Developing Global Leadership Competencies Chen Oi Chin Chinese American Educational and Cultural Center of Michigan John Gu Prudential Corporation Stewart L. Tubbs Eastern Michigan Executive University Summary This paper documents the intense need for greater global leadership competencies in American and Chinese business leaders. The paper also explores some of the cultural and philosophical differences. Finally, the paper explains an original conceptual model for developing global leadership competencies. This is offered as a heuristic attempt to advance the research and development on this topic. About the Authors: Chen Oi Chin Ph.D. is Executive Director of the Chinese American Educational and Cultural Center of Michigan. She received her Ph.D. from The Ohio State University and her Masters degree from Yale University. She is originally from Singapore. John Gu is Senior International Assignment Manager for Prudential Corporation. He received his Masters degree from Michigan State University. He is originally from Shanghai, China. Stewart L. Tubbs is the Darrell H. Cooper Professor of Leadership and former Dean of the College of Business at Eastern Michigan University. His Ph.D. is from the University of Kansas. He is originally from Lakewood, Ohio. 21 Introduction With the rapidly changing nature of modern global business practices, one business executive was prompted to exclaim, &dquo;If you are not confused, you do not understand what is going on.&dquo; It seems that there is a greater than ever need to develop theoretical and practical models of global leadership competencies to be able to develop leaders who can lead effectively in an increasingly global business milieu. Need Viceri and Fulmer (1997) have argued that improving &dquo;strategic leadership development&dquo; is the single most potent focal point for strengthening an organization’s strategic competitive position. Recent research in leadership has focused on developing leadership competencies. For example, Goleman (1997, 1998) has identified two broad categories, personal competence and social competence. Bergmann, et. al. (1999) have identified eighteen specific competencies ranging from navigating change, to proactive listening, to coaching others, to handling emotions under pressure. Tichy and Cohen (1997) have taken the competencies discussion one step further arguing that all leaders must be able to not only demonstrate the competencies, but teach them to others in their organization as well. While these efforts have been extremely useful, they do not directly address the need to develop these leadership competencies across different cultural situations. More recent works by Rosen, et. al. (2000) and Sanchez, et. al., (2000), have advanced the concept of developing global competencies. This paper is dedicated to advancing that body of knowledge, specifically between Americans and Chinese. us that leaders are only effective in 1967; Vroom, 1993; Hersey, Blanchard and particular (Fiedler, the As that context so must leader behaviors. In order to Johnson, 1996). changes, develop an Asian-American model of leadership competency, we first examine some of the differences in communication style and behavior that exist across the two cultures. Contingency relation to a theories of leadership have taught context. Communication In the Styles U.S., people have traditionally admired charismatic leaders. Early writings of Weber Max (1947) emphasize that charisma is usually thought of as resting on devotion to specific and exceptional heroism or exemplary character of an individual person. This is also thought of as an outgrowth of an individual’s communication skills as being articulate, dynamic, etc. (Conger, 1998; Lucas, 1998). However, in Chinese culture, the Taoist philosophy is to follow nature, i.e., be as soft as water. This philosophy encourages one to be more serene and not to push others too hard. Pushing often provokes others to push back. Similarly, remaining silent and enduring the anger of others is considered a strength. Specific communication behaviors may be interpreted quite differently by Americans and Chinese. For example, Sanchez, et.. al. (2000) state that, &dquo;...being outgoing, as it is normally understood in the U.S., may be perceived as being rude in other cultures, thereby provoking rather than preventing social isolation.&dquo; (p. 98). 22 The Confucian tradition in Chinese culture encourages the leader to follow four practices. First, the leader should instill in followers a sense of security and peace of mind. Second, the leader needs to be able to identify each person’s particular talents that may contribute to the organization’s needs. Third, the leader should establish himself or herself by establishing or promoting the success of the followers. Fourth, the leader should enrich followers by extending to them opportunities to build their careers. In many ways, these principles are similar to some modern American leadership philosophies. (c.f., Bergmann, et. al. 1999 ;Cloke and Goldsmith, 2000; Kotter, 1999; and Krzyzewski, 2000). On a higher philosophical level, the overall goal of a leader according to Chinese thought, is to create harmony as the top priority. This is captured in the Chinese saying that; &dquo;Harmony (ho) is the key to successful leadership.