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Designing global leadership development programmes that promote social capital and knowledge sharing

Article in European Journal of International Management · January 2015

DOI: 10.1504/EJIM.2015.070229

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442 European J. International Management, Vol. 9, No. 4, 2015

Copyright © 2015 Inderscience Enterprises Ltd.

Designing global leadership development programmes that promote social capital and knowledge sharing

Inger G. Stensaker* and Paul N. Gooderham NHH – the Norwegian School of Economics, Helleveien 30, 5045 Bergen, Norway Email: [email protected] Email: [email protected] *Corresponding author

Abstract: This paper explores the role of Global Leadership Development (GLD) programmes for developing the social capital of multinational enterprises and ultimately the enhancement of knowledge sharing across corporate divisions and national borders. Drawing on both qualitative interview and survey data, we find that GLD programmes can promote cross-border knowledge sharing. However, the effects of such programmes depend on their design. We identify two factors crucial for social capital development and knowledge sharing: first, a selection issue related to participants’ previous experience with leadership programmes and, secondly, a process issue which concerns the quality of the social interaction in the group work.

Keywords: social capital; knowledge sharing; multinational enterprises; global leadership; leadership development programmes; international management; cross-border collaboration; knowledge sharing capabilities; geographically dispersed organisations.

Reference to this paper should be made as follows: Stensaker, I.G. and Gooderham, P.N. (2015) ‘Designing global leadership development programmes that promote social capital and knowledge sharing’, European J. International Management, Vol. 9, No. 4, pp.442–462.

Biographical notes: Inger G. Stensaker is a Professor in Strategic Change at NHH – the Norwegian School of Economics. Her research interests are within strategic change and organisation development processes. Her work has been published in journals such as Human Relations, British Journal of Management, Journal of Applied Behavioral Science, Organizational Dynamics and Journal of Change Management. She has served on the Executive Board of the ODC division in the Academy of Management.

Paul N. Gooderham is a Professor of International Management at NHH – the Norwegian School of Economics. He has published articles in a wide range of journals including the Strategic Management Journal, Journal of International Business Studies, Journal of Management Studies and Administrative Science Quarterly. He has recently co-authored the book International Management: Theory and Practice (Edward Elgar).

This paper is a revised and expanded version of a paper entitled ‘Designing global leadership development programmes that promote social capital and knowledge sharing’ presented at the ‘Academy of Management Conference’, Montréal, August 2010.

Designing global leadership development programmes 443

1 Introduction

Firms are increasingly investing abroad not only to exploit their knowledge advantages but also to augment their knowledge bases by ‘buying into’ foreign-created knowledge assets (Dunning, 1997; Cantwell et al., 2010). However, acquiring knowledge across different locations within the Multinational Enterprise (MNE) does not guarantee competitive success. MNEs are dependent on possessing those capabilities that enable them to make use of their knowledge bases (Kogut and Zander, 1993; Szulanski, 1996). Knowledge sharing across business units encompasses not only transfer, but also reciprocal development through exchange and combination (Nahapiet and Ghoshal, 1998). However, the possession of knowledge sharing capabilities among MNEs varies (Gooderham et al., 2011).

In the discussion of knowledge sharing capabilities, it has been argued that one significant attribute is the degree of social capital the MNE has developed. One way to secure knowledge sharing among diverse and geographically dispersed organisations is by developing the firm’s social capital (Tsai and Ghoshal, 1998). Social capital refers to “the assets that reside in networks of relationships and affect the conditions necessary for knowledge transfer to occur” (Nahapiet and Ghoshal, 1998, p.243). In essence, it refers to the breadth, the strength and the quality of the social relations between people within an organisation. While there is increasing interest in social capital as a means for securing knowledge sharing, and much of this literature acknowledges the role of social capital (e.g. Mäkelä et al., 2009; Taylor, 2007), little attention has been directed to the issue of how to build organisational social capital (Bolino et al., 2002). On the basis of a literature review, Gooderham (2007) identifies in-house Global Leadership Development (GLD) programmes as one means to develop the social capital necessary for knowledge sharing. However, what is unclear is which aspects of GLD programmes are significant for the development of social capital for knowledge sharing purposes. The purpose of this paper is to identify critical aspects to GLD programmes that aim at enhancing social capital and knowledge sharing across the MNE.

Our research is divided into two phases. Because of the lack of both theorising and previous empirical research related to our research issue, we chose to initially pursue an exploratory approach to the design of GLD programmes (Bryman, 2006). The context of our research is a Norwegian MNE, Conco, which has substantial operations in Denmark and Sweden. In both Norway and Denmark, Conco has developed its operations through acquisitions, whereas its operations in Sweden are ‘green-field’. Although Scandinavian cultures are relatively similar, extant research indicates that there are significant differences (Schramm-Nielsen et al., 2004), meaning Conco is a valid research setting for exploring GLD programmes. In designing its leadership development programme, Conco has specifically aimed at enhancing social capital across its operations for knowledge sharing purposes. This initial exploratory approach indicates two aspects to the design of such programmes that are critical for the development of social capital and knowledge sharing. The first concerns the selection of participants, particularly in regard to their previous experience of leadership development programmes. The second design feature that appears to influence the outcome of Conco’s leadership development programme concerns the composition of the groups that were formed in the course of the programme. On the basis of our qualitative data, we develop a research model, which we then test empirically. Prior to presenting our qualitative findings, research model and quantitative findings, we discuss the concept of social capital in relation to knowledge sharing and present our research setting.

