADERSHIP?

The above discussion on global strategy points to the conclusion that theconcept of global leadership is a rather recent phenomenon. While the termglobal leader first appeared in the 1960s and 1970s to describe a company’smarket position, it was not until the end of the 1980s that the term global wasbeing applied to executives and to individual jobs (McCall & Hollenbeck,


2002, pp. 20–21), although the work in this area focused almost exclusivelyon expatriates rather than global leaders, per se.

The interest in this topic has been driven by global corporations’ rush todevelop and execute global strategies that would get them privileged accessto global markets and supply chains (Mendenhall & Osland, 2002;Von Glinow, 2001; Bartlett & Ghoshal, 1989; Brake, 1997; Pucik, 1992;Morrison, 2000; Spreitzer, McCall, & Mahoney, 1997) and the need to findqualified leaders to help companies pursue complex global strategies. Be-cause of its practical heritage and its focus on providing pragmatic assist-ance to global corporations, the field is inherently managerially oriented anddoes not have a strong and rigorous research orientation (Hollenbeck,2001). The main publication outlet for the topic is the Advances in Global

Leadership series (Mobley, Gessner, & Arnold, 1999; Mobley & McCall,2001; Mobley & Dorfman, 2003), and a number of edited volumes have alsobeen published by Mendenhall, Kulhmann, and Stahl (2001); Mendenhalland Osland (2002); Hollenbeck (2001); and Suutari (2002).

Most authors on the topic seem more interested in providing normativeadvice to global executives and human resource (HR) professionals thantackling theoretical or empirical challenges involved in rigorously exploring,conceptualizing, and verifying the various constructs of interest (Osland,Bird, Mendenhall, & Osland, 2006). To begin with, the construct of globalleadership is seldom clearly defined. Most authors do not even try to definewhat they mean by global leadership, apparently assuming that it requiresno definition. The conventional view seems to be that global leadership is aconstruct in juxtaposition to domestic leadership. Whereas domestic leaderswork with domestic individuals, global leaders work with those from differ-ent countries (Hollenbeck, 2001). Morrison (2000) describes it in thefollowing way:

For a company to become more global, its leaders must develop competencies that go

beyond what is familiar in the home country (Yamaguchi, 1988). Globalization –

whether at the level of the industry, business, or individual leader – is all about over-

coming national differences and embracing the best practices from around the world.

Something more than an American, European, or Asian approach to leadership is

required. Needed is a global model that can be applied throughout the world, a model

that transcends and integrates national schemes and becomes an essential tool for hiring,

training, and retaining the leaders of tomorrow. (p. 120)

This approach is consistent with Bartlett and Ghoshal’s (1989) and Adlerand Bartholomew’s (1992) view that global leaders work in global organ-izations and execute global strategies across, rather than within, borders.Bird and Osland (2004) suggest that the transition from purely domestic to


global is a ‘‘quantum leap’’ (p. 4) because of significantly greater complexityfacing the global leader. They suggest that the increased complexity is due to:

�
greater need for cultural understanding, � heightened need for broad knowledge spanning functions and nations, � more frequent boundary spanning across national and organizationalboundaries,
�
more stakeholders to consider when making decisions, � higher levels and types of tensions on and off the job, � heightened ambiguity, and � more challenging ethical dilemmas.
The complex transition from domestic to global arenas led Kets de Vriesand Florent-Treacy (1999, p. xvii) to conclude that ‘‘within virtually a singlegeneration, our comfortable existence in a familiar home culture has beenshaken by an awareness that we cannot escape being part of this global,interconnected environment y . Leaders at the helm of the corporations ofthe future will need the capacity to step out of their own comfort zone andadapt to other realities.’’

While the approach to defining global leadership in terms of the globalnature of the leader’s job is helpful, it does not provide sufficient insight intowhat is unique about global leadership (Hollenbeck, 2001). There is con-fusion and fuzziness in using such terms as global executive, global manager,and global leader interchangeably without delineating the boundaries be-tween them (Osland et al., 2006). What many writers describe as leadershipis actually the organizational tasks performed by global executives. But justbecause an executive is in charge of a global organization does not neces-sarily mean that he or she is an effective global leader.

The extant US-based literature on leadership has dealt with this issue in itstreatment of leadership versus management (Yukl, 2006; Kouzes & Posner,2002; Daft, 2002) but the global leadership literature does not currentlypresent a clear view. An exception is the work by Osland et al. (2006), whoprovide a more detailed definition of global leadership as ‘‘a process of in-fluencing the thinking, attitudes and behaviors of a global community towork together synergistically toward a common vision and common goals’’(p. 204). In contrast, most writing in the global leadership literature seemsless interested in a clear definition and more interested in the issue of com-petencies. Perhaps due to its practical heritage, most of the literature is con-cerned with the question of what competencies or capabilities are needed foreffective global leadership and how they are developed (Osland et al., 2006).


Since various summaries of the existing research on global leadership areprovided elsewhere (see, for example, Hollenbeck, 2001; Morrison, 2000;Bird & Osland, 2004; Suutari, 2002; Mendenhall & Osland, 2002; Oslandet al., 2006), we will provide only a brief overview of the findings here.

GLOBAL LEADERSHIP COMPETENCIES

When defining and identifying the qualities of global leadership, most writ-ers and managers focus on competencies, a term that came into use in theearly 1980s to describe the group of skills, attitudes, values, and personaltraits that were considered essential to performing a specific task (Boyatzis,1982; Brisco & Hall, 1999). In fact, a number of researchers define globalleadership only by the list of competencies that purportedly characterizeindividuals who have been identified as ‘‘global leaders’’ (e.g., Brake, 1997;Rhinesmith, 1996; Mendenhall et al., 2001).

Rhinesmith (1996) identified a set of 24 competencies related to threemain responsibilities of global leaders: strategy and structure, corporateculture, and people. Brake (1997) identified three characteristics of globalleadership, relationship management, business acumen, and personal effec-tiveness, and John Pepper, the former CEO of Procter & Gamble, suggestedthe following global competencies (Bingham, Felin, & Black, 2000):

�
dealing with uncertainty, � knowing customers, � balancing tensions between global efficiency and local responsiveness, and � appreciating diversity.
Some of the skills needed by global leaders are generic, while othersare firm-specific, depending on the industry, the strategy of the firm, andits culture. For example, Black, Morrison, and Gregersen (1999), in theirinterviews of 130 senior line and human resource executives in 50 compa-nies in Europe, North American, and Asia, found that effective globalleaders:

�
demonstrate both global business and global organization savvy; � exhibit character, including the competencies of emotional connectionwith people, and high integrity; and
�
embrace duality, having the ability to manage uncertainty and to balanceboth globalization and localization pressures.


At the same time, these authors found that two-thirds of the character-istics of effective leaders were generalizable across situations and companies,while one-third were idiosyncratic or specific to a particular situation.

The lists of effective global leadership competencies are practically end-less, to the point at which they become useless. We have seen companiesworking hard to define the necessary qualities ending up with a list of 80 toover 200 vital competencies. While there is no definitive list of global com-petencies, in the same way that there is no single definition of a ‘‘global job,’’McCall and Hollenbeck (2002) provide one of the most comprehensivecategorizations, derived from interviews with 101 executives (92 men and9 women) who were considered extremely successful global executives bytheir organizations. These executives, from 36 countries, worked for 16global companies in diverse positions. McCall and Hollenbeck do not focuson the business skills required to do well in an international posting, as theseare considered a basic requirement. Rather, they focus on the experiencesthat prepare a person for leadership challenges, analyzing the individual andexperiential characteristics that help a global executive excel in his/her job(see Table 1).

Mendenhall and Osland’s (2002) review of the literature produced 56global leadership competencies, which they categorized into a set of six coredimensions: cross-cultural relationship skills, traits and values, global

Table 1. Global Executive Competencies.

� Open-minded and flexible in thought and tactics: The person is able to live and work in a

variety of settings with different types of people and is willing and able to listen to other

people, approaches, and ideas.� Cultural interest and sensitivity: The person respects other cultures, people, and points of

view; is not arrogant or judgmental; is curious about other people and how they live and

work; is interested in differences; enjoys social competency; gets along well with others; is

empathic.� Able to deal with complexity: The person considers many variables in solving a problem, is

comfortable with ambiguity and patient with evolving issues, can make decisions in the

face of uncertainty, can see patterns and connections, is willing to take risks.� Resilient, resourceful, optimistic, and energetic: The person responds to a challenge, is not

discouraged by adversity, is self-reliant and creative, sees the positive side of things, has a

high level of physical and emotional energy, is able to deal with stress.� Honesty and integrity: Authentic and consistent, the person engenders trust.� Stable personal life: The person has developed and maintains stress-resistant personal

arrangements, usually family, that support a commitment to work.� Value-added technical or business skills: The person has technical, managerial, or other

expertise sufficient to provide his or her credibility.

Source: Competencies of Global Executives, McCall and Hollenbeck (2002, p. 35).

Table 2. Global Leadership Dimensions (with attendant competencies).

VisionBusinessExpertise

RelationshipSkills

OrganizingExpertise

Traits Cognitive

Close PersonalRelationships

CC Communication Skills“Emotionally Connect” Ability

Inspire, Motivate OthersConflict ManagementNegotiation ExpertiseEmpowering Others

Managing CC Ethical Issues

Environmental SensemakingGlobal MindsetThinking AgilityImprovisation

Pattern RecognitionCognitive Complexity

CosmopolitanismManaging Uncertainty

Local vs. Global Paradoxes

Global Business SavvyGlobal Organizational Savvy

Business AcumenTotal Organizational

AstutenessStakeholder Orientation

Results-Orientation

Articulating a tangible visionand strategyEnvisioning

Entrepreneurial SpiritCatalyst for Cultural Change

Change AgentryCatalyst for Strategic

ChangeEmpowering, Inspiring

Source : Figure 11.1 Categorization of global leadership competencies in the empiricalresearch Osland et al., 2006, p. 209.

Team BuildingCommunity Building

Organizational NetworkingCreating Learning SystemsStrong Operational Codes

Global Networking Strong Customer Orientation

Curiosity/InquisitivenessContinual Learner

Learning OrientationAccountability

Integrity/CourageCommitment

HardinessMaturity

Results-Orientation


business expertise, cognitive orientation, global organizing expertise, andvisioning (see Table 2).

More recently, Goldsmith, Greenberg, Robertson, and Hu-Chan (2003)surveyed 74 Forum group members and conducted interviews with 28CEOs, current and future global leaders, and 202 high-potential next-generation leaders. They identified 12 dimensions of global leadership: in-tegrity, constructive dialogue, shared vision, developing people, buildingpartnerships, sharing leadership, empowerment, thinking globally, appreci-ating diversity, technological savvy, customer satisfaction, and maintainingcompetitive advantage. Similarly, Kets de Vries and Florent-Treacy (1999)found from their semistructured interviews with senior executives that glo-bal leadership encompasses 12 dimensions: envisioning, empowering, ener-gizing, designing, rewarding, team building, outside orientation, team globalmindset, tenacity, emotional intelligence, life balance, and resilience tostress.


In sum, the extant literature provides a wealth of information about thedimensions of global leadership, but much of the writing is of a normativenature and does not follow the traditional requirements of rigorous empir-ical research. Instead, it can best be viewed as exploratory research buildingthe foundation for more rigorous work to come. While the research hasgenerated a number of overlapping dimensions, most of the research onglobal leadership has been published in books, rather than peer-reviewedjournals, and the findings thus far can be viewed as only preliminary. Inaddition, there is still confusion in the field regarding the definition of globalleaders versus domestic leaders and the difference between global leadersand global managers (Osland et al., 2006).

Existing research does not explain how individual characteristics con-tribute to effective global leadership nor does it identify which competenciesare critical in all contexts versus those that are important in only particularcontexts (Osland & Bird, 2006). None of the published studies includesdirect measures of behaviors nor do they correlate leaders’ attributes withobjective measures of leadership effectiveness (Osland & Bird, 2006).

To help set the stage to develop a framework linking global leadershipand global mindset we provide the following definition for global leadership:

Global leadership is the process of influencing individuals, groups, and organizations

(inside and outside the boundaries of the global organization) representing diverse cul-

tural/political/institutional systems to contribute toward the achievement of the global

organization’s goals.

There are a number of components to this definition that we would like tohighlight. First, our view of global leadership as a process of influence is inline with the conventional literature on leadership, in which most definitionsreflect the notion of intentional influence exerted by one person over otherpeople (Yukl, 2006). Unlike the prevailing literature in the global leadershipfield, our definition of leadership means that leadership can be exercised byan individual or a group.

We also explicitly acknowledge that in addition to a leader, leadershiprequires other people or groups who are led toward an organization’s goals.However, in the extant literature on leadership, the assumption is that‘‘other people’’ are typically the direct reports working for the leader in atraditional hierarchical relationship. Most of the writing on leadership isfocused on how leaders can motivate their direct reports toward somecommon goals. While the same is true in the case of global leaders, it is onlya small part of the picture. Global leaders do have employees, but theyare scattered around the world. Furthermore, since a typical global


organization is more of a network of supply chain partners, joint venturepartners, or strategic alliance partners trying to execute integrated globalstrategies (Brake, 1997), the boundaries of the typical global organizationare more permeable and fuzzy than those of the traditional organization(Ashkenas, Ulrich, Jick, & Kerr, 1995). Global leaders need to influenceindividuals, teams, or organizations from different parts of the world to helpachieve their organizations’ objectives. And they need to do this withoutrelying on traditional lines of authority. Furthermore, those being influ-enced are different from the global leader. Their cultural background isdifferent, so the way they see and interpret the world is different. In ad-dition, what motivates them may be different from what the global leader isused to because they do not have common experiences and their culturalvalues and practices are different:

Crossing business borders – borders of business unit, of market, of product, of function,

and of customer – although important, is fundamentally different from crossing borders

of country and culture. Dealing with multiple business elements, however arranged, adds

layer upon layer of complexity and contributes to ambiguity, anxiety, and uncertainty, but

the impact on executives is primarily cognitive or intellectual. Although the problems may

be more complex, they are, at bottom, business problems, not personal problems. It is the

crossing of cultural lines that is an assault on the identity of the person. When the task

becomes managing differences of country, culture, language, and values, the assumptions

we make about ourselves and other people are brought into question. Effective executive

performance when crossing country and cultural borders often demands a kind of trans-

formation of who we are and how we see ourselves. (McCall & Hollenbeck, 2002, p. 22)

The ‘‘other people’’ are also from different social and political systems.Their institutional systems, their legal frameworks, and their social struc-tures are different from those in the global leader’s home context (North,1990). They may even have different views on the whole notion of thecorporation and its role in the society (Hunt, 2000). In sum, global lead-ership is about influencing those who are different from the leader in manyimportant ways.

WHAT IS CROSS-CULTURAL LEADERSHIP?

Our view is that to understand fully the construct of global leadership, weneed to connect it better to the concept of cross-cultural leadership (CCL).Whereas the field of global leadership is in its infancy, the related field ofCCL has a longer history. For example, the widely recognized Bass andStogdill’s Handbook of Leadership dedicated one page to CCL in its 1974


edition, 14 pages in its 1981 edition, and 40 pages in its 1990 edition, reflectingthe increasing prominence of the topic. We will not provide a comprehensivereview of the literature because various authors have done so (Bass, 1990;Smith & Peterson,1988; House, Wright, & Aditya, 1997; Peterson & Hunt,1997; Dorfman, 2004), but we provide a high-level overview below.

While the literature in CCL, like that in global leadership, is driven by theglobalization of the world of business, it is, in contrast to global leadership,only partly focused on practical and managerial needs. Instead, rooted inthe discipline of cross-cultural psychology, it is also interested in theoreticaland methodological issues, as evidenced by Dorfman:

From a scientific and theoretical perspective, compelling reasons exist for considering the

influence of culture on leadership processes. Because the general goal of science is to

develop universally valid theories, laws, and principles, leadership researchers should

strive to develop leadership theories that transcend cultures. Most likely, these theories

will take the form of mid-range theories such as those prevalent in the leadership lit-

erature (e.g., LMX theory from Graen & Uhl-Bien, 1995). (2004, p. 269)

As Triandis (1993) suggests, leadership researchers will be able to ‘‘fine-tune’’ theories by

investigating cultural variations as parameters of the theory. Cross-cultural research may

also help uncover new theoretical relationships by forcing the researcher to consider a

much broader range of non-cultural variables (Chemers, 1983). For instance, models

promoting participatory leadership may be valid for relatively sophisticated employees

in developed countries, but less valid for employees in less developed countries where

egalitarian values may not be highly valued. (2004, p. 269)

The major driver of the field is the fact that most of the research in lead-ership during the past few decades has been conducted in Western countries(Yukl, 2006). Given the increasing cross-cultural contact in global corpo-rations, research has focused on the following questions:

�
To what extent are the theories and models of leadership applicable tonon-Western cultures?
�
Are there universally desirable or undesirable attributes of leadershipacross cultures?
�
Are there culturally specific aspects of leadership? � What are the dynamics of CCL and how does one succeed in a cross-cultural context?
The starting point in the CCL literature is the notion of culture. Despitemany years of work by many researchers and writers, there is no unifieddefinition of culture. Definitions of culture vary from the very inclusive (e.g.,‘‘culture is the human-made part of the environment’’; Herskovitz, 1955) to


highly focused (‘‘culture is a shared meaning system’’; Shweder & LeVine,1984, p. 110).

The conventional wisdom in cross-cultural psychology reflects Hofstede’snotion of the cultural onion (1980, 2001). Hofstede defines culture as ‘‘thecollective programming of the mind that distinguishes the members of onegroup or category of people from another’’ (2001, p. 9). He defines values asthe invisible part of culture manifested through cultural practices, consistingof symbols, heroes, and rituals (2001, p. 10). He visualizes the relationshipbetween culture, values, and practices as the ‘‘Onion Diagram’’ (2001, p. 11)arguing that cultural values drive practices.

There is general acceptance that the values-based framework for meas-uring cultures has been helpful in deciphering cultures (Leung et al., 2002;Smith, Peterson, & Schwartz, 2002; Leung, Bhagat, Buchan, Erez, &Gibson, 2005), but other researchers have started to take a different ap-proach. The GLOBE research program defined societal culture in terms ofcultural values and practices (House, Hanges, Javidan, Dorfman, & Gupta,2004). It identified nine cultural dimensions and compared 62 societies interms of their cultural values and practices related to the nine dimensions.Leung et al. (2002) introduced the notion of social axioms, which they defineas general beliefs.

The conventional approach to measuring cultures is through asking in-dividual respondents about what is important to them as individuals andthen aggregating the results at the culture level. Leung and Bond (2006)summarize the underlying premise for this approach:

For most people, life is not an aimless, mindless drift; their actions and activities are

conscious or unconscious manifestations of their responses to two fundamental ques-

tions: What do they want to pursue in life and how do they pursue those goals? The

‘‘what’’ question has been extensively researched under the rubric of values, the study of

which seeks to identify general goals that people regard as important (e.g., Rokeach,

1973). (p. 2)

Schein (1992) presents a different view of culture, as a product of a col-lective’s attempts to address two sets of group issues: external adaptationand internal integration. Culture evolves as a collective adapts to ongoingchallenges surviving in the face of external threats and opportunities andmanaging relations among its members.

