Management Research Paper

cornell HR review

NAVIGATING LEADERSHIP IN U.S.-BASED MULTINATIONALS

Jacob Goodapple

U.S.-based organizations once found a competitive advantage in going multinational and

leveraging resources and markets their competition could not access. But in today’s

market, simply going global is no longer enough to provide that advantage.

Organizations must now adapt to create more global connectivity and an integrated

workforce. This is the new way to achieve a competitive advantage, but it does not occur

without first hurdling several obstacles.

What happens when a U.S.-based organization launches internationally? Do the U.S.

leaders pioneer and establish the new business? They cannot talk the talk (literally) or

walk the walk (figuratively). When U.S. leaders do not understand how to connect with

diverse employees, clients, cultures, or norms, how successful can they be? Organization

culture versus region culture, which wins? With the Pyramid of Multinational

Leadership in place, any organization can take on the worldwide frontier. Everyone

wins.

The Pyramid of Multinational Leadership is built on four factors: the organization vision,

organization culture, region culture, and leadership awareness.

 Organization vision: the core ideology and envisioned future that drive strategic decisions.1

 Organization culture: a set of shared mental assumptions that guide interpretation and action in organizations by defining appropriate behavior

for various situations.2

 Region culture: the symbols, language, values beliefs and norms that make up a society.3

 Leadership awareness: understanding of how to adjust leadership styles according to situation context.

Building a Stable Foundation – the company vision

As Collins explains1, vision includes the organization’s core ideology and envisioned

future. Core ideology breaks down into the core values and purpose of the organization;

a consistent identity that transcends product or market life cycles, technological

breakthroughs, management fads, and individual leaders. While markets, labor pools,

and technology change, expand, and challenge the organization, the core values remain

static. These are intrinsic to the organization and guide it into the future, intending to

preserve the reason for its existence.

The envisioned future is what Collins coins as an organization’s big, hairy, audacious

goals (BHAG). This is a 25 year vision that is specific, intense, passionate, tangible, and

© 2015 Cornell HR Review

2

linked directly to the core ideology. Similar to the core ideology, the envisioned future is

the driving engine intended to stimulate ongoing progress in the correct direction.

Since the organization vision is static and the core of all objectives and strategies, this is

the foundation of the hierarchy. Without the organization vision clearly drawn out and

shared across the entire organization, the chances of having a strong global company

immediately decrease. The organization and region cultures are not necessarily static,

and this is why it is important to be grounded to the vision. To build a strong foundation

of leadership from the top down there needs to be consistent and constant communication

of the vision and strategy across the entire organization. This can happen during

orientations, town halls, informal meetings, formal feedback conversations, training and

development programs and more. It is just important that it happens with conviction and

it happens often.

Adding Levels – culture versus culture

Assimilating organization culture into region culture is one of the obstacles an

organization needs to hurdle to be successful. Organization culture typically shares

commonalities with the region in which it originated. A U.S.-based organization

expanding into areas of South America, for example, should expect a clash. Referencing

Hofstede’s cultural dimensions, differences may prevail in the following dimensions:

 Individualism versus collectivism

 Feminine versus masculine

 Power distance

 Uncertainty avoidance

 Pragmatic versus normative

 Indulgence versus restraint

Specifically, a U.S.-based organization culture may operate as individualistic and

masculine within a flat structure, comfortable executing in ambiguity while maintaining a

poor work-life balance and normative orientation. The region culture in South America

may tend to be collectivist with a desire for a strong hierarchy, clear direction and context

provided at all times. Additionally, South America might have a high focus on family

and life outside of work. The U.S.-based organization may restrain from celebrating with

social events and dancing whereas the region culture thrives on this. These differences in

cultures can cause problems with teamwork, communication, motivation and reward,

engagement, collaboration and innovation. The big question is, how do you conquer the

clash to be as effective as possible in the increasingly competitive global market? In the

Pyramid of Multinational Leadership, the organization culture and region culture need to

blend and operate together. With this being said, they have very different roles that need

to be understood by everyone in the organization.

