Working Paper No. 08/10
An exploration of two perspectives on global leadership and the potential consequences for
global leadership development by
Rune Rønning Bjarne Espedal
Atle Jordahl
SNF Project No. 6308
Tools and Techniques for Global Leadership Development in Norwegian MNEs
The project is financed by The Research Council of Norway AFF Konsult AS
Rieber & Søn ASA Veidekke ASA
Yara AS
INSTITUTE FOR RESEARCH IN ECONOMICS AND BUSINESS ADMINISTRATION BERGEN, FEBRUARY 2010
ISSN 1503-2140
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Abstract
The p ap er exp lores tw o logics of global lead ership ; the logic of instru m entality and the logic of ap p rop riateness. These tw o logics and their relation to m u ltinational enterp rises are traced in organizational theory and in global lead ership theory and the consequ ences of the tw o logics for the d esign of global lead ership d evelop m ent p rogram s are exp lored . It is argu ed that ap p lying a logic of instru m entality u ncritically to global lead ership in m u ltinational enterp rises is p otentially frau ght w ith great risk given the d iversity and com plexity of MN Es and their environm ents.
It is su ggested that a logic of ap p rop riateness in global lead ership and in global lead ership d evelop m ent p rogram s constitu tes a viable, su itable and com p lem entary alternative. What is referred to as a m ixed service logic of global lead ership d evelop m ent p rogram s involves exp loration and reflection concerning the p articu lar contexts in w hich global lead ership p rocesses and exem p lifies a logic of ap p rop riateness in global lead ership and global lead ership d evelop m ent.
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Introduction
The nu m ber of m u ltinational enterp rises (MN Es) has increased from ap p roxim ately 7000 in 1970 to ap p roxim ately 77,000 in 2006 (H irst et al, 2009; Steger, 20091) and the general challenge MN Es are facing is an increasingly d iverse and com p lex context. For at least 20-30 years, scholars have acknow led ged that increasing globalization p resents new challenges for m anagem ent and lead ership in the (MN E) (Bartlett & Ghoshal, 1989; Rosenzw eig & Singh, 1991; Parker, 1996; Kostova & Roth, 2002; Johnson et al, 2006; Mend enhall et al., 2008; N avarro, 2008). Organizational theory and lead ership theory, how ever, seem to have had p roblem s in d ealing w ith the sp ecial challenges of MN Es (Ghoshal & Westney, 2005; Osland , 2008a). This challenge is exacerbated by the fact that d om estic contexts have form ed the backd rop for the d evelop m ent of both extant theory and p ractice in m anagem ent a nd lead ership of organizations. Accord ingly, these m anagerial and lead ership concep tions m ay p rove inad equ ate for a rad ically globalized context, and new p ractices and concep tions m ay be need ed w ithin m anagem ent and lead ership of MN Es. This actu alizes the qu estion of w hich theories that are likely to w ill inform the d evelop m ent of new p ractices, and how su ch d evelop m ent efforts m ay be carried ou t. In this p ap er, w e w ant to exp lore these tw o qu estions to focu s p rim arily on highlighting the p otential consequ ences for m anagem ent and lead ership d evelop m ent p rogram s for MN Es.
This issu e is of consid erable im p ortance since both scholars and p ractitioners in MN Es seem to agree that “global lead ership ” is greatly need ed by MN Es; that
“global leaders” are scarce and very much in demand by MNEs, and that effective m eans for d evelop ing global lead ers is need ed (Su u tari, 2002). H ow ever, the emerging field of “global leadership” and “global leader development” seems to be
1 Both referring to UN CTAD nu m bers.
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p lagu ed by the sam e p roblem s as trad itional lead ership research: lack of an agreed u p on d efinition of lead ership , fragm entation of research into isolated asp ects of lead ership , as w ell as, lack of an agreed u p on criteria for assessing the effectiveness of lead ers (Mend enhall, 2008). Thu s, a single concep tion of w hat global lead ership is m ay not be fou nd in the literatu re. In ad d ition, the old d ebate of w hether m anagem ent is d ifferent from lead ership (Zaleznik, 1992) is still alive and w ell. We argu e that in ord er to sp eak m eaningfu lly abou t the consequ ences of globalization for m anagem ent and lead ership d evelop m ent in MN Es, som e attem p t m u st be m ad e tow ard s clarification of these contested issu es. In other w ord s; the relationship betw een global m anagem ent and global lead ership w ill have to be clarified – at least for the p u rp oses of this article. It w ill also be necessary, w e argu e, to exp lore to som e extent the assu m p tions u nd erlying the p roblem s in lead ership theory, as w ell as the p otential roots of these p roblem s in organizational theory. Finally, the sp ecial characteristics of the globalized environm ent of MN Es w ill have to be inves tigated and clarified together w ith the consequ ences for m anagem ent and lead ership in MN Es.
We w ill argu e that d esp ite the d ocu m ented p roblem s of fragm entation in lead ership theory, it is still p ossible to id entify a d om inant trend w hen it com es to the concep tion of m anagem ent and lead ership of organizations. We w ill also argu e that the greatest p otential p roblem for attem p ts at d evelop ing new m anagerial and lead ership p ractices in MN Es m ay be that researchers and p ractitioners alike continu e to abid e by im p licit assu m p tions em bed d ed in the d om inant ind ivid u al, rational and instru m ental p ersp ectives on m anagem ent and lead ership . More sp ecifically, taking for granted that global lead ership has to d o w ith ind ivid u al traits, cap acities, skills and m ind sets w hich p rom ote organizational effectiveness in a globalized bu siness environm ent, w ill not constitu te su fficient grou nd s for d evelop ing new and need ed m anagerial and lead ership p ractices. While it m ay not
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necessarily be highly p roblem atic to d efine m anagem ent as w hat m anagers d o, it is m u ch m ore p roblem atic to d efine lead ership in this w ay. And , even if d efining m anagem ent and lead ership as ind ivid u al activities is help fu l in p rovid ing a straightforw ard rationale for d evelop m ent efforts, it is a p roblem that tr aits, skills and cap acities are d e-contextu alized in this concep tion. And a new , d iverse and com p lex context is p recisely w hat MN Es are faced w ith.
We w ill argu e that the traits and characteristics ap p roach im p lies that global m anagem ent and lead ership behavior are seen as d e-contextu alized instru m ents;
u niversal m eans for achieving organizational goals faced w ith the challenges p osed by increasing globalization. We w ill argu e that su ch a concep tion of m anagem ent and lead ership , w hich p ortrays lead ership as a u niversal m eans to a d esired end , is at od d s w ith the consid erable d iversity and com p lexity that MN Es face. We w ill call this ap p roach to global lead ership a “logic of instru m entality”, and w e w ill argu e that it has d eep roots in social and organizational theory. In this p ap er, w e w ill contrast this logic of instru m entality w ith w hat March & Olsen (2009:2) have d escribed as “a logic of ap p rop riateness“: “human (…)action, (..), policy making included, is seen as driven by rules of appropriate or exemplary behavior, organized into institutions (….) Rules are followed because they are seen as natural, rightful, expected, and legitimate. A ctors seek to fulfill the obligations encapsulated in a role, an identity, a membership in a political community or group, and the ethos, practices and expectations of its institutions. Embedded in a social collectivity, they do what they see as appropriate for themselves in a specific type of situation.” Thu s, w e choose to em p loy an exp licitly neo - institu tional ap p roach to the u nd erstand ing of organizations, inclu d ing m anagem ent and lead ership . We d o this becau se su ch an ap p roroach p resents a d ifferent and em erging p ersp ective from trad itional theories on the interaction betw een m anagem ent, lead ership and organizational en vironm ents. In this ap p roach, m angerial action and lead ership are seen as reflections of w hat is ap p rop riate in
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relation to p articu lar contexts rather than as d e-contextu alized instru m ental behavior.
