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What we talk about when we talk about ‘global mindset’: Managerial cognition in multinational corporations

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Abstract

Recent developments in the global economy and in multinational corporations have placed significant emphasis on the cognitive orientations of managers, giving rise to a number of concepts such as ‘global mindset’ that are presumed to be associated with the effective management of multinational corporations. This paper reviews the literature on global mindset and clarifies some of the conceptual confusion surrounding the construct. We identify common themes across writers, suggesting that the majority of studies fall into one of three research perspectives: cultural, strategic, and multidimensional. We also identify two constructs from the social sciences – cosmopolitanism and cognitive complexity – that underlie the perspectives found in the literature. We then use these two constructs to develop an integrative theoretical framework of global mindset. We then provide a critical assessment of the field of global mindset and suggest directions for future theoretical and empirical research.

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Notes

  1. Although outside the scope of this paper, a similar theme can be found in the literature on global leadership (e.g., McCall and Hollenbeck, 2002).

  2. Merton (1957) conceptualized cosmopolitans as individuals who are oriented toward the outside world, and locals as those who are narrowly concerned with the affairs of the community to the exclusion of world affairs. Extending this concept to university faculty, Gouldner (1957: 290) characterized cosmopolitans as ‘those lower on loyalty to the employing organization, higher in commitment to their specialized role skills, and more likely to use outer reference group orientation’. While the cosmopolitan-local distinction was parsimonious, subsequent research (e.g., Gouldner, 1958; Glaser, 1963; Goldberg et al., 1965; Flango and Brumbaugh, 1974; Goldberg 1976) found the construct to be more complex and multidimensional. For example, Gouldner (1958) divided cosmopolitans into two groups: outsiders and empire builders. Locals were split into four groups: dedicated, true bureaucrats, homeguards, and elders. Goldberg et al. (1965) expanded the cosmopolitan–local classification system to include four categories. In addition to the cosmopolitan and local categories, a third category, termed ‘complex’, described those employees who are simultaneously loyal to both their employing organization and their profession. The fourth category, termed ‘indifferent’, described those employees who were loyal to neither.

  3. Within the past 5 years, a host of initiatives and publications concerning cosmopolitanism have appeared (see Hollinger (2002) for a review of these developments). While we draw on this literature, a comprehensive discussion of the concept of cosmopolitanism is beyond the scope of this brief overview.

  4. The underlying logic behind this advice lies in the ‘law of requisite variety’ that maintains that, if a system is to survive, its internal complexity should match the complexity of its environment (Ashby, 1956).

  5. While information-processing theory has been applied at the individual (e.g., Wang and Chan, 1995; Hult and Ferrell, 1997; Leonard et al., 1999), top management team (e.g., Sweet et al., 2003), and organizational levels of analysis (e.g., Egelhoff, 1991; Wang, 2003), consistent with our approach to global mindset as an individual-level construct, our primary focus in this discussion is at the individual level. At the same time, there is an obvious and important overlap between the levels of analysis, as the more macro strategy literature views the top management team of MNCs as the location where a large portion of the strategic information-processing capacity of the organization lies (Egelhoff, 1991: 197).

  6. In general, the information-processing model is based on three fundamental tenets. First, individuals have limited information-processing capacity and therefore attend to only certain facets of the environment while ignoring others (Sproull, 1984). Second, environmental information undergoes interpretation that gives structure and meaning to the data (Daft and Weick, 1984). Third, these interpretations influence action (Kiesler and Sproull, 1982; Daft and Weick, 1984; Dutton and Duncan, 1987).

  7. The most explicit example of a multidimensional measure is used by Murtha et al. (1998), who draw on the integration–responsiveness framework (Prahalad and Doz, 1987). They measure global mindset in terms of managers’ expectations regarding integration, responsiveness, and coordination. Similarly, Arora et al. (2004) use a self-report instrument that reflects two drivers of global value (local competencies and global coordination) suggested by Govindarajan and Gupta (2001).