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2 A social capital approach to knowledge sharing

A substantial proportion of the research on knowledge management focuses on putting in place appropriate governance mechanisms for knowledge transfer (e.g. Hansen, 1999; Mahnke and Pedersen, 2004). The social capital perspective represents an alternative approach with its focus on the development of strong relations and shared mindsets among managers and employees working more through informal networks rather than hierarchical structures (Tsai, 2002). The perspective has its roots in a number of studies of intra-MNC knowledge transfer that indicate that inter-unit transfer of knowledge, particularly tacit knowledge, is possible only when social ties have been established between senders and receivers (Bresman et al., 1999; Gupta and Govindarajan, 2000; Lyles and Salk, 1996; Simonin, 1999). In their review, Eisenhardt and Santos (2002) highlight that while knowledge transfer is impaired by distance, this barrier can be overcome by integrative mechanisms such as inter-unit teams and the development of common norms. In short, MNEs that achieve superior levels of knowledge transfer do so because managers are able to “create a collaborative context through culture and organisational structure” (Eisenhardt and Santos, 2002, p.152). In similar manner, Tsai (2002) argues that informal lateral relations, as opposed to hierarchical structures, represent an effective means to achieving knowledge diffusion.

This focus on the significance of networks and relations infused by “good will” (Adler and Kwon, 2002, p.23) for facilitating knowledge sharing is the basis of the concept of social capital. The concept of social capital was originally developed at the individual level based on community studies (Coleman, 1988) but has since been applied as a more collective trait (Portes, 2000). Nahapiet and Ghoshal (1998) introduced social capital within the organisational context as consisting of three dimensions: the relational, the cognitive and the structural. The structural dimension refers to the presence or absence of specific network or social interaction ties between units of the MNE and the overall configuration of these ties. The relational dimension encompasses such facets of personal relationships as trust, obligations, respect and even friendship, which together increase the motivation to engage in knowledge exchange and teamwork. Hence, this dimension describes the quality or the nature of the connections between individuals in an organisation (Bolino et al., 2001). The cognitive dimension refers to shared interpretations and systems of meaning within a social network. The mere existence of a network, even with close and trustful relations, is not sufficient; knowledge sharing requires an ability to understand one another. Thus, the cognitive dimension includes the extent to which a shared language and codes has been developed that provides the foundation for communication. These three dimensions are highly interrelated, so that in practice it is problematic to differentiate them.

Social capital solves coordination challenges (Bolino et al., 2002; Tsai, 2002) and facilitates the flow and exchange of information and knowledge (Nahapiet and Ghoshal, 1998), and social interaction enables individuals to work more effectively and efficiently together and provides easier access to network resources (Bolino et al., 2002). However, social capital may come at a cost as interpersonal networks can produce strong norms and in-group processes which limit the absorption of new information, openness to alternative views and act as a barrier to change (McFadyen and Cannella, 2004).

In response to this, we may observe that within the social capital literature, a distinction is made between “bridging” and “bonding” social capital (Burt, 1992; Granovetter, 1973). The former refers to linkages between groups and the latter to trust-

Designing global leadership development programmes 445

based within-group relationships (Coleman, 1988). While bonding social capital is of importance for within-group knowledge sharing, bridging social capital (between for example business units in an MNE) provides access to alternative and therefore novel information (Putnam, 2002).

Despite the increasing interest in social capital and the positive effects it is argued to have on knowledge sharing, we have only limited insight into how bridging social capital can be developed across an MNE. Gooderham (2007) has argued that social capital across MNEs is enhanced by socialisation and by motivation mechanisms. Motivation mechanisms refer to a mix of rewards and sanctions that both establish and maintain particular norms or ‘rule systems’ for knowledge development and combination (Kostova et al., 2008). Osterloh and Frey (2000) argue that it is intrinsic rather than extrinsic motivation mechanisms that are critical for knowledge sharing, and empirical research by Gooderham et al. (2011) supports this view. Socialisation, on the other hand, refers to such mechanisms as transnational project teams and GLD programmes that promote the internalisation of MNC-wide shared goals. Cross-border travel (Bjørkman et al., 2004; Bozkurt and Mohr, 2011) and pursuing global careers (Mäkelä and Suutari, 2009) can also contribute in developing social relationships. According to Tsai (2002), social interaction amongst corporate divisions will foster knowledge sharing as long as the divisions do not compete for internal resources.

GLD programmes can be designed as a means to developing not only the individual leader (i.e. leader development) but also the leadership of the organisation (i.e. leadership development) or both (Day, 2000). While leader development refers to individual skills, leadership development concerns the development of relational and social skills, which is the basis for the development of social capital (Day, 2000). Thus, a GLD programme may be perceived as a structured context within which social capital potentially may be developed (Gooderham, 2007). In bringing leaders together, an MNE creates a basis for potentially developing trusting relationships, a shared mindset and inter-unit networks. The format of a GLD programme will typically depend in part on the specific goals of the programme.

In the next section, we present the content and format of Conco’s GLD programme which had a specific aim of developing social capital. Conco’s GLD programme is its primary means for enhancing inter-unit social capital, as ‘global’ or inter-country careers are rare and cross-border physical travel is limited. We then present an overview of our qualitative data, which were collected between the late 2007 and early 2009.

3 Research setting: Conco and the Scandinavian leadership development programme

Conco ASA is a leading Scandinavian building contractor and property developer operating within construction, property development and industrial operations. While the construction industry is a highly cyclical industry, since its foundation some 70 years ago, Conco has continuously achieved high performance. Headquartered in Oslo, Norway, the company has since the 1990s expanded rapidly in the Scandinavian countries. According to the top management, its rapid expansion has created a pronounced need for consolidation and integration across its operations and borders: “The need for values became apparent when we were doing acquisitions as we suddenly

446 I.G. Stensaker and P.N. Gooderham

had so many different cultures in Conco. Similar systems did not make us similar. We needed a shared history … We have since developed a series of tools aimed at developing our culture” (Corporate Top Manager).

