International hospitality operations need global leaders

Figure 1
International Hotel
Properties by Brand.

Source: Statista, https://www.statista.com/statistics/197869/us-hotel-companies-by-number-of-properties-worldwide/

The number of international locations for restaurants (see Figure 2) is just as significant as the number of hotels located worldwide.

Figure 2
Restaurant Brands by Number
of Locations Internationally.

As illustrated above international operations by hotel and food service companies alike are a significant force within the global marketplace.

One should also take into consideration the fact that most governments make an effort to establish and maintain good working relationships with foreign governments (McDonald, 2018). This is important because progressive governments advocate that healthy global relationships will help the domestic nation to embrace and enjoy the benefits of international trade as well as foreign direct investment (FDI) for their homelands (Amirkhanyam, 2015).

Think about the introduction of McDonalds to Eastern Europe in 1990 with the first store opening up in Pushkin Square, downtown Moscow, Russia. The negotiation process began in 1976 during the summer Olympic Games in Montreal, Canada between then McDonalds Canada CEO George Cohon and a group of Russian officials. Even at that time the Russian government recognized the importance of FDI in order to help their struggling economic system (CBC Archives, 2019). Once again, it is proposed that hospitality organizations should be serious about going international and this worldwide outlook will drive the demand for qualified global leaders in the years ahead (Ratanjee, 2019). However going global can be a cautionary tale. The journey will be met with challenges in terms of logistics, human resources, time and money (Keller & Meany, 2017). A successful outcome will be dependent upon having a game plan and an accomplished global leader in place to champion the organization’s transition from domestic to international (Quackenbos, Ettenson, Roth, & Auh, 2016). These global leaders will be responsible for many tasks and to specifically align the local organization’s objectives with the overall global purpose(s). It is important to take notice that global leaders are no longer a luxury for businesses but a necessity in order for organizations to survive in the global arena (Engesland, 2014).

A case in point is a look back at Starbucks expansion into China. The Chinese are traditionally tea drinkers and not consumers of coffee. However, Starbucks first attempts in the Chinese market were met with disappointment. However, Starbucks was persistent, they stayed the course, and over the long run was able to convince and convert thousands of Chinese consumers to embrace coffee as their favorite go to caffeine beverage and not tea. This success was achieved as a result of having an effective global leader. At that time the CEO of Starbucks for China was Wang Jinlong. Jinlong was very familiar with Starbucks as had spent many years in the United States while attending school at Columbia University. He has continued his success within the coffee/food service industry as he now works as the CEO for Pizzaexpress in London, England (Li, 2019).

Zooming in on what is the expectation one cannot allow the roles of supervision and management to become blurred (Cappellia & Tavis, 2016). Global leaders must understand how his/her colleagues are contributing to the organization in a supervisory or management role. To be clear, supervisors are responsible for the successful performance of the organization at the operational level either as a whole unit or within subunits (Cunningham & Hyman, 1995).

Management has the responsibility of crafting strategy by identifying goals and objectives and to ensure that said strategy is successfully executed via the resources that he/she has at his/her disposal (Wykowski, Kiryanoff, Mishra, & Bharat., 2017).

The overall function of leadership is to have the ability, skill sets, to persuade people to embrace the guidance and direction provided from the organization and to carry out the required actions in order to move the entity towards its end goals (Popovici, 2012).

Productive supervisors and effective managers will have demonstrated leadership performance ability on a consistent basis for and of the organization (Wykowski, Kiryanoff, Mishra, & Bharat., 2017).

A case in point is Bill Marriott Jr. who has managed, in some capacity, the Marriott hotel brand for over 50 years through both good times and bad. He has a deep understanding of the role and need for leadership, supervision and management (Eisen, 2017). Effective leaders must also be able to execute strategy at any given level and adapt quickly to cultural dilemmas as they unfold (Crossan, Dusya, & Len, 2008). In reflection, several academic research projects have been undertaken in order to understand what characteristics an effective leader must have in order to be effective (Morgeson, DeRue, & Karam, 2010).