We are not argu ing, how ever, that ap p rop riateness is sim p ly a m atter of managerial choice. In March and Olsen‟s formulation of the logic of appropriateness, exp licit ru les and consciou s, rational d ecisions seem to be given prom inence (March
& Olsen 2009: 30-31), and accord ingly, consciou s choices and d ecisions becom e the m ain d eterm inants of w hat is ap p rop riate. Im p licit and u nconsciou s influ ences are obscu red , or even ignored , in this form u lation. Scott (2008) and DiMaggio and Pow ell (1995), how ever, have p ointed ou t that these latter influ ences are an integra l p art of the sociological ap p roach to new institu tionalism in organizational theory, and Kostova (1999) has argu ed that the im p licit cognitive and norm ative asp ects of the institu tional context rep resent a greater challenge for MN Es than the exp licitly regu latory asp ects2.
In this p ap er, w e w ill em p loy a version of the logic of ap p rop riateness w hich inclu d es im p licit, u nconsciou s influ ences on w hat is ap p rop riate. Thu s, the logic of ap p rop riateness as w e w ill be u sing it im p lies that global m anagem ent and global lead ership activities are ad ap ted , consciou sly or u nconsciou sly, to the p articu lar context confronting both lead ers and follow ers. This is to say that global lead ership em erges in the local context rather than sim p ly reflecting the rational choices of the p erson in the lead ing role of m anager. This logic fu rther im p lies that global lead ership is ad ap ted , consciou sly or u nconsciou sly, to the p articu lar context confronting both lead ers and follow ers. We argu e that this alternative rationale for the d evelop m ent of new global m anagerial and global lead ership p ractices p oints
2 We regard this im p licit cognitive and norm ative asp ect as virtu ally synonym ou s w ith t he concep t of cu ltu re as em p loyed by for exam p le H ofsted e (1980). As a consequ ence w e view the
“culture” literature as subsumed und er neo-institu tional theory.
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tow ard s a m ore exp eriential and reflexive ap p roach to lead ership d evelop m ent3, and that this carries sp ecial p rom ise for d evelop ing global lead ership in MN Es. Thu s, w e su ggest that su p p lem enting the logic of instru m entality w ith the logic of ap p rop riateness to the d evelop m ent of new p ractices w ithin global m anagem ent and global lead ership w ill serve MN Es w ell. As ind icated above, this is becau se the latter logic p laces m ore em p hasis on u nd erstand ing the contextu al challenges im p lied by increasing globalization. This logic is also fou nd ed in neo -institu tional theory, w hich constitu tes the clearest challenge that has em erged over the last 20 years to trad itional organizational theories. We w ill argu e that ap p lying this logic im p lies a rationale for d evelopm ental w ork that is m ore exp eriential and reflexive, and thu s m ore com p lex, than the seem ingly straightforw ard ap p roach im p lied by the logic of instru m entality.
3The p ap er is w ritten w ithin the fram ew ork of tw o interrelated research p rojects u nd ertaken at the N orw egian Sch ool of Econom ics and Bu siness Ad m inistration. One p roject is called GOLD (Global Organization and Lead ership Develop m ent) and the other is called Beyond Bu d geting. The resp ective foci of these p rojects are the contingencies for corp orate g overnance and control in the absence of trad itional bu d get control; and w hich tools and techniqu es m u ltinational corp orations m ight ap p ly to increase social cap ital in su ch a w ay that know led ge d evelop m ent and sharing of strategically im p ortant know led ge is also enhanced .
6 The structure of the paper
The p ap er is d ivid ed into fou r p arts. Parts I and II p rovid e an exp loration of the logic of instru m entality and ap p ropriateness in m anagem ent and lead ership as they are reflected in organizational theory and m anagem ent/ lead ership theory. With resp ect to the latter, an attem p t is also m ad e to clarify the relation ship betw een m anagem ent and lead ership . Part III exp lores consequ ences of the logic of ap p rop riateness for global m anagem ent and global lead ership d evelop m ent p rogram s. Finally, in part IV w e su m m arize ou r find ings and id entify qu estions that w arrant fu rther research in the field s of global m anagem ent, global lead ership and global lead ership d evelop m ent.
Part I
Organizational theory, MN Es and management
One m ain task for social theory is to exp licate and u nd erstand the relationship betw een ind ivid u als and society. In the case of organizational theory , this task translates to u nd erstand ing and exp laining the existence an d su rvival of organizations as stru ctu res and p rocesses, and to d escribe how ind ivid u al action and interaction m ay contribu te. One su b-them e is d escribing and u nd erstand ing m anagem ent and lead ership , and how they contribu te. Colem an‟s “bathtu b” m od el is one illu stration of the relationship betw een ind ivid u al behavior and collective social p atterns (Colem an, 1990), and of the im p ortance of seeing ind ivid u al behavior and social interaction as m icrofou nd ations of collective social p atterns .
In the introd u ction, w e referred to the observation that increasing globalization resu lts in increasing d em and from MN Es for global lead ership and for the d evelop m ent of global lead ers. In som e versions this takes the form of a call for id entifying or d evelop ing ind ivid u als p ossessing or exhibiting traits and characteristics d eem ed to be beneficial w ith resp ect to organizational effectiveness
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(see for exam p le Parker, 1996; Gregersen et al., 1998; Su u tari, 2002; Mend enhall, 2008). Other versions, like Bartlett and Ghoshal (1992) exp licitly state that there is no su ch thing as one kind of global m anager. Instead , Bartlett and Ghoshal argu e that several typ es of global m anagers are need ed . Still, they argu e in term s of ind ivid u al skills and p ersp ectives w hen d iscu ssing how the d em and for global m anagem ent of the organization is to be m et (Bartlett & Ghoshal, 1992: 108). We su ggested in the introd u ction that this focu s on ind ivid u al characteristics and skills im p lies that a logic of instru m entality is im p licitly em p loyed to global m anagem ent and lead ership , and that this logic cou ld fru itfu lly be su p p lem ented by a logic of ap p rop riateness. In this section, w e w ill u tilize organization theory to gain fu rther insight into how the resp ective logics of instru m entality and ap p rop riateness p ortray global m anagem ent and global lead ership in
MN Es. This necessitates som e sp ace being given to d iverse organizational theories and the p rescrip tions, and the ensu ing consequ ences for
m anagerial and
lead ership p ractices in MN Es.
The first challenge in this resp ect is that
organizational theory, accord ing to Ghoshal & Westney (20054), has had d ifficu lties d ealing w ith MN Es as d istinctive organizations. The d om inant organizational p arad igm s in the last centu ry saw organizations as closed , and later as op en, system s
4 In the second 2005 ed ition of “Organization Theory and The Multinational Corporation” they
reiterated this argu m ent m ad e in the 1995 version of the book (Ghoshal & Westney, 2005).