In an interview conducted with the CEO, the aims of its Scandinavian Leadership Development (SLD) programme were further specified. He defined SLD programme as going beyond developing personal leadership skills to include “… two additional effects (to be achieved) through the leadership programme: (1) agreement on values, goals and culture and (2) the network” (CEO).

Thus, SLD has been designed with the specific purpose of developing collegial relations, trust and a shared mindset across corporate divisions. Furthermore, the CEO indicated that this combination of networks, common values and trust, which we will refer to as social capital, is regarded as critical to a decentralised organisation, such as Conco, if knowledge sharing across operations is to occur.

SLD was launched in 2004 and by the end of 2008, seven cohorts of SLD participants had completed the programme. The programme was designed in a cascading fashion first targeting leaders from the corporate level and later regional leaders as well. Line managers were then given the responsibility to nominate candidates for the programme. In addition, particularly talented managers could be nominated even if they were not yet at a regional or corporate level. Corporate HR followed up on the nominations to ensure participation from different divisions and countries. The programme format was designed as three three-day seminars focusing on (1) corporate values and strategy, (2) leadership role and organisation development and (3) communication and presentation. Leadership development lectures and reflections were typically conducted by external consultants. The CEO made a point of attending each seminar to communicate his views on strategy and values, as well as to share his own experiences on current topics such as change management. Group work ran parallel with the lectures and discussions. Corporate management nominated a current business issue for the group work, thereby ensuring ‘earning while learning’. The group membership cut across nations, divisions and gender, and great care was taken to avoid putting people with subordinate or supervisory relations in the same group.

4 Phase 1: exploratory qualitative methods

In the first phase of our study, we adopted an exploratory approach to studying SLD’s impact on the development of social capital and the facilitation of knowledge sharing. We draw on three qualitative datasets collected within Conco (see Table 1). Access was provided by Conoco as part of its commitment to participating in a Research Council of Norway funded research programme that aimed at generating new insights into knowledge sharing within MNEs. As academic researchers, while we presented our analyses to the Conco, we did not engage in any form of consulting or action research. Our initial source of qualitative data comprised several meetings as well as formal interviews with three corporate managers and ten divisional top managers. All of these had participated in SLD. Our goal was to generate a better understanding of the company background and its GLD. Each interview lasted between 60 and 90 minutes. The questions focused on the history of the company, its internationalisation strategy, main business challenges, the tools, techniques and processes it applied to foster knowledge sharing and, finally, what it viewed as the main barriers to developing

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dynamic capabilities based on such knowledge sharing. The interviews were transcribed verbatim. In our analysis, we probed top management’s perspective on knowledge sharing and the measures they used to enhance knowledge sharing. Table 1 Data overview

Fall 2007 Fall 2008 Late 2008 Early 2009

Interviews 10 divisional top managers (5 NO, 3 SE, 2 DK)

3 (CEO, HR director, strategy director)

6 2008 SLD participants (telephone interviews upon completion of programme)

Real-time reports

6 × 3 = 18: Six programme participants report at three points in time during the programme (2 NO, 2 SE, 2 DK)

Documents Corporate history, strategy, values statements, CEO presentations, SLD programme description at different points in time

Survey 103 (respondents from all 7 SLD cohorts)

Notes: NO = Norway; SE = Sweden; DK = Denmark.

Our second qualitative dataset comprised real-time feedback reports from six SLD participants who followed the programme during the fall of 2008. Our view was that in order to assess whether social capital was developed, we needed to access the perspectives of programme participants. We targeted participants within the leadership programme that was being run at the time of our research and asked the programme leaders to select six participants based on the following criteria: (1) there should be equal representation from the three nations that took part in the SLD programme, (2) we were looking for individuals who were willing and able to articulate their views and (3) we further emphasised that it was important for our research to interview participants who had some degree of critical distance to SLD rather than participants who would simply laud the programme. Our first meeting with these participants took place on-site in Sweden at the first of three SLD sessions. We informed them about the project and instructed them on how to report to us by email within one week after each of the three SLD sessions. The reports we received were rather brief and we therefore supplemented these data with telephone interviews upon completion of the programme. The telephone interviews were tape recorded and the data were coded in terms of programme results, such as social capital outcomes in the form of any or all three dimensions (of structural, cognitive and relational dimensions) and personal leadership development (such as leadership skills, competences and tools for leadership). Statements related to knowledge sharing were coded as different perspectives on knowledge sharing (for instance, statements indicating that knowledge sharing was viewed as positive and worthwhile vs. statements suggesting that the respondent viewed knowledge sharing as challenging and time-consuming). We worked inductively searching for factors that appeared important for knowledge sharing and development of social capital. In this, we probed the stories and actual references to situations where knowledge sharing had taken place. Through

448 I.G. Stensaker and P.N. Gooderham

this process, we observed that previous programme experience and perceived gains from group work appeared to be important for understanding whether knowledge was shared and social capital was developed. A research model was developed illustrating the factors that appeared to influence what each participant obtained from the programme. In early 2009, we used our research model as a basis for a survey submitted through quest-back to all SLD participants who had taken part in the programme in the course of its operation. These quantitative data will be discussed in more detail in the section covering Phase 2 of our study.

The third set of qualitative data consists of corporate documents and plans describing the SLD programme from its inception and throughout its history. This includes strategy plans, CEO corporate presentations, SLD presentations and company management and governance models. These documents provide valuable information on what was emphasised in the formal communication within the company and by the CEO, as well as evidence of how the SLD programme focus had evolved over time. The documentary data were particularly useful in our preparations for our primary data collection, while various sources of data enabled data triangulation in our analyses.