Despite the divergence of views on the definition of culture, there is gen-eral agreement among researchers that culture refers to the cognitive sys-tems and behavioral repertoires that are shaped as a result of individuals’experiences. To the extent that individuals share common experiences, theywill form similarities in their cognitive and behavioral profiles. Of course,


the extent of commonality is also influenced by such other factors as in-dividual personality. Human beings are not cultural robots and, even withineach culture, there is a range of individual cognitive and behavioral profilesfueled by, among other things, individual idiosyncrasies.

Given the above link between culture and cognitive and behavioral rep-ertoires, many authors believe that culture can impact leadership in severaldifferent ways (Adler, 1997; House et al., 1997; House et al., 2004; Javidan& Carl, 2004; Dorfman, 2004; Javidan & Carl, 2005; Javidan, Dorfman,Sully de Luque, & House, 2006). Growing up in a particular culture, leadersdevelop and internalize the cultural values and practices of the culture andlearn, over time, desirable and undesirable modes of behavior. Smith et al.(2002) showed that the extent to which managers rely on formal rules andsupervisors for guidance is related to their cultural background. Geletanycz(1997) showed that executives’ adherence to existing strategy is related totheir cultural background in terms of individualism, uncertainty avoidance,and power distance. Rahim and Magner (1996) found that leaders in in-dividualistic cultures tend to put more emphasis on coercive power. Mehraand Krishnan (2005) found that Indian Svadharma orientation (followingone’s own duty) is related to transformational leadership in that country.

Culture also impacts the context of the relationship between the leaderand the followers (Yukl, 2006). Cultural norms influence the way people in asociety relate to each other and, as such, influence the type and content ofrelationships in general. Leadership, as a unique form of relationship, isbound to be also influenced. For example, a leader in a high power distanceculture is likely to act autocratically not just because he/she has learned it inhis/her own experience, but also because any other type of behavior may bedeemed ineffective by his/her boss or those outside the organization(Javidan et al., 2006; Javidan & Lynton, 2005).

Another important impact of culture on leadership is through its impact onthe implicit leadership theories of the members of the culture (Lord &Maher,1991; House et al., 2004; Javidan & Carl, 2004; Javidan & Carl, 2005).A society’s culture reflects some sort of collective agreement on meanings andinterpretations. Such agreements turn into social influences by producing ‘‘aset of compelling behavioural, affective, and attitudinal orientations andvalues for the members’’ (House et al., 1997, p. 538). Triandis (1994), in acomprehensive review of almost 400 studies, concluded that the cultural valueorientations in a country will determine the optimum leadership profile forthat country. He concluded that, while there are some universal attributes ofmanagement systems, each distinct culture may have a distinct managementstyle that is both moderated and directly influenced by culture.


The implicit theories of leadership in a society are influenced by its culturebecause of the prominent role of leaders and because of their contribution tothe collective’s success or failure. The theories are also culturally dependentbecause leaders mostly work with people. Leadership is about relations withother individuals and groups, most of whom are at least partially influencedby cultural values and beliefs. For leaders to succeed, they need to act inways that are culturally acceptable (Javidan & Carl, 2004).

The GLOBE research program (House et al., 2004) proposed and testedan integrated theory on the linkage between a society’s culture and its im-plicit leadership theory. It shows that members of a culture tend to develop acommon implicit theory of leadership that is a set of attributes, expecta-tions, and criteria to assess their leaders. The closer the fit between a leader’sactions and attributes and the group’s implicit criteria, the more the leader isaccepted by the members. GLOBE shows that cultural values, and notpractices, are associated with specific culturally endorsed leadership theo-ries. For example, it shows that societies that report relatively higher valuesof performance orientation prefer leaders who demonstrate higher levels ofvalue-based leadership. Or societies that report higher scores on power dis-tance values tend to demonstrate a more positive view of self-protectiveleadership compared to those societies that score lower on power distancevalues.

GLOBE also identifies leadership attributes that are universally desirable,such as ‘‘decisiveness’’ and ‘‘foresight.’’ It further shows that such leader-ship attributes as ‘‘ruthless’’ and ‘‘irritable’’ are universally undesirable. Inother words, while societies have different expectations from their organi-zational leaders as a result of their differing cultural values, they also haveseveral common expectations or criteria to evaluate such leaders (Dorfman,Hanges, & Brodbeck, 2004).

To conclude this section and to set the stage for the comparison of globalleadership and CCL, we define:

Cross-cultural leadership as the process of influencing individuals or teams representing

diverse cultural/meaning systems to contribute toward the achievement of the organ-

ization’s goals.

The key element of this definition is that those being influenced representcultures that are different from that of the leader and have differing ways ofmaking sense and interpreting their world. Owing to the roots of the field incross-cultural psychology, CCL is generally focused on the relationship be-tween a leader and one or more direct reports who are from differentcultural backgrounds.


WHAT IS THE DIFFERENCE BETWEEN GLOBAL

AND CROSS-CULTURAL LEADERSHIP?

Given the fact that global leadership and CCL are rooted in different dis-ciplines, and that their focus is significantly different – helping executives inglobal positions in the former and enhancing the science and theory ofleadership in the latter – the two streams of work are largely independent ofeach other. The CCL literature simply ignores the notion of global lead-ership and makes no attempt to connect to it, even though it acknowledgesthe reality of global responsibilities for many executives. The field of globalleadership seems relatively more aware of the CCL literature but makes onlypassing reference to it and certainly makes no attempt to bridge the divideor even define and contrast the two constructs.

In this section, we will contrast the two constructs and will explain howthe two are connected. We suggest that CCL is a subset and a component ofglobal leadership (GL). As can be seen from the definitions provided earlier,CCL is about leading individuals and teams who are from a different cul-tural background. GL is about leading those who are from different cul-tural, political, and institutional backgrounds. The focus of globalleadership goes beyond that of managing cultural differences and extendsinto dealing with the political and institutional systems that underpin in-dividual and organizational behavior in different countries.

Both CCL and GL are focused on how to influence others who aredifferent from the leader. Both constructs are based on the assumption thatto succeed, leaders need to understand and address these differences. CCL isconcerned with understanding and managing cultural differences. GL isconcerned about the same plus the impact of differences in political andinstitutional frameworks. For example, a manager trying to influence andmotivate his/her employees from a different culture needs to learn abouttheir cultural heritage and its implications for individual motivation (CCL).But he/she also needs to understand the rules and regulations governingemployer–employee relations in that society (GL) because they can play abig part in driving or constraining employees’ and employers’ behavior.

The new general manager of a Korean electronics firm in Cuba made abig effort to understand the Cuban and Latin American culture during hisfirst few months in the job. While he found it helpful, he realized that it waseven more important to learn the Cuban political and institutional frame-work because of the severe restrictions they imposed on his and his em-ployees’ actions. For example, he learned that he did not have the freedomto choose what employees to hire; the state provided the workers. He also


realized that any form of bonus or performance-based reward was illegal.His solution: He would take his best performing Cuban salesperson to theonly foreign supermarket in Havana where locals are not allowed on theirown and where only US dollars are accepted. He would give the sales persona cart for 30 minutes and would pay for everything that the sales personcould put in the cart in that time.

Another important distinction between CCL and GL is that CCL, due toits roots in psychology, is almost exclusively focused on an influence rela-tionship between a leader and his/her direct reports inside the organization.While some researchers examine the dyadic relationship between a leaderand individual subordinates (Hiller & Day, 2003; Graen, Hui, & Gu, 2004),others take a more aggregate view of the relationship between a leader andhis/her subordinates in general (O’Connell, Lord, & O’Connell, 1990; Ling,Chia, & Fang, 2000; Javidan & Carl, 2004; Javidan & Carl, 2005).

In contrast, global leadership goes beyond the influence relationship be-tween a leader and direct reports in two important ways: first, it also en-compasses individuals outside the organization. Global leaders need toinfluence many individuals who are not their direct reports and are not evenemployees of the firm. They may be individuals working for other firms whoare the clients, the supply chain partners, or joint venture partners of thefirm. As explained earlier, the global corporation is evolving as a globalnetwork of interconnected and tightly integrated internal and external ac-tivities designed to satisfy their varied customer markets in different parts ofthe world (Palmisano, 2006). To create such a global network, global leadersneed to successfully influence many individuals in other organizations in thenetwork. But they need to go beyond individuals and influence variousteams and organizations to ensure tightly integrated systems. They need tomanage global virtual teams like R&D and product design that span severalorganizations around the world. They also need to influence such organ-izations as supply chain partners or joint venture partners to ensure properlevels of cooperation and integration. A company like Eaton with hundredsof supply chain partners in 86 countries needs global leaders who are capableof managing massive numbers of global partners across the globe. Last, butnot least, global leaders need to influence external organizations who are nottheir partners but who are critical stakeholders, such as political and reg-ulatory agencies who embody and enforce the institutional framework ineach society (North, 1990). Building and sustaining support from these or-ganizations can be critical to the ongoing success of the global corporation.For example, GE’s planned acquisition of Honeywell was thwarted not byUS regulatory agencies but by the European Union’s regulatory agency.


To sum up, CCL and GL are distinct phenomena that differ mostly interms of their scope. CCL is focused only on relationships among individ-uals within the boundaries of an organization. GL is focused on broaderrelationships between the leader and a wide range of stakeholders inside andoutside the global organization. It is because of this difference in scope thatwe regard CCL as a subset and component of global leadership.

GLOBAL MINDSET: THE KEY TO SUCCESSFUL

GLOBAL LEADERSHIP

Responding to heightened global competition and increased levels of com-plexity and volatility in the global environment, global mindset has emergedas a key source of long-term competitive advantage in the global market-place. The cognitive abilities (mindsets) of key decision makers play a keyrole in the strategic capabilities of global firms because the ways in whichmanagers make sense of their organizational and global environments canenhance or inhibit competitive advantage (Caproni, Lenway, & Murtha,1992). Mindset drives discovery of new market opportunities, establishingpresence in key markets and converting presence into global competitiveadvantage (Govindarajan & Gupta, 2001).

Having a global mindset has become a critical success factor in globalfirms (Bartlett & Ghoshal, 1990; Gupta & Govindarajan, 2002; Murtha,Lenway, & Bagozzi, 1998; Harveston, Kedia, & Davis, 2000; Jeannet, 2000;Levy, Beechler, Taylor, & Boyacigiller, 2007):

Diverse roles and dispersed operations must be held together by a management mindset

that understands the need for multiple strategic capabilities, views problems and op-

portunities from both local and global perspectives, and is willing to interact with others

openly and flexibly. The task is not to build a sophisticated structure, but to create a

matrix in the mind of managers. (Bartlett & Ghoshal, 1989, p. 212)

Because global firms face contradictions or paradoxes, key decision makersmust have ‘‘dualistic perspectives.’’ For example, an individual with a globalmindset has an openness to and awareness of diversity across businesses,countries, cultures, and markets; the ability to develop and interpret criteriaand business performance that are independent of the assumptions of asingle country, culture, or context; and the ability to synthesize across thisdiversity and to implement those criteria appropriately in different coun-tries, cultures, and contexts (Govindarajan & Gupta, 2001; Maznevski &Lane, 2004). For the global firm the key advantages of a global mindset are


(Govindarajan & Gupta, 2001):

�
early mover advantage in identifying emerging opportunities, � greater sophistication and more fine-grained analysis as the trade-offbetween local adaptation and global standardization,
�
smoother coordination across complementary functional activities dis-tributed across borders,
�
faster rollout of new product concepts and technologies, � more rapid and efficient sharing of best practices across subsidiaries, and � lower failure rate in expatriate assignments.
Cross-cultural leadership and global leadership represent a constellation ofcognitions, behavioral repertoires, and behaviors. A leader’s cognitions, ormindset, determine what a person believes is worth doing, which helps todetermine the competencies that that individual develops over time. In turn,those competencies help determine actual behaviors. There is a recursive el-ement to this process as mindsets are both drivers of behaviors and outcomes.

In the sections below we provide a brief overview of the extant work onglobal mindset, our definition of global mindset, and then a model linkingglobal mindset and global leadership effectiveness.

There have been two approaches used by researchers looking at globalmindset at the individual level. Many writers have conceptualized globalmindset in relation to salient dimensions of the global environment, mostnotably in relation to cultural and national diversity and environmental com-

plexity associated with globalization (Levy et al., 2007), underscoring the chal-lenge of crossing cultural boundaries, interacting with employees from manycountries, and managing culturally diverse interorganizational relationships.Levy et al. (2007) use the term cosmopolitanism for this dimension of globalmindset that emphasizes an individual’s level of engagement and an ability tonavigate through unfamiliar cultures with an external and open focus.

Other researchers writing about global mindset have focused on aspects ofenvironmental complexity and strategic variety stemming from the global-ization of operations and markets. The environmental complexity approachhighlights an additional demand placed on MNCs: the need to integrategeographically distant and strategically diverse operations and markets(Prahalad & Doz, 1987). Appropriately, this approach often defines globalmindset as a cognitively complex knowledge structure characterized by highlevels of both differentiation and integration (Levy et al., 2007).

There are two aspects of cosmopolitanism that are important to globalmindset. First is an orientation toward the outside and the external


environment, rather than a focus on the inside, the local or the parochial.A second key aspect is the characteristic of openness, which represents notonly being interested in others but also being willing to engage and be open toexploring the alternative systems of meanings held by outsiders and to learnfrom them (Levy et al., 2007). As Kanter (1995) discusses, it is possible forsomeone to be externally oriented without being open to the people orknowledge they learn about: ‘‘It is not travel that defines cosmopolitans –some widely traveled people remain hopelessly parochial – it is mindset’’(Kanter, 1995, p. 23).

The cosmopolitan perspective was first introduced into the internationalbusiness literature by Perlmutter and his colleagues in the late 1960s whenthey highlighted the importance of mindset among international senior ex-ecutives in defining the multinational firms (Perlmutter, 1969). Perlmutterdistinguished among three primary attitudes (mindsets) toward managing amultinational enterprise, which he labeled ethnocentric (home-country ori-entation), polycentric (host-country orientation), and geocentric (world ori-entation). These orientations, Perlmutter suggested, influence and shapediverse aspects of the multinational, including structural design, strategyand resource allocation, and management processes.

Perlmutter’s descriptive typology defines the ethnocentric, polycentric,and geocentric orientations in terms of specific attitudes. An ethnocentricorientation is expressed in terms of headquarters and attitudes of nationalsuperiority: ‘‘We, the home nationals of X company, are superior to, moretrustworthy and more reliable than any foreigner in headquarters of sub-sidiaries’’ (Perlmutter, 1969, p. 11). A polycentric orientation represents arespectful disengagement from foreign cultures: ‘‘Let the Romans do it theirway. We really do not understand what is going on there, but we have tohave confidence in them. As long as they earn a profit, we want to remain inthe background’’ (Perlmutter, 1969, p. 13). Leaders with a global mindset,or a geocentric attitude, to use Perlmutter’s term, have universalistic, sup-ranational attitudes and downplay the significance of national and culturaldifferences: ‘‘Within legal and political limits, they seek the best men (sic),regardless of nationality, to solve the company’s problems anywhere in theworld’’ (Perlmutter, 1969, p. 13).

Many of the current conceptualizations of global mindset build onPerlmutter’s approach. For example, Maznevski and Lane (2004) defineglobal mindset as ‘‘y the ability to develop and interpret criteria for per-sonal and business performance that are independent from the assumptionsof a single country, culture, or context: and to implement those criteriaappropriately in different countries, cultures, and contexts’’ (p. 172).


While cosmopolitanism is important to a global mindset, it does not meanthat individuals do or should forego the historic roots of their existence orcultural heritage. Jeannet (2000) notes that even with a ‘‘global mindsetya managery is operating from a long rope or cord, with a large radius, notconstrained by ethnocentric view, but grounded in a home country culturefor personal balance’’ (p. 197).

In contrast to the cosmopolitan approach to global mindset describedabove, other writers, primarily working in the field of international strategy,have focused on aspects of environmental complexity and strategic varietyassociated with globalization when writing about global mindset. This ap-proach focuses on global mindset as a cognitively complex knowledgestructure characterized by high levels of both differentiation and integra-tion. Govindarajan and Gupta (2001), for example, state that every mindsetrepresents a knowledge structure with two primary attributes: differentia-tion and integration (p. 110). Differentiation is the number of constructs ordimensions used to describe a domain, while integration refers to thenumber of links among the differentiated constructs (Bartunek, Gordon, &Preszler, 1983; Weick & Bougon, 1986). People who are more cognitivelycomplex can perceive a larger number of dimensions in a domain andcan simultaneously hold and apply several valid but competing andcomplementary interpretations to that domain (Bartunek et al., 1983).Cognitive complexity is also associated with the capacity to balance con-tradictions, ambiguities, and trade-offs (Tetlock, 1983) and the ability tomanage dualities or paradoxes (Evans, Pucik, & Barsoux, 2002; Levy et al.,2007).

Our conceptualization of global mindset encompasses both the simulta-neous and the integrative use of the cognitive capabilities associated withcosmopolitanism and high cognitive complexity (Levy et al., 2007). It is amultifaceted construct that represents the fusion between an orientationtoward the external environment, an ability to notice and integrate diverseelements in this environment, and a person’s underlying openness to ideasand experiences (Levy et al., 2007; see also the work of Rhinesmith, 1996;Kedia & Mukherji, 1999; Govindarajan & Gupta, 2001).

An individual with a global mindset has an awareness of diversity acrossbusinesses, countries, cultures, and markets; the ability to develop and in-terpret criteria for business performance independent of assumptions re-garding a single country, culture, or context; and the ability to synthesizeacross this diversity and to implement those criteria appropriate in differentcountries, cultures, and contexts (Govindarajan & Gupta, 2001; Maznevski& Lane, 2004). Global mindset is the capacity to navigate successfully across


cognitive and geographical space, including different knowledge and mean-ing systems. We provide the following definition:

Global mindset is an individual’s stock of knowledge, cognitive, and psychological at-

tributes that enable him/her to influence individuals, groups, and organizations from

diverse sociocultural systems.

COMPONENTS OF GLOBAL MINDSET

The essence of global leadership, as in generic leadership, is to influenceothers to contribute toward some shared and common goals. Yukl (2006)showed that there are a number of specific influence tactics that help achievethe expected results. They are:

�
Rational persuasion: use of logical arguments and factual evidence. � Apprising: explaining the relevance and benefit of the expected end pointto the target of influence.
�
Inspirational appeal: arousing the target’s emotions by connecting to his/her values and ideals.
�
Consultation: soliciting suggestions from the target. � Collaboration: offering resources and assistance to the target. � Ingratiation: using praise and flattery before and during the influenceattempt.
�
Personal appeals: appealing to friendship or asking for personal favors. � Exchange: offering incentives and willingness to reciprocate. � Coalition tactics: seeking the aid of others to influence the target. � Legitimating tactics: using rules, policies, and contracts to legitimate therequest.
�
Pressure: using demands, threats, frequent checking to get the target tocarry out the task.
Kotter (2003) suggested that effective leaders use a combination of theabove influence tactics to achieve three outcomes: setting direction, aligningpeople, and motivating them. Leaders gather and analyze substantialamounts of data to help create visions and strategies (direction setting).Aligning means intensely and effectively communicating a legitimate andcredible message and empowering people to take initiatives toward thecommon goals. Motivating means inspiring, exciting, and energizing othersby connecting to what is important to them: their values and ideals. Whatdistinguishes global leadership from generic leadership, and what makes it

Perceive,analyze,decode

Accuratelyidentifyeffective

managerialaction

Possess behavioralflexibility and

discipline to actappropriately

Fig. 1. What Effective Global Managers Do. Source: Bird and Osland (2004, p. 66).


more complicated, is that global leaders need to influence others who rep-resent diverse sociocultural/political/institutional systems.