As identified in a variety of publications there are imperative skill sets required of an effective leader. In Forbes (Council, 2017) a comprehensive list highlights 16 desirable skills that leaders should demonstrate and perform. The top five include: 1) fearless agility, 2) earnings respect, 3) empathy, 4) selflessness, and 5) flexibility (Council, 2017).

To this end, one can state that a domestic leader should have the same qualifications as to what would be required of a global leader. However, global leaders must also have an elaborate international lens known as a global mindset. A global mindset is defined as, “a set of attributes that will help a manager to influence individuals, groups, and organizations from diverse cultural, political and institutional backgrounds” (Javidan, 2012). With a global mindset, international leaders will be able to facilitate the achievement of their organizational performance objectives because they will be well prepared when dealing with different and diverse stakeholders (Scandelius & Cohan, 2016).

An example of a global leader with a global mindset exists with the author and creator of Four Seasons Hotels and Resorts Mr. Isadore Sharp. Issy, as he is known by members of his inner circle, always had a global vision and over the years while building his luxury hotel brand he was successful in honing his global mindset skill sets (Gordon, 2016).

However, organizations going international will encounter many obstacles such as the cultural barriers that arise from different languages, preferences, religion, and or purchasing power (Rahman, Uddin, & Lodorfos, 2017). Accordingly, global leaders must prepare for the continuing changing conditions in their current and future operating environments. They will need to be able to identify challenges, opportunities and threats as quickly as they arise. In addition, local strategies may not easily transfer into multinational strategies because the environments and culture will be different (Verbeke & Asmussen, 2016). Therefore, the role of a global leader is to find a way to align the local and multinational strategies into a unified force (George, 2015). As such, businesses must have a global strategy that will facilitate the alignment of local strategies with international plans.

From the article “Global Strategy ... In a World of Nations?” (Yip, 1989), there are three steps presented that are essential for the successful transition and execution of a global strategy. First, there must be a core strategy. This is leveraging the organization’s essential competitive advantages and usually serves the domestic market first prior to exportation for use in the international arena. Second, there is a need to “internationalize the core strategy” by adhering to what works at home but also by making the necessary adjustments for a foreign market. This would include taking action to embrace new practices, ways and means, given a novel and dynamic foreign operating environment. Finally, there is need to ensure effective implementation of the core and alternative strategies in each new and entered country of the global market (Yip, 1989). From the literature one can state with a degree of confidence that global leaders can and will be successful in achieving these three imperative steps.

2. Literature Review

2.1. Competencies

Leadership is a concept that many scholars have investigated overtime and that pursuit continues today, as there are numerous books and articles that speak to this complex and significant domain. Academia alone has provided many versions of what leadership is and how it can be used effectively within organizations.

Within this frame of mind and as identified in “Global Leadership Competencies”(Hassanzadeh, Silong, Asmuni, & Wahat, 2015), there is a continued necessity to investigate leadership characteristics and traits. To this end, perhaps it is even more important to identify the differences that exist between local and global leaders.

One should ask what competencies are imperative and not just desirable in order for global leaders to succeed, be effective and survive? It has been advocated that successful global managers arise because of prudent managerial skills and cross-cultural competencies (Steers, Sanchez-Runde, &Nardon, 2010). In the “Global Leadership Competencies” research paper, the authors explain that competencies previously identified by many scholars may apply to domestic leaders and or leaders in a multicultural community only. They argue that the same competencies for domestic leaders should not apply to global leaders because the international operating environment is much more complex and diverse (Hassanzadeh et al., 2015). Other researchers argue that the competencies required for successful leadership are universal (Tompson & Tompson, 2013). In contrast, some believe that the competencies for global leaders and domestic leaders are different but they demonstrate common competencies and therefore those crosspollination competencies are deemed to be universal. They defend that some of the universal qualities that leaders must have include but are not limited to trustworthiness, planning, staying positive, and active team building (Czarnecka & Szymura- Tyc, 2016). The research within this domain continues but there are very few investigations with respect to how competencies are crucial drivers to a global leaders’ performance. To this end, there is also an imperative need for more research to done on domestic leaders and the factors that contribute to high performance organizations (Tompson & Tompson, 2013).