5 Findings from the exploratory phase

5.1 Corporate intentions with SLD

In our above presentation of Conco, we drew on our first qualitative dataset as well as our documentary data to show that although the terminology that the top management employs differs from ours, it is reasonable for us to construe its aim as being one of developing social capital. Thus, when these top managers typically refer to the SLD programme ‘as an arena for getting to know people from other divisions’ and as ‘an opportunity for networking’, we interpret this as attempts to develop the structural dimension of social capital. Similarly, when they refer to the aim of ‘developing trusting relationships among participants’, we identify the relational dimension of social capital. Equally, when they view SLD as aimed at contributing ‘to developing a shared mindset’, ‘a shared set of values’ and ‘common norms’, we interpret this as referring to the cognitive dimension of social capital.

Although the divisions in Conco are continuously compared in terms of their results and they make use of incentive systems, such as performance-related bonuses, top management is very explicit in emphasising cooperative values. Likewise, it articulates a view that knowledge sharing is values driven. As such, top management expresses a strong belief in the significance of intrinsic motivation to share knowledge, based on a desire to share one’s own knowledge base and seek other people’s expertise. This latter aspect to Conco thinking is illustrated in the following remarks by Conco’s CEO:

“All people are interested in sharing their knowledge … You have pride in telling others about something you are good at. I cannot stand attitudes like ‘what’s in it for me?’ They make me frown. It’s all about having an open attitude and being generous … Then other people will want to work with you … Contributing even if you don’t get anything in exchange right there and then …”

“I tell the SLD participants that perhaps some networks will not be as relevant, but this is long-term. The networks have to be maintained and taken care of. If they are misused, they will be destroyed.”

Designing global leadership development programmes 449

5.2 Social capital outcomes

Drawing on our complete set of interview data, we observe that SLD participants emphasised outputs in terms of developing shared values, a common understanding of Conco, increased trust in colleagues and the opportunity to develop a corporate network. In general, our informants reported more modest outcomes in terms of their own leadership development and organisation development skills. Thus, the primary outcomes of SLD may be construed as comprising social capital development. The quotes in Table 2 contain typical statements regarding these primary outcomes from SLD participants. We have attempted to group these statements in accordance with Nahapiet and Ghoshal’s (1998) three-dimensional conceptualisation of social capital, but we readily concede that some of the statements span more than one of the dimensions. Table 2 Social capital outcomes

Outcomes Empirical evidence

Structural dimension: creating new meeting places

“Without SLD, we would not have met.” (SLD Participant 1) “SLD functions as a meeting place.” (SLD Participant 2) “SLD is excellent as a meeting place. We get a shared understanding, particularly from [the CEO’s] presentations.” (SLD Participant 3) “SLD is really essential for knowledge sharing. You have to meet and this does not happen by coincidence. The first point of meeting must be created.” (SLD Participant 5) “Some of my [countrymen] spent a whole evening talking about concrete moulding. Contact was established and this experience transfer would not have happened without SLD.” (SLD Participant 5) “My group has planned to continue meeting. It’s easier to contact people who have been in the programme with me.” (SLD Participant 2) “My group has booked another meeting [after SLD was completed], but I don’t know if I will be contacting anyone after that …” (SLD Participant 4)

Relational dimension: developing trusting relationships

“SLD has been very valuable. I have met many fine people who have shared their experiences and knowledge …” (SLD Participant 2) “I have gotten to know other managers in a different way than I would had I not participated in SLD. I have established good relations and some really strong relations. If I need to I can contact the other participants and these are absolutely long-term relations.” (SLD Participant 3) “There is bonding, not just across borders, but also within each nation … We are like old soldiers who have experienced something together.” (SLD Participant 5) “I did not learn anything new [in terms of leadership development], but I developed an extremely good network and I learned the Conco values.” (Divisional top manager and previous SLD participant)

Cognitive dimension: developing a shared understanding and culture

“The Conco values are lived out through SLD. We send people here and get ambassadors among the managers. We should do the same for project managers.” (SLD Participant 1) “The cognitive part is developed and the person-to-person relations are developed, but this depends on whether or not the participants see this as an opportunity.” (Divisional top manager and previous SLD participant) “The value of SLD has emerged over time. Some people were sceptical after the first meeting. But participation triggers some attitudes and thoughts that sink in.” (SLD Participant 2)

450 I.G. Stensaker and P.N. Gooderham

Thus, SLD appears to create an initial meeting place for managers who would otherwise not meet. For some participants, additional meeting places have been established based on this initial point of contact within SLD. The relational dimension of social capital is also developed through the SLD programme. The data suggest that new relationships bridge both divisions within the national business units of Conoco and divisions across the national business units. There is also evidence of bonding and the development of trust-based relationships between colleagues. Participants particularly emphasise that having shared the SLD experience, they are able to communicate together through the shared language developed in SLD. Feedback from participants in the programme suggests that a shared understanding of the Conco values and strategy, the cognitive dimension of social capital, has indeed evolved throughout the programme.

