Global Leadership Skills: A Case Study Of Nokia

“Globalization” a term which has driven the world to a new level, it has given rise to new concepts world-wide in terms of strategies, markets, technologies, corporations and many other. It has been defined as an integration of market, technologies, and nation states to such an extent which is enabling individuals, corporations and nation states to reach around the world faster, deeper and cheaper than like never before. (T.L. Friedman, The Lexus and the Olive Tree, 1999, p 7-8) The industries have transformed themselves to global competitive structures from multi-national. Globalization has given an opportunity for new entrepreneurs and existing companies to go global expand their businesses increase their revenue and profits by establishing themselves in different markets. Globalisation has also presented some challenges and threats to new managers going global. A multinational company having managers in different country has to face many difficulties as the environment is unfamiliar to him. This has aroused the need for global leadership skills as an important role is played by manager at a corporate level in multinational organisation.

Introduction:

As the economy is going more and more global the organisations have to bring about changes in their way of managing its employees. It’s not possible for a human resource department in one country to manage all its companies from one country only. Here the need to have a manager in another country arises and develop skills which helps him to carry out the same duties effectively in different country as well. Due to globalization there has been increase in competition and hence the transfer of managers to overseas assignments has been a common practice in multinational organisation. (Aycan & Kanungo, 1997; Black Gregersen, Mendenhall & Stroh, 1999; Evans, Pucik & Barsoux, 2002 ). Global leadership skills have been looked in various perspectives; it is defined as a specific model, success factors in international positions and motivating workers in different cultures. The main essence of a global leader is the ability to influence people not similar to the leader and also people coming from different cultural backgrounds. These skills provide competitive advantage to the organisation and improve the organisations reputation in the market. The attributes of effective global leader are excellent performance in terms of profitability and productivity, continuity and efficiency, commitment and morale, and adaption and innovation. A global leader would also face some challenges while working globally in another country, he has to overcome those challenges to be an effective leader and display his capabilities. Operating globally and thinking beyond boundaries has been critical for the organizations survival and growth in world of globalization in 21st century. Thus the need for understanding global marketplace and developing global mindset arises for the global leaders.

To understand the effectiveness of global leadership skills in multi-national organisation, a case study on Nokia, a mobile manufacturer company has been taken. As it is market leader in mobile production and employees approx 123553 employees from over 120 countries, and is globally present.

Aims and objectives:

Research question: What is the role of global leadership skills in multinational organisation and their effectiveness?

The key aim of the study is to investigate the importance of global leadership skills for the multinational organisation and to learn about their characteristic and challenges face by them.

Hypothesis:

H1: Global leadership skills have positive effect in Nokia.

H2: Global leadership skills have no effect in Nokia

H0: Null hypothesis.

Literature review:

Why do we need global leaders in multi national organisation?

For any multi-national organisation, skills and credibility are required by global HR to carry out the global agenda, which will help the organisation’s strategic mission. E.g. If an organisation is entering a joint venture with another company from another culture, HR needs to be involved in decision making process and must be able to identify the loopholes and eliminate them. And this needs analysing differences in work practice, different leadership styles, organizational cultures, and cultural environment which could cause problems.

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Similarly, even if setting subsidiary company in a different country or a new country, various practices of the country related to the organization has to be identified as they are likely to vary due to cultural difference, which might otherwise affect the organizations success. However, research carried out by International Personnel Association (IPA) 1998, in multinational companies’ shows that management is not very keen in involving HR in this process as they lack knowledge on issues of cultural difference and lack expertise on international business issues. So, multi-national corporations which are successful have recognized the importance of global leaders, who could counter the problems faced by the company and solve them and reduce the cultural barriers. As a result an important part of HR strategy is to develop global leadership skills in managers, which could be achieved by handing them with overseas assignment, which will provide an experience and will favour their development.

As the companies are going global, the need for mangers with global leadership skills for the continuing its progress and to establish new companies effectively is increasing. The organization’s global success depends on the managers global leadership skills. The manager is recruited at global level to provide high level of technical or functional knowledge and to provide experience required for particular designation to provide excellent executive with international experience. Hence one of the important tasks for the human resource department of any organisation is recruitment of an individual with global leadership skills and with right characteristics. The role played a global leader in any multinational organization is crucial.

There are few attributes of global leadership skills which are as follows:

Exploring the organisation’s depth of presence, identifying opportunities and overcoming threats in the operating environment.