The “Global Leadership Competencies” (Hassanzadeh, Silong, Asmuni, & Wahat, 2015) paper also presents key themes in understanding the difference between leadership, global leadership and their respective required competencies. Understanding the differences that exist of each competency allows an organization to identify the best suitable candidate to fill a job vacancy. The individual that has the most exposure to dealing with many different cultural issues at once will have a more comprehensive mindset and thus be able to deal with the issues more effectively (Mockaitis, Zander, & De Cieri, 2018). It is also important to note that there is disparity in the job market. As the demand for required, or at least desired, competencies by many organizations remains high but unfortunately the availability of qualified candidates to satisfy those competencies is very low (Tarique & Schuler, 2010).

Other findings demonstrate competencies focused and popular have very little impact on organizational performance; while those competencies that are not as popular, such as “interpersonal and political savvy”, have a greater positive influence on affecting high organizational performance (Tompson & Tompson, 2013).

In summary, required competencies to be an effective and successful global leader may not be the same as the competencies required for prosperous leadership at home.

However as spoken to in this paper there are common, universal, competencies that will assist an individual to perform as an effective leader in either a domestic and/or international operating environment. One should recognize that research must continue in a quest to contribute to the body of knowledge that currently exists with respect to both domestic and global leadership.

2.2. Global mindset

As previously discussed herein, global leaders are important to any organization that intends to expand internationally. These global leaders require core competencies in order for the transition from domestic to international markets to be successful. One key factor that a global leader must have according to Astrid Nygaard Engesland is global mindset. Global mindset and leadership have become important prerequisites for organizations that aim to become international champions within the competitive worldwide arena (Engesland, 2014). Prior research has shown that global mindset is crucial for organizations and individuals in order to grow internationally (Gaffney, Kedia, & Clampit, 2014). Global leaders who have the ability to recognize and manage cross-border issues will increase the likelihood of success for the organization (Fourne, Jansen, & Mom, 2014).  Along this tangent, having a global mindset assists a leader in analyzing different practices of interaction and function within the community/society of operation (Fung, 2014). Mary Teagarden defines global mindset as having specific attributes that gives a global leader the ability to influence others who represent a different cultural and/or environment (Teagarden, 2012). In the Engesland paper global mindset is defined in accordance to three different perspectives: cultural, strategic, and multidimensional. Further, Engesland provides a general explanation of global mindset as to having the capability to recognize, accept and engage oneself in a global setting to a point of comprehending cultural differences and seeking out possible opportunities (Engesland, 2014).

Additionally, the global leader that is able to transform the work environment into a unified community instead of using force to impose foreign practices, ways and means, will be successful in building trust with the international stakeholders. Engesland also identifies and provides an analysis of the three capital items required to have a global mindset. These three cornerstones were first established by the Thunderbird School of Global Management in 2009 and include: psychological, intellectual and social (Engesland, 2014). These capital items have three sub areas that Engesland refers to as building blocks because they assist organizations in achieving the capital items. The building blocks support the capitals and over time the capitals intertwine, build and evolve on each other, to help shape the global mindset.

Furthermore, each of these capitals, independently or collectively, help to drive the development of global competencies needed in order to have the desired global mindset. Moreover, these capitals focus on different behavioral characteristics of a person and emphasize the need for the global leader to have “the right mix” of these qualities (Engesland, 2014). In application, once an organization identifies the need for its key personnel to have a global mindset the required resources and supports can be allocated accordingly. As a result of these efforts the global leader will perform with a much wider and deeper mindset by acknowledging and appreciating the diversity that exists in the world. This global leader will be adequately equipped to handle complex and diverse challenges and leverage opportunities as they are presented in an international environment.