Figure 1: An illustration of generic open systems theory (after Marion, 1999).
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in several and su ccessive variations. Early theories of organizations as rational closed system s p ortray organizations as tools to achieve p reset end s, and largely ignore perturbations in the organization‟s environment (Scott, 1987: 99). Scientific m anagem ent and hu m an relations are exam ples of theories w hich p rescribe internal effectiveness and efficiency of p rocesses, as the m ain goals for m anagem ent and lead ership . Op en system s theories, in variou s versions, have been centrally concerned w ith the interaction betw een the organization and its environm ent. (Scott, 1987; Morgan, 1996; Marion, 1999; Ghoshal & Westney, 2005). This has resu lted in relatively less attention being p aid to the internal and p otentially highly com p lex p rocesses of MN Es. Ad op ting a m acro p ersp ective w ithin this p arad igm , one m ight d ep ict the organization as an op en system bou nd ed from a generalized “faceless”
environm ent, and d ep end ent u p on its interaction and exchange w ith that environm ent for its su rvival (figu re 1). This w ou ld entail receiving inp u t, p rocessing this and p rovid ing an ou tp u t; the w hole interaction being regu lated throu gh feed back. In this view , globalization m ay be seen as som ething external, hap p ening in the organization‟s environment.
Tw o historically d om inant variations on op ens system s theory, “Structural Contingency Theory” (SCT) and “Resource-Dependency Theory” (RD) (Pfeffer &
Salancik, 1978), m ay be term ed “p rescrip tive theories” in that they yield exp licit p rescrip tions for m anagem ent (Marion, 1999). SCT theory states that "The best way to organize depends on the nature of the environment to which the organization must relate"(Scott, 1987). Organizational stru ctu re is thu s a m eans for ad ap tation to the environm ent (Marion, 1999). RD theory ad vises m anagem ent of organizations to aim tow ard s a red u ction of the organization‟s d ep end ency on its environm ent, and a corresp ond ing increase in its au tonom y, relative to the environm ent (Scott, 1987;
Marion, 1999).
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The resou rce-based theories in econom ics state that an organization‟s com p etitive ad vantage is a fu nction of its resou rces being valu able, rare, inim itable and non-su bstitu table (Barney, 1991; Barney et al., 2001; Barney & Clark, 2007), and in this view , d evelop m ent of resou rces becom es p aram ou nt, p articu larly in the versions of resou rce-based theory argu ing that know led ge is becom ing the m ost im p ortant resou rce of MN Es. A d istinction is also m ad e in resou rce -based theories betw een resou rces and cap abilities, w here resou rces are trad e-able and non -sp ecific to the organization (Am it & Schoem aker, 1993), w hile cap abilities are sp ecific and used to utilize the organization‟s resources, for instance through processes transferring know led ge w ithin the firm . This d istinction is also of p rim e im p ortance in the theory of d ynam ic cap abilities (Teece et al., 1997; Eisenhard t et al., 2000; H elfat et al., 2007; Teece, 2007) w hich goes som e w ay tow ard s d ifferentiating the organization, its environm ent and the interaction betw een the tw o in the sense that the relation is seen as d ynam ic: the organization m u st change as the envir onm ent changes to m aintain its com p etitive ad vantage. The p rescrip tion for m anagem ent in this theory would be to ensure that the organization‟s dynamic capabilities – as resou rces - are d evelop ed to m eet changes in the environm ent. But still, also in this theory the focu s is p rim arily on internal p rocesses and the d iversity of the environm ent is not given su fficient w eight.
Thu s, extant organizational theories referred to above have tend ed to be u sed in relation to MNEs in such a way that “the environment” has been treated as a relatively u nd ifferentiated and u nsp ecified entity (Du ncan, 1972). This is also the case for theories from econom ics in w hich interaction as w ell as internal and external interd ep end encies have received too little attention (Rosenzw eig & Singh, 1991;
Ghoshal & Westney, 2005). In ou r context, it is im p ortant to stress that a ll of the theories referred to above m ay be p laced w ithin the closed and op en system s p arad igm as p rescribing a generalized p ractice of m anagem ent em p hasizing rational choice and a m eans-end s p ersp ective w ith resp ect to the m anagem ent‟s role in
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secu ring organizational effectiveness. In this resp ect, they m ay also serve as exam p les of the logic of instru m entality w here the m anagem ent and lead ership of organizations are p ortrayed as a generalized , u nequ ivocal and u niversally ap p licable m eans to a d esired end . The influ ence of this logic is su ccinctly d escribed by Plow m an and Du chon (2008) w ho argu e that w hat they call the “implicitly surviving cybernetic5 heritage of early systems theory” im p lies that m anagers and lead ers in organizations see the organization as a relatively holistic and relatively clearly bou nd ed system w hich can be regu lated and controlled from a p osition ou tsid e and beyond the system . From this “transcendent”6 p osition, both the organization and the environm ent can be su rveyed and assessed by m anagem ent p rior to taking instru m ental action in ord er to ensu re that the organization m oves in “the right direction” towards enhanced effectiveness. This is entirely consistent with the generic op en system s theory m od el p resented in figu re 1, and constitu tes a rational- choice version of the instru m ental logic of m anagem ent and lead ership . In the follow ing, w e w ill d em onstrate how institu tional theory m ay contribu te to a logic of ap p rop riateness in global lead ership and m anagem ent w hich m ay act as a su p p lem ent, or even correction, of the theories referred to above. The institu tional p ersp ective im p lied in this logic p rovid es a contrast to d om inant theories by seein g the environm ent as highly d ifferentiated , and thu s, bringing globalization into the organization itself in the form of d iverse institu tional affectations, p u lling at and p u tting p ressu res on m em bers of an MN E.
5 Cybernetics is the interd iscip linary stu d y of regu latory system s, and an exam p le of 1st
generation cybernetics ap p lied to m anagem ent w ou ld be to see m anagem ent as analogou s to the regu lation of a therm ostat by setting the tem p eratu re w ithin w hich the heat -sou rce (a p anel oven, for instance) op erates. An exam p le of an organizational p aram eter w hich cou ld be set in this w ay throu gh m anagem ent m ight be anything m easu rable.
6 By transcend ent lead ership w e m ean “ou tsid e; or on the ou tsid e of” in a su p er -ord inate w ay.
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An MN E m ay be d efined as a corp oration ow ning assets and op erating in and across m u ltip le d om estic location s. Bu t su ch a broad d efinition conceals hu ge variation in term s of d egree and typ e of internationalization of these com p anies.
Thu s this d efinition m ay seem too w id e w hen stu d ying the natu re of the m anagem ent and lead ership challenges of MN Es7. In relation to global m anagem ent and global lead ership one m ight argu e that only enterp rises op erating in a tru ly global fashion shou ld be consid ered (see for exam p le Parker, 1996). This w ou ld im p ly that only enterprises w hich are p resent globally need global m anagem ent and lead ership . We consid er that su ch a d efinition is too narrow for ou r p u rp oses p rim arily becau se the nu m ber of su ch enterp rises m ay be very low (Ru gm an, 2004, 2005). And second ly, globalization is affecting all MN Es and thu s w e w ish to focu s on the broad category encom p assed by the d efinition of MN Es given above. Even thou gh these organizations m ay be highly d iverse, in term s of internal characteristics, w e argu e that in a globalization context it is the d iversity of these organizations‟ environment that should be the focus.