Committing to global vision, planning out the strategy for achieving current goals and also the objectives in the long run, should take initiative in formulation process, show commitment and be instrumental in carrying out strategic initiative.

Appealing to the customers worldwide by understanding the need of the customer be it a local or global preference. Making products which suits the customer needs and also fit culturally into the market.

Managing the organizations connection, the mangers helps to connect with the environment and build a connection with culture and help to incorporate the culture into the organization.

Inspiring and influencing the thinking of the people their attitude and behaviour of people from around the world.

Inquisitiveness: the leaders should be willingly open to learn about, should be curious to learn about new local culture, learning about global environment which will help him to cope with uncertainty and also help to solve various cross cultural issues.

The key to successful global organization is when leaders are able to get everyone in the organization think globally and they are capable at exchanging ideas, processes and systems across borders (Maruca, 1994). For being successful global leader following core competencies are needed.

To recognize and incorporate global market trends, technology, and strategies into the organization.

To think and plan beyond cultural and political boundaries and systems.

To build and effectively lead worldwide business teams.

Commitment to risk taking and innovation.

Comfort and confidence with technology.

Adapt to the culture without changing their values and virtues.

A successful global leader is expected to have a global mindset in this world of globalization. He should have a positive attitude in understanding the world, globalization of market, people and the companies. The difference between a domestic and a global leader is that, a global leader is expected to have broader perspective on the world, on the markets, companies and the people. Global leaders play an important role in multi-national organisations by not only setting the company’s objectives and developing strategies’ but also influencing the globalization of their business and human resource. As per the presence in cross borders and cross cultural activities are the characteristics of a multi-national company similarly, crossing country, time zone & cultural borders at the same time are peculiar characteristics of a global leader.( MaCall & Hollenbeck,2002; O’ Hara- Devereaux & Johensen,1994.) Managerial way of looking at things and interpreting the world is a step towards the making of a global leader, which will help build qualities like build trust, communication, bring about a change and build new community and make ethical decisions (Bird & Osland, 2004.)

Global competency:

Some competencies of global leadership are managing uncertainty, understanding stakeholder orientation, creating systems which make it easier for employee from any region to learn, and managing cross cultural ethical issues.

One of the needs for a successful business is global competency. It has been said that for global leaders to be successful in multi-national companies, they must be globally literate and to be globally literate following competencies are required.

Personal literacy – understanding one self’s need, capabilities, and valuing oneself.

Social literacy – engaging and making people believe in your decision, challenging people and being clear with you decisions.

Business literacy – focussing on priorities, mobilising one organisation, and being flexible and aware of the business environment globally.

Cultural literacy – valuing, respecting the cultural ethics and giving equal importance and sorting cultural differences ( Rosen et al, 2000)

There are also some important characteristic role played by a global leader mentioned by Mai- Dalton, 1993 are as follows:

Having a personal, long range vision for the organizational objectives and employees from different cultural background.

Broadminded and knowledge of diversity dimensions and an awareness of multi- cultural issues.

Ready to accept change, feedback from the employees should be appreciated and encouraged, and criticism should be taken in a positive way and put the organisation before oneself.

Understanding of cultural dimension is one of the important skills required by a global leader. The leader should be able to handle the cultural issues sensitively and diplomatically and resolve the issue. He should be able to build respectful relationship between all the parties (Alder 2002). Many leadership theories have been suggested for the success of the global leaders. Current leadership theories have paid little attention to process through which leaders can avoid major errors. However on the other hand, contemporary theories of leadership such as transformational leadership theory is a powerful explanation of the mechanism by which leaders can transform their colleagues and employees working for them, their attitude, and their belief to achieve set objectives and reach targets. This style of leadership is displayed more at a higher level as compared to lower level.

The four most important components of transformational leadership have been identified as Idealized influence (or charisma), Inspirational motivation, Intellectual stimulation, Individualized consideration.

Idealized influence (or charisma): In this component the leaders express their judgemental and firm belief clearly and lay importance to trust, urge the subordinates to stick to their values. They also take firm stand on difficult issues, they lay stress on importance of purpose, commitment and to be ethical.

Inspirational motivation: The leaders are highly optimistic and enthusiastic, encourage the members and explain the things to be done. They accept challenges and follow high standard in work.

Intellectual stimulation: they bring in new belief to the team, new thinking and encourage the members to come up with ideas and reasons and questions. They question old traditions and assumptions.