A question arises at this time as to whether or not a correlation exists between global mindset and global leadership. That is to say “will a global mindset transform into a global leader”? To answer this query Engesland performed an analysis and identified that in order for an individual to rise up as a great leader they must have a global mindset. For example, without a global mindset it would be difficult to communicate the organization’s vision and mission to new and existing employees. That demonstration of great leadership comes from not only a global mindset but also from an organizational commitment to train and develop employees to have the right international focus and understanding in place as an operational foundation (Engesland, 2014).

Global mindset is the recommended approach and global leadership is the goal for the organization. These two objectives will be satisfied if the organization can leverage the appropriate personal competencies as well as cognitive complexity.

To this end, Engesland identifies that a correlation does exist between global mindset and leadership. This is a result of globalization causing a need for individuals to expand their minds and leaders needing to have a global mindset to guide their organizations in a foreign environment. Engesland concludes that global mindset is not only for global leaders but also for those who work in an intercultural environment at home.

Accordingly, a global mindset is an organic process shaped by many influential factors. Taking this thought into consideration one must carefully treat global mindset with a separate scope from global leadership. This is due in part to the possibility that an effective leader may not care about his/her nationality or the affairs of other nations. Therefore, this individual can still qualify as a global leader but is void of eligibility with respect to a global mindset.

At this time, a test does not exist to prove if a leader has a global mindset. However, the Thunderbird Global Mindset Leadership Institute has assets that can help an organization to 1) measure and 2) educate, shape, an employee’s global mindset (Global Mindset Inventory, 2019).

Global mindset measurement can take place via the design and use of an assessment tool and global mindset education can occur through a variety of programing alternatives. These resources assist organizations in getting up to speed more efficiently for international operational goals with a global mindset at its core. Achievement of the global mindset occurs within the organization given sufficient time, positive motivation, and the appropriate allocation of supports (Teagarden, 2012).

2.3. Problem Statement

Globalization has pushed the need for firms to expand internationally and therefore HMNCs must understand the importance of having a global leader(s) on their team. Global leaders are critical for survival, relevance, and sustaining competitive advantage. Business leaders that go international are somewhat aware and recognize that the success they enjoyed at home may not take place in foreign markets. Therefore, corporations need to know and understand the importance of a “global leader”. With this thought in mind the organization must exercise due diligence at a very high level to make sure the right personnel are brought on board for any international expansion opportunities. Conversely, HMNCs may understand the importance of having a global leader but fail to the find the right personnel from within their internal pool of candidates. This problem may occur from not having the right information, selection criteria, to work with from the onset. An organization needs to compile a list that identifies the competencies and skill sets that would be required of their very own global leader (Cappelli, 2019).

Once the organization has secured a global leader, many benefits may occur. Such as an easier transition from domestic to international markets, an understanding of the operating environment culture, and leveraging best practices for and within a particular foreign market(s). A 2015 leadership study coming out of the University of North Carolina, Kenan- Flagler Business School and The Human Capital Institute brought to light that most HMNCs have a global leader strategic deficit despite having an awareness that global leaders are fundamentally important to the success of their organizations (UNC, 2015).

This deficit is damaging to the company because losing just one global leader is costly in terms of both time and money. Generally, a leader has gone through extensive training and development provided by the company in preparation for his/her organizational position.

Furthermore, most organizations have set cost reduction as a priority and goal without sacrificing product and/or service quality (O’Hern, 2016). To this end, when a trained leader fails, leaves voluntarily or involuntarily, the organization must repeat the entire human resource process including: recruitment, selection, training and development, and performance evaluation at a great cost of valuable organizational resources including time and money. This leads to unnecessary organizational stress. The positive take away is for the organization to learn from the experience and to make sure the required characteristics of a future global leader are well articulated and understood.

2.4. General objectives

To evaluate and understand the importance of the global leader role.