  8. Put differently, the issue is whether the global mindset constructs theorized and measured at different levels are isomorphic, partially identical, or only weakly related (Rousseau, 1985). According to Rousseau (1985: 8): ‘Isomorphism exists when the same functional relationship can be used to represent constructs at more than one level. isomorphism implies that constructs mean the same thing across levels…’ Partial identity implies that constructs, although similar, ‘behave’ somewhat differently across levels. In addition, the same constructs used at different levels may be only weakly related.

  9. Arora et al. (2004), for example, established the construct validity of their global mindset measure by testing the relationships between global mindset and a set of individual background characteristics (training in international management, foreign country living experience and job experience, family member of foreign origin), often considered to be antecedents of global mindset. They found that global mindset was significantly positively related to these characteristics. These theoretically predicted relationships tentatively support Arora's et al. (2004) global mindset measure.

  10. Some of the future research we are suggesting has already been conducted on related constructs (e.g., how to increase success on international assignments; global leadership development), but not on global mindset per se.

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Acknowledgements

This paper contains material based upon work supported by the National Science Foundation under Grant No. 0080703. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation. The authors would also like to thank Columbia University, Duke Corporate Education, Portland State University, Sabanci University, San Jose State University, and the International Consortium for Executive Development Research for their support of this research. We also thank Professor Tom Murtha, colleagues at ION, C4, anonymous reviewers at the Academy of Management, the Academy of International Business, and JIBS for their helpful comments on earlier versions of this paper. The authors also gratefully acknowledge the research assistance of Elif Cicekli and Pinar Imer and the helpful guidance of JIBS Departmental Editor, Professor Mary Ann Von Glinow.

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Correspondence to Orly Levy.

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Accepted by Mary Ann Von Glinow, 7 November 2006. This paper has been with the author for two revisions.

Appendix: Global mindset scales

Appendix: Global mindset scales

Individual level

Murtha et al. (1998)

Scale: seven-point Likert scale (ranging from ‘extremely unlikely’ to ‘extremely likely’).

Integration expectations

As the company globalizes, I believe that the country operations most familiar to me will:

  1. 1)

    Have global marketing responsibility for one or more products.

  2. 2)

    Produce one or more products for global markets.

  3. 3)

    Go global with locally developed products.

  4. 4)

    Lead global product development processes.

Responsiveness expectations

As the company globalizes, I believe that the country operations most familiar to me will:

  1. 1)

    Demonstrate clear benefits to the local economy.

  2. 2)

    Have flexibility to respond to local conditions.

  3. 3)

    Harmonize the company's activities and products with national government policies.

  4. 4)

    Adapt existing products to local markets.

Country coordination expectations

As the company globalizes, I believe that the country operations most familiar to me will:

  1. 1)

    Provide early warning of global competitive threats.

  2. 2)

    Put global objectives ahead of country bottom line.

  3. 3)

    Identify local business opportunities with global potential.

  4. 4)

    Learn from the company's operations in many other countries.

Divisional coordination expectations

As the company globalizes, I believe that the country operations most familiar to me will:

  1. 1)

    Coordinate strategy on a global basis.

  2. 2)

    Take product development input from more countries.

  3. 3)

    Coordinate among countries to rationalize production.

  4. 4)

    Anticipate countries’ needs.

  5. 5)

    Balance price and market share objectives.

  6. 6)

    Respond quickly to countries’ requests and needs.

Govindarajan and Gupta (2001) and Gupta and Govindarajan (2002)

Scale: five-point Likert scale (ranging from ‘strongly disagree’ to ‘strongly agree’).

  1. 1)

    In interacting with others, does national origin have an impact on whether or not you assign equal status to them?

  2. 2)

    Do you consider yourself as equally open to ideas from other countries and cultures as you are to ideas from your own country and culture of origin?

  3. 3)

    Does finding yourself in a new cultural setting cause excitement or fear and anxiety?

  4. 4)

    When visiting or living in another culture, are you sensitive to the cultural differences without becoming a prisoner of these differences?

  5. 5)

    When you interact with people from other cultures, what do you regard as more important: understanding them as individuals or viewing them as representatives of their national cultures?

  6. 6)

    Do you regard your values to be a hybrid of values acquired from multiple cultures as opposed to just one culture?

