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SHRM Foundation Research

     

Dynamic Competencies and Performance in Global Leaders: Role of Personality and Developmental Experiences

Funded: June 2008   Completed: January 2011

Paula Caligiuri, Ph.D., Rutgers University, School of Management and Labor Relations, Department of Human Resource Management
Ibraiz Tarique, Ph.D., Pace University, Management Department, Lubin School of Business

Executive Summary

Today’s global economy has created a more complex and dynamic environment in which most firms must learn to compete effectively to achieve sustainable growth.  Leaders who can effectively manage through this complex, changing, and often ambiguous global environment are critical for firms’ future success.  Using data from a sample of 420 global leaders (matched with 221 supervisors), this study examined the combined effect of personality characteristics (extraversion, openness to experience, and conscientiousness) and cultural experiences (organization-initiated cross-cultural work experiences and non-work cross-cultural experiences) as predictors of dynamic cross-cultural competencies (tolerance of ambiguity, cultural flexibility, and reduced ethnocentrism) which were, in turn, predictors of global leadership success.

Key Findings and Implications for Practice

• Dynamic cross-cultural competencies were related to global leadership effectiveness. To be effective, global leaders need high levels of both cultural flexibility and tolerance of ambiguity, and low levels of ethnocentrism required in jobs with complex international and multicultural responsibilities.

• Non-work and organization-initiated cross-cultural experiences were negatively related to ethnocentrism, positively related to cultural flexibility, and positively related to tolerance of ambiguity. Similar to international work experiences, prior non-work international experiences allow individuals to learn competencies important for living and working in different cultural contexts.

• High contact organization-initiated cross-cultural experiences (e.g., long-term expatriate assignments, member on a global team, being mentored by a person or people from another culture, and participation in meetings in various international locations) were positively related to cultural flexibility and tolerance of ambiguity.

• Openness to experience, and extraversion were negatively related to ethnocentrism, positively related to cultural flexibility, and positively related to tolerance of ambiguity.

• Greater emotional stability was related to less ethnocentrism.

• This study developed and tested the “black-box” between developmental experiences and performance outcomes of global leaders. Dynamic cross-cultural competencies are mediators between developmental experiences and personality characteristics and effectiveness in global work activities.


Suggestions for Human Resources Management
While many global firms advocate the use of global leadership experiences (usually international assignments) as mechanisms for increasing the intercultural competence of their leaders, the prevailing logic has, up to this point, largely assumed that everyone benefits equally from engaging in them. The findings of this study refine the practice of global leadership development by suggesting that certain experiences are better than others (i.e., those that are high-contact) and that certain people benefit more from those experiences (i.e., those with extraversion, emotional stability, and openness).

Given the extraordinary high costs and criticality of developing global leaders, it is important to understand who will benefit the most from cross-cultural developmental experiences. This study demonstrated the dynamic interplay between individual differences (e.g., extroversion) and high-contact cross-cultural experiences for improving global competencies and global leadership effectiveness. Global leadership development programs should identify those individuals with the requisite individual characteristics (e.g., personality) and then offer high-contact cross-cultural experiences to those identified.  Multinational organizations (MNCs) are encouraged to (1) assess their potential global leaders for personality characteristics and, having selected carefully, (2) promote high-contact culturally oriented experiences.  These practices combined could improve organizations chances for having global leaders who understand the cultural norms across a variety of cultural contexts.  In turn, the improved cross-cultural acumen of leaders should lead to better performance in the global arena -- for both leaders and their organizations.

Study Methods

The study was designed as a two-survey study, a Global Leader Survey (Survey 1) and a Supervisor Assessment Survey (Survey 2). Our potential sample included international executives or global leaders from three large multinational conglomerates. Each global leaders completed survey 1 and his/her immediate supervisor completed Survey 2. The final sample included 420 global leaders (matched with 221 supervisors). Twenty four percent of participants were females. Majority of participates were 41 to 50 years old, eighty nine percent of the participants had a bachelor’s degree or higher, and the average tenure with the current organization was 15.8 years. The participants were from 41 different countries.

View the full list of SHRM Foundation funded research.