To identify the competencies and skill sets of a global leader.

To ensure the global leader can align domestic strategies with international strategies.

2.5. Specific objectives

To analyze the impact of global leadership in HMNCs.

To determine the global leadership skills required for a successful HMNC.

3. Methodology

This paper focuses on the use of secondary data to postulate a theoretical approach in understanding the importance of global leaders as contributors to the success of HMNCS. In addition, the literature regarding what is required to be a global leader and to develop a global mindset is examined within the context of effective and successful global leaders. 4. Analysis

International commerce and the need for corporate presence in foreign markets has created the demand for qualified and skilled global leaders. Many organizations recognize the need for leaders and have them present on their management teams.

Unfortunately, as time passes it is possible that management performance does not meet or exceed the organization’s expectations. As such, it is important for organizations to provide all employees with training, workshops, seminars, revised performance assessments, presentations, etc. to make sure that they are more than adequately equipped to perform their jobs at a high level. Employees are the most valuable asset of an organization and therefore appropriate investments are required to ensure they are performing to and above the required task (Batarliene & Ciziuniene, 2017).

Within this train of thought, one needs to recognize that it is the employees of the organization that have vast knowledge, skills, exposure and experience of the company and therefore all are at some point in time in a position to be possible leaders in the future. So companies must make the necessary investments in their human resources so that they are on

the path with the skills to be or become a leader. With training and development the effectiveness of the global leader will increase proportionately (Nagavi & Jahandideh, 2012). Organizations must always update their leadership development programs to reduce the possibility of negative outcome occurrences. Many of these programs fail because they lack adequate and effective internal marketing and communication among the employees (LeStage, 2015). Once they have the skills to be a leader then the company has to continue to make investments to keep them on track to become global leaders. In leadership development members of the organization will be able to obtain the competencies required to be a global leader. Additionally, a global leader with the correct competencies will provide added value to the organization. Leadership expert George C. Maxwell explains during a 2018 conference that it is very important for leaders to be bring value to an organization. This can be accomplished by “adding value to people”. This positive action will be an advantage and benefit to the organization (Global Leadership Network, 2018). Hence, any investment that the company makes with their employees will reap significant benefits in the future.

Especially since globalization has increased the need for all organizations to expand operations into foreign markets.

Global leaders need competencies that adapt to international settings so that their performance is not adversely affected. Previously it has been assumed that domestic leadership competencies can be easily transferred into an international setting for global leaders. In contrast to this belief, this paper speaks to the reality that domestic and global leader competencies are different. For example, domestic leaders will not have the same obstacles as a global leader will be confronted with in another country. As such, the degree of operating difficulty can be much greater in a foreign market. In support of this conviction, Dr. Maryam Hassanzadeh identifies seven competencies that a global leader must have. They ude: 1) global mindset, 2) the ability to learn from experience, 3) being culturally aware and sensitive, 4) effective communicator, 5) develop and maintain relationships, 6) demonstrate positive traits or attitudes, and 7) appropriate knowledge and skills (Hassanzadeh, 2015). Having possession of these competencies will increase the likelihood that a global leader will be able to deal with the many diverse challenges encountered in new global environments. The global leader must also be mentally ready. He or she must demonstrate a willingness to forge strong relationships with the local population internally and externally of the organization and have the ability to be engaged and embedded within different cultures (Hassanzadeh, 2015.

Global leaders must also be effective communicators and have complimentary ambitions. They must be able to motivate employees in getting the job done by understanding the purpose of the job and not just how to do the job. This will contribute to a positive outcome of the intended strategies that are aligned with overall global mission.

Global leaders must communicate organizational goals and objectives efficiently and effectively. Thus one of the main competencies that interacts with and influences the other competencies is global mindset. As global mindset is a concerted effort by the global leader to help achieve corporate mission, global leadership, and competitiveness (Subrahmanyam, 2018). This occurs because the global leader has an ability to understand the cultural norms, customs, traditions and best practices that are in place within a particular international setting.