Integrating the ideas above with the work of Osland and Bird (2006), wecan apply the lens of expert cognition to examine differences between novicesand expert global leaders (see Fig. 1). As Osland and Bird note, expertsperform at higher levels of proficiency because they perceive the worlddifferently and use more sophisticated processes of insightful thinking. Whenlooking at a problem, they differentiate more readily between relevant andirrelevant information, while novices sometimes overlook important cues orassign too much importance to irrelevant information (Osland & Bird, 2006,p. 131). Experts then combine relevant information into relevant patterns toallow for more accurate diagnosis of a problem and, compared to novices,perceive more patterns. Experts also possess a vast store of knowledge that ismore extensive than that of novices and they are better at gauging the im-portance of different types of knowledge and the difficulty of problems(Klein & Hoffman, 1992, p. 209, quoted in Osland & Bird, 2006, p. 131).

Experts are also better at perceiving the interaction among cues and un-derstanding the meaning of invisible or absent cues. They are better thannovices at reacting to nonroutine situations and making decisions underpressure and are more likely to generate a high-quality solution in their firstattempt without having to compare alternatives. In addition, although thereis no difference in analytic reasoning between novices and experts, ex-perts complement their analytical skills with intuitive reasoning, which is‘‘a cognitive conclusion based on a decision maker’s previous experiences


and emotional inputs’’ (Burke & Miller, 1999, p. 93, quoted in Osland &Bird, 2006, p. 132). Finally, because of their knowledge and their experiencebase, experts’ perceptions of their work become more complex than that ofnovices (Osland & Bird, 2006, p. 133). Based on the research on expertthinking, Osland and Bird (2006, p. 133) conclude that compared to novices,expert global leaders should be better able to:

�
differentiate between relevant and irrelevant cues, � perceive more patterns in cues, � recognize what is missing, � interpret patterns and the interaction among cues more accurately, � have more extensive knowledge bases, and � cross-index patterns from other industries, country operations, and cul-tures.
While Osland and Bird (2006) focus on the cognitive implications of glo-bal leadership, it is also important to examine the complexity of influenceprocesses in a global context. As indicated earlier, the ultimate success ofglobal leaders lies in their ability to influence others to contribute to thegoals of the global enterprise. Cognitive complexity is a necessary but notsufficient requirement for successful influence. To succeed, global leadersneed a package of attributes called global mindset:

Global mindset is the stock of (1) knowledge, (2) cognitive, and (3) psychological at-

tributes that enable a global leader to influence individuals, groups, and organizations

(inside and outside the boundaries of the global organization) representing diverse cul-

tural/political/institutional systems to contribute toward the achievement of the global

organization’s goals.

The critical components of global mindset are intellectual capital, psycho-logical capital, and social capital. Below we will provide a brief explanationof each component.

Global Intellectual Capital

Intellectual capital refers to the global leader’s intellectual and cognitivecapabilities. It consists of several key attributes:

�
knowledge of the global industry, � knowledge of the global value network,


�

K

th

In

G

Ec

H

H

knowledge of the global organization,
� cognitive complexity, and � cultural acumen.
Table 3 shows a summary of the various elements of intellectual capital.Global leaders with high stocks of intellectual capital are capable of un-derstanding the complex global industry in which they are operating. Theyare aware of differing competitors and competitive strategies, and divergent

Table 3. Components of Global Intellectual Capital.

nowledge of

e Global

dustry

Knowledge of

Global Value

Networks

Knowledge of

the Global

Organization

Cognitive

Complexity

Cultural

Acumen

lobal business,

competitors,

and industry

Knowledge of

global supply

chains

Understanding

the tension

between

global

efficiency and

local

effectiveness

Ability to define

challenges

and

opportunities

from multiple

and diverse

perspectives

Cultural self-

awareness

onomic,

political, and

institutional

systems

Understanding

the

importance

and the

processes of

building

global value

networks

Understanding

global

implications

when making

local

decisions

Ability to find

solutions to

challenges

and

opportunities

from multiple

and diverse

perspectives

Understanding

cultural

similarities

and

differences

ow to transact

business in

different

parts of the

world

Understanding

the

importance of

global

strategic

alliances and

networks to

the global

firm’s

strategy

Understanding

the

importance of

global

inclusive

visions and

finding

common

views

Ability to

bridge and

integrate

among

multiple

perspectives

Knowledge of

other

histories and

cultures

ow to scan the

world for

trends and

opportunities

Knowledge of

how to

manage

global

networks and

teams

Understanding

the global

value

proposition

and business

model

Ability to

empathize

with those

who hold

conflicting

views

Knowledge of

other

languages


economic and political systems, and are able to identify business opportu-nities in different parts of the world. They understand the importance ofglobal value networks and supply chains and integrated global operationsand are aware of the importance of global virtual teams. They understandthe complexities of a global organization and the natural tensions existingbetween global and local requirements. They are cognitively complex indi-viduals who are able to understand multiple perspectives on how to defineand address global opportunities and challenges. While they understandthat their global context is complex, they are not paralyzed by it. Finally,they have strong cultural acumen, which includes cultural self-awareness,understanding cross-cultural differences as well as other’s histories, andknowledge of other languages. Our notion of cultural acumen is similar toEarley and Mosakowski’s (2004) concept of cultural intelligence, but is notexactly the same in the sense that theirs includes behavioral componentswhile our notion of cultural acumen does not. It contains only cognitiveelements that help trigger particular behaviors.

Global Psychological Capital

Having a sufficient stock of global intellectual capital is only one componentof global mindset. Having knowledge and understanding global issues areimportant attributes of effective global leaders but they do not automat-ically lead to success. Global leaders have the appropriate knowledge butthey also have the appropriate psychological makeup that enables them toput the knowledge to good use. Individuals who are knowledgeable aboutglobal phenomena but lack the required psychological makeup are probablysuccessful global analysts, but they are not global leaders.

Global leaders possess a package of psychological attributes that we callglobal psychological capital. Rooted in positive organizational behavior,psychological capital is defined by Luthans and Youssef (2004) as a set ofstate-like (as opposed to fixed and trait-like) variables that can be developedthrough proactive management and workplace intervention. Luthans andhis colleagues (e.g., Luthans, Youssef, & Avolio, 2007) define psychologicalcapital as an individual’s positive psychological state of development that ischaracterized by: (1) having confidence (self-efficacy) to take on and put inthe necessary effort to succeed at challenging tasks; (2) making a positiveattribution (optimism) about succeeding now and in the future; (3) perse-vering toward goals and, when necessary, redirecting paths to goals (hope) inorder to succeed; and (4) when beset by problems and adversity, sustaining


and bouncing back, and even beyond (resiliency), to attain success (Luthans,Youssef, & Avolio, 2007).

We believe that the above state-like attributes are critical components ofglobal psychological capital. Global leaders need self-efficacy because theyface high levels of ambiguity and challenging tasks in diverse parts of theworld. They need the self-confidence to drive them to meet and face suchchallenges. Optimism and hope are also important parts of global mindsetbecause they energize the global leader to look for and believe in a successfulending regardless of the enormity of the challenge. Resiliency is a criticalcomponent of global mindset because global leaders are more likely to ex-perience failures and to need to continuously readjust and regroup. Resil-iency provides the reservoir of energy to sustain global leaders through theups and downs of complex challenges.

But the above four psychological states are not the only attributes neededfor successful global leadership. Our concept of global psychological capitalis further informed by the extant literature on expatriate success and globalleadership. Table 4 provides a summary of the various components of globalpsychological capital, which consists of positive psychological profile, cos-mopolitanism, and passion for cross-cultural encounters.

Cosmopolitanism refers to a set of psychological attributes that enable anindividual to take a nonethnocentric view of the world (Levy et al., 2007).Cosmopolitan global leaders downplay their own national identity (Levyet al., 2007). They are open and sensitive to other cultures, showing a

Table 4. Components of Global Psychological Capital.

Positive

Psychological Profile

Cosmopolitanism Passion for Cross-cultural and

Cross-national Encounters

Self-efficacy Downplay significance of

nationality

Passion for cultural differences

Optimism Openness and sensitivity to

other cultures and systems

Curiosity about and interest in

other cultures

Hope Positive attitude toward

international affairs

Quest for global adventure

Resiliency Willingness to accept good

ideas regardless of where

they come from

Passion to learn about other

cultures

Willingness to work across time

and distance

Emotional connection to

people from other cultures

Respect for other cultures

Flexibility


willingness to learn about others and a positive attitude toward interna-tional issues and affairs (Spreitzer, McCall, Jr., Mahoney, 1997; Barham &Oates, 1991; Woodruffe, 1993; Javidan et al., 2006). They are able to workacross boundaries of time, location, and distance and to accept ideas re-gardless of where in the global organization they are generated (Derr, Jones,& Toomey, 1988). Finally, cosmopolitan individuals show strong flexibilityand adaptability while working with people from different other parts of theworld (Aycan, 1997).

The third component of global psychological capital is passion for cross-cultural encounters. This characteristic refers to a deep sense of excitementand passion for working with people from diverse cultures (Spreitzer et al.,1997). The challenge of working with diverse individuals and teams is notviewed as just an intellectually stimulating occasion, but also as an emo-tionally enriching experience. Curiosity about other cultures and quest forglobal adventure are also integral parts of global psychological capital be-cause they turn the unknown into an exciting target to pursue rather than afearful state to run away from (Bird & Osland, 2004). They generate astrong passion to learn about other cultures and diverse points of view. Last,global leaders with passion for cross-cultural encounters are able to connectemotionally to people from many different parts of the world and are able togenerate positive emotional energy in them.

To sum up, our notion of global psychological capital consists of a pos-itive psychological profile, cosmopolitanism, and passion for cross-culturalencounters. It is important to point out that while the elements of positivepsychological capital (e.g., self-efficacy, optimism, hope, and resiliency) arepsychological states that can be enhanced, some of the other elements ofglobal psychological capital (e.g., openness and curiosity) may be deeperpsychological traits and attributes and thus not as easily changeable.

Global Social Capital

Social capital is ‘‘the potential value arising from certain psychologicalstates, perceptions and behavioral expectations that social actors form as aresult of both their being part of social structures and the nature of theirrelationships in these structures’’ (Kostova & Roth, 2003, p. 307). In simpleterms, social capital refers to relationships inside and outside the firm. Itreflects ‘‘the ability of actors to secure benefits by virtue of membership insocial networks or other social structures’’ (Portes, 1998, p. 6). According toKidd and Teramoto (1995), social capital is ‘‘know who’’ and is derived

Table 5. Components of Global Social Capital.

Structural Social Capital Relational Social Capital Cognitive Social Capital

Assets based on the position

an individual occupies in a

network and the contacts

that he/she enjoys that

provide him/her with

access to information or

other benefits.

Assets derived from

interactions with others in

the network, rather than

just the structure itself.

For example, relational

social capital includes

beliefs and attitudes such

as trust and

trustworthiness.

Resources providing shared

representations,

interpretations, and

systems of meaning

among parties.


from the network of relationships an individual possesses. It involves beingable to draw on acquaintances as well as the various relationships theseacquaintances possess or have access to. There are three types of socialcapital: cognitive, relational, and structural (Nahapiet & Ghoshal, 1998;Kostova & Roth, 2003) (see Table 5).

Structural capital is based on the position an individual occupies in anetwork and the contacts that he/she enjoys that provide him/her with ac-cess to information or other benefits. People with high levels of structuralsocial capital occupy important positions with connections to a largenumber of individuals. They have the potential to call on these contacts toget access to information and to accomplish action.

Relational social capital includes assets that are derived from interactionswith others in the network, rather than just the structure itself. For example,relational social capital includes beliefs and attitudes such as trust andtrustworthiness (Kostova & Roth, 2003). Relational social capital is the‘‘y capability that arises from the prevalence of trust in a society or incertain parts of it’’ (Fukuyama, 1995, p. 27).

Cognitive social capital is defined as the ‘‘y resources providing sharedrepresentations, interpretations, and systems of meaning among parties’’(Nahapiet & Ghoshal, 1998, p. 224). For example, cognitive social capitalrefers to shared norms, values, attitudes, and beliefs and is therefore moresubjective and intangible than structural social capital.

Global leaders possess high levels of structural social capital because oftheir position within networks both inside and outside of the global organ-ization. They must also possess high levels of relational social capital withan ability to connect to and work with people from other cultures andcountries. Global leaders have the underlying ability to build mutually

PsychologicalCapital

What isthe game?

Individualswho are

capable ofperceiving,analyzing

anddecodingthe globaloperating

environment

IntellectualCapital

Individualswho have a

globalmindset

GlobalLeaderswho are

effective ininfluencing

peoplefrom

differentsocio-

culturalsystems

What arethe rules?

How dowe win?

GlobalCorporations

that aresuccessful

in their differentglobal

markets

Beh

avio

ral

Rep

erto

ire

SocialCapital

Individuals whocan accurately

identify effectivemanagerial action

in the globaloperating

environment

Individualswho possess

thebehavioral

flexibility anddiscipline to

actappropriately

Fig. 2. Global Mindset and Effective Global Leadership.


trusting relationships with people from other countries and cultures.Finally, through cognitive social capital and shared representations andsystems of meaning, global leaders have the capability to generate positiveenergy through their relationships with others to motivate and influencethem.

Integrating the components of our discussion above, an important keyto successful global leadership is global mindset, which is, in turn, made upof three important components: global intellectual capital, psychologicalcapital, and social capital. However, global mindset is a necessary but notsufficient condition for global leadership (Kedia & Mukherji, 1999). Inaddition to a global mindset, effective global leaders must also possess abehavioral repertoire that is appropriate to given cross-cultural and/orcross-national contexts and have the ability to execute the appropriatebehaviors effectively (see Fig. 2). Only if mindset can be translated intoeffective behavior can global leaders influence individuals, groups, and or-ganizations (inside and outside the boundaries of the global organization)representing diverse cultural/political/institutional systems to contribute to-ward the achievement of the global organization’s goals and ultimately itssuccess.


DEVELOPING GLOBAL LEADERSHIP MINDSETS

AND BEHAVIORAL CAPABILITIES

While some aspects of global mindset are genetic (cognitive complexity islargely determined at birth, for example), individuals and organizations candevelop global psychological, intellectual, and social capital in a variety ofways. The speed with which individuals and organizations can cultivate aglobal mindset is driven by four factors (Govindarajan & Gupta, 2001, p. 126):

�
curiosity about the world and a commitment to becoming smarter abouthow the world works,
�
exposure to diversity and novelty, � an explicit and self-conscious articulation of current mindset, and � a disciplined attempt to develop an integrated perspective that weavestogether diverse strands of knowledge about culture and markets.
Employee selection and recruiting from diverse sources worldwide sup-port the development of a global mindset. Global firms need to draw from awide pool of candidates worldwide. A company that restricts itself to hiringcandidates that are only of a certain nationality, gender, or background willbe at a disadvantage because such practices decrease the pool in which tofind candidates who are cognitively complex and cosmopolitan.

In addition, to increase curiosity about the world and understanding ofhow the world works, as well as exposure to diversity and novelty, formaleducation, cross-border teams and projects, diverse locations for meetings,foreign experience, and expatriation are the most commonly used andeffective tools in MNCs (e.g., McCall & Hollenbeck, 2002). To understandone’s current mindset and to develop and integrate different perspectivesabout culture and markets, the tools of meritocracy, global ownership, de-fining core organization values, job rotation, and creating social ties acrosslocations are critically important (Govindarajan & Gupta, 2001).

Networking and collaborative opportunities can also help to create a glo-bal mindset and effective global leadership repertoires and behaviors. Globalteams can be used as effective collaborative coordination tools to help de-velop a global mindset and hone global leadership skills. Staffing teams withmembers from diverse countries, backgrounds, and functional specialties canhelp members appreciate and understand multiple perspectives on challengesand opportunities faced by the firm and provide valuable practice fields. Inaddition, cross-national communities of practice, knowledge networks, andglobal meetings can all play an important role in exposing employees to


different ways of thinking and diverse sources of information and can help tofoster a global mindset and global leadership competencies.

Challenging experiences and working in a context in which one has noprevious expertise are the best ways of inspiring people to learn (McCall &Hollenbeck, 2002). In an international context, they also serve to stretchpeople’s minds beyond narrow domestic barriers and create a more complexmental map of the world (Black & Gregersen, 2000). Accepting challengingassignments involves setting priorities or making sacrifices, depending onone’s perspective. From their survey of 101 global executives, McCall andHollenbeck (2002) found that the single event that produced the most les-sons for leadership was turning around a business. Thirty-five percent ofleaders found turnarounds to be the most difficult, challenging, and pow-erful learning opportunities in their lives. The second most powerful expe-rience cited was culture shock (29%), while career shifts accounted for 21%.These are both perspective-changing leadership experiences outside the per-son’s area of expertise. Special projects, consulting roles, and staff advisoryjobs were also of high importance (24%) to leaders’ learning.

Despite the expense and the time required, there is every indication fromresearch that direct cross-cultural and cross-national experience is the bestteacher (e.g., Javidan et al., 2006; McCall & Hollenbeck, 2002; Black &Gregersen, 2000). Career-path planning and international assignments helpdevelop global mindset and global leadership competencies. A career pathshould provide for recurring local and global assignments and the ideal careerpath should alternate between local, global, local, and again global assign-ments. For example, SmithKline Beecham follows a policy that requires can-didates for senior management positions to have a ‘‘2+2+2’’ experience, i.e.,hands-on experience in two businesses, in two functions, and in two countries.With each new assignment these managers broaden their perspectives andestablish informal networks of contacts and relationships (Paul, 2000, p. 197).

At the same time, learning from experience in an unfamiliar context maybe particularly difficult, since the cues people give about areas of conflict orto indicate the existence of a problem vary from one culture to another, asdoes the way in which they provide feedback. As individuals have cross-national and cross-cultural experiences, it is critical that they are able to stepback, reflect, and learn quickly, deeply, and well from their experiences sothat they can apply this new knowledge and insight to future experiences.Those who have the capability to expose themselves to challenge and thenlearn quickly from it have been shown to have the greatest global leadershippotential (McCall & Hollenbeck, 2002). One way to enhance learning andbuild psychological capital as well as effective global leadership behaviors is


through facilitated reflection and reframing. Building on preliminary workat the Gallup Leadership Institute at the University of Nebraska, whichindicates that microinterventions can be used to develop and change par-ticipants’ psychological capital through cognitive, emotional, and behavioralprocesses by enhancing individuals’ staunch view of reality (Luthans, Avey,Avolio, Norman, & Combs, 2007, forthcoming), MNCs can use setbacksand failures as critical learning and development opportunities. Following asimilar process outlined by Luthans et al. (forthcoming), MNCs can set up astructured process for expatriates or those working on global teams and inother global jobs in which individuals first identify recent personal setbacksat work and then write their immediate reactions to the setback. A facilitatorthen elaborates on examples of a staunch view of reality and an ideal re-silient process for mentally framing the setback. Participants then assess therealistic impact of their setback – what is in their control, what is out of theircontrol, and options for taking action. Participants are asked to repeat/practice these new processes on additional personally relevant setbacks atwork to reinforce learned cognitive processes that perpetuate the develop-ment of not only resiliency, but also ‘‘realistic’’ optimism. They are encour-aged to practice anticipating and addressing setbacks associated with thepersonal goals set in the hope-building process or with other events inside oroutside of work. When participants more accurately frame a personal set-back in terms of true impact, control, and options, they not only are moreapt to bounce back quickly from the setback, but may be able to attain levelseven above where they started (Luthans et al., forthcoming).