We have alread y observed that an organizational theory of u nd ifferentiated environm ents is at a d isad vantage for d escribing and u nd erstand ing these organizations. Ghoshal and Westney (2005) argu e that the institu tional p arad igm w ithin organizational theory extend s (and p erhap s transcend s) the generic op en system s p arad igm d ep icted in figu re 1 in that it d issolves the sep aration betw een the organization and the environm ent, effectively bringing the environm ent into the organization. This im p lies essentially that the d iverse environm ents of an MN E, in the form of d iverse institu tional p u lls and p ressu res regard ing w hat is ap p rop riate, is being felt and acted u p on by the d iverse geograp hically and cu ltu rally d isp ersed
7 Verbeke and Bru gm an (2009) argu e that research investigating the relationship betw een
d egree of internationalization and p rofitability has show n highly inconsistent resu lts p artly cau sed by the consequ ence of trying to “compare apples with pears”.
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ind ivid u al actors of the organization . The interaction betw een these p eop le and their environm ents, inclu d ing other p arts of the MN E, in tu rn constitu te the organization.
Thu s Scott (2008: 48) d efines institu tions as: “comprised of regulative, normative and cultural cognitive elements that, together with associated activities and resources, provide stability and meaning to social life.” Institu tional theory, in tu rn, varies w ith the em p hasis it p laces u p on these three elem ents.
Accord ing to Scott (2008), econom ists and rational choice scholars have tend ed to em p hasize strongly the regu lative elem ents, su ch as ru le -setting, m onitoring and sanctioning activities. H e su ggests that scholars em p hasizing these elem e nts tend to view ind ivid u als as rational, u tility-m axim izing agents m aking rational choices to fu rther their self-interests. In this view , lead ership w ou ld also tend to be seen as an instru m ent u sed to attain a d esired goal in ord er to align the organization to an environm ent of internal and external ru les. Thu s, w ithin institu tional theory , a logic of instru m entality m ay also ap p ly to lead ership , p articu larly w hen the m ain em p hasis is on the regu lative elem ents. Bu t w hen Scott‟s other tw o elem ents, the norm ative and cu ltu ral cognitive, are given m ore prom inence, centralized rational choice and instrumental action on management‟s part, based on factual/ technical inform ation abou t the environm ent, is no longer the only issu e in the m anagem ent of organizations. Ju st as im p ortant are w hat kind s of m anagem ent and lead ership are rend ered ap p rop riate and legitim ate relative accord ing to the institu tional p u lls and p ressu res. Thu s, these cognitive and cu ltu ral elem ent versions of institu tional theory w ou ld tend m ore tow ard s u tilizing a logic of ap p rop riateness w hen p ortraying lead ership of MN Es. This version of institu tional theory also seem s p rom ising in accou nting for the d iversity and com p lexity of the MN E.
Morgan and Kristensen (2006) have argu ed that the relatively recent im p act of institu tionalist theory, in its variou s gu ises, has contribu ted to a n increasing focu s
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am ong scholars on the d istinctive natu re of the MN E. They go on to say that the concern of institu tional theory w ith how the social em bed d ed ness o f firm s in p articu lar contexts shap es their d iverse stru ctu res and p rocesses has led to an increased exp loration am ong institu tionalists o f the p lu ralistic natu re of social em bed d ed ness p rocesses in m u ltinationals. They also d escribe w hat they call
„institutional duality‟ (see Kostova & Roth, 2002) as typical of MNEs: within m u ltinationals, local actors are p u lled and p ressu red to conform to the exp ectations of their hom e context w hile also being su bjected to the transfer of p ractices from the hom e context of the MN E itself. And this is significant, becau se m ost MN Es are strongly hom e-centered (H irst et al., 2009). Whether this lead s to H Q d om ina nce is another issu e (see Forsgren et al., 2005), bu t in any case this institu tional d u ality lead s to conflicts th at can be labelled form s of „m icrop olitics‟ – the negotiations and clashes betw een d iverse w orld view s, cu ltu res and interests.
Thu s, head office m anagers transfer p ractices, p eop le and resou rces to su bsid iaries in ord er to m aintain control and achieve t heir objectives. Local su bsid iaries have d ifferential cap acities to resist these transfers or to d evelop them in their ow n interests d ep end ing on their institu tional context. Accord ingly, w ithin an MN E, a d ifference in view s and p ractices m ay em erge betw een H Q and su bsid iaries as to w hat constitu tes ap p rop riate lead ership . H Q m anagem ent m ay ad vocate d evelop ing “global lead ership ” as a m eans tow ard s a d esired end for the organization as a w hole w hile local m anagers m ay em p hasize lead ership that is ap p rop riate for the local context. And w ithin an institu tional theory fram ew ork , these d ifferences m ay not be a m atter of rational d eliberation only; in the cu ltu ral - cognitive varieties of institu tional theory , institu tional p u lls and p ressu res, of w hich m anagers are u naw are, or ind eed u nconsciou s of, m ay exert a n equ ally strong influence. Accordingly, the “choice” between global integration and local adaptation
14
m ay not alw ays be clear, or even p ossible, for m anagers w ho are exp osed in their everyd ay p ractices to the resp ective elem ents of this institu tional d u ality.
One of the au thors exp erienced an exam p le of institu tional d u ality w hen interview ing a foreign su bsid iary m anager of an MN E abou t the H Q, and the p arent organization‟s attempts to integrate the activities of the subsidiaries, including his ow n. This m anager stated w ith great em p hasis: “The essential issue here will be whether HQ will pay sufficient attention to local business.” This m ay be read as a sim p le restatem ent of the need to balance global integration of the MN E w ith local resp onsiveness. Bu t the statem ent m ay also be read as a statem ent to the effect that it is essential for the H Q m anagem ent to reflect on their ow n p otentially u nconsciou s em bed d ed ness in their ow n institu tional hom e region environm ent, and also to p ay close attention to the varying d egree of em bed d ed ness of the local su bsid iary in its local bu siness and general institu tional environm ent. From this p ersp ective, it m ay not even be p ossible for H Q m anagers to u nd erstand and grasp the local context su fficiently to p erform their balancing act in global lead ership . Ind eed , Forsgren et al.
(2005: 104) argu e that becau se of the p ath-d ep end ent and largely externally
“invisible” character of local embedded business relationships, headquarter m anagers of MN Es are p otentially fu nd am entally ignorant of the em bed d ed typ e of local ad ap tations and , therefore, that their ability to balance them against each other is highly constrained . One m ight even argu e that they cannot choose. Thu s, the instru m ental logic of attem p ting a m anagerial balancing act m ay constitu te a spurious “prescription of choice” in MNEs – in the extreme case, it may even be irrelevant. Instead , m anagers m ay be left w ith the op tion of continu ou sly attem p ting to achieve econom ies of scale and scop e, am ong su bsid iaries in a fed erative MN E, throu gh negotiations w ith local m anagers in the hop e of achieving som e coord ination and integration (see And erson et al., 2007).
15
Even if organizational theory has not p aid su fficient attention to the sp ecial character and challenges of the MN E, several contribu tions have been m ad e tow ard s a d ifferentiation of organizational environm ents w hich m ay be of use. Du ncan (1972) introd u ced the sim p le-com p lex d im ension and the static-d ynam ic d im ension as concep tu al tools for achieving d ifferentiation of internal and external environm ents.