5.3 Knowledge sharing outcomes

The SLD participants were explicitly asked what was needed for knowledge sharing and why they would want to share knowledge. Their replies indicate a close alignment with corporate management and the CEO. When asked about why people share knowledge, SLD participants emphasise the desire to show others what they know and the ability to contribute to others as well as gain from others. Key findings are displayed in Table 3. Table 3 Knowledge sharing outcomes

Knowledge sharing Empirical evidence

Programme participants’ perspectives on knowledge sharing

“I don’t believe in bonuses. It is important with similar values, that we are a family, and that we have a network.” (SLD Participant 1) “It’s not at all important with incentives or bonuses. You gain by making better profits in your division. It would feel awkward if some people were to get other types of advantages from sharing knowledge.” (SLD Participant 6) “Getting the opportunity to come together across divisions … there are no expectations about rewards, but a pat on the back is always appreciated … if I wasn’t backed up it would be difficult to spend time on [knowledge/experience sharing].” (SLD Participant 5)

Programme participants’ perspectives on why people share knowledge

“Most of us are proud of our competencies and want to share our knowledge. (SLD Participant 3) The motivation for sharing knowledge is mutual exchange. You get a lot back. You also listen to what they [other SLD participants] don’t say. They tend to avoid those things they don’t do well …” (SLD Participant 3) “We want to share knowledge because we are vain. It’s good if other people are good, but we want to be the best. Other people being good is not a threat or a barrier, it simply motivates us to do better. We also have bonuses at a group level … Incentives is part of the answer, but it all depends on leaders that want to share. Then we want to share as well.” (Divisional top manager and previous SLD participant)

Whereas the quotes in Table 3 illustrate how managers think about knowledge sharing, we were also interested in probing their actual experience of sharing knowledge. This distinction was based on the assumption that ‘good’ intentions do not always translate

Designing global leadership development programmes 451

into action. Hence, we felt it was important to gather actual examples and illustrations of knowledge sharing taking place in practice, rather than merely statements reflecting people’s thoughts about knowledge sharing. A number of specific examples of cross- national collaboration (such as between divisions in Sweden and Denmark) suggest that knowledge was indeed shared and had resulted in new forms of collaboration.

5.4 SLD design issues

Our second qualitative dataset explored two issues that emerged as potentially important factors in our initial interviews. The first one related to whether participants had previous experiences of similar programmes and the way in which these affected their SLD

outcomes. The other concerned their experiences within the SLD work groups. Our data suggested that previous experience with leadership development programmes influenced the expectations participants had of SLD and their assessments of the outcomes from the programme: “I have several management programmes from before and I did not get any useful tools here. They could have increased the tempo in the programme” (SLD Participant 4). “I had extensive leadership development experiences and had high expectations…However I think people without previous leadership development programmes find SLD valuable” (SLD Participant 3).

These quotes indicate that participants with previous experience from leadership development programmes may not be gaining any new leadership development competencies. However, referring to Table 2, we may note that Participant 3 is extremely positive about the social capital outcomes. Hence, our data suggest that those with previous programme participation derive social capital benefits, but not personal leadership benefits. While they already have leadership development experiences, they lack a network within the organisation and specific leadership knowledge about corporate strategy and values.

The functioning of the SLD work groups to which they were assigned also emerged as an important issue through our initial analyses. The group work centres on practical, operational and strategic issues which require that participants share their knowledge and put experience and theoretical knowledge into practice. The groups generate solutions that involve both sharing and creating knowledge. This is also a setting which facilitates the development of closer relationships and trust between participants. Few participants had negative group experiences, but those who did appeared to be more negative toward the whole programme. Thus, for example: “The group work did not work well. We had two top managers (in our group) who dominated and they kind of set the scene for others. They did [the group work] without putting any effort into it” (SLD Participant 1).

Summing up our findings from the interviews and the in-process reports, participants reported substantial social capital outcomes. These span the creation of meeting places, opportunities for networking and developing trusting relationships, and the development of shared values and a common understanding of corporate strategy. Although several participants expressed a wish for more functional leadership tools and skills, the main benefits of the programme appear consistent with the corporate goals for SLD, particularly as SLD increasingly became aimed at developing what we refer to as social capital. As a consequence of our qualitative analyses, two factors emerged that appear to influence the SLD outcomes. The first of these concerns the participants’ previous experience with leadership programmes and the second has to do with the experiences of their group work during SLD.

452 I.G. Stensaker and P.N. Gooderham

We will refer to the first of these two factors as ‘previous programme experience’ and the second as ‘gains from groups’. In Figure 1, we have incorporated these two factors in a research model that aims at examining their effects on SLD outcomes and knowledge sharing outcomes. The model contains eight hypotheses. In the next section, we clarify the reasoning underlying each of these hypotheses and describe the methods and findings from the second phase of our study.

Figure 1 Research model

Knowledge sharing outcomes SLD outcomes

H3a

H1b  H1a  Perspective on knowledge 

sharing  Previous program 

experience  Social capital     benefits 

H3b H2a 

H2b 

Gains from  groups 

Experiences of  knowledge  sharing 

Personal leadership  skills 

H4a and H4b

6 Phase 2: quantitative methods

Our qualitative findings resulted in a research model. In the next phase of our research, we sought to empirically test the model by collecting data from a broad set of SLD participants. Below, we begin by explaining the research model and then describe our methods before presenting our findings.

6.1 Hypotheses

At the core of our research model are the two outcomes of SLD: social capital benefits and personal leadership skills. Our qualitative data lead us to expect that these two outcomes will vary depending on whether participants have undertaken such programmes in any previous companies and on their gains from group work. Findings from Phase 1 lead us to speculate that participants who have previous experience of similar programmes already possess basic leadership knowledge and that as a consequence they are more oriented towards company-specific insights and network development. Thus, SLD participation will result in only a limited development of their individual leadership skills. Participants with limited experience, on the other hand, are more likely to focus on obtaining and developing general leadership skills, as this is more new to them. The group work is important because there is extensive and intensive social interaction within the groups. Well-functioning groups thus create a basis for learning not only about the other participants and their way of thinking, but also about others’ experiences of leadership more generally. In other words, the selection of participants and their social interaction during the programme are key drivers of the development of social capital and personal leadership skills. Thus, we hypothesise:

Designing global leadership development programmes 453

Hypothesis 1a: Previous experience with leadership programmes will positively affect social capital outcomes.

