THE IMPACT OF DIVERSITY ON GLOBAL …...THE IMPACT OF DIVERSITY ON GLOBAL LEADERSHIP PERFORMANCE A...

THE IMPACT OF DIVERSITY ON GLOBAL LEADERSHIP PERFORMANCE

A thesis submitted to The University of Manchester for the degree of

Doctor of Business Administration

In the Faculty of Humanities

2013

SYLVANA STOREY

MANCHESTER BUSINESS SCHOOL

Contents

CONTENTS ....................................................................................................................................................... 2

OTHER LISTS..................................................................................................................................................... 6

TABLES .................................................................................................................................................................. 6

DIAGRAMS ............................................................................................................................................................. 6

ABBREVIATIONS ...................................................................................................................................................... 6

ABSTRACT ........................................................................................................................................................ 7

DEDICATION .................................................................................................................................................... 8

ACKNOWLEDGEMENTS .................................................................................................................................... 9

DECLARATION ................................................................................................................................................ 10

COPYRIGHT STATEMENT ................................................................................................................................ 11

THE AUTHOR .................................................................................................................................................. 12

SYLVANA STOREY – EDUCATION AND BACKGROUND..................................................................................................... 12

CHAPTER 1 – AN OVERVIEW OF THE RESEARCH ............................................................................................. 13

INTRODUCTION ..................................................................................................................................................... 13

CONTEXT ............................................................................................................................................................. 13

RATIONALE FOR UNDERTAKING THE RESEARCH ............................................................................................................ 14

RESEARCH OBJECTIVES ........................................................................................................................................... 16

RESEARCH OUTPUT ................................................................................................................................................ 16

STRUCTURE OF THE THESIS ...................................................................................................................................... 17

CHAPTER TWO: LITERATURE REVIEW – GLOBAL LEADERSHIP ....................................................................... 20

INTRODUCTION ..................................................................................................................................................... 20

REVIEW OF LEADERSHIP THEORIES ............................................................................................................................. 21

DOMESTIC LEADERSHIP THEORIES ............................................................................................................................. 21

MULTI-LEVEL THEORIES.......................................................................................................................................... 27

Leaderplex Model ......................................................................................................................................... 27

Strataplex Model .......................................................................................................................................... 30

CROSS-CULTURAL STUDIES ...................................................................................................................................... 32

Country Culture ............................................................................................................................................ 32

Organisational Culture ................................................................................................................................. 43

GLOBAL LEADER COMPETENCIES AND MINDSET .......................................................................................................... 46

Global leader competencies ......................................................................................................................... 46

Global mindset ............................................................................................................................................. 49

CONCLUSION ........................................................................................................................................................ 52

CHAPTER THREE: LITERATURE REVIEW – DIVERSITY ...................................................................................... 53

INTRODUCTION ..................................................................................................................................................... 53

CHRONICLING THE JOURNEY OF DIVERSITY .................................................................................................................. 54

THEORETICAL FOUNDATIONS ................................................................................................................................... 60

Resource-Based Theory ................................................................................................................................ 60

Theories/Studies underlying Structural Diversity ......................................................................................... 60

Theories/Studies underlying Cognitive Diversity .......................................................................................... 62

Theories/Studies underlying Behavioural Diversity ...................................................................................... 68

THE LEADERS ROLE ................................................................................................................................................ 71

BENEFITS OF DIVERSITY .......................................................................................................................................... 75

CRITIQUES OF DIVERSITY ......................................................................................................................................... 78

CONCLUSION ........................................................................................................................................................ 81

CHAPTER FOUR: LEAD³FRAMEWORK ............................................................................................................ 84

INTRODUCTION ..................................................................................................................................................... 84

THE TOOL – LEAD³ ............................................................................................................................................... 86

THEORETICAL FOUNDATIONS THAT SUPPORT LEAD³..................................................................................................... 87

DIMENSIONS OF LEAD³ ......................................................................................................................................... 90

Leadership Dimensions ................................................................................................................................ 90

Performance Drivers .................................................................................................................................... 91

Stakeholder Dimensions ............................................................................................................................... 94

Diversity Dimensions (Change Levers) ......................................................................................................... 95

Organisational Activities (Change Interventions) ........................................................................................ 98

Performance Outcomes ............................................................................................................................... 99

CONCLUSION ...................................................................................................................................................... 102

CHAPTER FIVE: METHODOLOGY .................................................................................................................. 104

INTRODUCTION ................................................................................................................................................... 104

QUALITATIVE VS. QUANTITATIVE METHODS .............................................................................................................. 106

ONTOLOGY AND EPISTEMOLOGY ............................................................................................................................ 110