Arora et al. (2004)

Scale: five-point Likert scale (ranging from ‘strongly disagree’ to ‘strongly agree’).

Conceptualization

  1. 1)

    In my job, the best one can do is to plan ahead for at the most one year.

  2. 2)

    Doing business with former enemies is not patriotic.

  3. 3)

    I think it is necessary today to develop strategic alliances with organizations around the globe.

  4. 4)

    Projects that involve international dealings are long term.

  5. 5)

    I take pride in belonging to an international organization.

  6. 6)

    I believe that in the next 10 years the world will be the same as it is today.

  7. 7)

    In this interlinked world of ours, national boundaries are meaningless.

  8. 8)

    Almost everybody agrees that international projects must have a shorter payback period than domestic ones.

  9. 9)

    We really live in a global village.

  10. 10)

    In discussions, I always drive for bigger, broader picture.

  11. 11)

    I believe life is a balance of contradictory forces that are to be appreciated, pondered, and managed.

  12. 12)

    I consider it to be a disgrace when foreigners buy our land and buildings.

  13. 13)

    I really believe that 5–10 years is the best planning horizon in our line of business.

  14. 14)

    I find it easy to rethink boundaries, and change direction and behavior.

  15. 15)

    I feel comfortable with change, surprise, and ambiguity.

  16. 16)

    I get frustrated when someone is constantly looking for context.

  17. 17)

    Contradictors are time wasters that must be eliminated.

  18. 18)

    I have no time for somebody trying to paint a broader, bigger picture.

  19. 19)

    I believe I can live a fulfilling life in another culture.

  20. 20)

    Five years is too long a planning horizon.

Contextualization

  1. 1)

    I enjoy trying food from other countries.

  2. 2)

    I find people from other countries to be boring.

  3. 3)

    I enjoy working on world community projects.

  4. 4)

    I get anxious around people from other cultures.

  5. 5)

    I mostly watch and/or read the local news.

  6. 6)

    Most of my social affiliations are local.

  7. 7)

    I am at my best when I travel to worlds that I do not understand.

  8. 8)

    I get very curious when I meet somebody from another country.

  9. 9)

    I enjoy reading foreign books or watching foreign movies.

  10. 10)

    I find the idea of working with a person from another culture unappealing.

  11. 11)

    When I meet someone from another culture I get very nervous.

  12. 12)

    Traveling in lands where I can’t read the street names gives me anxiety.

  13. 13)

    Most of my professional affiliations are international.

  14. 14)

    I get irritated when we don’t accomplish on time what we set out to do.

  15. 15)

    I become impatient when people from other cultures seem to take a long time to do something.

  16. 16)

    I have a lot of empathy for people who struggle to speak my own language.

  17. 17)

    I prefer to act in my local environment (community or organization).

  18. 18)

    When something unexpected happens, it is easier to change the process than the structure.

  19. 19)

    In trying to accomplish my objectives, I find, diversity, multicultural teams play valuable role.

  20. 20)

    I have close friends from other cultural backgrounds (Arora et al., 2004: 409–410).

Nummela et al. (2004)

Scale: five-point Likert scale (ranging from ‘disagree totally’ to ‘agree totally’).

Proactiveness on international markets

  1. 1)

    It is important for our company to internationalize rapidly.

  2. 2)

    Internationalization is the only way to achieve our growth objectives.

  3. 3)

    We will have to internationalize in order to succeed in the future.

  4. 4)

    The growth we are aiming at can be achieved mainly through internationalization.

Commitment to internationalization

  1. 1)

    The founder/owner/manager of the company is willing to take the company to the international markets.

  2. 2)

    The company's management uses a lot of time in planning international operations.

International vision

  1. 1)

    The company's management sees the whole world as one big marketplace.

Group level

Levy (2005)

Attention to the external and internal environment

Top management team attention was measured as attention paid to specific element of the environment in the letter to shareholders. External environment elements included: competitors, customers, dealers, strategic partners, and foreign-related aspects of the environment. Internal environment elements included: board of directors, employees, owners, and top management.