Accord ing to Du ncan, a simple environm ent has few factors that are also sim ilar to one another, w hile a complex environm ent has m u ltip le and d issim ilar factors. In a static environm ent, the factors rem ain the sam e and also rem ain stable over tim e, w hile in a dynamic environm ent, new factors em erge and factors also change over time. Duncan‟s research indicated that it is not the number of factors (what he calls com p lexity) w hich creates the greatest am ount of u ncertainty bu t rather the d ynam ic changes in m u ltip le factors (Du ncan, 1972: 322-325). Scott & Meyer (19918) introduced the differentiation between strongly or weakly developed “technological environments” and “institutional environments”, and u tilized this d ifferentiation in exp loring how d ifferent environm ents seem to em p hasize d ifferent typ es of rationality. They su ggested that technical environm ents em p hasize a rationality that incorp orates p rescrip tions for m atching m eans and end s in w ays that are effective in p rod u cing ou tcom es of a p red ictable character (Scott & Meyer, 1991: 124). With resp ect to institu tional environm ents, these tend to em p hasize a rationale for organizations that em p hasize conform ity to stand ard s, regu lations, norm s and au thorities in each p articu lar sector. These tw o typ es of environm ents w ou ld seem to em p hasize, resp ectively, w hat w e have called the logic of instru m entality and the logic of ap p rop riateness.
Rosenzw eig & Singh (1991) su ggested analyzing the institu tional environm ent in term s of p ressu res for isom orp hism w ith the local environm ents of
8 Originally p u blished in 1983.
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MNEs and pressures for consistency with the MNE‟s policies and structures. They argu ed that these p ressu res w ou ld vary w ith the d ifferent d om estic contexts of the MN E, and that they w ou ld influ ence stru ctu res and p rocesses of the p articu lar MN E.
Rosenzw eig and Singh (1991) also argu ed that MN Es m ay exert a consid erable influ ence of their d iverse contexts and thu s, the issu e of com p lex interaction be tw een the MN E, and its variou s environm ents, is brou ght to the fore in a m anner not cap tu red by trad itional organizational theory .
Kostova & Zaheer (1999) have exp lored three typ es and locations of com p lexity that affect the legitim acy of the MN E; in the legitim ating environm ent of an MN E, in the organization of the MN E, and in the p rocess of legitim ation. They conclu d e that the sheer nu m ber of d ifferent contexts faced by MN Es creates issu es of legitim acy, and that the tensions betw een the MN E‟s internal legitim acy requirements and the legitimacy requirements of its subunits‟ host countries are likely to create difficulties for the subunits. They also argue that what they call “the bou nd ed rational nature of the legitim ation p rocess” (Kostova & Zaheer, 1999: 77) creates sp ecial p roblem s of d iversity for MN Es. Finally, they p oint ou t that MN Es are much more vulnerable to “legitimacy spillovers” than are purely domestic firms.
This m eans that for MN Es, p roblem s w ith legitim acy in one context m ay easily sp ill over to other contexts. Kostova and Zaheer (1999) also p oint ou t the im p ortance of investigating further the complexity of the MNE‟s contexts wit h respect to potential interactions w hich w ou ld p rod u ce ad d itional com p lexity.
Good erham et al. (1999) have sh ow n that the national em bed d ed ness of firm s has a strong effect on the ap p lication of both calcu lative and collaborative hu m an resou rce m anagem ent p ractices. They also argu e that their resu lts highlight the shortcom ings of rational organization theory by r evealing the need to incorp orate cou ntry-sp ecific, institu tional factors in stu d ies of m anagem ent p ractices
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(Good erham et al, 1999:527). Thu s, the d egree of m anagerial au tonom y su ggested by the logic of instru m entality is revealed to be red u ced by institu t ional factors.
We conclu d e that organizational theory offer s p ersp ectives w hich em p hasize both typ es of logic w ith resp ect to m anagem ent; the logic of instrum entality and the logic of ap p rop riateness. The qu estion lingers, how ever, w hether MN E m anagerial p ractice m ay transcend p rescrip tions originating in trad itional organizational theory.
Alread y 10 years ago, N ohria and Ghoshal (1997) su ggested that MN Es m ay be seen as netw orks m ore than as bou nd ed u nitary “system s” in a generalized environm ent.
And , Forsgren et al. (2005) argu e that a m ore d etailed analysis of the MN Es d iverse environm ent reveals that the contem p orary MN E – w ith increasing connectivity, interd ep end ence and ensu ing com p lexity - is becom ing m ore sim ilar to a loosely cou p led netw orked coalition than to a trad itional, bou nd ed hierarchical organization9. Certainly, if organizations are seen as “complex adaptive systems embedded in heterogeneous networks consisting of nodes such as people, machines, projects and heterogeneous components of the modern technological environment”10 (Kild u ff et al.
(2008: 83), then efforts tow ard s central, head qu arters-initiated integration m ay constitu te clear risks to MN Es w ith resp ect to local legitim acy and ap p rop riateness.
Integration m ay com p rom ise the fragile integrity of the netw ork MN E. An em ergent trend tow ard s seeing MN Es as d e-centered netw orks (Kild u ff & Tsai, 2003; Kild u ff et al., 2008: 83) w hich are locally intertw ined w ith other netw orks (Forsgren et. al., 2005) - and p u lled and p ressu red everyw here by the m u ltip licity of institu tional contexts,
9 See also Hed lund ‟s d escrip tion of “the heter-archy” (H ed lund , 1993).
10 This evokes im ages of ActorN etw orkTheory w hich goes one step fu rther in d e -centering
organizational action aw ay from an exclu sive focu s on hu m an agents op erating rationally on the organization, tow ard s an inclu sion also of non -hu m an “p articip ants” in the netw ork (see for exam p le Czarniaw ska & H ernes, 2005).
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often in non-transp arent and u nconsciou s w ays (Scott, 2008) - w ou ld am ou nt to lead ership being seen not m erely as the instru m ental actions of a central, transcend ent m anager bu t also as an em ergent social p rocess that is em bed d ed in organizational p ractice (Plow m an & Du chon, 2008). In contrast to w hat w e called
“transcendent leadership” above, this conception of leadership may be referred to as
“immanent11” leadership , embedded as localized processes in local contexts.
In conclu d ing this section , w e state that throu gh the lens of trad itional organizational theory global lead ership m ay be seen as a u nitary, u niversally ap p licable typ e of lead ership , effective across all contexts and corresp ond ing to a logic of instru m entality – the m anager as an agent p u rsu ing a p reconceived end : the integration of the MN E threatened by fragm entation. H ow ever, w ithin the fram ew ork of institu tional theory , the MN E m ay also be seen as an organization characterized by m u ltip le em bed d ed ness in d iverse local contexts, each being constitu ted by environm ental (isom orp hic) p u lls and p ressu res from institu tions (Ghoshal & Westney, 2005). This institu tional p ersp ective of the MN E w ou ld yield a d ifferent u nd erstand ing of global m anagem ent an d global lead ership bu ilt on a logic of ap p rop riateness. This latter p ersp ective w ou ld seem to offer p rom ise in u nd erstand ing the d iversity and com p lexity of MN Es. The next section w ill exp lore global lead ership and global lead ership d evelop m ent through th e lens of m anagem ent and lead ership theory.