RESEARCH STRATEGY – CASE STUDY ....................................................................................................................... 111

METHODOLOGY – GROUNDED THEORY ................................................................................................................... 115

METHODOLOGY – THEMATIC ANALYSIS ................................................................................................................... 119

METHODOLOGY – CONTENT ANALYSIS .................................................................................................................... 120

METHODOLOGY – IN-DEPTH SEMI-STRUCTURED INTERVIEWS ...................................................................................... 121

PILOT STUDY - AKZONOBEL ................................................................................................................................... 122

THE RESEARCH PROCESS ....................................................................................................................................... 129

Research setting ......................................................................................................................................... 129

Sample group ............................................................................................................................................. 129

Ethics .......................................................................................................................................................... 130

Clustering of Nations .................................................................................................................................. 131

Company selection ..................................................................................................................................... 132

Data Collection Process .............................................................................................................................. 133

Case Study Protocol ................................................................................................................................... 133

Interview Etiquette ..................................................................................................................................... 133

Structured Interview design ....................................................................................................................... 134

Case study report ....................................................................................................................................... 135

CONCLUSION ...................................................................................................................................................... 135

INTRODUCTION TO CHAPTERS SIX & SEVEN................................................................................................. 137

CASE STUDY REPORTS ........................................................................................................................................... 137

SAMPLE SELECTION.............................................................................................................................................. 138

INTRODUCTION TO CHAPTER SIX ................................................................................................................. 139

CASE STUDY 1 – MAHINDRA & MAHINDRA .................................................................................................. 140

EXECUTIVE SUMMARY .......................................................................................................................................... 140

THE COMPANY .................................................................................................................................................... 140

KEY FINDINGS ..................................................................................................................................................... 143

SUMMARY OF FINDINGS – BUSINESS IMPACT ............................................................................................................ 147

CASE STUDY 2 – ANGLO PLATINUM ............................................................................................................. 150

INTRODUCTION ................................................................................................................................................... 150

THE COMPANY .................................................................................................................................................... 151

KEY FINDINGS ..................................................................................................................................................... 152


CASE STUDY 3 – AL BARAKA BANKING GROUP ............................................................................................ 161

INTRODUCTION ................................................................................................................................................... 161

THE COMPANY .................................................................................................................................................... 162

KEY FINDINGS ..................................................................................................................................................... 164


INTRODUCTION TO CHAPTER SEVEN ............................................................................................................ 173

CASE STUDY 4 - SKANSKA AB ....................................................................................................................... 174

INTRODUCTION ................................................................................................................................................... 174

THE COMPANY .................................................................................................................................................... 175

KEY FINDINGS ..................................................................................................................................................... 176


CASE STUDY 5 – L’ORÉAL .............................................................................................................................. 188

INTRODUCTION ................................................................................................................................................... 188

THE COMPANY .................................................................................................................................................... 189

KEY FINDINGS ..................................................................................................................................................... 191


CASE STUDY 6 – NOVARTIS .......................................................................................................................... 204

INTRODUCTION ................................................................................................................................................... 204

THE COMPANY .................................................................................................................................................... 205

KEY FINDINGS ..................................................................................................................................................... 207


CONCLUSION TO CHAPTERS SIX & SEVEN .................................................................................................... 223

CHAPTER EIGHT: ANALYSIS OF THE SIX CASE STUDIES ................................................................................. 227

INTRODUCTION ................................................................................................................................................... 227

PROCESS –THEMATIC ANALYSIS AND CONTENT ANALYSIS ............................................................................................. 228

DATA DISPLAY: COMBINED ANALYSIS OF THE SIX CASES ACROSS THE THREE CONSTRUCTS ................................................... 230

COMPARATIVE ANALYSIS OF CASES ACROSS DEVELOPED AND DEVELOPING COUNTRIES ....................................................... 261

CONCLUSION ...................................................................................................................................................... 265

CHAPTER NINE: DISCUSSION ....................................................................................................................... 267

INTRODUCTION ................................................................................................................................................... 267

THE PURPOSE AND OPERATIONALISATION OF LEAD³ ................................................................................................. 269

MAPPING THE FINDINGS ONTO THE LEAD³ TOOL. ...................................................................................................... 273

CONCLUSION ...................................................................................................................................................... 304

CHAPTER TEN: CONCLUSION ....................................................................................................................... 305

INTRODUCTION ................................................................................................................................................... 305

KEY RESEARCH ACHIEVEMENTS .............................................................................................................................. 306

Contribution to academia .......................................................................................................................... 306

Contribution to practice ............................................................................................................................. 307