Hypothesis 1b: Previous experience with leadership programmes will negatively affect personal leadership skills outcomes.

Hypothesis 2a: Positive assessments of group work will positively affect social capital outcomes.

Hypothesis 2b: Positive assessments of group work will positively affect personal leadership skills outcomes.

Our qualitative data suggest a second set of hypotheses that involve the relationship between social capital gains and knowledge sharing. This relationship, knowledge sharing depends on the connections between people (shared mindset and trusting relationships), has been claimed in much of the existing literature, but with limited empirical support to it.

Hypothesis 3a: Social capital is positively related to perspectives on knowledge sharing.

Hypothesis 3b: Social capital is positively related to having experienced knowledge sharing.

Finally, our qualitative data indicate that participants who were dissatisfied with the group work were dissatisfied with the GLD in general. As mentioned earlier, social interaction is perhaps most intensive in the group work, and when the groups are not functioning well, this dissatisfaction spills over on perceptions of knowledge sharing within the entire programme. This leads us to expect that ‘gains from groups’ also have an impact on knowledge sharing. Thus, we hypothesise:

Hypothesis 4: Positive assessment of group work is positively related to perspectives on knowledge sharing.

Hypothesis 4b: Positive assessment of group work is positively related to experienced knowledge sharing.

6.2 Operationalising key constructs

In order to be able to test our hypotheses, we developed a questionnaire, which was distributed in January 2009 among all SLD participants throughout the history of the programme. A total of 159 Conco managers had completed the programme by the end of 2008, and we received 103 responses. Thus, the overall response rate was nearly 65%. In the survey, we set out to measure each of the constructs in Figure 1. These operationalisations are described in Table 4, which also features their Cronbach α.

Previous programme experience was categorised in four ways: previous participation in Conco leadership development programmes; participation in leadership development programmes in previous company/companies; participation in open (external) leadership development programmes; and no previous participation in leadership development programmes. The last category is the reference category. Previous programme experience features as a control variable in the testing of Hypotheses 3a and 3b.

454 I.G. Stensaker and P.N. Gooderham

Table 4 Operationalisation of key constructs

Construct Measurement

Social capital benefits, Cronbach’s α: .761

#11q1: The main outcome of SLD is creating a shared understanding of Conco’s strategy and goals #11q2: The main outcome of SLD is to establish and develop relations #11q3: The main outcome of SLD is to create a meeting place across divisions and nations #41: Conversations and being together with other participants have been very valuable to me

Personal leadership skills, Cronbach’s α: .711

#11q1: The main outcome of SLD is that I have developed my personal leadership skills #11q2: The main outcome of SLD is that I have developed a set of practical tools

Perspectives on knowledge sharing, Cronbach’s α: .797

#27: Sharing new ideas and thoughts with other divisions is positively acknowledged in Conco #31: Collaboration with other divisions is viewed as very valuable in Conco #36: Knowledge sharing among divisions is viewed as very valuable in Conco

Experienced knowledge sharing, Cronbach’s α: .885

#22: I have received important knowledge from other divisions in Conco #23: I have made use of important knowledge from other divisions in Conco #24: I have contributed with important knowledge to other divisions in Conco

Gains from groups, Cronbach’s α: .693

#39: I have had great value from the collaboration in group work #40: I have had great value from the group-based project work

In addition, we included a number of control variables: participant’s home country to examine whether there were any systematic differences across the three countries, Norway, Sweden and Denmark (Norway is the reference country); corporate division to examine whether there are any systematic differences across the various divisions of construction, property development, industry, staff and corporate staff (construction is the reference category); and SLD class: seven cohorts had completed the GLD at the time of our study (the class of spring 2005 is the reference category).

Because our design includes most of the population of SLD participants, we are not employing a random sample. Thus, where t-statistics or other inference qualifying quantities are reported, the main purpose is to point to parameters that are clearly noteworthy, i.e. given that we had a random sample, the parameter would be significant. For purposes of generalisation, it is an advantage to have such a large proportion of the target population included in the survey. However, common measurement errors due to misinterpretations, misunderstandings and individual particularities, such as excessive yes-saying, defensiveness with respect to scales (always answering in the middle), which are present in most survey data, cannot be ruled out. On the other hand, when people are highly motivated to answer, as is the case here, measurement errors may be acceptable and most likely random.

Designing global leadership development programmes 455

7 Findings from the quantitative analysis

Initially, we performed a correlation analysis, which is shown in Table 5. The table also features means for our constructs. These indicate that social capital benefits and knowledge sharing outcomes of the SLD programme are greater than outcomes with regard to personal leadership skills. This is in line with the Conco corporate aim for the SLD programme. The correlation matrix shows significant correlations between ‘gains from groups’ and social capital benefits, personal leadership skills and knowledge sharing. Table 5 Correlation matrix

Construct Mean St. dev. 1 2 3 4 5 6 7

1 Social capital benefits 3.95 0.667 1.0000

2 Personal leadership skills 3.01 0.840 0.1875 1.0000

3 Perspectives on K.S. 3.80 0.798 0.3497* .3075* 1.0000

4 Experienced K.S. 3.63 0.758 0.4880* 0.1611 0.3193* 1.0000

5 Assessment of group work 3.79 0.756 0.4027* .2866* .2620* 0.3159* 1.0000

6 Previous programme experience

2.65 2.123 0.2120* –0.1387 –0.0764 0.1545 0.0603 1.0000

Notes: *sig ≤ .05; N = 103.

