2. Introduction
• In order to transfer knowledge or critical capabilities across
borders effectively, managers need to develop not only an in-
depth knowledge in specific functional areas but also an ability to
effectively communicate with people who have different cultural
values and norms.
• As one of the top managers of a U.S. MNC remarked, “My top
globalization issue is people development and building a learning
organization.”
• These companies are trying to find a way of managing the free
flow of talent and necessary skills around the world with the
objective of building a competence-based organization.
• Globalization implies accepting that cultural diversity in
management composition and management style contributes to
the competitive advantage of the global company.
• To develop and manage a global organization implies developing
and managing people who can think, lead, and act from a global
perspective, and who possess a global mind as well as global skills.
• Developing a global mind-set in the manager’s way of thinking is
the most critical factor in creating a truly global organization
3. • Managers with a cosmopolitan mind-set understand intuitively that
different cultural norms have value and meaning to those who
practice them.
• Differences in behavioral patterns and social norms that create
cultural distance may impede and complicate not only interpersonal
relations between managers from different cultural backgrounds but
also the contexts of decision making as established within the MNC.
• This is because people with different cultural backgrounds have
different “frames of reference.”
• A frame of reference refers to a set of patterned meanings or the
collective mental programming that is shared by a specific group of
people.
• Thus, frames of reference determine and regulate whether particular
ends, as well as the means to those ends, would be acceptable or
not.
• They further dictate appropriate behavior by stipulating positive and
negative sanctions for what is expected (or forbidden) behavior
within each specific setting.
• Moreover, positive and negative sanctions are often communicated
through a variety of non-verbal means, such as facial expressions,
body postures, or hand gestures.
4. • Difficulties in understanding behavioral characteristics and
in properly interpreting various verbal and nonverbal
signals pose great challenges to managers as they are
exposed to a new and different environment.
• Global leaders are those who overcome these challenges
by understanding ways to influence the actions and beliefs
of others.
• “Three distinct sets of competence or characteristics were
identified in previous research: cultural savvy, unwavering
character, and dual perspective.”
• An executive cannot develop a global perspective on
business or become comfortable with foreign cultures by
staying at headquarters or taking short business trips
abroad.
• Indeed, the most effective way to fundamentally change
how people think about doing business globally is by
having them work abroad.