Global leaders must also analyze the operating environment to identify the most prudent approach to compete with local and international competitors. A global leader understands and accepts diversity in their new global setting. He or she will be able to recognize and analyze the different cultures that are in play. This will provide the global leader with an opportunity to capture and leverage any possible trends prior to the competition (Caldwell, 2015). Learning from their experiences a global leader does not repeat mistakes and misfortune. They will examine the situation, reflect on the past and be able to makebetter, wiser, decisions. This affirmative corrective action will have a positive impact on expanding their global mindset. They will take into account past situations, outcomes, and select the best course of action with respect to future decisions.

A global leader being culturally aware and sensitive will be prepared for any challenges or obstacles that may arise. In the business environment they realize that because of globalization they have to act in an appropriate manner to the situation at hand. Therefore it is imperative that appropriate training, education, has occurred for leaders and employees alike to be culturally aware and sensitive (Lutz, 2017). Business professionals such as global leaders must be competent in cultural issues and diversity. Even communication pieces provided by the organization must be correctly aligned with the host operating environment. This is fundamental to and active part of conducting business within the global environment (Toth, 2009). Being cultural aware and sensitive will increase the global mindset of the leader. They will have the ability to research and understand the culture, norms, customs and traditions of the foreign market. These competencies will increase their knowledge and be much better prepared to be a leader within a global setting. These competencies can be taught to all members of the organization and can continue to progress over time with precise and suitable leadership programs.

Most organizations use popular, standard, traditional methods for developing and grooming leadership in house. Roselinde Torres argues that companies should not focus on traditional practices when developing leaders. The concern is that conventional techniques restrict potential growth of the leader and ultimately the organization because the results are simply not there (Torres, 2015). In a study of 4,000 companies that had leadership training programs and supports in place “58% failed to grow great leaders” (Torres, 2016).

If using old traditional training standards, then the organization is not taking into account the dynamic, fast, growing innovative environment in which they are competing.Customers will quickly change their purchasing behavior so organizations must stay current with the latest trends and global leaders must embrace the change that is required in order for their organization to remain relevant and have the ability to compete.

Organizations must leverage the inside knowledge of all its members in order to discern what trends are significant and to analyze that information accordingly (Torres, 2013). By performing trend identification and analysis the organization can take an appropriate course of action. Aligning the strategy with both the operating environment and the organization. This is an important responsibility for a leader because they should be able to connect with different stakeholders who are striving for the same goal. In 2017, Deloitte released a report titled “High-Impact Leadership: The New Leadership Maturity Model” which clearly states that “change is a constant challenge for today’s organizations and as such leaders must be champions of knowing their operating environment so that adaptation and adjustments can be made effectively” (Deloitte, 2017). Also from the Deloitte report it is noted that the leadership pool in organizations is weak to moderate with only 60% having the ability to make business judgments quickly and 48% have the willingness and ability to innovate and evolve (Deloitte, 2017). These statistics are very alarming for organizations because it appears once again that their efforts to groom leaders in house is not working.

Once again, there is more evidence that organizations are losing time and money in their attempts to develop leaders in house.

Adding another layer to this issue is that organizations have recently stated that over the next five years they will lose more than 50% of their existing senior leaders (Achieve Forum, 2016). Thus companies need to refocus their efforts on training, developing, employees who have leadership potential. By always offering training programs organizations can focus on work in progress leaders and hopefully have a return on their investments with leaders in place. This can be done through innovative practices and evolved performance techniques so that the value of the organization can continue to rise over time.

This can be seen in the results of a research project in which twelve different leadership development practices were analyzed. The discoveries and findings from this research project identifies that organizations that used the least popular practices were actually the ones that were most effective while the companies that used the more popular ones were less effective (Tompson & Tompson, 2013).