11 By Im m anent w e m ean intrinsic to, and in -d etach able from , the system
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Part II
Leadership theory, global management and global leadership
In review ing the field of global lead ership , Mend enhall (2008) argu es that the field is p lagu ed by p roblem s that have long been ram p ant in gen eral lead ership theory: no agreed u p on d efinition of lead ership , lack of m u ltid iscip linary thinking (“balkanization”), researchers in any given period being excessively influenced by the Zeitgeist, lack of clear criteria of lead ership effectiveness, and a lack of u nd erstand ing of follow ership . In his review of lead ership stu d ies, Rost (1991) conclu d ed that 60% of au thors in lead ership stu d ies u p u ntil then d id not d efine lead ership . H is conclu sion w as that the au thors seem ed to assu m e im p licitly that everyone know s w hat lead ership is. Barker (1997) observes that those w ho d o p rovid e a d efinition tend to equ ate lead ership w ith good m anagem ent, d efining it as the activity of su ccessfu l ind ivid u al m anagers exhibiting ind ivid u al traits and cap abilities w hich are seen as cond u cive to organizational effectiveness (see also Bu rns, 1978, and Streatfield , 2001). On the other hand , Zaleznik (1992), Bennis (1990) and Kotter (1999) have argu ed that lead ership is d ifferent from m anagem ent, even if they see both as ind ivid u al activities.
While som e m ight conclu d e, like Barker (1997: 346), that “the study of leadership is an academic discipline in shambles”, Mend enhall (2008:9) has stated m ore soberly that agreed u p on d efinitions of lead ership are lacking , and that attem p ts to clarify th e relation betw een m anagem ent and lead ership have p roven to be be “com p lex and unsuccessful”, and further, that this remains a problem in the field of global lead ership . Clarifying the relation betw een m anagem ent and lead ership is also a p roblem in lead ership theory in general (Yu kl, 2006). Rost (1991, 1993) and Bu rns (1978) have argu ed , how ever, that lead ership shou ld not be view ed as the activity of m anagers bu t rather as a social and contextu alized p rocess, a p attern of localized interaction, involving both lead er s and follow ers. It w ou ld seem obviou s that there is
20
no lead ership w ithout follow ers, and p lacing all resp onsibility for the follow ers‟
follow ing the lead er in su ch a p rocess risks ignoring the follow ers‟ ind ivid u ality, as w ell as the p rocess in w hich the follow ers are involved and the context in w hich both lead er and follow ers find them selves. Within the fram ew ork of neo-institu tional theory ou tlined in the p reviou s section , lead ership m u st su rely be contextu alized , and a p rocess view seem s natu ral.
Accord ingly, w e choose to bu ild u p on Rost‟s and Bu rns‟ elaboration of the relationship betw een m anagem ent and lead ership . This im p lies that m anagem ent m ay be d efined as ind ivid u al or collective attem p ts tow ard s influ encing the d evelop m ent of an organization (see Clegg et al., 2006), w hile lead ership is a social p rocess w hich m ay, or m ay not, ensu e follow ing su ch influ ence attem p ts. The activities of ind ivid u als in form al m anagerial p ositions are thu s intrinsically involved in the p rocess of lead ership bu t their activities are not id entical w ith lead ership . It follow s from this, that lead ership is an ep isod ic rather than a constant p rocess (see Rost, 1993), and that both m anagem ent and lead ership fu nd am entally involve the relationship betw een ind ivid u al action and collective p atterns of activities.
Thu s m anagem ent and lead ership overlap , and it becom es im p ortant not to aim for a com p lete d istinction betw een them . On the contrary, w e agree w ith Krantz
& Gilm ore (1990) that sp litting the tw o concep ts is p articu larly p roblem atic w hen m anagem ent is p ortrayed as d role and d u ll w hile lead ership is seen m ore as a heroic end eavou r (see for exam p le Zaleznik, 1992 and Bennis, 1990). Interestingly, Krantz &
Gu lm ore (1990) su ggest that su ch a sp lit m ay fu nction as a social d efense against the anxieties resu lting from an increasingly com p lex environm ent , su ch as the one MN Es are exp eriencing. Su ch a d efense m ay constitu te an exam p le of an u nconsciou s social p rocess p u shing tow ard s the institu tionalizaton of a sim p lified instru m ental logic of global m anagem ent and lead ership : first by id ealizing the transcend ent god -like
21
lead er, and second by sim p lifying the p rocess of lead ership into ind ivid u al heroic action.
In line w ith ou r argu m ent above, w e w ou ld argu e that the field of global leadership my have “inherited” from general leadership theory a pronounced schism betw een the d om inant view , w hich u nd erstand s m anagem ent and lead ership as ind ivid u al rational choice agency , and the fringe view u nd erstand ing of lead ership as a situ ated and em bed d ed p rocess. In Granovetter‟s (1985) term s, the first accou nt is an “u nd er-socialized ” theory of m anagem ent and lead ership w hile the other one illu strates “em bed d ed ness”12. This involves the risk that global lead ership of th e transcend ent kind , w hat Osland (2008a: 61) has referrered to as “the predominant individual competencies approach in extant global leadership literature”, fails to exp lain how global m anagers and lead ers interact w ith the contextu al d iversity they find them selves in. We w ill argu e that this follow s from the im p licit ind ivid u al-centered instru m ental logic im p lied in these concep tions of global m anagem ent and global lead ership .
In p art I, w e referred to this ind ivid u alist, instru m ental, rational-choice accou nt as “transcendent”, and as exhibiting a logic of instru m entality. We su ggest that the second , em bed d ed p rocess accou nt, m ay be referred to as “immanent”, exhibiting instead a logic of ap p r op riateness. In the follow ing, w e trace these tw o accou nts in general lead ership theory before exp loring how they are reflected in exam p les of extant theory of global m anagem ent and lead ership .
In lead ership theory, several m ain ap p roaches m ay be id entified . For the sake of sim p lification w e w ill p rovid e a brief accou n t of fou r m ain ap p roaches; the trait ap p roach, the behavioral ap p roach, the contingency ap p roach , and the p rocess
12 The challenge, of course, is avoid ing that the ind ivid u al‟s role in lead ership becomes too und erstated , and that the conception of lead ership becomes “over -socialized ”.
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ap p roach as these em erged and follow ed each other historically. In the old est ap p roach, the trait ap p roach , d esirable p ersonal traits of the lead er are seen as beneficial, ind ep end ent of context, to effective lead ership of organizations. Exam p les of this would be “gregariousness”, “openness”, etc. In the behavioral approach, sp ecified behavior – m ost often referred to as “lead ership styles” – are seen as cond u cive to effective lead ership , also relatively ind ep end ent of a w id er context. The m ost typ ical exam p le of this ap p roach w ou ld be the Ohio State stu d ies w hich id entified the activities of “initiating structure” and “showing consideration” as the tw o basic factors in effective lead er ship .