While there are various ways to enhance leaders’ global mindset, there isone critical universal tool that will improve the success of the many tech-niques and strategies: assessment. Regardless of how a corporation decides todevelop leaders’ global mindset, it needs to use some form of assessment.Without a valid and reliable method to assess the current state of one’s globalmindset, it is difficult, if not impossible, to properly measure and enhanceglobal mindset. Our description and explanation of the three components ofglobal mindset can be a useful first step in creating such an instrument.

CONCLUSION

It is a truism that the world of business is increasingly global. The world isincreasingly flatter (Friedman, 2005), mostly due to technological develop-ments. While the flatter world provides many new opportunities, it alsoprovides a variety of challenges that are driven by the fact that humans


developed and are accustomed to a round world. The challenge to globalleaders is to mobilize global resources to achieve their companies’ ambi-tions. To succeed, they need a new and increasingly critical tool called globalmindset. In this chapter we have defined global mindset, identified its com-ponents and shown how it can help global leaders. Our hope is that ourchapter and the others in this volume will help encourage a more rigorousand scientific approach to decoding such an integral element of globalleadership success and global corporate competitive advantage. At the sametime, much work lies ahead.

ACKNOWLEDGMENT

The research support by the Worldwide ERCR Foundation for WorkforceMobility is thankfully acknowledged.

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LEARNING CULTURES ON

THE FLY

Luciara Nardon and Richard M. Steers

We do not see things as they are, we see them as we are.

– Talmud

Bangalore, India, 5:30 AM. Adhira Iyengar wakes up early, prepares a cup of tea, and

logs onto her computer. As expected, Debra Brown, her business partner in California, is

already logged on. ‘‘Good morning! I have a few questions about your last report and

would like to discuss them with you before I leave for the day.’’ As they finish their

online meeting, Adhira stares at her calendar – it will be a long day. At 10 AM she has a

conference call with Mr. Wu, a client in Hong Kong, about some changes in their service

contract. At 1:30 PM she has a face-to-face meeting with a group of prospective

Australian clients in her office in Bangalore. Before the end of the day, she must finish a

report and e-mail it to Mrs. Sanchez, a partner in Mexico City, and she still needs to

prepare her trip to Berlin coming up next week.

This example from a day in the work life of a busy international managerillustrates how recent technological advancements have pushed both thepace and the complexity of globalization to new heights (Friedman, 2005).Communication technology makes it possible to collaborate – or compete –globally from anywhere in the world, regardless of one’s country of origin orcultural background. As a growing number of organizations establishincreased operations around the world, managers’ exposure to both partnersand competitors from significantly different cultural backgrounds hasincreased at a rate that has surprised both economists and social scientists.The implication of this for managers of all types is clear: Managers with

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LUCIARA NARDON AND RICHARD M. STEERS172

a significant capability to think and understand business relationships froma global perspective will more often than not succeed over those with morelimited nation-based mindsets (Nummela, Saarenketo, & Puumalainen,2004). In this pursuit, the concept of the global mindset is of no smallconsequence.

CHALLENGES OF WORKING ACROSS CULTURES

Developing successful relationships with people from different cultures ischallenging by definition. Several reasons account for this, including peo-ple’s tendencies to have preconceived notions about how the world works(or should work), how individuals behave (or should behave), and whichbehaviors are acceptable (or unacceptable). These ideas are largely influ-enced by our personal experiences and the cultures in which we grew up. Wetend to approach intercultural interactions based on our own perceptions,beliefs, values, biases, and misconceptions about what is likely to happen(Kluckhohn, 1954; Geertz, 1973; Hofstede, 1980, 1991; Trompenaars &Hampden-Turner, 1998; Schneider & Barsoux, 2003; Steers & Nardon,2006). As a result, when we engage in exchanges with people from differentcultures we often find that the consequences of our actions are differentfrom what we expected or intended (Adler, 2002). The results can rangefrom embarrassment to insult to lost business opportunities.

Traditionally, practitioners and scholars have suggested that managersshould deal with cross-cultural conflicts by adapting to the other culture(Earley & Mosakowski, 2004; Earley & Ang, 2003; Trompenaars &Hampden-Turner, 1998; Bennet, 1998). In this regard, academic and man-agement training programs have long recognized a fairly typical pattern ofbehavior and accommodation referred to as culture shock (Chaney &Martin, 1995). That is, new expatriates initially experience stress and anxietyas a result of being immersed in an unfamiliar environment. Over time, theylearn new ways of coping and eventually feel more comfortable living in theculture of the host country. Expatriate managers are able to be effective indealing with people from another country by learning the foreign culture indepth and behaving in ways that are appropriate to that culture (Bennet,1998). For example, a manager assigned to work in France for several yearsis advised to study French language and culture and then begin to makeFrench friends upon his or her arrival in the new location. While thisapproach to training remains popular, we suggest that the increasingintensity and diversity that characterize today’s global business environment

Learning Cultures on the Fly 173

require a new approach. This new approach is forced upon managersbecause, unlike in the past, the new global manager must succeed simul-taneously in multiple cultures, not just one or two (Berthoin Antal, 1995;Adler, 2002; Friedman & Berthoin Antal, 2005). Gone are the days whena manager prepared for a long-term assignment in France or Germany – oreven Europe. Today, this same manager must deal simultaneously withpartners from perhaps a dozen or even two dozen different cultures aroundthe globe. Thus, learning one language and culture may no longer beenough, as it was in the past. In addition, the timeline for developing thesebusiness relationships has declined from years to months – and sometimes toweeks. To us, this requires a new approach to developing global managers.

This evolution from a collection of principally bicultural business envi-ronments to one more integrated and global environment presents managerswith at least three challenges in attempting to adapt quickly to the newrealities on the ground:

1.
Many intercultural encounters happen on short notice, leaving little time to
learn about the other culture. Imagine that you just returned from a week’sstay in India where you were negotiating an outsourcing agreement. Asyou arrive in your home office you learn that an incredible acquisitionopportunity just turned up in South Africa and that you are supposed toleave in a week to explore the matter further. You have never been toSouth Africa, nor do you know anybody from there. What do you do?While there are many books covering the ‘‘do’s and don’ts’’ of cultures,they are typically helpful guides on how to eat or behave politely and saylittle about how local managers behave (Osland & Bird, 2000; Friedman& Berthoin Antal, 2005).

2.
It is often unclear to which culture we should adapt. Suppose that yourcompany has asked you to join a global project team to work in a six-month R&D project. The team includes one Mexican, one German, oneChinese, and one Russian. Every member of the team has a permanentappointment in their home country but is temporarily assigned to work atcompany headquarters in Switzerland for this project. Which cultureshould team members adapt to? In this case, there is no dominant culturalgroup to dictate the rules. Considering the multiple cultures involved, andthe little exposure each manager has likely had with the other cultures,the traditional approach of adaptation is unlikely to be successful. Nev-ertheless, the group must be able to work together quickly and effectivelyto produce results (and protect their careers) despite their differences.What would you do?


3.
Intercultural meetings increasingly occur virtually (using computers or
video conferencing) instead of through more traditional face-to-face con-

tacts. Suppose you were asked to build a partnership with a Koreanpartner that you have never met and that you know little about Koreanculture. Suppose further that this task is to be completed online, withoutany face-to-face communication or interactions. Your boss is in a hurryfor results. What would you do?

Taken together, these three factors demonstrate how difficult it can beto work across cultures in today’s rapidly changing business environment.The old ways of communicating and doing business are simply less effec-tive than in the past. The question before us, then, is how to facilitatemanagement success in such situations. In the remainder of this chapter,we argue that managers need to ‘‘learn how to learn’’ to deal with othercultures and make sense of varied environments (Schwandt, 2005). To thisend, we will discuss how individuals learn from experience (Kolb, 1976;Argyris, 1995) and how these theories and models can be applied tointercultural contexts.

TOWARD A GLOBAL MINDSET: LEARNING

CULTURES ‘‘ON THE FLY’’

In recent years, numerous academicians and global managers have pointedout that, faced with increasing challenges of adapting to a fast-paced, mul-ticultural, and technology-intensive environment, managers need to developwhat has been called a global mindset (Rhinesmith, 1992; Kedia &Mukherjim, 1999; Jeannet, 2000; Maznevski & Lane, 2003; Nummelaet al., 2004). As noted by Javidan, Dorfman, de Luque, and House (2006,p. 68), ‘‘it is insufficient for a manager who is likely to assume, mistakenly,that being open minded in Atlanta, Helsinki, and Beijing will be perceivedidentically, or that walking in someone else’s shoes will feel the same inHouston, Jakarta, or Madrid. Because of the lack of scientifically compiledinformation, businesspeople have not had sufficient detailed and context-specific suggestions about how to handle these cross-cultural challenges.’’Developing a global mindset is one clear way to resolve this deficiency.

In this chapter, we follow Maznevski and Lane’s (2003) conceptualizationof global mindset as the ability to develop and interpret criteria for personaland business performance that are independent of the assumptions of asingle country, culture, or context and to implement those criteria


appropriately in different countries, cultures, and contexts. In other words,global mindset is a cognitive structure or knowledge structure that containsinformation about several cultures and realities (Chatterjee, 2005). Thisknowledge allows managers to interpret situations using multiple culturalframeworks and then select the most appropriate action for each particularsituation (Rhinesmith, 1992; Maznevski & Lane, 2003).

However, while knowing everything about every culture and using suchknowledge in appropriate ways is ideal, in reality achieving this level ofunderstanding is difficult, if not impossible, for at least two reasons: first,learning about another culture from a distance is difficult at best and,second, most managers do not have the time to learn about other culturesand develop a global mindset well before they are asked to be effective.As a result, to develop a global mindset and be effective in the process,managers need to develop the ability to learn how to deal with other cultures‘‘on the fly,’’ that is, to learn enough about the other and his or her culturalbackground in the course of the interaction.

We argue in this chapter that intercultural episodes represent oppor-tunities for interdependent learning in which managers can oftencompensate for knowledge gaps by developing personal mastery(Friedman & Berthoin Antal, 2005). We argue further that developingan ability to learn how to learn about interacting with other cultures andmaking sense of their divergent environments is probably the best strategyavailable for managers who want to succeed in the multicultural reality oftoday’s global business environment (Schwandt, 2005). Finally, we discussbelow how individuals can learn from experience and how individuallearning cycles, if managed correctly, can influence the success of inter-cultural interactions.

INDIVIDUAL LEARNING: EXPERIENTIAL

LEARNING THEORY

According to experiential learning theory, knowledge is created through acombination of grasping and transforming experience (Kolb, 1976; Kolb &Kolb, 2005). The learning process is composed of four stages, which includethe two modes of constructing knowledge: knowledge is grasped throughconcrete experience and abstract conceptualization and transformedthrough reflective observation and active experimentation (Kolb & Kolb,2005). While it may begin in any of the four stages, learning is a process

ConcreteExperiences

Observation &Reflections

Abstract concepts& generalizations

Testing implicationof concepts

Fig. 1. The Experiential Learning Model.


of experience, observation and reflection, abstract conceptualization, andactive experimentation. The experiential learning process is depictedin Fig. 1.

To illustrate how experiential learning theory works, consider the fol-lowing scenario: Imagine that you come from a culture that values directand straightforward communication. As you engage in a conversation withanother individual, you are likely to think that direct questioning is appro-priate and will result in a straightforward answer. Further, imagine that theother individual with whom you are communicating comes from a culturethat values indirect communication and ‘‘saving face.’’ For this persondirect questions are inappropriate and information is exchanged indirectlythrough subtle suggestions and hints. Now, consider that neither of you aresufficiently knowledgeable to adapt your communication styles to fit theother’s culture.

The most likely result of this scenario is that you will ask a direct questionand will get what you perceive as an unsatisfactory response. At this point,you are likely to experience an emotional reaction – discomfort, perplexity,offense, or surprise. The feelings you experience as a result of your actionsare referred to as concrete experience. In other words, it is your emotionalreaction to the results of your actions.

Your experience or feelings may then prompt you to try to understandwhat is happening. You may engage in observation and reflection. Once yourecognize that there is a mismatch between what is happening and what youthought would happen, you observe the other person and try to guess whyhe or she is responding in that way. You may mentally run through a list ofpossible problems: maybe he or she did not hear you, did not understand the


question, does not speak English very well, is shy, is not comfortable withthe question, and so forth. You then search for other clues in his or herbehavior and in the context of the situation that can help explain thebehavior. In other words, you look for additional information that will helpyou make sense of the situation.

This observation and reflection forms the basis of abstract concepts and

generalizations. As you think about it, you develop a theory of what ishappening. In other words, you identify a plausible explanation for thebehavior and are ready to start searching for alternative solutions to yourproblem. Let us suppose that you concluded that your partner is uncom-fortable with your question. The individual’s body language suggests that heor she feels embarrassed to answer. Therefore, you theorize that you shouldpose the question in a different way.

Your newly developed theory will guide future actions you may take todeal with this individual and others from the same culture. As you practicethese new actions, you are testing implications of concepts. You decide, forexample, to formulate your question in a different way, you observe theresults, and start a new learning cycle. The cycle continues until you are ableto identify successful behaviors.

Learning through experience is a process of trial and error in which weperceive a mismatch, reflect on it, identify solutions, and initiate new be-haviors. When we identify successful behaviors, we incorporate them intoour theories of how to behave. The next time we engage in a similarsituation, we draw on our latest theory for guidance (Kolb & Kolb, 2005;Hogan & Warrenfeltz, 2003).

As the circular pattern of experiential learning theory suggests, we maystart our learning process at different points of the cycle, depending on thesituation and our learning preferences (Kolb & Kolb, 2005). For instance,some people have a preference for abstract concepts and generalizations,preferring to go to the library and read about the other culture prior toengaging with its members. These individuals will strive to develop a theorybeforehand and will improve their theory in the course of the interaction.Others have a preference for observation and may choose to watchforeigners interacting prior to engaging with them. In other words, they willfine-tune their theories based on their observations. Still others may preferto jump into the situation without prior exposure and draw on their feelingsto decide how to behave.

Given our individual preferences for some learning abilities, we tend toemphasize some learning opportunities over others (Kolb & Kolb, 2005).When we rely exclusively on the set of preferred abilities, our capability to


learn from situations that do not draw on them decreases. As the circularmodel suggests, individuals that are able to utilize the four types of abilitiesare better equipped to learn in the complex environment of interculturalinteractions.

INTERDEPENDENT LEARNING: THE

INTERCULTURAL INTERACTION

LEARNING MODEL

While experiential learning theory has remained one of the most influentialtheories of management learning (Kayes, 2002, p. 137), it has been criticizedfor its failure to account for the social aspects of learning (Holman, Pavlica,& Thorpe, 1997). Kayes (2002) addresses this concern, arguing that concreteexperience is manifested in an emotional state of need, which becomes aninternalized representation through observation and reflection. He relatesabstract conceptualization to identity, which serves to organize experienceand equates active experimentation to social interaction through whichexperiences arise.

Building upon these ideas, the intercultural interaction learning model

focuses on two or more individuals who are simultaneously experiencingproblems, reflecting on them, theorizing about them, and engaging in newcorrective actions. In other words, the learning process is interdependentand interactive, not independent or linear (Thomas, 2006; Kayes, 2002;Schwandt, 2005). The learning of one party leads to an action that willinfluence the learning of the other party and so forth. This interdependenceis illustrated in Fig. 2.

action actionReflect

ConcreteExperience

ConcreteExperience

Reflect

Developnew theory

Developnew theory

Fig. 2. The Intercultural Interaction Learning Model.


Ideally, as these individuals’ learning processes interact, better ways ofcommunicating are created. However, if learning is short-circuited, therelationship suffers, and the interaction fails. For instance, if after askinga question and receiving an unsatisfactory answer the person does notstop to observe the other party and reflect on his or her behavior, he orshe may engage in actions that are detrimental to the relationship. In sum,an effective intercultural interaction is the result of a successful interde-pendent learning process, in which two or more parties learn to worktogether.

In our view, an intercultural interaction is an opportunity for interde-pendent learning in which individuals both learn about the other’s cultureand negotiate effective ways of relating to one another. Building on previouscommunication research we suggest four main areas that need to be nego-tiated: identities, meaning, rules, and behaviors. Each of these negotiatingactivities is based on a specific learning ability: (1) the ability to negotiate

identity draws on the ability to engage in concrete experiences; (2) the abilityto negotiate meaning builds on the ability to reflect and observe; (3) theability to negotiate new rules is based on the ability to develop new theories;and (4) the ability to negotiate new behaviors is based on the ability to takeactions. Fig. 3 integrates individual-level processes with interaction-levelprocesses.

Negotiateidentity

Neg

otiate

mean

ing

Neg

oti

ate

beh

avio

rs

individual

interaction

Take action

ExperienceResults

Reflect

Developnew theory

Negotiatenew rules

Fig. 3. The Interaction Negotiation Process.


Negotiating Identity

An individual’s identity is the set of attributes that are central, enduring, anddistinctive about an individual (Ashforth & Mael, 1989). In other words,identity is the answer to the question, ‘‘Who am I?’’ Identity is constructedthrough social interactions, whereby individuals create categories and definethemselves in relation to others. This process of categorization influencesnot only how individuals position themselves in relation to others, but alsohow people act and feel about the interactions. Our own identity or self-image is closely linked to our interpretations of reality (Schwandt, 2005).In other words, we make sense of the world based on how we see ourselves.Social identification theory suggests that one’s actions will be congruentwith one’s identity. Individuals tend to engage in activities that are harmo-nious with their self-concept and to support institutions that embody theiridentities (Ashforth & Mael, 1989).

It is for this reason that intercultural interactions are potentially chal-lenging. When we engage with others from a different cultural background,our assumptions, values, and beliefs may be questioned. Our perceptionsabout who we are, our competence, our status, and our self-worth may bechallenged. An intercultural interaction is likely to produce strong feelingsassociated with our own identity and how we expect to be treated. For thesefeelings to be positive, individuals must engage in a process of identitymanagement or negotiation (Ting-Toomey, 1988).

The importance of negotiating identity in cross-cultural conflicts has beenrecognized in the intercultural relations literature (Rothman & Olson, 2001).According to this body of knowledge, conflicts of interests among differentgroups or individuals are projected on the basis of identity, and differencesin international conflicts must involve a resolution of the parties’ identities.Rothman (1992) suggests that dealing with international conflicts requiresfirst dealing with oneself through reflexive dialogue. In other words, itrequires addressing how the issue is reflected ‘‘inside’’ one’s mind and howone’s identity is challenged or threatened by it.