LEAD³ - Philosophy, Benefits and Value ..................................................................................................... 308

BUILDING ON THE RESEARCH: GLIDE ..................................................................................................................... 311

OTHER POSSIBILITIES FOR FURTHER RESEARCH ........................................................................................................... 313

METHODOLOGICAL ISSUES WITH CROSS-CULTURAL RESEARCH ...................................................................................... 313

IMPLICATIONS ..................................................................................................................................................... 315

CONCLUSION ...................................................................................................................................................... 315

Reflections on the Process.......................................................................................................................... 316

Reflections on Learnings ............................................................................................................................ 317

ODE TO LEADERSHIP AND DIVERSITY ........................................................................................................... 319

HOPE .............................................................................................................................................................. 319

APPENDICES................................................................................................................................................. 321

APPENDIX 1 – QUESTIONNAIRE REFERENCES ............................................................................................................ 321

APPENDIX 2 – QUESTIONNAIRE 1 / CASE STUDY 1 ..................................................................................................... 328

APPENDIX 3 – QUESTIONNAIRE 6 / CASE STUDY 6 ..................................................................................................... 332

APPENDIX 4 – COUNTRY DIFFERENCES ..................................................................................................................... 338

APPENDIX 5 - CASE STUDY PROTOCOL ..................................................................................................................... 342

APPENDIX 6 – EXAMPLE OF CONTENT ANALYSIS FOR A SINGLE CASE STUDY ...................................................................... 343

APPENDIX 7 – EXAMPLE OF CONTENT ANALYSIS FOR A QUESTION ACROSS THE SIX CASE STUDIES ......................................... 344

APPENDIX 8 – GLIDE – GLOBAL LEADERSHIP INDEX FOR DIVERSITY .............................................................................. 348

BIBLIOGRAPHY ............................................................................................................................................. 351

Word Count: 129, 552

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Other Lists

Tables Table 1: An Overview of Domestic Leadership Theories 22 Table 2: Sample Information 114 Table 3: Global Leadership – Category and Themes 226 Table 4: Diversity – Category and Themes 230 Table 5: Organisational Factors – Category and Themes 233

Diagrams Figures 1: LEAD³ 80 Figures 2 -18: Worked Data Analysis 226-236 Figure 19: LEAD³ 270

Figure 20 – 22: Working Examples of LEAD³ 271-272

Abbreviations

Abbreviation Meaning

BRIC Brazil / Russia / India / China

CEO Chief Executive Officer

CIPD The Chartered Institute of Personnel Development

CIVETS Columbia / Indonesia / Vietnam / Egypt / Turkey / South

Africa

CLT Culturally Endorsed Implicit Leadership Theory

D&I Diversity and Inclusion

GLIDE Global Leadership Index for Diversity

GLOBE The Global Leadership and Organizational Behavior

Effectiveness Research Project

HQ Head Quarters

HRM Human Resource Management

IT Information Technology

KRA Key Responsibility Areas

KPI Key Performance Indicators

LEAD³ Leadership And Diversity to the power of three

M&A Mergers & Acquisitions

R&D Research and Development

RoI Return on Investment

SBU Strategic Business Unit

SMT Senior Management Teams

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Abstract

Name of University The University of Manchester – Manchester Business School

Candidate full name Sylvana Clare Bernadette Storey

Degree Doctor of Business Administration

Title of thesis The Impact of Diversity on Global Leadership Performance

Date submitted 13th September 2012

Purpose: The focus of this research is to understand the impact of diversity on global leadership performance. Design/methodology/approach: From the literature review the researcher developed the components of the LEAD³ tool as well as, devised the questions for the in-depth semi-structured interviews that would test the tool. The questions centred on the three constructs of leadership, diversity and organisational factors and interviews were conducted between 2009 and 2010. The sample consisted of 79 senior leaders from seven companies across seven differing sectors and covered 22 different countries across 5 continents. A case study research strategy using a hybrid of open coding, thematic analysis and content analysis was employed. Findings: A series of themes were found under the three constructs: For Global leadership – competencies, connecting, rigour, stakeholder satisfaction, value based professional, influences. For Diversity – inclusivity, performance measures, role modelling, positioning diversity and innovation. For Organisational factors – organisational way of being, facilitating diversity, behavioural practices, ways of working, issues of concern and driving diversity. Issues emerging from the comparative analysis consist of cultural dimensions, engagement and learning. Research Limitations: Issues on reliability and validation, translation in measurement, environmental inconsistency, interviewer/interviewee bias, and ecological fallacy often levied at qualitative research. Research Contribution and Value: The findings tested against the tool, confirm the robustness and relevancy of the LEAD³ as an operational tool that will enable leaders to focus and integrate their diversity efforts. LEAD³ is encapsulated within an integrated change management framework and proposes a multi-level and multi-dimensional approach to global leadership and diversity that also includes performance drivers, stakeholder groupings, performance outcomes and organisational activities (change interventions). Future Research: Finally, an attempt is made to develop a competency framework for leadership and diversity from data emerging from findings. This is named the Global Leader Index for Diversity (GLIDE) – a framework that recognises the diverse aspects of a global leader’s role and identifies associated skills and behaviours that global leaders of the future need to develop.