Individualized consideration: individuals needs, abilities and aspirations are considered, they give a thought about what employee has to say, deal as individuals with everyone.

Further Bass states that the leader who combines all this four components of transformational leadership and follow them would be a successful global leader in any situation, any culture,and at any level in the organisation. (Bass 1997)

Global leaders have to face problems such as they need to consider the need for local consumers and global consistency at the same time to maintain the standards set by the organization. Also when organisation has few subsidiaries abroad, that means limited activity and comparatively easy control as compared to organisation with many subsidiaries where the leader has to deal with local markets, global efficiency and functional coordination with other subsidiaries.

Research methodology:

The method in which the research is carried out is discussed in this part. And this will serve as the base for the analysis and findings to be found out. The company chosen to carry out the research to investigate the role of global leadership skills in multinational organisation is Nokia, a mobile device manufacturing company. The company started in 1865 as a paper mill and made a move to mobile industry. Its head office is in Finland: and R&D, production, sales, marketing activities across many countries in the world. The reason for choosing this company is that it is a market leader in its field, it has 33% market share almost double to its competitor which is 17%. It has about 123553 employees from 120 different countries and has sale in over 160 countries and it truly is a global company and hence it has been chosen for research.

Data collection: In this, sometimes the data is already there and it has to be extracted whereas sometimes information has to be collected. Depending on the approach of collecting data they are categorized into

Primary data.

Secondary data.

Primary data – Primary data is collected through three sources which are observation, interview and questionnaire.

Observation could be participant and non participant. It is a systematic and a selective way of data collection. It is more useful when the research is about human behaviour.

Interviews best appropriate when the interview is about more complex, sensitive issue where interviewer gets a chance to explain complex questions to the respondent.

Questionnaire: it is extremely important to develop right questions as they are key source for providing information and quality of information depends on it.

Secondary data – Secondary data is collected through sources such as books, magazines, newspapers, articles, survey reports, internet, government publications, etc..

Procedure:

The research will start by collecting detailed study about the topic which is role of global leadership skills in multi national organization. Information on various theories and role of global leaders will be collected which will help in literature review and will give an overview of global leadership skills in MNC’s in general.

Now the information about the company would be collected through various sources such as books, journals, company record, internet which is known as secondary data. This will help in getting an overview of the current situation of the organisation in the global environment. After secondary data has been collected we will carry out research to collect primary data which will help in carrying out the analysis and findings which are not carried out in this assignments and it will also help in determining the hypothesis which is whether the global leadership skills has been effective or not in this organization. Primary data would be collected through questionnaires. Questionnaires would be mailed to two branches one in London, UK and another in Mumbai, India. These two locations are chosen as it will give better idea about the leadership skills and employee relations in different culture. A questionnaire will have 15 question and 50 samples would be mailed to both India and United Kingdom.

The initial step would be contacting the regional offices and obtaining permission to carry out a research on their organization. After getting approval, the next step would be briefing the employees about the objective of research and the questionnaires would be given and would be collected the next day as the employee gets enough time to fill it. Now the data collected would help in knowing about the relation between employee and a leader and level at which the leader has been effective in that organisation. Data collected would be used through descriptive statistics and will finally produce result for the hypothesis.

Questionnaire: The purpose of the questions should reflect the objective of survey. Purposive sampling technique will be used for the questionnaire. Global managers and subordinate employees will be selected as respondents.

Advantage of using questionnaire method:

Reduction in bias if the questions are well structured.

Accessibility, as it can be mailed, posted.

Anonymity.

Gives time to the respondent.

Research ethics: The research ethics would be maintained by ensuring the company the employee that data given by them would be kept confidential and will be used for the research use only.

Limitation of the research: The limitation of this research was lack of response, and its inability. And the respondent many not be very serious regarding about the value of this research, which is a common problem with questionnaires.

Conclusion:

Conclusion can be drawn from the analysis and the findings and as it is not a part of this project also the primary data is missing, no conclusion can be drawn about effectiveness of global leadership skills on the organization, and here “Nokia” is taken for the research purpose. However, this study has helped in understanding the role of global leadership skills in multi national organisation. It has also helped in understanding the need of global leaders in multi-national organisation in current world when globalization is on its high. Various characteristics of a global leader, his competencies and also some challenges faced by him have been discussed in this project which has been extremely helpful in understanding the concept.