By Cynthia Corzo
Firms seeking success in a global landscape must pay close attention to a CEO's global mindset. This is particularly important for firms that are highly diversified internationally or have undertaken a major cross-border merger or acquisition. These are the findings of a study by an FIU Business professor published in the November 2020 issue of the Global Strategy Journal.
What is behind a global mindset and which leaders have it?
"Leaders with a global mindset are often embedded in multiple national contexts. They could be born elsewhere before moving to another country or have in-depth work experience in other countries, or have studied abroad," said Aya Chacar, professor of international business and one of the researchers. "A global mindset helps provide the awareness needed to manage more successfully across borders."
Chacar's research examined 228 newly appointed CEOs at the helm of the 187 largest European and U.S. firms that experienced at least one CEO succession between 2005 and 2010. The results indicate aspiring C-suite executives should align their knowledge bases, outlook and perspectives to understand the challenges faced by companies operating in an international landscape.
"A GLOBAL MINDSET HELPS PROVIDE THE AWARENESS NEEDED TO MANAGE MORE SUCCESSFULLY ACROSS BORDERS."
"Managers with a global mindset can better integrate operations, manage a global workforce, conduct arbitrage across countries and identify synergies across various operations and countries," said Chacar. "They understand the institutional context of different countries and can often see what those embedded in a single country at times can't."
More importantly perhaps, she added, this also means they have a better understanding of the informal rules of the games, the norms and beliefs or culture in a country, increasing the chances of being selected as CEO by global companies. The study shows firms with global strategies are more likely to select new CEOs with global mindsets.
The study also indicates boards of directors that include foreign members are more inclined to select CEOs with global mindsets.
Chacar explained that, from the company board's perspective, the selection of a new CEO provides the opportunity to assess a firm's future strategic direction and enables the board to select an executive with the managerial capabilities required to address strategic challenges. Today, globalization is a key challenge for an increasing number of companies.
While many companies go out of their way to hire executives who have a global mindset, researchers insist there is work left to be done.
This research was conducted by Chacar, also Ingersoll-Rand Chaired Professor, with Yannick Thams of Florida Atlantic University and Margarethe Wiersema of the University of California, Irvine.