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Dedication

This thesis is dedicated to the memory of my Father, Arthur Neil Storey who sadly passed away

in February 2011 and to my Mother June Ann Storey for her ongoing love and support.

“You may not remember what someone says or does,

But you’ll never forget about how they made you feel”

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Acknowledgements

This research has been successful due to the guidance, and generous contribution of

several individuals.

I am grateful to the CEOs and Board Members who kindly agreed that their organisations

participate in this research. Not only did they direct me to their internal resources that

would assist and support me, but given the sensitive nature of the research, I applaud their

courage and openness. They are exemplars of leadership.

In particular, I am indebted to the Senior Leaders who gave so generously of their time.

Their honest and heartfelt comments helped to make this study on complex organisational

phenomenon relevant. They offered valuable insights in providing the meaning that

constructs and shapes both the organisational and management realities in global

leadership and diversity.

I am appreciative to those individuals who assisted in identifying and persuading Senior

Leaders to participate and others who were involved in the scheduling of interviews.

Specifically, I would like to acknowledge my thesis supervisor, Professor Bernard Burnes,

for his ongoing guidance and wisdom in what has been a demanding and exciting journey.

To my Fiancé, Mark Eisenecker whose patience, support and love throughout the course of

this research is deeply appreciated.

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Declaration

No portion of the work referred to in the thesis has been submitted in support of an application

for another degree or qualification of this or any other university or other institute of learning.

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The Author

Sylvana Storey – Education and Background

Qualifications:

• Master of Business Administration.

Durham University Business School

• MSc Occupational & Organisational Psychology.

University of East London

• BSc Hons Psychology/Sociology.

Froebel College, Roehampton - University of Surrey

I am a business psychologist and a managing consultant and have been developing and

delivering Organisational Change and Development programmes and interventions for 18

years. I have consulted as a strategic advisor to multinationals, Public Sector organisations,

and NGOs. This has afforded me the opportunity to work across a range of sectors including

Oil, Transport, Mining, Pharmaceutical, FMCGs and Financial and has provided me with deep

insight into business operations and approaches. My main areas of expertise are

Organisational Culture and Behavioural Change Management, Leadership Development

Programmes and Executive Coaching, Internal Communications Strategy, Employee and

Stakeholder Engagement, Group Dynamics and Performance, Diversity and Inclusion and

Cross-Cultural integration in M&A’s.

This variety of experience of operating in differing sectors across a variety of cultures aids my

appreciation and subsequent understanding of the complexity of globalisation and guides and

shapes both my personal philosophy and guiding principles. My philosophy is that whilst we

continue our efforts to grow and learn through adversity and challenge we must retain humanity

toward others. We are people because of other people – we are a community.

My philosophy links to my stance on work practice which is, if change is to be implemented

successfully all stakeholders must be engaged heart and mind. Only through engagement and

collaboration can effective change be sustained. Involvement at every level allows for changes

in behaviours, attitudes, and mind sets. Applying this approach I have helped a wide range of

clients to explore how they relate with self and others as well as establish their sense of

purpose and vision for their future so as to develop their leadership capability, reshape their

relationships and processes and rejoice in their diversity.

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Chapter 1 – An overview of the research

Introduction

Chapter one provides an introduction to the research and sets the context for the study on

leadership and diversity, the rationale for undertaking the research, and the key research

questions.

Context

In the 21st century leaders are required to navigate through and negotiate through a myriad of

complexities. These can range from leading different national and organisational cultures, to

integrating peoples who are brought into an existing portfolio of companies, to managing a

greater proliferation of virtual team set-ups comprising of members from different geographic

locations.

Today, employers understand the importance of leveraging changing demographics in order to

be high-performing organisations that sustain competitive advantage. Von Bergen (2005) says

that support for the business necessity perspective on diversity is threefold in that firstly,

changing national demographics will require companies increasingly to fill key management

positions with diverse candidates, both to communicate with potential customers and to manage

effectively a workforce composed of employees of differing backgrounds.

Secondly, more companies are entering the global marketplace, creating a need for employees

at all levels skilled in dealing with the culture of each customer country.