In the contingency theories w hich follow ed , the basic issu e is that lead ers shou ld ad ap t their lead ership style to the context; to the situ ation at hand (Brym an, 1986; Sm ith & Peterson, 1988; Yu kl, 2002). While this latter ap p roach d oes evoke a logic of ap prop riateness, the d om inant em p hasis in lead ership theory has been given to the lead er‟s rational, instru m ental choice of w hat is ap p rop riate, w hile ap p roaches encom p assing less exp licit cognitive and cu ltu ral institu tional p ressu res and p u lls have been d isp laced to the fringes of the field . Thu s, th ese three first ap p roaches have in com m on a focu s u p on the m anager/ lead er as a m ore or less ind ep end ent agent acting u p on follow ers exam p lifying the transcend ent – instru m ental logic – ap p roach to lead ership .
The fou rth ap p roach, the p rocess ap p roach, d iffers from p reviou s ap p roaches in that it p ortrays lead ership as a social interaction process which involves both leader and follower, and w hich m ay be p otentially transform ing13 for both p arties (Rost, 1991;
Bu rns, 1978:19). Thu s, this ap p roach (see Sm ith and Peterson, 1985; Brym an, 1986
13 The use of transform ative here should not be confused with Bass‟ “transform ative
lead ership”. In Bass‟ use “the transformative lead er” transform s the organization throu gh his/ her actions, thus Bass‟ approach is an example of what we have called the transcend ent ap p roach.
23
and Yu kl, 2006) em p hasizes that lead ership is not an instru m ental ind ivid u al activity ap p lied to organizational ind ivid u als, stru ctu res and p rocesses from a transcend ent p osition relative to these contextu al elem ents. Instead lead ership is seen as em bed d ed in, and em erging from , p articu lar contexts (Streatfield , 2001). On the p rocess view , lead ership em erges as ap p rop riate to contexts throu gh the institu tional p u lls and p ressu res acting u p on both lead er and follow ers as they interact to m aintain these institu tions (social p atterns), exem p lifying a logic of ap p rop riateness.
One early example of a process theory would be Graen‟s (1975) conception of lead ership p rocesses as the ou tcom e of m u ltip le negotiations w here role exp ectations are exp licitly and im p licitly negotiated throu gh ongoing interaction betw een lead er and follow er14. A contem p orary exam p le of a rad ical p rocess theory of lead ership , accom od ating lead ers and follow ers as a com p lex ad ap tive social system , w ou ld be Uhl-Bien et al.‟s (2008) “Ad ap tive Lead ership ”, w hich they d efine as “emergent change behaviors under conditions of interaction, interdependence, asymmetrical information, complex network dynamics and tension. A daptive leadership manifests in CA S (complex adaptive systems) and interactions among agents rather than in individuals, and is recognizable when it has significance and impact.
Within the p rocess p ersp ectives lead ership it is no longer a qu estion of the lead er m erely acting on the su bord inates in ord er to achieve a goal, it also involves the legitim acy, or ap p rop riateness, of the lead er‟s actions in relation to p articu lar contexts, and how the lead er is influ enced , or even u sed , by the su bord inates and other stakehold ers. For instance, the lead er m ight be “u tilized ” by follow ers as a sym bol, w ithou t the lead er necessarily having intend ed this, or even being aw are of this. Thu s, the p rocess view exem p lifies the logic of ap p rop riateness and d iffers from the m ore trad itional view s of lead ership by being thorou ghly contextu alized and by em p hasizing the em bed d ed ness of both lead er and follow ers in p articu lar
14 See also Graen & Scand u ra (1987) for an elaboration of the d yad ic p ersp ective.
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institu tional contexts. In other w ord s, lead ership is im m a nent to social p rocesses as op p osed to transcend ent; ap p lied instru m entally from ou tsid e.
Knu d sen (1995) has coined the term s agents and actors to d ifferent ap p roaches to lead ership : lead ers as agents are ind ivid u als w hose m ain characteristic is seen as the taking of ind ep end ent action; w hile lead ers as actors are ind ivid u als w ho are assu m ed to p lay certain roles (consciou sly or u n-consciou sly) in accord ance w ith the exp ectations of stakehold ers and other influ ences in their environm ent (Knu d sen, 1995: 135-6). This d istinction thu s corresp ond s to the d istinction betw een d om inant economics‟ view of agents choosing rationally to maximize utility; and the sociological view of actors strongly influ enced – if not d eterm ined in their actions - by their em bed d ed ness in a context (DiMaggio & Pow ell, 1991). We w ill now tu rn to the qu estion of how global m anagem ent and global lead ership have been theorized , and how su ch theories align them selves w ith the d istinctions w e have argu ed for above. H as the field inherited the schism w e referred to earlier?
Mend enhall (2008), a lead ing scholar in the field , has argu ed that global lead ership em erged as a field of research in resp onse to MN Es‟ p ressing need s for m anaging increasing globalization. We w ou ld ad d that the challen ge of achieving integration across inter-organizational, national and cu ltu ral bord ers w ill also have contribu ted significantly to MN Es‟ focu s on global lead ership . This cou ld be seen - in essence - as a call for a p articu lar typ e of lead er/ lead ership w ho can act to achieve a d esired end – in other w ord s: lead ership as an instru m ent to achieve an end . In p art I on organizational theory, w e referred to the em erging consensu s that the MN E environm ent is characterized by high levels of d iversity and d ynam ic com p lexity com p ared to p u rely d om estic contexts. Lane et al. (2004) have argu ed the com p lexity facing m anagers of MN Es is evid enced by an increased m u ltip licity of com p etitors and cu stom ers, increased m u ltip licity through d isp ersion of the valu e chain, and increased m u ltip licity of governm ents and non -governm ental stakehold ers. All of
25
this translates, as w e have d em onstrated , to m u ltip le and p otentially interacting and u np red ictable institu tional p ressu res. When it com es to the technical environm ent, econom ic interd ep end ence is increasing, d ifferent p arts of the valu e chain are becom ing m ore interd ep end ent, and interd ep end ence m ay be increasing betw een alliance p artners, su bsid iaries, su p p liers and cu stom ers. In ad d ition, increased am bigu ity resu lts from a lack of inform ation clarity (for exam p le, d iverse sou rces and d iverse ind icators in statistics), and increased am bigu ity also resu lts from equ ivocality cau sed by m u ltip le interp retations of facts – for exam p le, as seen throu gh d ifferent cu ltu ral lenses. And finally, increased am bigu ity m ay increase throu gh less transp arent relationship s betw een cau se and effect d u e, for exam p le, to the increasing m u ltip licity of influ ences.
Lane et al.‟s (2004) p rescrip tion for organizations seeking to achieve effective m astering of this com p lex globalizing context is that they shou ld id entify, em p loy and d evelop m anagers w ho are able to cop e w ith this d ifferentiation and com p lexity in seeking global integrated action (see also Gu p ta et al., 2008 and Wibbeke, 2009).
Thu s, in this view it w ou ld seem that all the com p lexity of the environm ent of MN Es is su p p osed to be “su cked u p ” and d ealt w ith by the m anagers, and that these m anagers are also exp ected to lead by ind u cing follow ers to go along w ith these integration attem p ts. This clearly im p lies a logic of instru m entality. Mend enhall et al.
(2008: 17) p rovid e a d efinition of global lead ership w hich exp licitly d oes not d istingu ish betw een lead ers and lead ership ; and w hich follow s this logic:
“Global leaders are individuals who effect significant positive change in organizations by building communities through the development of trust and the arrangement of organizational structures and processes in a context involving multiple cross-boundary stakeholders, multiple sources of external cross-boundary authority, and multiple cultures under conditions of temporal, geographical and cultural complexity”.