Negotiating identity is particularly important in situations in which oneculture is perceived to be in a more powerful position than the other. Forinstance, in global business acquisitions, the managers from the acquiringcompany are generally more powerful, have greater status, and may try toimpose the ‘‘right’’ way of doing things on the people from the acquiredcompany. Individuals from the less powerful group may find that theirculturally based assumptions and values are criticized and consideredinappropriate and may feel that their own sense of self is being challenged.


In other words, their position in the social environment is decreased. Forinstance, a Spanish manager may consider that arriving 30min late to ameeting is normal and acceptable. However, the manager of the recentlyacquired Polish company may see this as a sign of disrespect and a sign thatshe is no longer important to the organization. Having one’s identitythreatened may close off communication, impede learning, and eventuallycompromise the success of the interaction. Unless both parties can negotiatean acceptable identity for themselves, the interaction is likely to fail.

The process of identity negotiation involves two identities – our own andthe other’s identity (Imahori & Cupach, 2005). For an intercultural inter-action to be successful, we need to be able to preserve a satisfactory identityfor ourselves while at the same time respecting and preserving the other’sidentity.

To preserve our own identity, we need to develop self-awareness (Cant,2004; Adler, 2002). Self-awareness refers to understanding who we are, whatour values are, and what our place in the social interaction is. In otherwords, we need to understand that we are complex cultural beings and thatour values, beliefs, and assumptions are a product of our cultural heritage.When we understand that who we are is heavily influenced by our owncultural experiences, we are better equipped to separate our sense of worthfrom the situation. For example, the Polish manager above may think ‘‘As aPolish manager, I do not like to wait,’’ rather than ‘‘Only people that are notimportant are kept waiting.’’ The first statement preserves her identity, thesecond challenges it.

To preserve the other’s identity, it is important to develop empathytoward the other. Empathy refers to the ability to identify and understandthe other’s feelings and motives. In other words, empathy suggests anunderstanding that the other is also a complex cultural being and that theiractions – like ours – are a product of deep-seated cultural values and beliefs(Friedman & Berthoin Antal, 2005). In other words, when there is a mis-understanding, managers with a global mindset tend to search for a culturalexplanation for the other’s behavior, before judging the other party’sbehavior. For example, suppose you had asked your Egyptian counterpart ifan important report would be ready today, and he had answered yes but didnot deliver it. Instead of judging him based on your own culture (perhapssuggesting that he is not dependable, trustworthy, or competent), youempathize with him on the grounds that his behavior is also a product ofculture. Maybe he indirectly told you that he could not finish the report, butyou did not understand. Maybe your request was not appropriate or timeexpectations were not clear. Therefore, you assume that he is acting


consistently with his own cultural rules even though you do not understandthem. You then proceed to try to understand what happened, trying toidentify a possible miscommunication. Managers that are open-minded andwilling to suspend judgment are more likely to be successful. Skilled man-agers empathize with others, not based on shared values and assumptions,but based on the common fact that we are complex cultural beings andbehave in accordance to a complex web of cultural values and beliefs.

In summary, to negotiate identities effectively we need to understand thatwe are cultural beings. We need to know our own values and assumptionsand their relationship with our own culture. We also need to empathize withthe other, knowing that he or she is also influenced by culture even if we donot know what it means. With this in mind, we can negotiate acceptableidentities in which our own and the other’s sense of self is preserved. Whenour sense of self is preserved, our feelings in the interaction are more likelyto be positive and it becomes easier to continue with the learning experience.

Negotiating Meaning

Meaning refers to the interpretation we give to things. For example, whatdoes signing a contract really mean? For some cultures a contract means theend of a negotiation, for others it means the beginning of a relationship.New assignments of meaning are based on current and past experience.Jointly understood meaning is constructed through interaction, as individ-uals exchange information (Berger & Lukeman, 1966). Therefore, when twoindividuals from different cultures interact, they are likely to start withdifferent understandings about the meaning of the concrete thing they aretalking about (for example a contract). However, to be effective, they willneed to arrive at a common understanding of the issue. Friedman andBerthoin Antal (2005) refer to this idea as ‘‘negotiating reality.’’ Whereas webuild on their ideas, we prefer to call this process negotiating meaning, aswe believe ‘‘reality’’ is a broader term that involves identities, rules, andbehaviors, discussed in other parts of this chapter.

Meaning cannot be transmitted from one person to another, onlymessages are transmitted (Gudykunst, 1998). When we send a message toanother we attach certain meaning to it, based on our interpretation of theissue, ourselves, and the other. When others receive our message, they attachmeaning to it based on their interpretation of the issue, the message, them-selves, and ourselves. For example, when you say, ‘‘I am glad we were ableto sign a contract,’’ you may mean ‘‘I am glad the negotiations are over and


I can go back to business.’’ However, your Asian counterpart may hear‘‘I am glad we agreed to start a relationship and will continue the nego-tiations for a long time to come.’’ A common meaning must be constructedfor this interaction to be effective.

Meaning is constructed through interaction, as individuals exchangeinformation. Negotiating meaning involves uncovering hidden culturalassumptions, becoming aware of how culture shapes perceptions, expecta-tions, and behaviors for all parties involved. Friedman and Berthoin Antal(2005) suggest that to negotiate meaning effectively individuals must engagein two behaviors: inquiry and advocacy. Inquiry refers to exploring andquestioning one’s own reasoning and the reasoning of others. In other words,individuals strive to create and accept a new, commonmeaning, by asking thefollowing questions: How do I/you perceive the situation? What do I/youwish to achieve in this situation?Which actions am I/are you taking to achievethis goal? Inquiry requires suspending judgment, letting go of a previousunderstanding, and tolerating uncertainty until a new understanding may becreated. Advocacy refers to expressing and standing for what one thinksand desires. Advocacy suggests stating clearly what you think and wantand explaining the reasoning behind your view. When individuals combineinquiry with advocacy they share information about their cultural assump-tions, the meanings they associate with the issue, and the reasoning behindtheir thinking. This sharing of assumptions and interpretations creates thebasis for a new, mutually acceptable meaning to emerge.

Engaging in inquiry and advocacy is challenging because it requiresuncovering our own perceptions, exposing ourselves, being open to listen tothe other’s perception, and being willing to give up the safety of our ownprevious interpretations for a new culture-free interpretation to emerge.To make matters worse, cultural-based preferences also influence howindividuals may go about doing this (Saphiere, Mikk, & DeVries, 2005). Forexample, in some cultures, individuals prefer to express themselves usingopen and direct communication, whereas in other cultures individuals arelikely to share their assumptions indirectly, making it difficult for directcommunicators to fully understand (Hall, 1959, 1981). Some indirect com-municators may even feel uncomfortable with direct questioning of theirassumptions, which could potentially close communication even further.Additionally, culturally based preferences may suggest circumstancesin which inquiry and advocacy are more likely to be successful. In somecultures it may be during formal meetings, in other cultures it may be late atnight over drinks, still in others it may be through informal one-on-oneconversations.


Therefore, to negotiate meaning, individuals must gather information inseveral different ways, relying on the context, body language, subtle cues,and messages. These abilities rely heavily on learning skills associated withobservation and reflection: information gathering and analysis (Yamazaki &Kayes, 2004). Information gathering refers to the ability to collect infor-mation through various means to understand the point of view of others.Competent managers gather information by observing context, bodylanguage, face expression, and other behavioral cues; listening to what isbeing communicated; and asking questions when appropriate and in a waythat is appropriate. Information analysis refers to the ability to interpret thisinformation in light of what is being discussed, the people involved, andthe context in which the interaction is happening.

In summary, negotiating meaning requires the ability to explore what liesunder the surface of the cultural iceberg by asking questions when appro-priate, observing others, testing assumptions, and stretching frames ofreference. It requires the ability to gather and analyze information fromvarious sources.

Negotiating New Rules

Once individuals agree on acceptable identities and meanings, they need tofocus their attention on developing or negotiating new rules that will informtheir relationship in the future. These rules are akin to theories of action(Argyris, 1995) and over time create a common context. For instance, theyneed to establish rules about acceptable behaviors regarding time. How lateis too late? Managers may agree that, for instance, 15min is not consideredlate, but that further delays should be avoided – or at a minimum deserve anapology. Alternatively, they may agree on a more clear specification of timewhen making appointments: 8:00 AM Mexican time means that delays areexpected, while 8:00 AM American time means that punctuality is expected.These rules should cover the most important cultural obstacles to the suc-cess of the relationship, whether they are about time, use of titles, style ofcommunication, or any other thing.

Over time, these rules will equate to a new shared culture (Casmir, 1992;Klimoski & Mohammed, 1994; Adler, 2002; Earley & Mosakowski, 2000)for the individuals involved. Sometimes, this culture is a combination of theseveral cultures involved, sometimes it is based on an overlapping culturesuch as the organizational, functional, or professional culture. At othertimes, it is possible to create a culture that is unlike any other, but that is


acceptable to all. Finally, there are times in which one of the parties willembrace the other’s cultural rules and adopt the other’s culture as their own.This last scenario is more common when one of the parties has been exposedto the other’s culture for a long time and can adapt. To develop new rules,managers must develop the learning skills associated with integration andtransformation of information (Kayes, 2002; Yamazaki & Kayes, 2004).

Integration of information refers to the ability to assimilate all the in-formation gathered in the negotiating meaning stage into a coherent theoryof action. For example, you noticed that your counterpart looked annoyedwhen you answered the phone during a meeting, you noticed that he turnedhis cell phone off, and you noticed that he signaled to the secretary thathe should not be interrupted. You integrate all these disparate piecesof information into one theory – your counterpart does not appreciateinterruptions.

Transformation of information refers to creating a theory of action basedon the information you have. Continuing with the interruption example,you transform your theory about the other into a theory about what youshould do – you should avoid interruptions that are not important andalways apologize for any interruption that might occur. As these behaviorstake place, rules are adjusted and fine-tuned.

In summary, to develop new rules, or common theories of action, man-agers need to develop the analytical skills to integrate and transform in-formation.

Negotiating New Behaviors

Finally, once individuals develop new theories of action and agree on acommon set of cultural rules to guide the interaction, they need to completethe learning loop by negotiating new behaviors. For example, if the nego-tiated rule is that delays of more than 15min should be avoided, you mustlearn to engage in a new set of behaviors that will allow you to control time,prioritize things differently, and arrive on time. Or, perhaps the new rulesuggests that direct communication should be avoided, in which case youwill need to learn to engage in a communication style that is more indirect,subtle, and diplomatic.

Engaging in new behaviors requires high levels of behavioral flexibility,that is, the ability to engage in different behaviors, being able to switchstyles and accomplish things in more than one way (Thomas, 2006). Forsome individuals it is easy to engage in some behaviors but not others (Kolb,


1976; Kolb & Kolb, 2005). Successful managers are able to recognize whichbehaviors are challenging for them and compensate with other behaviors.For instance, for some individuals it is very difficult to communicate in-directly. They recognize this limitation and, to compensate for it, search foropportunities to discuss issues one-on-one – where embarrassment isavoided – and preface their direct statements with an apology.

Additionally, competent managers need to be mindful of themselves, theother, and the interaction (Thomas, 2006; Thomas & Inkson, 2004). In otherwords, they are constantly paying attention to what they are feeling anddoing, what the other is doing, and how the other reacts to what they sayand do. In the process of learning about the other and testing ways tointeract, individuals are aware of their own behavior and the effect of theirbehavior on others.

In summary, negotiating behavior implies the ability to engage in newbehaviors that are consistent with negotiated rules, meanings, and identities.It also implies constant mindfulness, or attention, to what is happening inthe interaction.

PUTTING IT ALL TOGETHER

Dealing with foreign partners and competitors is increasingly unavoidable.As the examples throughout this chapter suggest, the realities of today’sglobal environment imply that managers often need to do business in severalcountries and deal with several cultures simultaneously. While the examplesin this chapter may suggest easy solutions – e.g., when dealing withSpaniards, know they will be late – the reality of intercultural encounters isconsiderably more complex for several reasons: First, individuals are ofteninfluenced by multiple cultures – national, regional, organizational, func-tional, and professional (Schneider & Barsoux, 2003; Friedman & BerthoinAntal, 2005). Second, in no country are the people monolithic in theirbeliefs, values, and behaviors. People are different, despite having the samecountry of origin. Third, our business counterparts are also learning how todeal with foreigners and may deal with us in ways that are not typical oftheir own culture. And finally, culture itself is very complex and may seemparadoxical for an outsider (Bird & Osland, 2003). For this reason,simplistic categorization of cultures may provide helpful explanations ofbehavior, or good first guesses (Adler, 2002), but they are not goodpredictors. If there is a persuasive argument for developing a global mindset,this is it.

Negotiateidentity

Negotiate

meaning

Neg

otia

tebe

havi

ors

Negotiatenew rules

Information Integration &Transformation

Fig. 4. Learning Skills for Intercultural Competence.


To succeed in such a reality, managers are encouraged to develop learningskills that will allow them to learn how to succeed in each interaction byuncovering cultural assumptions and learning how to deal with them. Theselearning skills are summarized in Fig. 4. The manager in our openingexample has to deal in one day with four or five different cultures. It wouldbe difficult for her to acquire fluency in these cultures, while sitting in heroffice in Bangalore. Instead, she needs to develop learning skills that willcompensate for cultural knowledge gaps, helping her to negotiate herinteractions.

We have argued that intercultural interactions involve four types ofnegotiation relating to identities, meaning, rules, and behaviors. The nego-tiation of identities relies on strong self-awareness and empathy, so theemotional experience is managed and the learning experience can proceed.The negotiation of meaning relies on information gathering and analysis,which uncovers a new basis of information from which new meaningscan be created. The negotiation of rules relies on an individual’s ability tointegrate and transform information into new theories of action. Finally, thenegotiation of behaviors relies on behavioral flexibility and mindfulness withwhich managers are able to engage in alternative behaviors according toeach situation.


The prospect of dealing with others from different cultural backgroundscan be very challenging, but at the same time very rewarding. Interactingwith others brings the possibility of learning more about ourselves, discov-ering new ways of doing things, and finding creative solutions to both newproblems and old. It also contributes in no small way to business success.In developing this global mindset, intercultural learning processes play asignificant – and often underappreciated – role.

ACKNOWLEDGMENTS

The authors thank Kathryn Aten, Santiago Garcia, Michael Hitt, andMansour Javidan for their helpful comments on an earlier draft of thischapter.

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ON BECOMING A GLOBAL

MANAGER: A CLOSER LOOK

AT THE OPPORTUNITIES

AND CONSTRAINTS IN

THE 21ST CENTURY

Rabi S. Bhagat, Harry C. Triandis, B. Ram Baliga,

Tejinder K. Billing and Charlotte A. Davis

During the first decade of the 21st century, various multinational and globalcompanies began the process of cultivating stronger global orientations insenior managers and the upper echelons of the organization. This is a rel-atively new phenomenon. Empirical research on the validity of the globalmindset is just beginning to develop (Boyacigiller, Beechler, Taylor, & Levy,2004). A number of leading textbooks are also beginning to offer a com-prehensive description of the aptitudes and skills that a global managershould possess. To this trend, the notion of a global mindset has been ad-vanced (Boyacigiller et al., 2004; Govindarajan & Gupta, 2001; Osland, Bird,Mendenhall, & Osland, 2006; Paul, 2000; Bartlett, Ghoshal, & Beamish,2007; Rhinesmith, 1993).

What precisely does this concept of ‘‘global mindset’’ connote? In itsessence, does it involve senior managers thinking primarily in global termsand painstakingly learning to abandon the multinational mentality

The Global Mindset




ISSN: 1571-5027/doi:10.1016/S1571-5027(07)19008-2

191

dx.doi.org/10.1016/S1571-5027(07)19008-2.3d

dx.doi.org/10.1016/S1571-5027(07)19008-2.3d

RABI S. BHAGAT ET AL.192

(Perlmutter, 1969)? Govindarajan and Gupta (2001) noted that some mul-tinational companies feel constrained by the economic situations and gov-ernmental regulations in the countries of their origin in their efforts todevelop global managers. The gap between economic, strategic, and tech-nological requirements for going global and functioning in the domestic ormultinational mode can be considerable and poses obstacles for developinga global mindset. Partly because of this, there has been limited attentiongiven to the various antecedents that might facilitate the growth of a globalmindset and, indeed, develop global managers. However, the situation isconsiderably different today, and as we begin to understand the dynamics ofthe growth of global companies in the BRIC (Brazil, Russia, India, andChina) economies and other emerging economies in Asia, Latin America,and even Africa, there is a need to address the issue of developing a globalmindset and global managers. The degree of environmental complexity (inthe domains of international marketing, strategic considerations, techno-logical and knowledge management issues, etc.) that an organization is re-quired to deal with is typically the best predictor of a global mindset. In thischapter our objectives are as follows:

1.
advance an integrative framework that depicts the evolution of a globalmindset in the interactive context of industry-specific, organization-
specific, and person-specific antecedents, which are largely responsible fordeveloping a global mindset;

2.
underscore the importance of cultural variations that a multinational orglobal organization needs to be concerned with as providing the over-arching context for understanding the emergence of a global mindset;
3.
provide a list of the opportunities and constraints on the path to be-coming a global manager;
4.
discuss the implications by emphasizing the importance of a meso (mul-tilevel) framework for future theory building and empirical research inthis area.
A global mindset has been defined in two different ways as:

y the ability to develop and interpret criteria for personal and business performance

that are independent from the assumptions of a single country, culture, or context: and

to implement those criteria appropriately in different countries, cultures, and contexts

(Maznevski & Lane, 2004, p. 4);

y one that combines an openness to and awareness of diversity across cultures and

markets with a propensity and ability to synthesize across this diversity. (Govindarajan

& Gupta, 2001, p. 111)

On Becoming a Global Manager 193

While these two definitions reflect the concept of a global mindset well, theydo not capture the essence of interactions among various environmental,organizational, and personal domains that global managers are required todeal with on an ongoing basis. The definition that we propose is as follows:

Global managers are those individuals who successfully manage the ongoing interactions

between industry-specific, organization-specific, and person-specific factors that are

present in their work lives. They do so both efficaciously and effectively in the cultural

contexts of their origin as well as in other diverse cultures with whom they must interact.

ANTECEDENTS OF A GLOBAL MINDSET

The schematic diagram shown in Fig. 1 suggests that a global mindsetevolves in the cultural context of industry-specific, organization-specific, andperson-specific antecedents that are salient in the context of the globalmanager and the environment in which he or she functions. Taken clock-wise, we discuss the relevance of various factors that comprise these threeimportant domains and how these domains interact with the overarchingcultural contexts salient in the domestic as well as in the international busi-ness environment. In Table 1, we present the various factors in industry-specific, organization-specific, and person-specific domains that either

Industry

SpecificAntecedents

OrganizationSpecific

Antecedents

PersonSpecific

Antecedents

GlobalMindset

Cultural Context

Cultural Context

Fig. 1. A Schematic Diagram Depicting the Evolution of a Global Mindset in the

Interactive Context of Industry-Specific, Organization-Specific, and Person-Specific

Antecedents.

Table 1. Factors that Facilitate and Constrain the Developmentof a Global Mindset.

