Global Mindset and Leadership Effectiveness

For centuries, the business environment of a great number of managers was shaped by only local market demands, local distribution, and domestic sales. Consequently, formulating the company’s strategy, organizing decision-making processes, and implementing control systems originated from a managerial scope that did not cross the national borders of their countries. However, as a result of globalization processes, today’s business environment increasingly becomes the whole world or at least the sum total of the environments of every nation in which the manager’s company operates. This simultaneous presence of worldwide business and the specific environment of every nation in which the multinational company operates determine the complexity of a manager’s contemporary business environment. Globalization processes force managers to scan the market from a global perspective and to develop a thorough understanding of where worldwide business is heading. At the same time, managers need to be aware of business developments within specific countries. These local market demands, as with differences in customer needs, distribution channels, market structures, and host governments, force managers to also be responsive to national business developments.

Although the term “global mindset” only surfaced in the American literature in the last decade of the twentieth century, its conception as a certain “worldview” had already appeared in the 1920s. Sampson and Smith (1957) developed the “Worldmindedness scale” that involved a value orientation, a frame of reference, or interest in a worldview of problems of humanity. Based on the idea of “world citizenship” (Murphy, 1945), they distinguish the concept of “worldmindedness” from “international mindedness,” the latter referring to interest in or knowledge of international affairs. Sampson and Smith consider international mindedness to be a narrower concept than worldmindedness, although they leave a discourse on the differences to other authors. The worldmindedness scale resembles, to a certain extent, the notion of “global awareness” as described in Chapter 2. In the decade after Sampson and Smith’s article, the ideas of global awareness and worldmindedness appeared in the economic and business literature. Aharoni (1966), Kindleberger (1969), and Fayerweather (1969) all describe the notion of global mindset in terms of cognitive abilities and a predisposition of senior managers in multinational companies in relationship with firm performance. However, it is Perlmutter’s (1969) typology of managerial mindset that is widely regarded as the starting point of global mindset studies (Govindarajan & Gupta, 2001; Kedia & Mukherji, 1999; Levy et al., 2007a).

As described in Chapter 3, there are only a few studies available that address the measurement of global mindset at the individual level, and an even smaller number are also empirically tested. Moreover, each existing study is based on different conceptual understandings making a comparison of the research results difficult. In this thesis, we aim to expose the global mindset concept based on empirical findings. Through interviews with managers with global responsibilities, we have identified the need for positive attitudes toward integrating global and local aspects of transworld business and social relationships that they consider to be essential global leader qualities. As discussed in Chapter 4, we label this quality a “global mindset.” In this chapter, we address our second research question: How can a global mindset be measured ? In order to answer this question empirically, we conduct a second field study to test the operationalization of our global mindset concept. Based on the literature and the results of the interviews, our aim is to build an instrument to measure the global mindset concept at the individual level. We call this instrument the “Global Mindset Questionnaire” (GMQ). In contrast to the first field study, this empirical research aims to collect quantitative data in order to support the instrument development.

In the preceding chapters, we examined what a global mindset is and how it can be measured by formulating two research questions. We addressed these research questions in Chapters 4 and 5, respectively, based on an extensive literature study as described in Chapters 2 and 3. In this chapter, we address the third research question: What is the relationship between the individual global mindset and criteria for leadership effectiveness ? As in the previous studies, we aim to answer the third research question empirically. For this, we conducted a second quantitative field study to explore the relationship between global mindset and its outcomes. As we had identified the concept of a global mindset by interviewing managers with global responsibilities, we also wanted to measure the outcomes in terms of leadership effectiveness in a sample of managers working in a globalizing company. We also retested the relationship between personal and person-in-job factors and the global mindset concept to gain a better understanding of the process through which one adopts a global mindset. The expected relationships are presented in a research model.

In this final chapter, we provide an overview of the results of this research in the light of the research questions posed in the introduction. Rather than going into details about the particular outcomes, the overview here will be presented on a higher level of abstraction. For specific outcomes, the relevant chapter is referred to. After this overview of results in Section 7.2, that is structured based on the literature study and our field research, we discuss the contributions of this thesis to theory in Section 7.3. We believe that this study as part of the third stage of leadership research contributes to the body of knowledge on global leadership theory. A theory on the concept of a global mindset has already been suggested, but empirical studies to support research models and theory are rare. This book has shed some light on the concept of a global mindset and its dimensions and two other related mindsets: the local mindset and the universal mindset. The study also contributes to the knowledge on the relationship between a global mindset and leadership effectiveness. In addition, the study explored the influence of personal and person-in-job factors on global mindset which has also barely been examined in the past. The global mindset construct contains contextual issues and also conceptual issues. We discuss these first, followed by measurement issues and the global mindset dimensions and typology.