The organization culture should be considered something like a moral compass. Per the

definition previously stated, the organization culture is a set of shared mental

assumptions that guide interpretation and action in organizations by defining appropriate

behavior for various situations. The organization culture links decisions to the vision of

© 2015 Cornell HR Review

3

the company and provides direction in any given situation. The organization culture

should not act or execute though. It is like the brains of the operation. The region culture

is the muscle. Region culture abides by symbols, language, values beliefs and norms of

the region the organization operates in and executes accordingly. This two-part system is

how conflicting cultures shift from a problem to a two-step solution providing a

competitive advantage.

Finish with the Apex – nothing works without awareness

Success would be easy if the journey ended at marrying the organization and region

cultures. It does not end there, however. To truly execute on a global strategy the

leadership of the organization must have highly developed awareness – an understanding

of how to adjust leadership styles according to situational context. In this specific

context, the leaders will be adjusting to the cultural variances. In order to accomplish

this, the organization needs to educate its leadership.

An ideal leader will show up every day with the organization vision leading each step,

defining the direction. All the decisions the leader makes will answer questions using the

organization culture, again the brain of the operation. However, all actions will be

executed in accordance with region culture. It is in the execution where leadership across

cultures is critical. Without expertise of what leadership styles match the organization

culture to specific region cultures, the leader will be ineffective. Knowing that match and

the variances in each situation is the key of leadership awareness; it ties everything

together and completes the pyramid.

For example, you work for a financial firm (your

organization) that is currently increasing assets

through client acquisition. It is well-known that this is

a performance-driven and performance-rewarded

culture. Per the strategy, your business development

team is on the forefront of this initiative as they

prospect for clients. Human resources (HR) is tasked

to structure a new rewards system for the business

development team to support client growth initiative.

Per the organization culture HR knows it is necessary

to implement a performance based rewards system.

That is step one. How you reward the business

development team is step two. In Asia rewarding the

business development team with recognition and more

complicated projects might work, in America a cash

bonus, in South America a celebration with public

recognition. Per the region culture, HR will need to

have rewards specifically designed for the region.

© 2015 Cornell HR Review

4

Conclusion – the pyramid is built

By viewing the Pyramid of Multinational Leadership as a linear process with four steps,

organizations can put a framework into place that will provide a global competitive

advantage. First, organizational vision is the foundation of the process – the core

ideology and envisioned future that drive long-term strategy. Second, organizational

culture guides decision-making processes on a day-to-day basis. Third, regional culture

dictates execution on a day-to-day basis after taking into consideration the strategy and

how the organization should address the situation. Fourth, leadership awareness helps

glue everything together by ensuring awareness of the cultural nuances and matching the

leadership style with the situation. With heavy leadership communication of the

organization’s vision, and training and development of leadership awareness, an

organization can harness a competitive advantage to succeed across cultures. ℵ

Jacob Goodapple graduated from Cornell in December 2014 with a Master of Industrial

and Labor Relations focused on Human Resources and Business. Before completing

graduate school, Jacob worked with Merrill Lynch, ExpertPlan, Goldman Sachs and

American Express. His bachelor degree is in Labor Studies and Employment Relations

from Rutgers University. He is currently working with General Electric in the HR

Leadership Program.

1. Collins, James C. Porras, Jerry I. (1996), “Building Your Company’s Vision”

Harvard Business Review

2 .Ravasi, D., Schultz, M. (2006), "Responding to organizational identity threats:

exploring the role of organizational culture", Academy of Management Journal,

Vol.49, No.3, pp. 433–458

3. Gerber, John J. Macionis, Linda M. Sociology (7th Canadian ed. ed.). Toronto:

Pearson Canada. pp. 59–65

Copyright of Cornell HR Review is the property of Cornell HR Review and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.