&dquo; Harmony is often promoted by leaders who accept differences among people. In addition, harmony must be achieved without compromising one’s professional integrity. In Confucian philosophy, according to Mencius, people are basically good. However, according to Xunxi, people are basically evil. These concepts are virtually identical to the philosophy articulated by Douglas McGregor ( 1960) in his famous writing on Theory Y and Theory X, respectively. Issues and Challenges Current global business practices present several challenges. Two of these are the differences between Eastern and Western behavioral styles, and the challenges presented by the paradox of hi tech and hi touch. Eastern Versus Western Style The Chinese style of thinking is exemplified by the yin/yang diagram. Chinese culture encourages people to think of opposites as occurring simultaneously and being in harmony. Table A A balance of Inner Confucianism Yang Proactive Interpersonal Propriety Rigid Pragmatic Actions Strength Daoism Yin Reactive Personal Spontaneity Openness Imaginative Non-action In contrast, the American style of thinking tends to be more Aristotelian and tends to be either/or, on/off, black or white. Furthermore, Americans, historically have been driven by the strong desire to get ahead. Chinese, on the other hand, have historically sought more of a balance (harmony) between work and family life. This is captured in famous dialogue with Confucius. A person asked Confucius, &dquo;What surprises you most about mankind?&dquo; Confucius answered, &dquo;They lose their health to make money and then lose their money to restore health. By thinking anxiously about the future, they forget the present, such that they live neither for the present 23 nor the future and live as if they will never die, and they die as if they never lived.&dquo; The need to find the appropriate level of balance is still just as relevant an issue today in both the East and West. Hi Tech Versus Hi Touch two decades ago, Naisbitt (1982) predicted that computers would become of a dominant force in our lives and in our professions. However, he also predicted that along with the increase in technology there would be an increased need for strong personal and interpersonal relations. As people become more isolated due to technology, they also feel an increased need for personal contact. His predictions have proved to be very accurate. One recent study found that people who spend even a few hours a week on-line, experience more loneliness than those who use the computer less. The researchers concluded that the study, &dquo;raises some troubling questions about the nature of ’virtual’ communication and the disembodied relationships that are often formed in the vacuum of ’cyberspace.&dquo;’(Tubbs and Moss, 2000, p. 19). This need underscores the paradoxes of modern day global communication. Nearly more and more Given the issues, challenges, and paradoxes identified above, it is imperative that scholars develop theories and practices that can facilitate the exponential growth of modern global businesses. That is the focus of our next section. Recommendations Research has shown that traditionally, 90% of all companies base their choice of international managers on technical expertise while ignoring other competency considerations. (Earley, ~000). We need to develop greater global leadership competencies in order to allow for the maximum potential for East/West business and cultural opportunities. These competencies seem to follow a hierarchy somewhat analogous to Maslow’s need hierarchy. At the lowest level of the pyramid, an individual begins with a state of &dquo;global leadership deficiencies.&dquo; In other words, it is difficult to move to the next level higher in the hierarchy until one has moved through the lower level. In addition, through negative experiences, it is possible to have individuals &dquo;backslide&dquo; and move from a higher level on the pyramid to a lower level. At the highest level of the pyramid, an individual can achieve some level of &dquo;global leadership competencies.&dquo; This should become clearer as we discuss each level of the hierarchy in the next section. But first, we present the model. 24 Ignorance Starting from the bottom of the pyramid, Ignorance is the first level when relating others from different cultures. Obviously, with no contact there can be no knowledge. Each party assumes that their own way of doing things is the correct to 25 and proper way. Stoltz (1997) has referred to this level of leadership as &dquo;unconscious incompetence.