Attention breadth

Attention breadth was measured as dispersion across 10 environment element: : competitors, customers, dealers, strategic partners, Africa, Asia-Pacific, Europe, the Middle East, Latin America, and North America.

Bouquet (2005)

Scale: additive of the following four (A–D) indicators

(A) Global scanning

Scale: five-point Likert scale (ranging from signifies ‘very rarely’ to ‘very frequently’)

  1. 1)

    Top executives collect strategic information (such as market share and competitor data from around the world) in a consistent format on a regular basis.

  2. 2)

    The data your company collects from around the world is pre-filtered by information analysts before being disseminated.

  3. 3)

    Your top executives use business intelligence software to analyze global market developments.

  4. 4)

    Your top executives use benchmarking systems that routinely compare the company against key competitors worldwide.

(B) CEO foreign travel

  1. 1)

    Indicate how much time (in percentage) the CEO spends working at the company headquarters, traveling throughout the domestic market, and traveling outside the domestic market.

(C) Communications with overseas managers

  1. 1)

    Indicate how often they use email, letters and memo, telephone, videoconference, and/or face-to-face meetings to discuss non-routine decisions with overseas managers.

(D) Discussions pertaining to major globalization decisions

Scale: five-point Likert scale (ranging from signifies ‘very rarely’ to ‘very frequently’).

  1. 1)

    Indicate the extent to which major globalization decisions are made after intensive discussions between top managers

Organization level

Jeannet (2000)

Scale: not provided

Looking at the business strategies pursued by the firm

  1. 1)

    What number of businesses should actually compete on a global scale?

  2. 2)

    Are there businesses with explicit global mandates?

  3. 3)

    How large is the corporate volume generated by businesses operating under expressed global mandates?

  4. 4)

    How many businesses operate under a formal global strategy?

Looking at a firm's managerial talent pool

  1. 1)

    How many managers understand their business in global terms?

  2. 2)

    How many managers in upper management pool operate under global mandates?

Looking at a firm's organization

  1. 1)

    At which level does the first geographic split in organization occur?

  2. 2)

    How many functional managerial positions operate under global mandates?

  3. 3)

    How many teams or task forces have global mandates?

  4. 4)

    Extent of global IT structure.

Govindarajan and Gupta (2001) and Gupta and Govindarajan (2002)

Scale: five-point Likert scale (ranging from ‘strongly disagree’ to ‘strongly agree’).

  1. 1)

    Is your company a leader (rather than a laggard) in your industry in discovering and pursuing emerging market opportunities in all corners of the world?

  2. 2)

    Do you regard each and every customer, wherever they live in the world, as being as important as a customer in your own domestic market?

  3. 3)

    Do you draw your employees from the worldwide talent pool?

  4. 4)

    Do employees of every nationality have the same opportunity to move up the career ladder all the way to the top?

  5. 5)

    In scanning the horizon for potential competitors, do you examine all economic regions of the world?

  6. 6)

    In selecting a location for any activity, do you seek to optimize the choice on a truly global basis?

  7. 7)

    Do you view the global arena not just as a playground (that is, a market to exploit) but also as a school (that is, a source of new ideas and technology)?

  8. 8)

    Do you perceive your company as having a universal identity and as a company with many homes or do you instead perceive your company as having a strong national identify?

Kobrin (1994)

Scale: five- or seven-point Likert scale (ranging from ‘strongly agree’ to ‘strongly disagree’).

  1. 1)

    A manager who began his or her career in any country has an equal chance to become CEO of my company.

  2. 2)

    In the next decade, I expect to see a non-US CEO in my firm.

  3. 3)

    In the next decade, I expect to see one or more non-US nationals serving as a senior corporate officer on a routine basis.

  4. 4)

    In my company, nationality is unimportant in selecting individuals for managerial positions.

  5. 5)

    My company believes that it is important that the majority of top corporate officers remain American (reverse-coded).

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Levy, O., Beechler, S., Taylor, S. et al. What we talk about when we talk about ‘global mindset’: Managerial cognition in multinational corporations. J Int Bus Stud 38, 231–258 (2007). https://doi.org/10.1057/palgrave.jibs.8400265

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