And thirdly, companies have recognised that individuals from diverse backgrounds bring

valuable perspectives, differences, and experiences to all aspects of corporate decision-making

– from operations to marketing, to communications to human resources.

But what impact does the new business necessity to leverage diversity have on a global

leader’s performance? In other words, what is the evidence of a leadership necessity for

diversity?

With the continued advancement of globalisation how leaders lead across cultures and

geographies has been extensively researched and discussed at length. At the root of these

complexities is the need to lead the organisation through and across diverse scenarios. These

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scenarios can include – maintaining competitive advantage whilst at the same time balancing

paradoxical needs of increasing market share whilst reducing costs; being aware of national

and other country politics; important anecdotal concerns relating to corporate social

responsibility and influencing in new economies of the BRICS and the CIVETS. The leader has

to orchestrate and influence on multiple levels and according to Javidan, Dorfman, Howell and

Hanges (2010:370) “It is the diversity of the targets of influence that signifies and distinguishes

the task of global leaders.”

In a similar vein, Robert Rosen (2000:316) states that “because multinationals are now an

exotic hybrid of cultures, traditional boundaries between politics, culture, technology, finance,

national security, and ecology are disappearing...business leaders must be ‘capitalists,

psychologists, technologists and culturalists: they must understand the seamless interaction of

all these dimensions.” Avolio and Gardner (2005) say that ‘organisations are addressing

challenges that run the gamut from ethical meltdowns to terrorism and pandemics such as

SARS’.

Charles Style (AMAC, 2007) uses a maritime analogy to describe the challenge of strategic

leadership – “the top leader must not only see through the fog ahead of the ship (to discern and

interpret hazy shapes faster and more clearly than anyone else); he must then choose correctly

whether to turn to port or starboard or accelerate or decelerate or keep going”. Unkindly but

realistically, “Churchill used to say “the higher the ape climbs, the more you see of his behind”

(Werner Brandmayr (2003:ppi). This is even more relevant to these times as the more today’s

leaders operate globally, the more they expose themselves to risks and hazards.

Rationale for undertaking the research

Although globalisation is a very real concept that positions global leaders in the spotlight,

Morrison (2000: 117) writes that “global leadership remains a nascent field of endeavour and

has received much less attention than domestic leadership.” As with any emerging field, there

is not as yet a definitive model of what global leadership consists of and many theorists

combine domestic models with cross-cultural theories to shape a view on global leadership.

Similarly, although the cross-culture literature looks at how leaders relate and work with

dimensions of diversity there remains a significant gap in the literature towards understanding

how and what global leaders can focus on in relation to multiple perspectives of diversity. To

date, most research in this area explores the six strands of diversity – religion, gender, ethnicity

race, physical ability and age. Consequently, it is this narrow focus in the literature with regard

to how diversity relates to the performance of leadership teams that intrigued the researcher.

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Combined with this, the researcher wished to build on suggestions made by April and Shockley

(2007) that encouraged future researchers to develop a tool that embraces a holistic approach

to leadership as well as comments by Nancie Zane (2002, pp 335) who attests that “while

theories on organisational change have focused on the benefits of having a diverse workforce

(Cox, 1993; Cross, 2000; Katz & Miller, 1986; Meyerson & Fletcher, 2000; Thomas, 2001;

Thomas & Ely, 1996), there are few longitudinal studies focused on the role that both leadership

and organizational groups play in co-constructing the meaning of diversity for the system as a

whole (Barrett et al., 1995; Bartunek & Moch, 1992).”

Primarily because in the researchers experience diversity tends to be on the agenda of

organisations due to regulatory, legislative and global pressures and not necessarily driven by a

legitimate interest of the leadership team to facilitate a more diverse organisation nor take into

account the multicultural society in which they operate. Given this scenario the researcher

wanted to better understand the relationship between global leadership and diversity.

Additionally, with regard to research methodology, Adler and Graham (1989) postulate that

most studies focus on single-culture descriptive studies and multi-culture comparative studies

rather than studies investigating cross-cultural interaction – specifically, organisational

behaviour issues.

In a similar vein, the Bass review (1990) revealed that there is a marked dearth of comparative

research with regard to global leadership and according to House (1995:434-444) “...there is a

growing awareness of need for a better understanding of the way in which leadership is enacted

in various cultures and a need for an empirically grounded theory to explain differential leader

behaviour and effectiveness across cultures...” This research seeks to address these

shortcomings by:

Reviewing a number of studies undertaken in the developing world so as to incorporate

questions in the interviews that would draw out non-Western/non-U.S. conceptualisations of

leadership.