&dquo; In other words, we don’t even know what we don’t know. Asians tend to associate the word ignorance with illiteracy or the rough edges of those who are uneducated. However, in this context, ignorance refers to a mindset. Even prominent leaders can be susceptible. Chairman Mao believed that he could -enlighten, liberate and improve peoples’ livelihood all over the world without having to pursue science and technology. In parts of Asia, there is foreign worshipping on one hand and aversion, on the other hand, to examining/challenging their traditional values and beliefs which they hold as superior. Elements of traditional Chinese ideology seem to be inward-looking, conservative of the land as piously and stubbornly as their Chinese ancestors. Before the industrial revolution, China was as advanced as any nation in the world, and more advanced than most. Why did the country fall so drastically behind? At the time Magellan’s ships were circumnavigating the globe, the first Ming dynasty’s emperor was closing China’s doors to the world. &dquo;Not a single ship,&dquo; he repeatedly ordered, &dquo;Not even a plank must be launched into the sea.&dquo; These are but a few examples of ignorance. Awareness As individuals begin to interact with those from another culture, impressions begin to form and, in many cases, bonds begin to develop. Institutions of learning, corporations and enterprises, both in the East and West seem to know the importance of international exchanges. They are also aware of the fact that most international activity now demands a cadre of personnel capable of operating easily with people from a variety of cultures, and that labor and management are both deficient in skills required of global business leadership. However, how many organizations have really invested in developing those competencies? Fewer than 8 percent of U.S. colleges and universities require knowledge of a foreign language for admission. Fewer than 5 percent of America’s prospective teachers take any courses in international subjects as part of their professional training. While most Asian countries seem to fare better in regard to language requirements and international subjects compared to America, they are not making investments in seriously learning the American culture (the mindset, the philosophical underpinnings) of which the English language is only a part. Hardly any business delegations from Asia visiting the States attend cross-cultural training programs before departure. American businesses, however, do seem to be more willing to make that kind of investment. Sanchez, et. al., (2000) refer to building this level of awareness as the &dquo;Novice stage&dquo; when going to a foreign country. They write that, &dquo;Expatriates from individualistic societies should be reminded that the lengthy social interactions observed in collectivistic cultures are not a waste of time, but a necessary conduit to doing business. Executives from collectivistic cultures transplanted to an individualistic one may make the opposite mistake.&dquo; (p. 102). At this level there tends to be some recognition of superficial cultural differences such as &dquo;Asians are more formal,&dquo; and &dquo;North Americans are more informal.&dquo; Emphasis is on the basis of commonality in ethnocentric terms (i.e., everyone is essentially like us). It may also adopt the blame approach (we are underdeveloped, because we were once colonized). At this level of competence, individuals may be aware of different cultures, but may still experience a significant degree of unconscious denial as well as ethnocentrism. They may also experience a certain degree of discounting the value of the other culture. If their culture is so good, why do they have so much violence in the streets? 26 Understanding At this level of competence, individuals begin to exhibit some conscious effort to learn why people are the way they are and why people do what they do. At this level people display interest in the history, psychology, and evolution of value systems, as well as in the environmental factors contributing to the makeup of a distinctive culture. Also at this level, individuals begin to develop some sense of the other culture and develop some tolerance of the new ways of doing things. Tolerance in this case means able to tolerate. There still exists a strong preference for one’s own culture. Sanchez, et. al. (2000) refer to this as the &dquo;transition stage.&dquo; We might add that this is the early transition stage. Appreciation At this level, individuals begin to take a &dquo;leap of faith&dquo; and experience a genuine tolerance of different points of view. Not just &dquo;putting up with&dquo; the other culture, but a genuine appreciation and, in some cases, preference for certain aspects of the new culture. There is no intent to denigrate or belittle the other culture. On the contrary, this stage sees alternative ways of living and alternative business practices and decision-making processes as viable. It is a mindset that allows individuals to things from the other point of view. However, appreciation still tends to remain somewhat at a friendly distance (i.e., arms length). For example, &dquo;Look, these Asian farmers are engaged in back-breaking rice seedling transplantation. They are a hard working people. We are so fortunate to live in a highly mechanized society.