Opportunities Constraints

Industry-specific Rapid pace of globalization

Fast product life cycle

Creation of economic trade

blocks that facilitate cross-

border commerce

Uniform practices in global

marketing and product

standardization

Effective government

interventions

Slower pace of globalization or no

globalization

Slower product life cycle

Limited opportunity for cross-

border commerce

Rigid patterns of global marketing

Centralized economies and

autocratic government

intervention

Organization-specific Administrative heritage that

facilitates rapid globalization

Strategic leadership

Effective monitoring of

organizational clients

Horizontal coordinating

mechanisms

Effective knowledge

management systems

Weak administrative heritage

Lack of strategic vision at the top

Ineffective linkages with

organizational clients and low

responsiveness

Vertical coordinating mechanisms

Lack of knowledge management

systems

Person-specific Cosmopolitan orientation

Cognitive complexity

Cultural intelligence

Emphasis on nonjudgmental

and universalistic modes of

thinking

Supportive network of family

and friends

Local orientation

Cognitively simple ways of

interpreting the world

Lack of cultural intelligence and

competencies

Emphasis on judgmental and

particularistic thinking

Lack of supportive network


facilitate (provide opportunities) or hinder (act as constraints) the develop-ment of global mindset and global managers.

Industry-Specific Antecedents

In 2005, the combined output of emerging economies reached an importantmilestone. It accounted for more than half of the gross domestic product ofthe world, when adjusted for purchasing-power parity. These developingcountries, China in particular, have a far greater influence on the economicperformance of the major multinational and global corporations of the G7countries than is generally assumed. The Economist (September 16–22,


2006), in a survey of the world economy, noted that the time to be surprisedby such developments is gone. The emerging economies are driving globalgrowth on an unprecedented scale and are having a major impact on eco-nomic indices such as the rate of inflation, interest rates, wages, and theprofits of corporations. The Economist also noted that as these emergingeconomies (Brazil, Russia, India, China, i.e., the so-called BRIC economies;Mexico; Poland; etc.) get more integrated into the global economy and theWorld Trade Organization (WTO) and per capita incomes of citizens ofthese countries rise up to the level of developed countries (e.g., UnitedStates, United Kingdom, Germany, Japan, France, Sweden, Denmark, andFinland), they will provide the largest push to the world economy since theonset of the Industrial Revolution in the early part of the 20th century.

The need for a global mindset is clearly heightened if the industry in whichthe firm is competing is evolving into a global one. Yip (2003) delineated theimportance of the following drivers that determine the likelihood that anindustry will become global.

Market drivers: Converging consumer needs and preferences in diverseparts of the world coupled with implementation of effective channels ofdistribution facilitate the globalization of markets (Leavitt, 1983). Rapidgrowth of China and India in the 1980s, 1990s, and 2000s has createdunprecedented opportunities on a global scale. Business Week (August22–29, 2005b), in a comprehensive coverage of what global organizationsneed to know about these two countries, focused a great deal on the role ofcreative marketing of products and services. In a related vein, Shenkar(2004), in describing the rise of China as a global economic power, discussedthe various challenges to management and marketing that lie ahead forUS-based multinational organizations.

Cost drivers: The steady pace of globalization in some industries hasgreatly affected the capacity of many organizations to set prices for theirproducts and services. International diversification, through which a firmincreases the sales of products and services in the international context (Hitt,Tihanyi, Miller, & Connelly, 2006) also increases cost-related concerns.Coupled with these developments, shorter product and technology life cyclesintensify R&D costs. What makes situations more complex is that increasesin research and development costs occur when the firm is experiencing sig-nificant declines in market share. General Motors (GM) is a good case inpoint. In an article entitled, ‘‘Why GM’s Plan Won’t Work; and the UglyRoad Ahead,’’ Business Week (May 9, 2005a) discussed the relevance ofhow large global corporations get entrapped into these kinds of cost-drivensituations. Managers of multinational and global corporations such as GM


need to be more responsive to differences in country costs, economies ofscope, economies of scale, and learning and experience curve-related effects.Insights into these processes are critical for international competitiveness.The process of developing better insights facilitates the development of aglobal mindset and global managers.

Institutional drivers: The national governments of over 100 countries whoparticipate in the WTO are devising policy changes that have profoundimplications for competitiveness as well as survival of global organizations.Also, other institutions, including nongovernmental organizations (NGOs),create various situations that facilitate or hinder development of globalcommerce. Recent concerns about the adverse affects of globalization (seeStiglitz, 2002; Kiggundu, 2002) have been addressed in various trade talks,such as the Doha Round of the WTO in Qatar and the summit ofG8 countries in Edinburgh, Scotland. Along with these summits, there is aworldwide movement leading to removal of visible and not so visible bar-riers for transnational commerce. This facilitates the growth of global cor-porations and the development of a global mindset – especially the kind thatenables senior managers to effectively scan, interpret, and utilize informa-tion inherent in the institutional environments.

Competitive drivers: Many global organizations are increasingly central-izing the activities of subsidiaries located in dissimilar cultures of the world.This enables them to obtain new sources of competitive advantage (i.e., lowercosts of production, lower factors costs, and seamless cross-border transferof organizational knowledge) and leads to further globalization (Yip, 2003).

MNCs that concentrate their activities either in the domestic market or ina region close to their headquarters become vulnerable to global competition(Kiggundu, 2002). To become less vulnerable, these organizations discovercreative ways of encouraging their senior managers to be more aware of thevarious economic, market, and technological trends that develop in theworld, thus facilitating the process of becoming global managers.

In his keynote address to the Academy of International Business (AIB,June 23, 2006) annual conference in Beijing, China, Jagdish Sheth, the notedscholar of global marketing, discussed the tremendous growth of what hetermed the ‘‘Chindia’’ region of the world economy. Comprising China andIndia, this Chindia region is well on its way to becoming the largest eco-nomic region in the world by the year 2020 (Business Week, August 22–29,2005b; Sheth & Sisodia, 2006). Sheth noted that by the time Western mul-tinationals develop a 20/20 vision of the various opportunities and con-straints that lie in the global marketplace, these countries will be powerfuleconomic blocks in what is being termed as the Asian century.


In fact, recent analyses suggest that China is not necessarily the majorcause of the American incurred deficit with the rest of the world. Considerthe following: China’s current account surplus with America is around$100 billion of a likely deficit of $900 billion. In other words, as The Econ-

omist (July 30–August 5, 2005) put it, the deficit that Americans experienceis ‘‘Made in America’’ and not in China. Relatively low to moderate globalorientation of US managers is often regarded as one of the major causes forlosing market share and competitiveness.

It takes a different type of manager with an intricate sense of the complexunderpinnings of the world economy (especially in the emergent economiesand developing regions of the world, such as Chindia) to be successful intoday’s global marketplace. To operate successfully in an interconnectedand partially globalized world (Leung, Bhagat, Buchan, Erez, & Gibson,2005), it becomes necessary to interpret accurately the developing trends inthe global economy. Furthermore, this should be accomplished by separat-ing signals from noise. In the auto industry, for example, major drivers ofglobalization are: (1) the accelerated product and technology life cycles,(2) the harmonization of regulations in the European Union, (3) the globaloutsourcing of parts and related services, and (4) the existence of globallogistics organizations such as FedEx, UPS, and DHL. Consider the case ofCarlos Ghosn of the Nissan Corporation (the fourth largest automobilecompany in the world). He was able to foresee the importance of thesedrivers and initiated a series of effective cross-border alliances. In the proc-ess, he sensitized Nissan managers to be more responsive to the worldwidedevelopments in the auto industry. In contrast, Richard Waggoner, thepresident and CEO of General Motors in the United States, was not asresponsive. As a result, not only is General Motors in the process of losingits lead in the industry, but it does not have a cadre of managers who areable to function with the required fine-tuned sense of a global mindset.In fact, there is a strong possibility that Toyota, operating as a well-coordinated and effectively integrated global manufacturing organization,will emerge as the largest automobile company in the near future. AndNissan, led by Carlos Ghosn (one of the best examples of a global manager),will be its close competitor.

In a related vein, Jorma Ollila of Nokia Corporation of Finland appre-ciated the substantial changes in the telecommunications industry due toworldwide deregulation and transformed this little known company into thehousehold name that it is today.

In fact, in 1992, Nokia had a market capitalization of only about150 million euros and today Nokia is valued at 62 billion euros. Global


managers such as Carlos Ghosn and Jorma Ollila not only were able togreatly improve the economic and market performance of their respectivecompanies, but also transformed some of the important features of theindustries in which their companies operate.

Organization-Specific Antecedents

Our research reveals the importance of the following factors that are locatedin the organizational context of those companies that facilitate the evolutionof a global mindset. In fact, we suggest that an ongoing emphasis on thesefactors leads to development of a global mindset in the organization.

Administrative heritage: Multinational corporations with strong admin-istrative heritages (Bartlett, Ghoshal, & Beamish, 2007) are better able tofacilitate the growth of a global mindset. This is accomplished with con-siderable ease if their organizational structures go beyond functioning asmatrix structures and instead encourage the development of a frame of mind(Bartlett, Ghoshal, & Beamish, 2007) that takes into account the dynamicsof misalignment that routinely arise in the course of adapting the structuresand strategies to the demands of the global marketplace. For example, theadministrative heritage of the Komatsu Corporation of Japan, with itsongoing emphasis on overseas orientation and user orientation, greatly in-fluenced the development of the global mindset of its managers (Bartlett,Ghoshal, & Beamish, 2007). In contrast, the largest global corporation inthis industry, i.e., Caterpillar, Inc., of the United States, was unable to do sobecause its administrative heritage was largely oriented toward dealing withlabor unions and other traditional issues.

Mirroring clients: The need to serve clients in the global marketplacebetter by adopting some of their strategies facilitates the development of aglobal mindset. In fact, an isomorphic orientation of organizational strat-egies with the strategies of the primary clients is a major factor that drivesglobalization (Yip, 2003). This approach to aligning the strategies of theorganization with the strategies of the primary clients is found in India-based high-technology and software multinationals that have emerged asmajor global competitors. Infosys and Wipro, who serve global clients suchas GE of the United States and Ericsson of Sweden, function in this mode.Senior managers of these highly competitive IT companies have beenstrongly encouraged to scan the latest developments in the informationtechnology industry (Friedman, 2005). Mirroring concerns of global clientson an ongoing basis fosters the creation of a global mindset (see Fig. 1).


Horizontal coordination mechanisms: Competing in a global industry re-quires continuous coordination and integration of organizational activitiesacross borders and cultures. As a result of the emergence of hybrid indus-tries (microelectromechanical systems, for example), hybrid strategies (outs-ourcing simple manufacturing activities while retaining more complexmanufacturing activities at home), and hybrid technologies (informatics in-corporating biology and computer sciences, for example), global organiza-tions develop cross-functional strategies. Such coordination and integrationare difficult to accomplish in traditional hierarchical multinationals.As network organizations become more prevalent and work teams com-posed of individuals from dissimilar cultures work in virtual teams, theprocess of developing a global mindset becomes easier.

Knowledge creation and diffusion: Global organizations of the 21st centuryfunction in what is known as a knowledge economy (Friedman, 2005). In-creasingly, the capacity to create and transfer valued organizational practicesand knowledge across cultures and borders is becoming crucial (Bhagat,Kedia, Harveston, & Triandis, 2002; Davenport & Prusak, 1997; Nonaka &Takeuchi, 1995; Shenkar & Li, 1999). While information technology-basedsystems (such as groupware) have been useful, the art and science of creatingand diffusing knowledge in the global network is critical (Davenport & Prusak,1997). In the process of emphasizing the effective functioning of global knowl-edge systems, MNCs also encourage the development of a global mindset.

Personnel transfers: Personnel transfers, which are employed as mecha-nisms to facilitate transfer of tacit knowledge and other related organiza-tional practices in subsidiaries located in dissimilar national and culturalcontexts, also facilitate the development of global managers. Japanese mul-tinationals, in particular, are noted for creating effective managementsystems for intraunit transfers of global personnel. Such transfers facilitateeffective implementation of innovative R&D techniques and related knowl-edge management mechanisms to develop products that have a better globalreach. A natural outcome of such personnel transfers is the development ofa global mindset in the organization: individuals get the opportunity to learndifferent ways of doing things in dissimilar global environments, which, inits turn, facilitates the development of global managers.

Person-Specific Antecedents

Factors that are idiosyncratic to the individual and facilitate the evolution ofa global mindset are cosmopolitanism (Boyacigiller et al., 2004), cognitive


complexity (Boyacigiller et al., 2004; Govindarajan & Gupta, 2001), culturalintelligence (Earley, 2002; Earley & Ang, 2003), nonjudgmental thinking

(Triandis, 2007), emphasis on a universalistic versus a particularistic mode of

decision making (Hooker, 2003), and social support from one’s family and

friends (Beehr, 1995; Beehr & Bhagat, 1985). Table 1 provides a list of thesefactors and how absence of these factors constrains the development ofglobal managers.

Cosmopolitan orientation encourages individuals to be more concernedwith important issues and events in the outside world. Persons characterizedby this attribute are more focused on developing their professional values andthink beyond the immediate concerns of their functional units and organiza-tions. These individuals are ‘‘a social class defined by its ability to commandresources and operate beyond and across wide territories’’ (Kanter, 1991).

Cognitive complexity as the next attribute of global managers is concernedwith the ability to differentiate among diverse yet related elements in theenvironment. Cognitively complex individuals are able to cultivate thegeographic and cultural diversity that is necessary for navigating the com-plex world of the interconnected global economy. Two facets of cognitivecomplexity are differentiation and integration. Cognitively complex indi-viduals will often employ a fairly large number of dimensions or constructsto describe an important business or situational event that has relevance forthe global organization. Having done that, they would also be able tointegrate these dimensions effectively in a meaningful fashion so that datafrom the environment get converted into information and then into knowl-edge (Bhagat et al., 2002). Cognitive complexity in the context of developinga global mindset is concerned with one’s ability to fine-tune and balancecompeting and often conflicting country, functional, and business concernsthat arise in the context of global organizations in unpredictable fashions.Murtha, Lenway, and Bagozzi (1998) and Govindarajan and Gupta (2001)emphasize the importance of cognitive complexity in their assessments ofglobal managers. We advance the notion that cognitively complex globalmanagers are also able to learn from their long-term rivals in the industrywithout expressing hostilities or frustrations.

Cultural intelligence is a vital aptitude that enables global managers tointerpret culturally complex and unfamiliar accents and events in a mean-ingful fashion (Earley & Ang, 2003). The idea of cultural intelligence is new,and it picks up where the idea of emotional intelligence left off with the workof Goleman (1995). While some aspects of cultural intelligence are innate,motivated individuals, through their own personal efforts and cross-culturaltraining (Landis & Bhagat, 1996), can enhance their cultural intelligence.


As global corporations expand their reach to culturally diverse parts of theworld, managers of subsidiaries need to grapple with confusing and uncer-tain cultural environments. Often, such environments are also filled withinstances of culture clashes (Bhagat, Kedia, & Shin, 2006), and it becomesnecessary that managers be not only culturally competent and culturallysensitive (Dinges & Baldwin, 1996), but also culturally intelligent (Earley &Ang, 2003).

Nonjudgmental thinking is crucial for developing tendencies toward impulsecontrol and acting in a calm fashion in conflicting and competitive situationsthat routinely arise in global transactions. This ability is concerned withone’s cognitive capacity to look at a situation without engaging in immediateappraisals, whether they are primary or secondary in nature (Lazarus &Folkman, 1984). It is indeed difficult to develop this ability because a largemajority of us hold deeply ingrained cultural beliefs, attitudes, and values andare more likely to make quick judgments regarding stimuli, events, and ac-tivities that are culturally unfamiliar or even unpleasant. Overseas experiencein dissimilar cultural contexts is likely to enhance this ability. In fact, thelonger and more successful the experience that an expatriate or global man-ager may have had in a dissimilar cultural context, the more likely is thepropensity for him or her to develop nonjudgmental thinking.

Emphasis on universalistic versus particularistic modes of decision making isconcerned with the extent to which an individual employs identical criteriain judging various important events (i.e., selection, development, promo-tion, and rewarding employees) and situations (i.e., responsible parties forthe incident of 9/11 in the United States). Individuals adopting the univer-salistic approach employ identical criteria in selecting, promoting, andrewarding subordinates and co-workers. These individuals also adopt abroader perspective in attributing the cause of various events taking place intheir environments. Highly emotionally disturbing events, such as the WorldTrade Center disaster on September 11, 2001, in the United States, are likelyto be interpreted in a broader fashion by these individuals, compared tothose adopting a particularistic mode. Particularism as a cultural value isfound in vertical collectivistic cultures (Triandis, 1998) as well as in culturesthat are driven by relationships as opposed to rules (Hooker, 2003). Incultures that are more driven by relationships and affective concerns, itbecomes necessary to be more sensitive to the welfare of one’s in-group andselectively recruit and reward members of one’s in-group even if they are notas competent as members of an out-group.

Universalism is more commonly found in individualistic cultures(Hooker, 2003; Triandis, 1994, 1995). Such cultures provide a large number

Development of global mindset is problematic.

These cultures are rare. The culture of Israeli Kibbutz and Mongolia are examples.

Collectivism

Development of global mindset is problematic. Examples of countries characterized by these cultural variations are China, India, Mexico, Brazil etc.

Development of global mindset is moderately easy. Examples of countries characterized by these cultural variations are US, UK, France, Germany, Austria, Ireland etc.

Development of global mindset is relatively easily accomplished.

Examples of countries characterized by these cultural variations are Sweden, Denmark, and Australia etc.

Individualism

Horizontal

Vertical

Fig. 2. Cultural Contexts that Facilitate the Development of a Global Mindset.


of situations that can facilitate and even energize the evolution of a globalmindset. In particular, countries with a horizontal individualistic orientationare likely to foster a global mindset in a stronger vein compared to thosewith a vertical individualistic orientation. In Fig. 2, we depict the emergenceof a global mindset in the four types of cultural contexts described byTriandis (1995, 1998) and Bhagat et al. (2002). However, this is not tosuggest that collectivistic cultures do not foster the development of globalmindsets. Our analyses suggest that while person-specific antecedents playa large role, one must take into account the role of relevant industry-specific and organization-specific antecedents in the development of globalmanagers.

Consider the case of Sony of Japan. Japan is a vertical collectivisticcountry (Triandis, 1998). Sony was an unknown Japanese electronics com-pany after World War II. It has emerged as the largest electronicsconglomerate in the world in the 21st century. Akio Morita, chairman ofSony, is largely responsible for this growth. He was a manager with an acutesense of the global marketplace and understood the changing demands ofconsumers in the electronics industry. He not only was cognitively complexand culturally intelligent, but also engaged in a universalistic mode of de-cision making (Nathan, 1992). Under his leadership, Sony, Inc., began torecruit and promote US and other Western managers to senior leadershippositions in various overseas locations – something relatively new in verticalcollectivistic cultures such as traditional Japan.


A supportive network from family and friends is no less significant in terms ofits role in developing a global mindset. Research on expatriates has shownrepeatedly that those who fail in overseas operations do not receive appro-priate support from their family and friends. In fact, the support of one’sspouse is of crucial significance in being able to function in an expatriate roleand later on the path to becoming a manager with a great deal of internationalexperience. The importance of family support systems has been examined inBurke (1988), Carlson and Perrewe (1999), and Caligiuri and Lazarova (2002).