We then conducted a regression analysis to test our hypotheses. The results are displayed in Table 6. Table 6 Regression analyses

Dependent variables

Independent variables Social capital benefits

Personal leadership

skills

Perspectives on knowledge

sharing

Experienced knowledge

sharing Coefficient

Gains from groups 0.349*** 0.317** 0.179* 0.227** Previous programme experience: internal Conco –0.015 –0.190

Programme in previous company 0.385** –0.382*

Open programme/study 0.153 –0.224 Social capital benefits – – 0.388*** 0.447***

Control variables Country

Denmark 0.169 –0.210 0.153 0.043 Sweden 0.308 –0.106 0.461* 0.162

456 I.G. Stensaker and P.N. Gooderham

Table 6 Regression analyses (continued)

Dependent variables

Independent variables Social capital benefits

Personal leadership

skills

Perspectives on knowledge

sharing

Experienced knowledge

sharing Division

Property development 0.034 0.199 0.478* 0.047

Industry 0.002 –0.018 –0.551*** 0.044 Staff division –0.049 0.26 0.407 0.159 Corporate staff 0.294 –0.382 –0.198 0.040

SLD class SLD 2004 0.067 0.322 –0.257 –0.065 SLD 2005 fall 0.012 –0.014 –0.223 0.325 SLD 2006 spring –0.223 0.217 –0.363 –0.286 SLD 2006 fall 0.034 –0.344 –0.167 –0.544** SLD 2007 0.123 0.540* –0.549** –0.264 SLD 2008 0.031 0.180 0.0184 –0.135 Personal leadership skills – – 0.174* 0.060 Previous programme experience: internal Conco 0.188 0.127

Programme in previous company –0.411** 0.137

Open programme/study –0.088 –0.006 Observations 103 103 102 103 R2 0.338 0.220 0.459 0.359

Notes: ***p < 0.01; **p < 0.05; *p < 0.1.

In testing Hypothesis 1a, we generally observe no effect of previous programme experience on social capital benefits. However, there is one significant exception and that is the positive impact of having undertaken leadership programmes with previous companies. It would appear that participants who have such experience from previous employers gain significantly more Conco-specific social capital than any other group of participants. In this regard, Hypothesis 1a is supported. Likewise, experience with leadership programmes from previous employers also has a significant negative effect, albeit at the 10% level, on personal leadership skills. Thus Hypothesis 1b is also supported.

The results further indicate that assessments of the gains from group work significantly impacts both social capital benefits and personal leadership benefits. Thus, Hypotheses 2a and 2b are both supported. Thus, it appears that Conco has succeeded in developing social capital through the SLD programme.

Our final analysis focuses on examining whether social capital has an impact on knowledge sharing. As above, we distinguish between perspectives on knowledge sharing and having actually experienced knowledge sharing. Our analyses confirm a relationship between social capital and both perspectives on knowledge sharing and experiences of knowledge sharing. Hence, both Hypotheses 3a and 3b are supported.

Designing global leadership development programmes 457

Examining direct effects from ‘gains from groups’ on the two knowledge sharing variables provides support for Hypothesis 4b, and somewhat weaker support for Hypothesis 4a. In other words, the impact of ‘gains from groups’ is primarily on experienced knowledge sharing, but there also appears to be a somewhat weaker effect on perspectives on knowledge sharing.

With regard to our control variables, we note that participants from the industry division were negatively disposed to perspectives on knowledge sharing. We speculate that this may be due to the nature of the business, which is highly labour and machine intensive and operates with small margins, whereas for instance the construction division depends on high-competence work performed in projects where knowledge sharing is an essential part of the activity. We also note that participants with programme experience from previous employers had a significantly negative view of perspectives of knowledge sharing. This is somewhat paradoxical given that these same participants acknowledged significant social capital benefits from SLD. In contrast, we note that participants from Sweden have a somewhat more positive view of perspectives on knowledge sharing in relation to their Norwegian counterparts and, to a lesser extent, their Danish colleagues. We speculate that this may be a product of the expansion mode of Conco in Sweden, i.e. unlike in much of Norway and Denmark, Conco expanded on the basis of green-field entry. Thus, in Sweden, those who joined Conco have done so on a ‘voluntary’ basis and may be therefore more inclined to a positive view of knowledge sharing than those who have joined Conco through acquisitions. This conjecture receives some support when we examine the negative impact of leadership development programme experience from previous employers on perspectives on knowledge sharing. Many of those with such experience have likely received this prior to their firms being acquired by Conco. We speculate that this may possibly negatively colour their perception of knowledge sharing in Conco. Finally, we note some SLD class effects with regard to perspectives on knowledge sharing and experienced knowledge sharing. We have no explanation for this.

8 Implications and conclusions

Drawing on multiple sources of qualitative and quantitative data collected over a period of 18 months, we have examined the degree to which a GLD programme can contribute in developing corporate social capital and subsequently facilitate knowledge sharing. This study documents the effects of Conco’s SLD programme and shows that it has indeed been successful in terms of developing the social capital and enhancing knowledge sharing. Our analyses indicate that managers report significantly higher outcomes in terms of social capital benefits as opposed to more traditional individualised leadership skills. We interpret this as support for the notion that leadership programmes such as SLD can play a significant role in developing social capital.

Our qualitative findings indicate that for many Conco managers, SLD clearly functions as a potent meeting place where international, as well as cross-divisional, networks can be established and perhaps later on get strengthened as well. In some cases, we also find evidence that SLD has generated additional subsequent meeting places. The cognitive dimension of social capital – a shared understanding and mindset – is developed not only through the conversations and discussions that take place during the

458 I.G. Stensaker and P.N. Gooderham

programme, but also through the presentations by the CEO. On the relational dimension of social capital (i.e. trust), we conclude that SLD appears to be a successful arena for bridging leaders from different divisions and nations, while there is more limited evidence of bonding. Our qualitative research identified two factors that appear to be critical for explaining what GLD participants derive from a programme such as SLD. These factors are their previous programme experience and their assessments of outcomes from group work.