&dquo; We might refer to this as the middle transition stage in this developmental process. see Acceptance/Internalization This is the later transition stage. At this level the possibility of interaction between cultures increases appreciably. People are more sophisticated both in terms of recognizing commonalities and in terms of effectively dealing with differences. At this level individuals begin to value and embrace their understanding of the new culture. This is a departure from the ethnocentric notion that &dquo;my way is the best way and the only way.&dquo; It is the beginning of a realization that diversity, globalism, and competition from overseas is real. For example, it took about a decade for the U.S. auto industry to accept the idea that the Japanese quality systems sets an example to be emulated and that competition can have a positive impact. At this level, individuals having tried something new, need to reflect, to digest, to analyze and to evaluate. Internalization is the stage in which one’s experience and learning is validated. It is a time to celebrate the true transformation that is taking place. Once people begin to appreciate other cultures, they may also begin to see that there are some universal values that apply to some degree across cultures. See Table B. 27 Transformation At this stage globalization becomes a way of life. It is internalized to the degree that it is out of one’s own volition. The process having become more or less completed, one’s behavior almost becomes effortless, subconscious, and second nature. words to describe this level are competent, fluent, balanced, broadminded, and international. One can truly be himself or herself at this level. The use of empathy or frame of reference has shifted. There is no longer fear of things that are new and different. On the contrary, there is obvious interest in trying new and different things. There is an eagerness to solve problems in the true spirit of cooperation. There is an eagerness to learn and to continue the adaptation process. There is a Chinese proverb that says, &dquo;Learning is a treasure that will follow its owner everywhere.&dquo; Similarly, the late B.F. Skinner from Harvard University said that, &dquo;Education is what is left when everything that you have been taught is Appropriate forgotten.&dquo; In other words, you have become irrevocably transformed. Sanchez, et. al. (2000) refer to this level as the &dquo;mastery stage.&dquo; They state that this stage is illustrated by the following. &dquo;Armed with the dual experience of having lived and worked both abroad and at home, expatriates are capable of seeing one culture through the eyes of the other. The ability to understand the cultural paradox that surrounds them, represents the pinnacle of...executive transformation.&dquo; (p. 103). The world has become a marketplace of ideas without a clear-cut borderline (your culture vs. my culture, your product vs. my product), much in the same way the Internet operates. Total Quality Management has become a universal language. However, it is important to point out that globalization does not mean uniformity. True integration is highly selective. Asian countries will remain highly &dquo;affiliationoriented,&dquo; and Western nations will continue to stress the virtues of individualism. Differences are not seen as threats, but rather as strengths, hence the need to &dquo;localize&dquo; even as we talk about globalization. 28 An Illustration In order to illustrate the different levels of the pyramid let us look at one example, namely, Guanxi. Ignorance. Guanxi is a concept that is part of the Chinese culture. It means relationships. One of the contributing factors to many American business failures in China is their ignorance of the importance of establishing a good relationship with friends and counterparts as a form of long term investment. One writer has observed that, &dquo;A business which followed the traditional Western practice of negotiating and enforcing contracts would be at a disadvantage to one which relied on guanxi-type methods.&dquo; (Lovett, et. al., 1999). When American leaders set out to the competitive Asian region, they are well oriented to the concept of efficiency, (i.e., accomplishing their goals within a given time frame). They are also accustomed to the practice of developing carefully worded contracts to protect in the case of subsequent litigation. However, this lack of cultural knowledge results in insult and mistrust by their Chinese counterparts. This further results in loss of time and investment. This is a bitter lesson that Americans have just begun to realize as a deficiency in a global economic reality. As De George remarked, &dquo;It is simply arrogance to assume that American ways of acting are the only morally correct ways or permissible ways of conducting business.