Taken cumulatively, social support and effective management of work–family conflict is of crucial importance in overseas assignments – a necessarystep in becoming a global manager. Individuals who are not able to un-dertake international assignments because their children’s education may becompromised (Fukuda & Chu, 1994), or who are excessively concerned withtheir feelings of personal and family well-being and security (Harvey, 1985),exclude themselves from the opportunities of becoming global managers.Social support in the form of informational, affective, instrumental, andstructural support is, in our view, a critical but often ignored factor indeveloping a global mindset.

Consider the case of Indra Nooyi, president and CEO of PepsiCo, in theUnited States. She maintains a core Hindu identity even as she leads a globalorganization that is a close competitor to Coca-Cola, the industry leader.She remains at ease with Indians as well as Westerners, wearing saris ascomfortably as business suits, thus maintaining a global perspective withoutlosing her individuality and originality. She receives considerable social sup-port from a strong network of family and friends, both in the United Statesand, from her native family, in India. Carlos Ghosn, CEO of Nissan, alsohas maintained a supportive network of family and friends. He maintainsthree residences, one in Tokyo, one in Paris, and another in New York City.He is a Brazilian, and in his initial years with Nissan, it was not easy for himto function in a leadership capacity because of the historical preference of theJapanese companies for native Japanese in senior roles. He has encouragedhis family to live closer to him and takes every possible opportunity tounderscore their importance in the overall scheme of his life. GurcharanDas, the country manager of Proctor & Gamble in India, has a similarprofile. Having graduated from Harvard Business School in the late 1960s,he returned to India to fulfill the need to do his duty as a devoted Hindu. Henot only has been successful as a country manager for P&G Corporation,but also has maintained a vital and socially active life in the global city ofMumbai in India. In Table 1 we depict various opportunities and constraintsthat one needs to take into account in development of a global mindset.


WHO DEVELOPS A GLOBAL MINDSET?

It must not be assumed that every person can develop a global mindset.Certain individuals have predispositions that strongly attach them to theirown culture and religion. Some of these individuals also feel that their pointof view is the only correct one and any other view is likely to be eitherincorrect or immoral. Such individuals are typically not sent to internationalposts, regardless of their technical competence. In a similar vein, cognitivelysimple individuals do not become global managers. When a person ‘‘solves’’a complex problem with a simple solution the chances are that the solutionis wrong. Most valid and effective solutions take into account multipleperspectives inherent in a given situation and often they include the cultureof the problem solver and the intricacies of the other cultures.

Another trait that is important for the development of a global mindset isavoidance of self-deception. Self-deception is the tendency to see the worldthe way the person hopes, wishes, or would like it to be rather than the wayit is (Triandis, 2007). Individuals who indulge in self-deception tend to selectinformation that is consistent with their culture, wishes, hopes, and needsand avoid information that is inconsistent with their ideology, religion, orframe of reference. Mild self-deceptions have been found to be beneficial.For example, a person who thinks that he or she is more intelligent than heor she truly is may feel protected from even valid criticisms by not expe-riencing lower self-esteem. But large self-deceptions (e.g., ‘‘We will begreeted with flowers in Iraq,’’ as Paul Wolfowitz, then Assistant Secretary ofDefense, stated in 2003) can result in enormous mistakes (Triandis, 2007).Individuals who engage in large self-deceptions are not likely to develop aglobal mindset (Triandis, 2007). A person who is high in self-deception isunlikely to make good decisions in dissimilar cultures and is likely to offendthe sensibilities of members of other cultures that he or she must deal within the context of the global organization. Ethnocentrism is a special caseof self-deception (my culture is ‘‘good’’ and other cultures are good tothe extent that they are like my culture). Stereotyping (I know accuratelythe attributes of the people in the other culture) is yet another form ofself-deception. The tendencies toward ethnocentrism, intolerance for diver-sity, and stereotyping are related (Altemeyer, 1981). Openness to newexperiences (McCrae & Costa, 1997) and modernity (Inkeles & Smith,1974) are predispositions that facilitate the process of developing a globalmindset. Individuals who are open to new experiences function better inwork groups in organizations that are characterized by horizontal relation-ships. Modernity as a cognitive state facilitates acceptance of change


and willingness to deal with the structural changes often brought about byglobalization.

In individualist cultures it is virtuous to be assertive, dominant, open tonew experiences, and self-reliant and to help people one likes. In collectivistcultures, it is virtuous to be modest, to emphasize harmony within the in-group, to keep relationships intact, and to be responsive to the needs ofothers, and one helps those with whom one has an established relationship,such as in-group membership, friendship, or previous obligations (Triandis,1994, 1995). These differences can result in misunderstandings across cul-tures and make interpersonal relationships difficult. Managers wishing to beglobally competent should understand these issues and their underpinnings.

In addition to knowing about cultural differences the manager needs toknow about cultural distances, because there are certain cultures that are sodifferent from his or her own culture that bridging the gap is likely to bevery difficult. It may be better for the organization to send to that post aperson from another culture whose cultural distance is smaller.

Cultural distance reflects (Triandis, 1994, p. 33):

(a)
Language distance. Languages are related to each other so that there arelanguage families. For example, the Indo-European languages belong tothe same family, but the languages of Finland, Estonia, and Hungarybelong to a different family. The more different the language family ofanother culture, the more difficult it will be for the manager to adjust tothat culture. Learning the language of the host culture is relatively easywhen the languages belong to the same subfamily (e.g., English andGerman) and gets more and more difficult the more the language fam-ilies differ. It is desirable to know some of the language of the country towhich one is going, though it is realized that a manager who has re-sponsibilities for several countries will not be able to do that.
(b)
Religions. Shamanic, Christian, Jewish, Islamic, Hindu, Buddhist,Shinto, and animistic religions have many differences within each re-ligion. It is also important to understand the appropriate fault linesamong the civilizations that are primarily based on religious differences.Time Magazine (November 27, 2006) provides an interesting discussionas to how Pope Benedict unintentionally offended many Muslims with acomment made in September 2006. The issue of differences among cul-tures in terms of how they differ in their religious underpinnings hashardly received any attention in the global management literature.However, it is important for global managers to be aware of regionaland worldwide clashes among civilizations and major religions.


(c)
Social structure. Social structure, such as wealth, gross national productper capita, and the United Nations Human Development index, whichtakes into account adult literacy and life expectancy, can be similar ordifferent. Norway, Sweden, Australia, and Canada are highest on thisindex; whereas Sierra Leone, Niger, Burkina Faso, and Mali are thelowest (The Economist’s World in Figs, 2006). Global managers shouldbe aware of differences in social structures.
At this time we do not know how to weigh these three facets of culturaldistance as barriers for making adjustment to other cultures. As a firstapproximation we might give each of these facets an equal weight. Theindividual with a global mindset will come from a culture that is very closeto the middle of the distribution of distance among cultures.

It is necessary for the global manager to be aware of some of the ways inwhich his or her own culture is similar or different from the culture of thehost country, as well as the cultures of the countries in which his or herorganization functions. In individualist cultures people generally emphasizewhat is inside the person (beliefs, attitudes, personality), while in collectivistcultures they emphasize what is outside the person (group pressure, norms,role definitions) as the causes of behavior. ‘‘Culture assimilators’’ have beendeveloped to train individuals to make isomorphic attributions (Bhagat &Prien, 1996; Gudykunst, Guzley, & Hammer, 1996), i.e., to be more or lessaccurate when making attributions concerning behaviors that occur in theother culture. There are numerous ways to train people going to anotherculture to be effective in that culture. They are discussed in some detail inFowler and Mumford (1995) and Landis and Bhagat (1996). The individualwith a global mindset should be familiar with the majority of the ways inwhich his or her own culture differs from other cultures.

Global organizations need to train individuals to develop self-efficacy indealing with people from dissimilar cultures. If managers find themselvesincapable of dealing effectively with members of the other culture then it isunlikely that they will be successful as global managers. We advance thenotion that individuals with a global mindset will feel capable of dealingwith the majority of cultures of the world.

Learning to avoid behaviors that are perceived as being offensiveto members of other cultures, and using those behaviors that make themfeel comfortable and at ease, is also critical. An excellent example of thisdifficulty of cross-cultural interaction is found in Kowner (2002), who re-ported that the Japanese avoid contact with non-Japanese because Westernbehavior makes many Japanese feel that they lose status. Japan is a vertical


collectivistic culture (Bhagat et al., 2002; Triandis, 1998) and losing status,especially in the public arena, can be difficult to accept. The Japanese feelthat they behave in meek and humble ways, while non-Japanese behave inways that are obtrusive and inconsiderate. The Kowner study (2002) com-pared the perception of verbal and nonverbal behavior of lower and higherstatus people in asymmetric dyadic interactions between Japanese andWesterners. The results of the study found that the Japanese perceived thatthey lost status in the interaction with non-Japanese due to some of theverbal and nonverbal gestures like the crossing of legs by Westerners. Thereality of this point was very clear when President George W. Bush was seeninteracting with Prime Minister Koizumi of Japan on television. In one ofthe public meetings, President Bush patted Prime Minister Koizumi on theback. This was viewed by the Japanese audience as culturally insensitive.One would have expected that the advisors of President Bush should havewarned him about this conduct, which, despite its good intentions, wasconsidered inappropriate and rude.

The point is that individuals with a global mindset are aware of most ofthe behaviors that cause difficulties across cultures and will have enoughbehavioral flexibility to avoid these behaviors (Triandis, 2007). In addition,they will know what behaviors are helpful in interaction across cultures(e.g., smile and show respect) and will include these behaviors in theirbehavior repertoire.

Having discussed the role of various antecedents in the domains of in-dustry, organization, and person, we are now in a position to delineate therelationship between a global mindset and organizationally valued outcomes.

RELATIONSHIP OF A GLOBAL MINDSET WITH

ORGANIZATIONALLY VALUED OUTCOMES

Fig. 3 depicts the relationship of the evolution of and emphasis on a globalmindset with valued outcomes. Global mindsets are not cultivated withoutrational consideration as to how they affect the performance of the globalorganization. The first criterion that organizations are concerned with isincreasing market share in the global marketplace. Research reviewed inGovindarajan and Gupta (2001) shows that emphasis on a global mindset isrelated with increased market share and the ability to function with greaterstrategic intent and posture. Superior financial performance is the nextclear outcome of sustaining and enhancing a global mindset across theirorganizational network. It has also been found that organizations that

IncreasedMarket Sharein the GlobalMarketplace

Evolution ofand

Emphasis onGlobal mindset

GlobalStrategicIntent andPosture

SuperiorFinancial

Performance

GreaterInternational

Diversification

Fig. 3. Relationship of Emphasis on Global Mindset with Valued Outcomes.


emphasize the art and science of thinking and interpreting the varioustrends in the industry and in one’s organization are also able to expand theirrange of products and services. In addition, the scope of international di-versification (Hitt et al., 2006, Annual Review, Journal of Management)is likely to be strongly influenced by the global orientation of the seniormanagers.

TOWARD A DYNAMIC CONSTRUCTIVIST

MESO MODEL

Our approach (Fig. 1) in understanding the antecedents of a global mindsetshows that we are simultaneously concerned with the study of a globalmindset by involving at least two levels of analyses, of which one is focusedon micro issues and the other is concerned with factors at the macro per-spective. Antecedents from the industry and organizational domains areclearly macro in orientation and are not under the direct control of theindividual whose global mindset needs to be assessed or developed. Ante-cedents in the personal domain are somewhat under the control of theindividual. A meso (multilevel) perspective highlights the significance ofconsidering multiple levels of analysis that are relevant for understandingvariations in a given dependent variable, such as a global mindset in thepresent case (House, Rousseau, & Thomas-Hunt, 1995; Klein, 2002; Klein& Kozlowski, 2000). In proposing the meso perspective, the authors notethat the primary objective is to enhance the quality of our understanding ofthe variations of the dependent or outcome variable by incorporating bothmicro and macro variables in a coherent framework.


The meso perspective is employed in considering the simultaneous rele-vance of the salient attributes from the three domains that are shown tointeract in Fig. 1. Furthermore, Fig. 1 also shows that development of aglobal mindset is also influenced by the broader variations present in thecultural contexts of the global organization. These cultural contexts are notnecessarily the same as the cultural contexts of the home country of the globalorganization, but indeed reflect the trend in global culture (Leung et al., 2005)that constitutes the overarching environment of the organization.

Methodological Concerns

The first methodological issue that should concern researchers in this area isto deal with the complexity of multilevel design in discerning the influence ofall three intersecting domains. The meso perspective, as we have noted, isemployed when researchers are interested in considering the simultaneousrelevance of salient attributes from different levels of analyses. The mod-erating influences also need to be considered, but we have not discussed therole of moderating influences in this chapter. The work of Lytle, Brett,Barsness, Tinsley, and Maddy (1995) should be of value in this connection.

The second methodological concern is with multimethod design. Ante-cedents from the industry-specific domain are macrolevel variables reflectingbroader economic trends in and shifts in the business environment, whereassome of the antecedents in the organization-specific and person-specific do-mains are microlevel variables. The various drivers in the industry-specificdomain need to be appropriately operationalized, and their interactions withindividual measures of cognitive complexity, cultural intelligence, etc., ope-rationalized at the microlevel are to be analyzed creatively. There is nodoubt a dearth of empirical research in this area of inquiry. It is importantthat we develop a body of empirically based findings to develop morerigorous models of a global mindset.

IMPLICATIONS FOR FUTURE RESEARCH

The strategic and long-term importance of a global mindset for the21st century is being routinely covered in popular press such as Business

Week, The Economist, and the New York Times. The July 9, 2006, issue ofthe New York Times discussed the significance of the new CEO of SonyCorporation, a British citizen, who was chosen for his special insights into


the nature of markets in the Western world. The coverage revealed thatwhile he was greatly impressed with the various trends in the global elec-tronics industry and how Sony might do in the future, he was concernedwith his possible acceptance as the CEO, given the fact that the Japanese, asa cultural group, have typically not had a Western manager at the helm ofthe company. The same is true for Carlos Ghosn of Nissan. In fact, in arecent survey of MBA students in one of the classes taught by the firstauthor, the students expressed surprise at how the Japanese managers mightaccept these Western managers as CEOs of such global companies like Sonyand Nissan. The same goes for Indian multinationals located in the AsianSilicon Valley in the southern region of India. There are talks about re-cruiting Western managers as senior managers to oversee the growth ofIndian software and outsourcing industries, but so far, there have only beentalks in this area. When we analyze these stories in some depth, we see theongoing interaction of how industry-specific trends are interacting with or-ganizational values and cultures to determine the kind of a global mindsetthat eventually can and will develop in different parts of the world.

In future research, it will be important to examine differences in culturalvariations in the development of a global mindset across similar industriesand organizational structures. As noted earlier, research in this area needs asustained multidisciplinary meso perspective that is undertaken in a con-structivist vein. We hope the ideas offered in this chapter will act as astimulus to future theory building and research in this area. There are chal-lenging issues to be resolved, but a journey of a thousand miles alwaysbegins with a single step.

ACKNOWLEDGMENTS

The authors thank the editors for their suggestions in the early stages ofdeveloping this chapter. Partial support for work on this chapter was madepossible by a summer grant from the Fogelman College of Business to thefirst author in the summer of 2006.

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Stiglitz, J. E. (2002). Globalization and its discontents. New York & London: W. W. Norton.

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Triandis, H. C. (2007, in preparation). A clash of fantasies: Simple self-deception in everyday life.

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River, NJ: Prentice-Hall.

PUTTING IT ALL TOGETHER:

SO WHAT IS A GLOBAL MINDSET

AND WHY IS IT IMPORTANT?

Mansour Javidan, Richard M. Steers and

Michael A. Hitt

My Wal-Mart hosts took me over to the 1.2 million-square-foot distribution center,

where we climbed up to a viewing perch and watched the show. On one side of the

building, scores of white Wal-Mart trailer trucks were dropping off boxes of merchan-

dise from thousands of different suppliers. Boxes large and small were fed up a conveyor

belt at each loading dock. These little conveyor belts fed into a bigger belt, like streams

feeding into a powerful river. Twenty four hours a day seven days a week, the suppliers’

trucks feed the twelve miles of conveyor streams, and the conveyor streams feed into

a huge Wal-Mart river of boxed products. (Friedman, 2005, p. 128)

In his best selling book, The World is Flat (2005), Thomas Friedman iden-tified the forces that he argued are making the world flatter: the demise ofcommunism as an alternative to capitalism; the development of the Win-dows program, which enabled mass access to personal computers; the in-vention of Netscape, which enabled mass access to the Internet; thedevelopment of interoperability across diverse software and hardware sys-tems; open source software development; outsourcing; off-shoring; supplychaining; in-sourcing; and ‘‘in-forming,’’ or any individual’s ability to buildhis or her own personal supply chain of information, knowledge, and

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MANSOUR JAVIDAN ET AL.216

entertainment. He argued that these forces have created unprecedentedconnectivity among individuals, groups, and organizations from many partsof the world. The ‘‘Wal-Mart symphony’’ (Friedman, 2005, p. 128) ofmoving 2.3 billion general merchandise cartons a year relies heavily on theforces identified above because it requires friction-free connections amongmultiple players in many parts of the world. While Wal-Mart has been amaster at developing integrated global systems, it is by no means the onlyone. A number of successful global corporations have been able to leverageglobal supply chains to cater to global customers.

Millions of miles in fiber optic lines around the globe and major advancesin software development have flattened the world of business by eliminatingfrictions among various parties and removing obstacles that impede con-nectivity among diverse players in different parts of the world. As a result, anew source of competitive advantage is emerging: the ability to integrateplayers from many parts of the world faster and more effectively than others(Palmisano, 2006). The challenge to global corporations is increasingly tocreate seamless globally integrated systems to satisfy diverse customer needsin different global markets. But while the technology to do this is now inplace, it is not an easy task due to the fact that even though the world isgetting flatter, individuals’ minds are still firmly round.

Corporations’ ability to create globally integrated systems depends to alarge extent on their success in getting their employees, managers, and ex-ecutives to understand and adapt to a flat world. Most individuals in theirnormal course of development grow up as unicultural individuals, under-standing how to work with individuals who are like them. Until the recentphenomenally rapid pace of globalization, most individuals were facing amostly unicultural work environment. However, work environments arerapidly changing as a result of the flattening of the world. Massive numbersof uniculturally developed individuals must now work with people who aredifferent from them in a globally integrated organization. But while theappropriate software has been developed to flatten the world of business, theappropriate software to flatten the human mind does not yet exist. Mostordinary individuals continue to have a round mind in an increasingly flatworld. Thus, the new competitive advantage of global corporations lies intheir ability to shape the minds and actions of their employees to ensuresuccessful performance. As a result, the challenge to global leaders is tosuccessfully influence, mobilize, and enable their global workforce, globalteams, and global networks to work effectively toward the achievement ofthe corporation’s global goals (Lasserre, 2003).