Conducting a pilot study involving interviewees from emerging markets.

Conducting the research in 22 countries spread over five continents with seven companies

across seven sectors.

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Research Objectives

In this context the researcher set out to address the following two objectives:

1. To examine how a global leaders performance can effectively leverage diversity in a global

context.

2. To develop a model or tool (derived from reviewing the literature) that broadens the scope

of diversity and takes into account key organisational factors. Thereby embodying a whole

system approach to diversity and leadership within a change management framework.

3. To test the viability of such a model or tool.

To do so the researcher will devise and employ a questionnaire to focus on three areas.

The first area will focus on the leaders’ characteristics, performance measures, values and

beliefs and sphere of influence to understand the challenges facing a leaders performance.

The second area seeks to understand the leader’s position on diversity in terms of their

understanding of the concept, their contribution to encouraging dialogue on the topic, how they

role model and actively engage their employees in the pursuance of diversity initiatives, the

strategic positioning of diversity and its overall alignment to the company’s strategic objectives,

as well as other factors concerning cross-culture adaptability and key performance indicators.

The third area will explore organisational factors that may influence how a diversity agenda is

pursued in organisations. This will include issues on, individualism vs. collectivism;

globalisation vs. localisation, integration of diversity policies and activities, managing conflict

and challenging the status quo, the structure of company and how this impacts on the roll out of

diversity change initiatives, organisational learnings, and issues that worry leaders or, practices

that require attention or should be introduced in relation to diversity.

Research output

It is the intention that this research produces a tool that is operational. A tool that presents an

integrated approach to both leadership and diversity by embracing a multi-level/multi-

dimensional approach.

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It is envisaged that this tool will be developed from the theories reviewed in chapters two and

three of the literature review, tested through the findings and if need be, further refined as a

result of emerging findings.

The philosophy of the tool would be to widen the scope of diversity so that a diversity strategic

agenda can be mapped to organisational objectives, activities and learning. Thus, it

emphasises a move away from a singular focus on structural diversity towards a broader focus

that includes cognitive and behavioural diversity as well. The intention is to facilitate buy-in and

commitment from all employees by making the strategic story for diversity real and enabling

leaders to amplify their performance by establishing a compelling organisational and personal

rationale for leveraging diversity. This means that global leaders have to be conscious of and

demonstrate commitment to thinking and behaviours on several levels whilst at the same time

coalesce key organisational elements.

It is hoped that this tool will provide an effective change management framework for

encapsulating the culture, behaviours, systems, processes and outcomes of an organisation so

that global leaders will be better able to embed and leverage diversity in such a way that has a

practical application and makes sense for the organisation.

It is also hoped that an index will emerge from the findings that encapsulates the relevant

characteristics, behaviours and skills required of global leaders to lead in the 21st century.

Structure of the Thesis

Each chapter is designed to be self-contained in terms of providing a full and clear explanation

of the particular area of research so that a story unfolds. Chapters two through to ten address

the following:

Chapters two and three provide a review of the literature to show how the theory guides the

research. Chapter two reviews the concept of global leadership. Global leadership is a

relatively new area in research and therefore is an integration of domestic leadership theories,

contingency theory and cross-cultural theories. This chapter also reviews multi-level leadership

theories and cross-cultural studies that are considered more relevant to the role and

responsibilities of a global leader. Further, the review goes on to investigate global leadership

competencies and the development of the global mindset.

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Chapter three reviews the concept of diversity by investigating the various paradigm shifts of

diversity over the years. The review further explores the theoretical foundations underpinning

diversity and seeks to identify the perceived role that a global leader may play in driving

diversity in their organisations and, in tandem, seek to understand the organisational factors

that leaders need to attune in order to work in an increasingly global environment.

In the fourth chapter the theories reviewed in the literature review will be applied in the

development of the LEAD³ Framework and the components of the tool are shaped.

The fifth chapter explains the epistemology behind the methodology chosen, the rationale for

the methodology used, and the methodologies employed in terms of the research strategy

(Case Study), the method (In-Depth Structured Interview) and analysis (Open Coding, Thematic

Analysis and Content Analysis). It describes the pilot study undertaken and how the results in

the pilot study further helped to refine the structure of the questionnaire.

This chapter will also describe the criteria for identifying and selecting the organisations who

took part, how those organisations were approached and detail the sample size and

characteristics, the sectors and countries involved and the geographical clusters. It will

elaborate on the research setting and data collection process and also explain the reasons for

the questionnaire design and show the relationship between the literature review and the

questions asked. It finishes by explaining the propositions generated, the coding process and

how the analysis was structured.

