SHRM Foundation Research Managing Multi-Cultural Teams: From a cross-cultural to a global perspective Funded: November 2008 Completed: July 2011 Miriam Erez, Ph.D., Israel Institute of Technology Executive Summary As part of the globalization process, a growing number of employees in Multi-National Organizations (MNOs) face the new reality of working in Multi-Cultural Teams (MCTs). Although a plethora of articles concerning MCTs were published in the last decades, most of them have not considered the role of leaders and followers in MCTs as part of their research models. The present research proposed and empirically tested a new MCT effectiveness model, using data from two samples: Study 1- consisting of MBA students in 73 virtual, short term MCTs, and Study 2- consisting of 55 on-going MCTs in 9 MNOs. Our MCT effectiveness model considers both global leadership behaviors and followers' openness to cultural diversity as antecedents of MCT effectiveness, through the mediating role of team identity, with team trust as a second mediator, preciding team identity in study 2. We developed a new 12- item Global Leadership Behaviors' typology that convey to the followers behaviors that represent global values of a collective sense of identity, openness to cultural diversity and team members' interdependence. Key Findings and Implications for Practice: • Study 1 (MBA sample) supported the proposed model. Followers' openness to cultural diversity moderated the effect of global leadership behaviors on MCT effectiveness through its effect on team identity. The strength of the relationship between global leadership behaviors and team identity increased when followers' openness to cultural diversity increased. • Study 2 (MNOs sample) partially supported the proposed model: a. Followers' openness to cultural diversity moderated the effect of global leadership behaviors on team trust, followed by team identity and team effectiveness. However, unlike Study 1, the interaction showed a compensatory relationship, with a stronger effect of global leadership behaviors when followers' openness to cultural diversity was low rather than high. Team trust played a significant role in stable long-term teams as compared to short term action teams. b. There was an indirect effect of global leadership behaviors on team identity through team trust, conditioned by followers' openness to cultural diversity. c. As in study 1, MCT identity had a positive effect on MCT effectiveness, and global leadership behaviors had a conditionally indirect effect on team effectiveness through team trust, followed by team identity, moderated by followers' openness to cultural diversity. • The results of both studies suggest that followers’ global characteristics should be taken into consideration for understanding the effect of global leadership behaviors on MCT effectiveness. Yet, the sign of the leader - follower interaction depends on MCT task, structure and longevity. • This research developed and validated a new 12-item Global Leadership Behaviors Scale (GLBS), which convey global work values that facilitate adaptation to the global work context. Recommendations for Human Resource Management This research has practical implications to global HR departments concerning selection, training and management development. Overall, it proposes that global HR departments should adopt and implement a global mindset approach rather than a cross-cultural approach to human resource management. By global mind-set we mean emphasis on openness to cultural diversity, development of a global identity, global team identity, cultural intelligence and for the leader- global leadership behaviors. These characteristics enable leaders and followers to adjust to the global context and therefore, could serve as predictors of global leaders' success. Additional findings, not yet summarized in this report, suggest that emerging leaders in MCTs scored higher on these global characteristics than their followers (Lisak, Erez & Schipper, 2011). Specifically, we propose the following recommendations to global HR departments for selection, training and development of global leaders and professionals. • Selection programs: In addition to existing test batteries for selection and placement of global managers and professionals, this research suggest to specifically assess global characteristics, such as openness to cultural diversity, global identity, cultural intelligence, global leadership behaviors (for managers) and demographics reflecting a multi-cultural experience (e.g. living in more than one country, speaking more than one language). In addition, assessment centers should include role-play in serving as members and managers of multicultural teams. • Training programs: Training programs for MCT leaders should consist of two important components: a. Theoretical and practical knowledge about global work values and behavioral norms, and specifically about global leadership behaviors that help followers overcome their cultural barriers and work together as one unified team. b. Training simulations, which offer opportunities for potential global managers to practice their global leadership behaviors in simulated virtual multicultural teams, where they get 360-degree feedback from the followers, peers, trainers and experienced global managers that enable them to take corrective actions and adjust their behaviors accordingly. • Global Leadership career development programs: We recommend two such programs. a. Exposure to the global work context. Our findings showed that exposure to the global work context with its structural complexity and cultural diversity, positively influences the development of a global mindset and of the global characteristics and leadership characteristics necessary to adjust and successfully function in the global work context. Potential global leaders and professionals should get involved in global activity, visit other sites and join virtual multi-cultural teams to gain a global experience. b. Mentoring programs. Assign experienced mentors to newly appointed global leaders who share their experience, and offer, guidance advice, feedback and help them in coping with new global challenges. Study Methods Our research used web- based questionnaires. There were two versions, one for the MCT leaders and one for the MCT followers. In Study 1, 282 MBA students from 42 nationalities participated in the study that took place in 8 universities in 6 countries. These students composed 73 virtual multicultural teams who worked on a team project for four weeks as part of their course assignment. Students filled out questionnaires three times: before the beginning of the project, in the middle and at the end of the project. In study 2, 274 employees from 22 nationalities, working in 55 on-going MCTs from 9 MNOs participated and responded to the research questionnaire in their free time. We analyzed data using path analysis model of simultaneous linear regressions. Download the full report. View the full list of SHRM Foundation funded research.