Our quantitative research supports our qualitative observation that previous leadership development programme experience appears to have a positive effect on social capital development when that experience stems from a previous company. In the context of SLD, this suggests that managers who have undertaken leadership programmes in other companies are primarily interested in learning about the specifics of Conco and developing their social networks within Conco. Our quantitative research also indicates that previous programme experience appears to have a negative effect on perspectives for knowledge sharing and, when we examine nationality and observe that this is not the case for Swedish managers, we speculate as to whether this is tied to Conco’s modes of expansion. Clearly, if this is the case, this has an important design implication in the sense that MNEs ought to purposefully target individuals according to expansion mode. If an explicit goal of the GLD programme is to increase knowledge sharing across divisions and nations, then those divisions and/or subsidiaries that have been acquired should be given priority in GLD programmes, as should those divisions and/or subsidiaries whose nature of business might enhance competition rather than collaboration (such as the industry division).

‘Gains from group work’ is an important factor not only for the development of social capital, but also for the development of both personal leadership skills and experience of knowledge sharing. In that sense, this design aspect to SLD is of considerable significance. Our qualitative data indicate that in the case of SLD, Conco had invested care in ensuring that the groups were balanced in terms of division and nationality. In addition, superiors were never placed in groups where subordinates or anyone reporting to them were a member. Hence, there were no competitive dimensions introduced within the groups. Each group was also given a task or challenge which was deemed as strategically or operationally important for the corporation. When the task was perceived as relevant and interesting, the group members both shared knowledge and developed new knowledge. Leaders who participated in SLD had a specific aim of networking and getting to know the other participants. This lack of competitive mindset internally among the participants in the programme was further manifested through statements of friendly competition on performance, but no personal or zero-sum competition. This resonates with Gratton’s (2007) focus on the need for a collaborative mindset for hot spots and innovation to evolve in organisations.

Related to the lack of competitive mindset, we observe that the SLD programme focused on developing organisational leadership rather than developing individual leaders. By this, we refer to the focus on group work, collaborative work and drawing on each other’s experiences. This supports the work by Day (2000), indicating that social capital will most likely not be developed to the same degree when leadership programmes focus on developing the individual leader as opposed to focusing on collaboration and team work.

Designing global leadership development programmes 459

Our interest in social capital is inherently tied to knowledge sharing, which is an explicitly stated value in Conco. Our quantitative findings provide support for the linkage between social capital and knowledge sharing, when it comes to the perspectives held on both knowledge sharing and actual experience with knowledge sharing. As such, our study corroborates the findings by Tsai and Ghoshal (1998), suggesting that social capital impacts on knowledge sharing.

These findings carry important implications for managers who design GLD programmes. If the purpose is to promote knowledge sharing and social capital across national and divisional borders, then they need to carefully consider the selection and composition of programme participants. Many prospective participants will have been through a number of leadership programmes; hence, management must consider the sequence in which to plan such a programme and how to balance participation from both experienced and less experienced managers. Managers who have experience with leadership programmes from previous companies report the highest gains in terms of social capital and should therefore be included. However, a balance between newcomers and more seasoned managers in the company is necessary since newcomers will have had only limited exposure to the corporate values. Additionally, we have argued that the mode of expansion and the nature of the tasks performed in the various divisions/subsidiaries appear to influence perspectives on knowledge sharing and is thus an additional aspect to GLD selection that should be considered. Finally, our qualitative and quantitative findings indicate the importance of well-functioning groups for GLD programmes. Not only does this matter with regard to the development of personal leadership skills, but it is also of importance for social capital development and knowledge sharing. Thus, careful consideration on how to put together the groups and assigning meaningful tasks to the groups appears crucial.

One major limitation of our study is that it was conducted in Scandinavia and consisted exclusively of Scandinavian managers. Other GLDs will be considerably more ‘global’ in their reach. The findings of Hofstede (1980a) and Hofstede (1980b) indicate that the Scandinavian countries are low in terms of ‘masculinity’ and ‘power distance’, suggesting that Scandinavian companies are particularly suited to the collaborative ideas within the social capital perspective as manifested in the thinking of the Conco top management. One might question whether programmes such as SLD could be as successfully employed in settings with different cultural characteristics, such as the UK, the USA and Eastern Europe. As argued by Gomez and Sanchez (2005), MNEs will need to take into account the idiosyncratic cultural context of the countries they operate in as they attempt to develop social capital. Successfully developing corporate social capital in other cultural contexts might involve mechanisms other than those we have identified in the context of Conco.

A second limitation is that while a large proportion of the target population of SLD participants is covered in our quantitative data, neither our qualitative nor our quantitative datasets enable us to compare our findings with managers who have not participated in SLD programmes. Future research should be designed to include a suitable control group of non-participants.

A third limitation relates to the survey-based part of our research and concerns our use of cross-sectional data and the issue of establishing causal direction with regard to knowledge sharing and social capital. However, our qualitative data indicate that SLD participants view knowledge sharing as a consequence of increased social capital.

460 I.G. Stensaker and P.N. Gooderham

A final limitation is that our focus has been on the formal aspects of SLD programmes. We have for example not investigated ‘the bar effect’, which is the networks and relations that are generated through purely social gatherings that are not part of the formal programme. Thus, future research into GLD programmes should attempt to distinguish the formal and the informal aspects of such programmes.

Acknowledgements

The authors would like to acknowledge the important contributions of Arne Kjoede (AFF) and Olav Kvitastein (SNF) in the earlier versions of this work.

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