Chapters six and seven present the six case studies and provide in-depth analysis of the

interviews that allows for further interrogation of the findings. Chapter six will focus on the

organisations in continents based in the developing world/emerging markets i.e. Asia, South

Africa, South America and the Middle East. Chapter seven will focus on the continents based in

the developed and industrialised Nations – i.e. Europe and America.

In Chapter eight an analysis is undertaken across the six case studies in relation to the three

constructs measured – Leadership, Diversity and Organisational Factors. The chapter will

define the emerging categories and themes. Anecdotes and examples provide further support,

robustness and validity to the findings and all anecdotes are anonymous. Further, a brief

comparative analysis of similarities and differences between the country clusters is presented.

Chapter nine further embeds the analysis by discussing the results in depth. First it presents

the LEAD³ tool and briefly explains how the tool is operationalised and made practical for

organisational use. Secondly, it assesses how the findings map onto the components of

LEAD³. Lastly it discusses whether the rationale for developing a multi-level/multi-dimensional

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approach for diversity and global leadership is the best way of enabling leaders to leverage

diversity in their organisation.

Chapter ten provides a conclusion to the research. This includes determining whether the

research objectives have been addressed; understanding what the contribution of the research

has been to both academia and practice in the field of global leadership and diversity, offering a

critique of the research methodology as well as ideas for future research and finally, reflecting

on both the process and the learnings of the research.

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Chapter Two: Literature Review – Global Leadership

Introduction

It has been shown that diversity can influence organisational performance in that a “diverse

work force leads to sustainable competitive advantage and ultimately superior performance”

(Barney & Wright, 1998; Cox & Blake, 1991; Johnson, 1999; Richard, 2000; Triandis, Kurowski,

& Elfand, 1994:2). This research aims to delve into this notion by examining how a global

leader’s performance can effectively leverage diversity in a global context. A leader’s

performance will be examined through the role that the leader adopts in directing, positioning,

facilitating and role modelling diversity in their organisation – that is, the interplay between a

leader’s practice, intentions and their attributes.

For example, at an organisational level, is diversity and inclusion seen as a business imperative

so that it abides by the same internal accountability mechanisms as other business operations?

Is diversity a priority on an organisations strategic agenda? Does diversity have a single focus

or multiple focal points? And, can diversity efforts be tailored and integrated to differing

contexts?

At a behavioural level and taking into account the complex structures of multi-nationals and the

environment that they operate in, how can a leader influence, engage and motivate across

borders; How do they respond to issue relating to innovation, localisation, challenge and

conflict? Does a leader’s heritage play an important part in how they relate to diversity? Do

leaders perceive diversity as a tool that enables organisational learning? And, if so, how does a

global leader does strive to learn from others ways of working so that learnings are embedded

and sustainable change is achieved? This culminates in what is, perhaps, the biggest crisis of

the day - are leaders people hired by shareholders to channel the lion’s share of profits in their

direction, or do they lead a learning, developing community?

To examine what the impact of diversity may be on a global leader’s performance when the

above elements of performance are considered and to understand how a global leader’s

performance can effectively leverage diversity in a global context this chapter will provide a brief

review of leadership theories. It will begin by providing context on leadership through outlining

domestic leadership theories to date. The chapter will then go onto provide an in-depth review

of multi-level leadership theories and cross-cultural studies that are deemed to be more relevant

to the complex, dynamic global environments that leaders operate in today.

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Review of leadership theories

Global leadership is a relatively new area in research and therefore is an integration of domestic

leadership theories, multi-level leadership theories and cross-cultural theories. Presented

below is an overview of the dominant theories in domestic leadership (for a thorough review of

leadership theories see Yammarino et al, 2005), as well as a specific focus on multiple level

leadership theories, global leadership competencies and the global mindset that correspond

with the complex scenarios that a global landscape can present.

Domestic Leadership Theories

In an attempt to understand the concept and process of leadership numerous theories and

frameworks abound as to who are leaders? (trait-based / “Great Man” approach); what do

leaders do? (behaviour-based approaches); what situations are most favourable for a leader?

(contingency/situational approaches); why do followers follow leaders (leader member

exchange); what are the ideas and implicit theories people have of what leaders are and how

they ought to behave? (Cognitive / information processing approach) And, what are the values

that drive and sustain a leader (authentic leadership)?

The table below provides a synopsis of these and other theories:

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Table 1- An Overview of Domestic Leadership Theories

Leadership

Theories

Description

Great man theory

/ Trait theories

The “Great Man” approach to leadership focuses on traits and enduring attributes of the leader (Carlyle, 1907). A

key assumption is that there are certain dispositional characteristics (i.e. stable characteristics or traits) that

distinguish leaders from non-leaders which are innate. E.g. intelligence [cognitive ability], dominance/achievement

[motivation], emotional maturity [social appraisal and interpersonal skills], integrity [personality] and task-relevant

knowledge [leader expertise and tacit knowledge] (Zaccaro, Kepm Bader, 2004).