What is a Global Mindset and Why is It Important? 217

GLOBAL MINDSET DEFINED

The authors of the various chapters in this book have approached the con-cept of global mindset from diverse perspectives and have defined it differ-ently. Levy et al. in this volume define global mindset as a highly complex

cognitive structure distinguished by an openness to and expression of multiple

cultural and strategic realities on both global and local levels and the cognitive

capacity to moderate and assimilate across this diversity. More specifically,global mindset is typified by three corresponding dimensions: (1) an open-ness and attentiveness to multiple realms of action and meaning, (2) acomplex representation and expression of cultural and strategic dynamics,and (3) a moderation and incorporation of ideals and actions oriented to-ward both global and local levels (Chapter 1 of this volume). At the core oftheir definition is the awareness of and openness to multiple realities, mean-ings, and perspectives.

Redding in this volume agrees with Levy et al. and engages in a deeperexamination of the complexities facing global corporations and global lead-ers. He suggests that a major source of such complexity is the diversity ofinstitutional systems around the globe. All global corporations need to un-derstand the institutional framework underpinning the world of business indifferent countries: ‘‘Among the many things included here would be thesystems of education, organized religion, law, government administration,and philosophy; social structures such as kinship patterns; and the specifichistorical circumstances likely to have shaped these institutions’’ (Redding,this volume). He then identifies the diversity in cultural systems and incognitive systems as the other two major sources of complexity and con-cludes that cosmopolitanism, openness, and flexibility are critical ingredi-ents of global mindset: ‘‘The real problems lie in the worlds of alternativemeaning, compounded by the competitive pressures of business. When theother poker player’s eye flickers, is he bluffing, or does he have mild con-junctivitis?’’ (Redding, this volume).

Earley et al. in this volume use the concept of cultural intelligence to shedfurther light onto the issue of openness to diverse institutional, cognitive,and cultural systems. They compare cultural intelligence (CQ) and theglobal mindset (GM) construct, identifying the areas of overlap as wellthe areas of disconnect between the two. They find two areas of overlap:cognitive structure and motivation or openness. In their analysis, bothglobal mindset and cultural intelligence consist of cognitive complexity andopenness to diversity.


They suggest, however, that the two constructs are different in that cul-tural intelligence emphasizes metacognition or the ability to move beyond asingle specific example of diversity to the general ability to understand andmake sense of any example of diversity. In their view, global mindset doesnot entail such a mental framework. Another point of divergence is thatcultural intelligence focuses on and incorporates behavioral manifestations,while global mindset is more limited to what is in the mind and is notmanifested in actual behavior: ‘‘GM scholars discuss behavior and adap-tation as profitably applying the knowledge of cultural diversity. This in-cludes the ability to craft policy, but not necessarily the ability to interacteffectively on an interpersonal basis. While crafting and implementingstrategy is one type of behavior, CQ takes adaptation further than doesGM. In CQ, behavior refers to the ability of individuals interacting withothers on a personal basis, sometimes simulating or mimicking other cul-tural practices. Behavior in CQ involves more than developing new plansthat incorporate diversity; it also involves acquiring the behaviors necessaryfor interpersonal interaction. At the extreme, a person may possess a highlevel of GM (being able to understand and create effective cross-culturalstrategy) but have a low level of CQ (unable to adapt his or her behavior tointeract effectively with other cultures)’’ (Earley et al., this volume).

Earley and his colleagues further suggest that scholars interested in globalmindset need to incorporate Bandura’s notion of self-efficacy (1997) to un-derstand better the psychological and motivational aspects of global mind-set: ‘‘The extensive work of Bandura (1997) leads us to conjecture thatmotivation to persist in international engagements can be increased by anelevation of the actors’ self-efficacy. Thus, one important subcomponentthat all GM scholars should address is the intercultural self-efficacy centralto CQ’’ (Earley et al., this volume).

Clapp-Smith, Luthans, and Avolio’s chapter in this volume is focused onself-efficacy (as suggested by Earley et al.). Using the concept of positivepsychological capital, they shed light on the motivational and psychologicalcomponents of global mindset. They define psychological capital, orPsyCap, as:

An individual’s positive psychological state of development that is characterized by:

(1) having confidence (self-efficacy) to take on and put in the necessary effort to succeed

at challenging tasks; (2) making a positive attribution (optimism) about succeeding now

and in the future; (3) persevering toward goals and, when necessary, redirecting paths to

goals (hope) in order to succeed; and (4) when beset by problems and adversity, sus-

taining and bouncing back and even beyond (resiliency) to attain success. (Luthans et al.,

2007, p. 3)


They suggest that leaders with a global mindset show strong self-efficacyand confidence when operating in a global cross-cultural context. Theseleaders are also resilient individuals because they must face complex cross-border challenges and are not always successful. Resilient individuals viewfailures in such situations as learning opportunities. They are optimisticbecause otherwise they would be unwilling to take risks and accept complexglobal challenges. They are also hopeful in the sense that they have clearobjectives and are able to find the appropriate paths to achieve them. Inshort, global mindset requires not only the cognitive software to understanda flat world, but also the psychological software necessary to deal with iteffectively.

Beechler and Javidan’s chapter in this volume presents an integrativemodel incorporating the concepts presented in the other chapters to explainthe link between global mindset, global leadership, and corporate perform-ance. They define global leadership as ‘‘the process of influencing individ-uals, groups, and organizations (inside and outside the boundaries of theglobal organization) representing diverse cultural/political/institutional sys-tems to contribute toward the achievement of the global organization’sgoals’’ (Beechler & Javidan, this volume). They explain that increasingly therole of global leaders is to achieve this influence without the existence ofhierarchical relationships because many critical individuals, groups, andorganizations are outside the boundaries of the leader’s own organization.They then define global mindset as ‘‘an individual’s stock of knowledge, cog-

nitive, and psychological attributes that enable him/her to influence individ-

uals, groups, and organizations from diverse sociocultural systems’’ (Beechler& Javidan, this volume).

They present a model showing that global mindset is a critical driver ofsuccessful global leadership, which in turn is a critical success factor forglobal corporations. They further suggest that global mindset consists ofintellectual capital (intellectual and cognitive capabilities), psychologicalcapital (state-like and psychological attributes), and social capital (the abil-ity to build, secure, and leverage trusting relationships). It is important tonote that Beechler and Javidan’s notion of psychological capital builds onthe work of Clapp-Smith et al. but goes beyond it to include otherpsychological attributes such as cosmopolitanism and passion for culturaldiversity. They also agree with Earley et al. that global mindset does notrepresent behavioral manifestations, but argue that such is not a disadvan-tage. Instead, they view global mindset as the content of the global leader’spsyche. It is a major driver of his or her behavior but is distinct from theleader’s actual behavior. Beechler and Javidan propose that leaders with a


global mindset are capable of perceiving, analyzing, and decoding the globaloperating environment. They possess behavioral flexibility and are able toidentify effective managerial action in different environments.

Nardon and Steers pick up on this issue. They point out that while it isimportant for global leaders to learn from diverse cross-border issues, theymust do it on short notice and ‘‘on the fly’’:

However, while knowing everything about every culture and using such knowledge in

appropriate ways is ideal, in reality achieving this level of understanding is difficult, if

not impossible, for at least two reasons: first, learning about another culture from a

distance is difficult at best and, second, most managers do not have the time to learn

about other cultures and develop a global mindset well before they are asked to be

effective. As a result, to develop a global mindset and be effective in the process, man-

agers need to develop the ability to learn how to deal with other cultures ‘‘on the fly,’’

that is, to learn enough about the other and his or her cultural background in the course

of the interaction. (Nardon & Steers, this volume)

Using an intercultural interaction learning model they suggest that inter-cultural interactions involve four types of negotiations relating to identities,meanings, rules, and behaviors. To succeed in such negotiations, globalleaders need strong self-awareness, empathy, information gatheringand analysis, new theories, and behavioral flexibility. In short, Nardonand Steers present a set of suggestions on how global leaders can learn aboutand adapt to their cross-border challenges in their day-to-day frequent andbrief interactions.

In another integrative approach, Bhagat et al. in Chapter 8 use a meso

approach and suggest that global mindset evolves as a result of three typesof antecedents: industry specific, organization specific, and person specific:

Global managers are those individuals who successfully manage the ongoing interactions

between industry-specific, organization-specific, and person-specific factors that are

present in their work lives. They do so both efficaciously and effectively in the cultural

contexts of their origin as well as in other diverse cultures with whom they must interact.

(Bhagat et al., this volume)

The authors conceptualize global mindset as constrained by industry- andorganization-specific markers. One who has a global mindset as an executivein the global investment banking industry may not have the same mindset asan executive in a corporation in the global telecommunications industry.They agree with the suggestion of Earley et al. that self-efficacy is a criticalelement of global mindset because it enables learning across cultures andorganizations:

The point is that individuals with a global mindset are aware of most of the behaviors

that cause difficulties across cultures and will have enough behavioral flexibility to avoid


these behaviors (Triandis, 2006). In addition, they will know what behaviors are helpful

in interaction across cultures (e.g., smile and show respect) and will include these

behaviors in their behavior repertoire. (Bhagat et al., this volume)

The authors suggest that understanding global mindset requires an inte-grative and meso approach in which we integrate microlevel individualphenomena (e.g., Clapp-Smith et al., this volume) with macrolevel industryand societal phenomena (e.g., Redding, this volume).

GLOBAL MINDSET AS A COMPETITIVE

ADVANTAGE: MANAGERIAL IMPLICATIONS

As part of the Thunderbird Global Mindset Project, a group of researchersinterviewed 215 senior international executives in cities in the United States,Europe, and Asia.1 The interviews were conducted in several waves. In thelast wave, a group of 15 senior global executives was asked to discuss com-panies that in their mind were successful in the global arena and those thatwere not. They were also asked to rate a number of individual attributes thatwere critical to the success of global executives.

Table 1 shows the attributes that received an average score of 5 and aboveon a 7-point scale. While these results are not scientific, they are indicativeof the importance of global mindset and its various components. Theexecutives interviewed seem to believe that psychological capital (e.g.,Clapp-Smith et al., Beechler & Javidan, this volume), as manifested by suchattributes as openness and respect for other cultures, adaptability, self-confidence, optimism, and resiliency, is a highly important requirement forglobal executives. They also indicate that intellectual capital (Redding,Beechler, & Javidan, Bhagat et al., this volume), as manifested throughunderstanding of other cultures, global business models, and political andeconomic systems in diverse parts of the world, is another importantrequirement.

The interviewees also highlighted another key issue that has not beenaddressed in sufficient depth by the authors in this volume. They pointed outthat successful global leaders are able to build and maintain trusting rela-tionships with those from other parts of the world. They felt that globalexecutives who have a global mindset are better able to build mutual trustbecause they can develop compatible objectives and align the various par-ties’ interests. They are also better able to build trust by treating people fromother parts of the world with respect and understanding. The interviewees

Table 1. Critical Global Executive Attributes.

Respecting cultural differences 6.73

Ability to generate positive energy in people from a different part of the world 6.50

Willingness to adapt, learn, and cope with other cultures 6.43

Adaptability 6.36

Willingness to accept good ideas no matter where they come from 6.33

Ability to excite people from a different part of the world 6.30

Acknowledgment of the validity of different views 6.29

Openness to cultural diversity 6.27

Ability to suspend judgment about those from other cultures 6.20

Positive attitude toward those from other cultures and regions 6.20

Self-confidence 6.14

Understanding of how to build and manage global alliances, partnerships, and

value networks

6.14

Ability to connect with people from other parts of the world 6.13

Ability to adjust behavior in a different cultural setting 6.13

Collaborativeness 6.00

Ability to manage the tension between corporate requirements and local challenges 5.93

Willingness to work across time and distance 5.87

Ability to handle complex cross-cultural issues 5.87

Resiliency 5.86

Understanding of the global business and industry 5.73

Optimism 5.71

Desire to learn about other cultures and other parts of the world 5.67

Understanding cultural similarities 5.67

Understanding other cultures and histories 5.60

Curiosity 5.57

Passion for learning about and being in other cultures 5.50

Understanding the political and economic systems in other parts of the world 5.47

Risk taking 5.00

1 ¼ Extremely unimportant; 7 ¼ Extremely important


suggested that mutual trust, or what Beechler and Javidan in this volumecall social capital, evolves as a result of the executive’s willingness to trustthose who are different from him or her, plus his or her ability to behave inways that are rooted in strong intellectual and psychological capital and tocreate alignment among the various parties. The issue of trust in a cross-border, cross-cultural setting is an important and as yet underexplored areaof research.

Integrating the various contributions in this volume, we conclude that theconcept of global mindset represents an important competitive tool fortoday’s managers. Corporate leaders are advised to develop, exhibit, and actwith a global mindset for their firms to achieve and maintain a competitive


advantage in international markets. Without such a mindset, in our view,such firms are likely to face better prepared and more knowledgeable globalcompetitors, thereby threatening the very survival of the firm.

IMPLICATIONS FOR RESEARCH ON

THE GLOBAL MINDSET

Taken together, the chapters contained in this volume offer a wealth ofinformation, ideas, and suggestions for future research on the concept andapplication of a global mindset. Each chapter adds value in its own right tothis important dialogue.

We view the chapter by Orly Levy, Sully Taylor, Nakiye Boyacigiller, andSchon Beechler as a signal contribution to theory development on the topicof the global mindset. This chapter offers a rich review of previous researchon the topic, as well as variations in conceptualizing it. As such, the chapteroffers a number of promising avenues for future research, as they themselvespoint out. Perhaps most promising here is a clearly articulated conceptualmodel of the global mindset concept, as well as several specific and testablepropositions. The results of such testing should go a long way toward clar-ifying both the concept and the role of a global mindset in managerialdynamics and success across borders.

Gordon Redding’s chapter discusses the challenge of developing a globalmindset in terms of the variety of alternative mindsets due to societal cultureand the variety of contexts across which decision making needs to take placeand in which the differences of mindset are grounded. The inadequacy ofinternational business theory in dealing with this contextual variety is high-lighted, as is the trend in social science to acknowledge the significance of thesocietal effect. Three research approaches are proposed and discussed: researchon cultural comparison, including recent work on social axioms; research onbusiness systems and attempts to map the key variables that account for theemergence of alternative systems of capitalism; and research on the spirit orethos of various economic systems. France is used as an example in thesediscussions. Taking these conceptualizations to the field presents significantchallenges. However, the presentation in this chapter invites simultaneouscomparisons of multiple models of cultural understanding.

Chris Earley, Charles Murnieks, and Elaine Mosakowski focus theirchapter on comparing two parallel concepts relating to interpersonal successin a global context: global mindset and cultural intelligence. The particularemphasis of this examination is on the psychology underlying each concept.


Earley et al. conclude that cultural intelligence is the more useful of the twoconcepts from the standpoint of their psychological explanatory power.A useful next step in this comparison would be to initiate comparativeempirical studies of the construct validity of each concept, that is, whichconcept hangs together better empirically, not just conceptually. Moreover,it would also be helpful to see serious comparative studies focusing on theutility of each concept in the managerial world – that is, how each approachfacilitates managerial success or failure in the workplace.

In their chapter, Rachael Clapp-Smith, Fred Luthans, and Bruce Avoliointroduce the concept of positive psychological capital in the developmentof a global mindset, particularly in the area of leadership success. The au-thors have been helpful here in articulating a model that is testable, albeit itwith some difficulty. The authors also point to a number of specific researchquestions that go beyond their own proposals to the general concept of aglobal mindset that are worthy of empirical exploration. Included here aresuch questions as whether a global mindset can be developed without salientinternational work experience and whether varying degrees of psychologicaldistance between two cultures can accelerate or impede the development of aglobal mindset. Taken together, this chapter offers a rich and varied set ofimplications for future researchers to consider.

The chapter by Schon Beechler and Mansour Javidan ties the concept ofglobal mindset most directly to leadership behavior and success. Based ontheir review of existing theory and research on global leadership, globalcompetencies, and the global mindset in general, they offer a precise defi-nition of global mindset that highlights both its cognitive and its behavioralcomponents. This clarity facilitates future research into both the concept ofglobal mindset and its construct validity. In addition, a number of impli-cations for future research focusing on the development of a global mindsetfollow from this chapter. In particular, the articulation of three types ofcapital – social, psychological, and intellectual – that can enhance the de-velopment of a global mindset, along with a model indicating how thesevariables can jointly influence a manager’s behavioral repertoire in globalsituations, is worthy of further empirical examination.

Luciara Nardon and Richard M. Steers focus their chapter on learningcultures ‘‘on the fly’’ – that is, adapting to cultures when time is of theessence or, more accurately, when managers do not have the luxury ofdeveloping a substantive cultural understanding of their partners or com-petitors prior to doing business. At such times, initiating impromptu ne-gotiations with others within the context of a cross-cultural episode becomescritical for success. To accomplish this, managers must understand learning


processes in general and how such processes occur in cross-cultural settingsin particular. As noted in the paper, developing these cultural adaptationmechanisms finds their theoretical base in learning theory. As such, many ofthe research implications focus on questions relating to how learning theoryrelates to efforts to develop a global mindset, in both the short and the longrun. An important question here is how learning theory itself applies acrosscultures. That is, is learning theory universal in its application or do culturaldifferences modify this application. Since much of what we know aboutlearning processes is derived from U.S.-based research, this becomes anintriguing question that goes beyond the concept of the global mindset itself.In addition, research focusing on the validity, utility, and generalizability ofthe model presented in this chapter is in order. In other words, is this modelaccurate in describing adaptation processes of global managers, as well asmeaningful and helpful for understanding managerial behavior in foreignsettings?

The chapter by Rabi Bhagat, Harry Triandis, Ram Baliga, Tejinder Billing,and Charlotte Davis focuses squarely on the content and processes involvedin developing a global mindset. As such, the research implications that followstress the importance of examining differences in cultural variations in thedevelopment of global mindset across both industries and organizationalstructures. The authors suggest that research in this area requires a sustainedmultidisciplinary meso perspective that is undertaken in a constructivist vein.As with several implications suggested in other chapters, this is not an easytask, but it may be a required one if we are to explicate further this centralconcept for the benefit of future global managers.

Finally, if there is a ‘‘golden thread’’ that winds throughout these diver-gent chapters, it is the utility and applicability of the concept of a globalmindset. That is, how useful is this concept both for better understandingthe success or failure of current managers and for developing more suc-cessful managers in the future. To succeed here, we require three things:First, we need substantive research on the validity and generalizability of theconcept of a global mindset, both as a construct and as a model. Second, weneed more research on how to measure this construct so future research canbe accomplished in a more systematic and integrative manner. Finally, weneed additional research on how to train managers so they can develop aglobal mindset in their future endeavors in the global economy. Taken to-gether, the answers to these questions could represent a genuine sea changein how we train and develop managers for the future. As such, we encouragemanagement researchers to incorporate the concept of a global mindset intheir future research endeavors.


NOTE

1. The authors thankfully acknowledge the support of Thunderbird colleaguesMary Teagarden, Femi Babarinde, Christine Pearson, David Bowen, Karen Walch,Nandani Lynton, and Angel Cabrera, who are all members of the Global MindsetProject and conducted interviews with global executives.

REFERENCES

Friedman, T. L. (2005). The world is flat: A brief history of the twentieth century. New York:


Lasserre, P. (2003). Global strategic management. London: Palgrave Macmillan.

Luthans, Y., & Avolio (2007). Psychological capital. Oxford, UK: Oxford University Press.

Palmisano, S. J. (2006). The globally integrated enterprise. Foreign Affairs, 85(3), 127–137.

Advances in International Management Volume 19 the Global Mindset

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