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This d efinition seem s to ad d ress w hat global lead ers d o, and global lead ers are d escribed as ind ivid u al agents w ho are instru m ental in effecting p ositive change of variou s kind s for the organization throu gh their activities in a com p lex context.
While this d efinition d oes not exp licitly state that the global lead er is the m ain sou rce of effectiveness in the organization‟s ad ap tation to the environm ent, this seem s to be assu m ed , im p licitly. Within this fram ew ork of a logic of instru m entality of lead ership , the logical step is to exp lore and id entify the char acteristics of global lead ers. Lead ers p otentially p ossessing sp ecial characteristics, like traits, skills, cap acities and m ind sets, w ou ld then be id entified as p otential global lead ers. Global lead ership d evelop m ent w ou ld then am ou nt to activities aim ed at d evelop ing these characteristics, thus developing “the right people” to become global leaders. And it seem s that lead ing theorists in the field of global m anagem ent and lead ership d o rely on traits and skills of m anagers in d efining global lead ership .
Osland‟s (2008a) review of global leadership research demonstrates in a striking w ay how p ervasive the search for “the right p eop le” has been. In ad d ition, Osland confirm s that global lead ers – the p eop le w ho are potentially alread y “right”
- are the ones researchers have m ost often u tilized as research objects in attem p ts to u nd erstand w hat global lead ership involves. Obviou sly, this ap p roach ru ns the risk of m irroring the rhetoric and concep tions of lead ership institu tionalized in this m anagerial grou p . Thu s - from the p ersp ective of institu tional theory - w e have a situ ation w here th e d om inant d iscou rse abou t w hat global lead ership is, and how it shou ld be ap p lied to MN Es in an ap p rop riate w ay , stip u lates and legitim izes that these organizations shou ld be m anaged accord ing to a logic of instru m entality. Also, accord ing to Osland (2008a: 35), w hen the field of global lead ership em erged in the early 1990s, it w as characterized by extrap olations from the d om estic lead ership literatu re, interview s w ith global, or international m anagers/ lead ers; focu s grou p s or observations from consu ltants. Follow ing this initial p hase, skills and com p etencies
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w ere tentatively d escribed and listed . Accord ing to Osland , one MN E listed 250 com p etencies and skills su p p osed to be fou nd in global lead ers, bu t the range for the MN Es she investigated also inclu d ed lists of as little as 7 characteristics. In later research, lists w ere stru ctu red and organized throu gh analysis and com p arisons into clu sters, and on this basis, m od els started to ap p ear.
Osland herself, together w ith Bird (Bird & Osland , 2004) have p resented “The Pyramid Model” of global leadership (figure 2). Fundamentally, the model is divided into three p arts:
1) Personal
characteristics of the global lead er (“global knowledge”, traits and also attitu d es, as w ell as, attitu d es and orientations like
“global mindset”,
“cognitive complexity” and
“cosmopolitanism”),
2) Interp ersonal skills of the global lead er (“m ind fu l com m u nication”, “creating and bu ild ing tru st” and “m u lticu ltu ral team ing”), 3) System skills of the global lead er (“making ethical decisions”, “influencing stakeholders”,“lead ing change and sp anning bou nd aries”, “architecting” and “bu ild ing com m u nity”).
To u s it seem s clear that this m od el focu ses on the lead er as a rational, instru m ental agent, influ encing the organization tow ard s d esired end s and goals. In
Figure 2: Osland’s model of global leadership (Osland, 2008).
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other w ord s, the d efinition seem s to be p rem ised u p on a logic of instru m entality15. We note, how ever, Osland‟s own evaluation of the research in the field of global lead ership : “there is no consensus on the construct definition of global leadership (….) conceptual confusion persists, as do questions about whether there is a significant difference (…) between global and domestic leaders. The global leadership research has, for the most part (….) focused on identifying competencies. (… ) it is an emerging field” (Osland , 2004a: 61).
Thu s, a rather bleak p ictu re em erges: the field has been em erging for 20 years – w ithou t achieving any sort of exp licit consistency w ith resp ect to w hat sep arates a global lead er from a d om estic one. Still, the d efinitions and m od els w e have p resented here seem – at least im p licitly – to em p loy a logic of instru m entality in d efining global lead ership . And m ore sp ecifically, they seem to fall w ithin the trait and behavioral ap p roaches to lead ership .
In this section, w e have p resented tw o d ifferent p ersp ectives from lead ership theory on lead ership of the MN E. One of these m ight be term ed “leadership as individual instrumental agency” and the other m ight be called “leadership as embedded process, including the leader as an embedded actor.” The first one seem s to be d om inating in the literatu re, and in this p ersp ective global lead ership is d ep icted as ind ep end ent of contexts and as follow ing a logic of instru m entality. In the second p ersp ective , global lead ership is seen as an em bed d ed p rocess w here lead er and follow er alike are being influ enced by - and influ encing - the context in w hich they are em bed d ed . We have seen that w ithin the field of global lead ership research , there is little evid ence of this latter p ersp ective being u tilized . Thu s, w hile the highly com p lex context of MN Es and their m anagers has been acknow led ged also in lead ership theory, global
15 While “mu lticu ltural teaming”, “cosm opolitanism ”, “global min d set” and “global
knowled ge” m ay be concerned with globalization, one might well ask what is specifically global in this m od el of global lead ership as long as the ind ivid u al is so heavily focu sed .
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lead ers seem not to be conceived as em bed d ed actors bu t rather as transcend ent agents w ithin the fram ew ork of a logic of instru m entality.
While su ch concep tions of m anagem ent and lead ership m ay p rovid e u sefu l gu id elines for the execu tion of m ore trad itional m anagerial skills and activities tau ght in MBAs, it is less u sefu l in accou nting for situ ations w here organ izations p ersist in p atterns of activities long after these activities ha ve any d em onstrable connection w ith effectiveness. Ind eed , this m ay be the case for the concep tion of m anagerial activities them selves. The p ersistence of institu tionalized m anagerial activities in MN Es, for instance those that are based in the hom e region of the MN E, and the effect this p ersistence m ay have on the fu nctioning of organizations , shou ld be a central issu e in the d evelop m ent of global lead ership . At least this is the case if global lead ership is seen as som ething m ore than w hat global lead ers d o. Kostova &
Zaheer (1999) have su ggested that d u e to the variation in institu tional contexts ethnocentric MN Es w ill be facing greater challenges than geocentric ones w hen it com es to establishing their legitim acy . And Good erham et.al. (1999) have show n that m anagers d o ind eed accom m od ate their p ractices to institu tional contexts. Thu s, there m ay exist a d ifference betw een w hat m anagers d o and w hat the d om inant theory say they shou ld d o. This highlights the necessity for exercising cau tion in d evelop ing lead ership along the lines of a logic of instru m entality .
Part III
D eveloping global leadership for MN Es
Within the logic of instru m entality, w here global lead ership is seen as m anagerial activity constitu ting an instru m ent for enhancing the organizational effectiveness of MN Es, global lead ership d evelop m ent m ight sim p ly be d evelop ing the m anagerial know led ge, com p etencies and skills need ed to ensu re this goal. This