&dquo; (1993, p 20). Arrogance grows out of ignorance. However, ignorance is due to a lack of education, exposure, experience and interaction with people of different cultures. Awareness. Awareness does not necessarily come with the recognition of the values and significance of a new culture. However, in recent decades, American business leaders have become increasingly aware of the guanxi system. This practice still prevails widely in China. Whether awareness is formed through reading, observation, or learning from business counterparts, Americans are faced with the challenge of adapting. The challenge is to change the mindset. However, guanxi does pose an interesting contrast in viewpoints. From the American point of view, &dquo;they cannot be trusted because they will help their friends.&dquo; From the Asian point of view, &dquo;they cannot be trusted because they would not even help a friend.&dquo; Understanding. At this level one would have gathered adequate information to help interpret the cultural dynamics of guanxi. This integral part of the Chinese culture grows out of the Confucian principle of interpersonal relationships. It finds it roots in the five relationships in The Doctrine of the Mean. The five relationships are: (1) between ruler and subjects; (2) father and son; (3) husband and wife; (4) elder brother and younger brother; and (5) friends and friends. The networking system is based on those relationships. When a person becomes a part of this system formed by familial communal and societal environments, his accountability as a participating member is enhanced. His sense of work and dignity are predicated on his ability to transform his primordial ties into vehicles of self-actualization and performance. To sustain and expand a good guanxi relationship of trustworthiness and respect requires the test of time. This evolving process of discovering involves all concerned and connected parties, and every level of the network. A healthy guanxi is based on trust, loyalty and reciprocity generation after generation. 29 Americans who want to learn about this system must pay special attention to its many characteristics both positive and negative. However, this closely-knit interdependence has helped sustain China for over three thousand years. It is with this assumption of underlying values that the Chinese do business with what Chen (1995) calls, &dquo;Fabulous deal-making skills.&dquo; (p. 107). Many players in the system however, are not even able to explain their techniques. It takes observers patient examination this approach. and involvement and first hand experience to truly understand With a deeper understanding of guanxi and an emphasis on ren qing human heartedness, one begins to be convinced of the system’s value. Since business is a human institution, it is logical and more pleasant to operate with human relationships that create a more meaningful and fulfilling life. At this level, people who are new to the guanxi system begin to appreciate the complexities, and the value of this approach’s time consuming nature. They can also compare and contrast this to the time consuming nature of the contractual and litigious procedures of the West. This level of appreciation does not discount the negative aspects of bribery, corruption and the back-door approaches that constitute the negative aspects of guanxi. The values of trust, efficiency and cost effectiveness tend to supercede the potential wrong doings. There is also the appreciation of mutual accommodation for flexibility and durability of the system. It is similar to the type of commitment and trust in the network marketing now being espoused in the West by Morgan and Hunt (1994). Appreciation. or It takes a higher level of competency to be able to accept the guanxi values to be added to one’s primary culture. It takes a good deal of courage and mental flexibility to see and accept the values enough to integrate these new practices into one’s own way of thinking. It is both an emotional and an attitudinal Acceptance. process. Transformation. This is the competence level required to reconcile the dilemmas of home culture and the new cultural phenomenon. There may be occasions when both systems can work together depending on how consensus can be achieved. It is precisely at this level that the contingency models of leadership come into play. Except, that the contingencies are far more complex than when working within a single culture. It seems that for future research, that all of these levels of competency should be explored further. However, ultimately, one’s effectiveness is measured at the behavioral or adaptation level. For example, it seems that American leadership theory has been moving more and more toward a Western version of the guanxi system for the past few decades ever since the influence of such writers as Ouchi (1981); Pascale and Athos (1981); and Rehfeld (1994) who wrote so persuasively about the values of Japanese management practices.. Summary In this paper we have identified the need for new models of global leadership competence. We have identified some of the challenges and paradoxes. 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