The Role of Global Leadership Skills in Multinational Organizations

The Role of Global Leadership Skills in Multinational Organizations



The Role of Global Leadership Skills in Multinational Organizations

Chapter 1: Introduction

Abstract

We are experiencing a massive flux in the way opinion formers are talking about the nature of organisational leadership. In his 2005 book Capitalism at the Crossroads, Stuart Hall (2005) takes the view that all the ecosystems on the planet, from fisheries to forests, are being abused and damaged. He argues that should the predicted levels of economic development be reached in areas of the world which are currently “poor”, then the future of the planet appears increasingly bleak. The current business models of multinational corporations are contributing to this environmental decline. The research comprised two phases. An initial questionnaire surveyed a sample of managers operating in the public and private sectors in Europe (n=108). A second stage of the research used in-depth interviews with 11 leading European-based multinational companies. The results of the research support the current awareness amongst management educators that the development of successful business leadership requires more than training in “hard” business functions. Although the importance of experientially learned “soft skills” has been acknowledged, the paper suggests that the development of responsible leadership needs a third dimension to be incorporated into management education.

Research aim

The purpose of this paper will be to explore how multinational organisations can develop leaders who have the competences necessary to ensure the sustainability of the company.

Research objectives

The paper will consider how the understanding and practice of responsible leadership can be enhanced by defining the competencies for integrating social and environmental considerations into business decision-making processes.

Research scope and delimitations

The globalization of finance and technology, the spread of privatization and deregulated markets have produced a range of unanticipated consequences. The global information age has been described as “the age of truth” (Henderson, 2006), where careless action can cost a company its brand overnight. Business leaders worldwide are embracing the concept of corporate responsibility by reporting on their social and environmental activities, as well as their economic ones. Companies are now monitored by many civic groups to see how they are doing on what has been termed “sustainability”. The rising importance of this new business awareness is indicated by the fact that over 2000 companies have now signed up to the ten principles of “global corporate citizenship of the global compact” launched by the UN in 2000, covering human rights, workplace safety, justice, anti-corruption ILO standards, and environmental impact. Henderson (2006) reports that some 77 per cent of CEO's of major corporations surveyed by KPMG and the World Economic Forum in 2005 said that higher ethical behaviour was “vital to profitability”.

While many of these CEOs have had a real change of heart, others have simply begun to see the practical light and decided to make changes because they make good financial sense. Ever more common are studies reporting that companies with higher sustainability ratings outperform their counterparts who score lower on sustainability ...