Unfortunately, organizations have become too comfortable using traditional practices for and of leadership development. This is a concern because of the shortage of leadership talent that exists today. One must not forget that investments must be made in order to have the right talent in place to create value and competitive advantage for the organization (Ogg, 2016). Any training that is offered has to be current, relevant and on point. It must be organic and adjust, evolve according to the necessities of the organization. This will enable leaders of tomorrow to have the competencies and skills sets to become not just good but great leaders.

So at this station it is apparent that the challenges include: 1) organizations need leadership talent, 2) organizations are losing leadership talent, and 3) organizations continue to use ineffective traditional leadership training practices.

Organizations must recognize these challenges and embrace change. Organizations must incorporate and utilize training programs that are current and align to the purpose of the organization. This will provide a positive return for all stakeholders over time.

If the global focused organization has effective global leaders in place then the organization is prepared to embrace a greater probability of success in an international setting with sustained competitive advantage (Nagavi & Jahandideh, 2012).Going global is a difficult task and not all organization are able to make it in the international world. Organizations that originate in developed countries have an easier transition, in most instances, because their domestic customs that are known and trusted worldwide. But organizations from developing countries do not enjoy that luxury.

Multilatinas, an emerging market multinational with headquarters in Latin America, provide examples of the importance of having a global leader in place. It is difficult for multilatinas to enter into new foreign markets and require the assistance of a global leader for said task.

German Rios, Corporate Director of strategic affairs CAF- Development Bank of Latin America, defined multilatinas in an interview as, “companies that in their natural process began to expand within Latin America and entered a market in neighboring countries with some beginning to internationalize,” (CAF, 2016). Multilatinas have an aim to transition from multilatinas to becoming global latina (latinas globales) in order to compete with the MNCs. Global latinas are companies that are earning income, have operations and a vast majority of their resources overseas (Aguilera, Ciravegna, Cuervo, & Gonzales, 2017).

Multilatinas like HMNCs want to have operations in overseas markets because it will facilitate a reduction in logistical (including transportation) costs while at the same time generating more revenue. Despondently there is evidence that many multilatinas fail to become global Latinas and are ignored by the international business research community (DeVilla, 2016).

Multilatinas struggle in different areas such as being able to recruit and retain the best talent for their organizations. They are predominantly family owned and operated. Their portfolio of operations is organized in a traditional pyramidal group (Aguilera et al., 2017). So there are constant challenges with stakeholders and that makes it difficult to prioritize the need for recruiting top talent when attempting to go global. Most multilatinas come from countries in which a cultural dimension does not place importance on valuing their employees. Additionally, a global leader not groomed from within or recruited from outside the organization will hinder the organization’s ability to successfully transition from one country to the next.

Another reason that multilatinas struggle in going global is greater barriers to access capital markets. The securement of much needed capital is more difficult due to more stringent borrowing conditions and restrictions given the countries in which operations are proposed or currently operate. Those countries historically have had tumultuous political and economic volatility resulting in greater forecasting complexity and thus great difficulty in accessing needed capital (Strom, Alvastam, & Jones, 2016). Other organizations in the global setting do not commit to any type of strategy such as joint ventures, alliances or mergers because of the instability, corruption, and unprofessional policies that are emphasized by various governments in Latin American countries. According to the corruption perception index of 2016 more than 50% of countries in Latin America were in the range of highly corrupt (Transparency International, 2017). Multilatinas have been able to expand in nearby countries because most neighboring countries have like or similar challenges. However, once multilatinas enter a country that is comparable to the home country challenges within that new market may still be encountered. Another reason that multilatinas struggle in going global is that there is a lack of programs that focus on leadership in Latin America (Aguilar, Madueño, & Violin, 2017). Multilatinas or a global latinas must have the best leadership talent available. Studies on global latinas have shown the importance of a highly educated leaders. These individuals have a tremendous amount of useable knowledge and as such propel up the organizational ranks to become top leaders (Aguilar et al., 2017). Organizations that have been able to achieve the transition from one country to the next are those that have the best education facilities/resources and focus on the importance of leadership.

