Effectively managing in cross-cultural business environments of multinational companies

Abstract

The demand of cross-border leader effectiveness in the contemporary globalized world is on the rise as business experiences a shortage in effective global leaders. Although global leadership development has become obvious in the recent years, there is still a significant gap in the international human resource competencies available to run Multinational Companies (MNCs). Over time, globalisation has brought about the rise of MNCs, as companies are continually involved in expansion strategies into new markets. These MNCs have the unique quality of being embedded in dynamic, multiple, complex and diverse global environments, which bring about distinct challenges and opportunities and have increased the requirement and criticality of having leaders with competencies that will allow them to successfully lead, globally. The author conducted twelve semi-structured interviews with expert global leaders in the financial sector, who have substantial experience in managing teams in cross-cultural business environments of MNCs, in more than one country. The global leaders occupied positions of Chief Executive Officers (CEOs), Multinational Client Service (MCS) Leaders, Sales Leader, Executives, Chairperson, Managing Director (MD) and Practice Leader. The leaders provided new insights into essential global leadership competencies, business practices, barriers, challenges and opportunities that are prevalent in complex cross-cultural contexts. From the research findings and the literature reviewed, a Cross-Cultural Leader Development (CCLD) Model was developed. Previous researchers have deemed the domain of Global Leadership Development (GLD) disintegrated and has failed to provide practical recommendations on how organisations can develop cross-cultural competencies. The CCLD Model addressed this gap. The key cross-cultural competencies that emerged from the research findings are that leaders need to possess sound cultural intelligence, value system, social intelligence, business acumen, learning, and unlearning capabilities. The model depicts an interconnected flow, which highlights the link on the types of cross-cultural practices that can be applied in business in order to strengthen the key cross-cultural competencies mainly, cross cultural and interpersonal skills training, an aligned localised business approach, diversity, inclusion and transformation initiatives, strategic partnerships and collaboration, business simulations, coaching and performance management.