There are very few organizations that have been able to achieve this transition from multilatinas to global Latinas. One example is the Colombian company, Grupo Nutres, that claims their achievement as a result of abandoning an old business model and embracing an new one that focuses on valuing their employees. Grupo Nutres looked at and hired talented individuals who fit the hiring criteria. In particular, Groupo Nutres hired individuals who demonstrated potential for: innovation, responsibility, and a strong commitment to brand.

Also a strategy (Uppsala model) was selected that facilitated market entry enabling the organization to grow in accordance with expectations Uppsala model (DeVilla, 2016). New markets were not entered quickly but instead a staggered, gradual, approach to market entry was utilized whereby measurement and evaluation of results were undertaken throughout the implementation and execution of said strategy.

This approach enabled the goals from headquarters to be in alignment with the goals of the global expansion strategy. Expansion first took place in countries that were similar to Columbia such as Ecuador and then slowly continued expanding into countries that were more dissimilar rather than alike. Learning was achieved throughout and along the way from this international expansion experience. Hence mistakes were not repeated and the organization became more aware of the customer tastes and preferences. Strategies were crafted that enabled achievement of the objectives they had identified at the start of the expansion program. This process assisted in transitioning from a multilatina organization to a global latina.

Every organization needs to establish goals for international expansion such as was the case with Grupo Nutres. These goals serve as objectives for the organization and as such milestones should be set as well. Milestone markers need to be identified for specific time periods such as the end of the week, month, in a year or in the next five years. So when an organization goes global they have a specific time orientated game plan in hand.

With milestones in mind, Michael Evens argues that is important for a company to build a business plan that includes the new localized strategy that still focuses on the corporate strategy as a whole. (Evans, 2015). This is important because one of the reasons for going global is to mitigate risk. Risk can be mitigated through a variety of ways including but not limited to: currency exchange, diverse labour pools, new markets, new suppliers, new buyers, and new best practices. The organization needs to continuously scan the external international environment looking for opportunities that can be embraced and leveraged.

As a final observation, organizations can successfully go global. However, due diligence and pragmatic, prudent steps must be taken when executing a global strategy. A global strategy can prove to be prosperous if the organization has a global leader in place. The global leader has many responsibilities. He or she needs to effectively communicate the purpose of the organization and must be able to adapt and adjust to a foreign operating environment as well as align organizational resources with organizational goals.

5. Conclusion

All organizations must go global because globalization has increased the need to be competitive and relevant throughout the world. Therefore, a need for global leaders to be properly groomed and educated exists today. Although research exists on leadership there is a very limited amount of research on global leaders with respect to their impact and importance to HMNCS. In this paper observations have been brought forward to suggest that existing global leaders do not necessarily meet the expectations of the organization. This is a result of little to no training, inadequate competencies and organizations not understanding the need for and of a global leader. Global leaders are important in an organization because they will connect headquarters with the new global setting effectively and efficiently.

Organizations need to constantly review and update their leadership development programs. The world is dynamic and change is a constant. Consumers are not predictable with respect to tastes and preferences in the years ahead. As such, consumer behavior as well as the competitive and political environments require constant monitoring and evaluation.

Organizations cannot afford to use the same old leadership programs because they are not effective. They do not yield the results organizations want and need.

Trained and skilled global leaders enable organizations to be successful with their respective global strategies. The global strategy that organizations embrace will allow operations to enjoy continued success at home and abroad.

Having a capable global leader on hand provides organizations with an opportunity to utilize local strategies in the domestic market and comprehensive global strategies in the international market taking into account all the possible obstacles that can arise. This will lead to the success of a company because they will be prepared for any problems that arise and will have a leader that knows how to deal with them in the best possible way (Lamson, 2018).

References

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1. PhD© . Dean School of International Studies UEES. isfierro@uees.edu.ec

2. PhD. Full Time Professor Niagara College, Canada

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