Transactional

Leaders who apply this leadership style give followers something they want (e.g. pay, job security) in exchange for

something the leaders want (e.g. high organisational performance). They engage their followers in a relationship of

mutual dependence. ‘As such, transactional leadership is defined as an exchange process to motivate follower

compliance with a leader’s requests and organisational role requirements’ (Bass, 1990).

Leader-Member

Exchange

Based on what was termed vertical dyad linkage theory (Dansereau, Graen, & Haga, 1975) it has evolved into what

is now termed leader-member exchange (LMX) theory (Graen & Uhl-Bien, 1995) which describes the nature of the

relations between leaders and their followers.

Implicit

Leadership

Theories

Advocated by Den Hartog, House, Hanges, & Ruiz-Quintanilla (1999). Using an information processing

perspective, implicit theories are cognitive frameworks or categorisation systems that people use during information

processing to encode, process and recall specific events and behaviour (Shaw, 1990). “While leadership

perceptions may not be reality, they are used by perceivers to evaluate and subsequently distinguish leaders from

non-leaders or effective from ineffective leaders. As such, a major assertion of ILT is that leadership is in the “eye

of the beholder” (Lord & Maher, 1991, p.98).

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Leadership

Theories

Description

Information

Processing and

Cognitive

The information-processing and person perception literatures (Lord & Maher, 1993; Hall & Lord, 1995, 1998) imply

that leadership perceptions and implicit views of leadership are based on both affective and cognitive processing

strategies. These mechanisms determine followers’ perceptions of leaders and play an important role in the

formation, often rapidly, of liking or disliking of a leader. Follower affect and cognitions result in leadership

perceptions that can be recognition-based or inference-based. Stereotypes and implicit theories of followers or

subordinates about effective leadership determine the perceived relevance of various types of leader behaviour.

Followers and subordinates also use information about the situation and past events to draw conclusions about

effective leadership and judge a leader’s intention. Thus, whereas information-processing theories still define

leadership as influence, they do so by examining the cognitive mechanisms that mediate the influence process,

rather than focusing on overt behavioural displays (e.g. transformational behaviour).

Participative

Leadership

Participative leadership theories suggest that the ideal leadership style is one that takes the input of others into

account. These leaders encourage participation and contributions from group members and help group members

feel more relevant and committed to the decision-making process. In participative theories, however, the leader

retains the right to allow the input of others.

(http://changingminds.org/disciplines/leadership/styles/participative_leadership.htm)

Behavioural

theories

This approach suggests that leaders differentiate themselves by observable behaviours. The focus of theories is to

identify those universal observable behaviours that are developable and could be modified through practicing

certain skills. Examples of leadership theories that were operationalised behaviourally include charismatic

leadership and transformational leadership. (see below)

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Leadership

Theories

Description

Charismatic

Leadership

Transformational

leadership

Contingency /

Situational

Theories

Charismatic leadership proposes that leadership style is based on personality and is generally defined in terms of

the leader’s influence over followers and the nature of the leader-follower relationship. Key leader behaviours

include articulating an appealing vision, communicating high performance expectations, displaying self-confidence,

role modelling exemplary behaviour, expressing confidence in followers’ abilities to achieve goals, and emphasising

ideological aspects of work and collective identity (House, 1977; Shamir et al., 1993). Other attributes include,

displaying unconventional or creative behaviours, taking personal risks, and showing sensitivity to follower needs

and environmental constraints, opportunities, and threats (Conger & Kanungo, 1987).

Transformational leadership is generally defined in terms of the leader’s behaviours and effect on followers.

Transformational leadership involves an underlying influence process that motivates followers by encouraging them

to transcend their self-interest for the sake of the organisation and goal accomplishment. In essence therefore, in

transformational theory the leader inspires, changes attitudes, beliefs, and/or goals of individuals, changes norms

of the organisation and gains commitment from followers. (Bass, Nadler & Tushman, 1985). .

Contingency theories are a class of behavioural theory that contend that there is no one best way of organising and

leading and, that an organisational and/or leadership style that is effective in some situations may not be successful

in others. In other words, the optimal organisation / leadership style is contingent upon various internal and

external constraints and different leaders have different characteristics and the leader should be a match to the

organisation’s needs

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Leadership

Theories

Description

Cont:

Contingency /

Situational

Theories

Some of the most notable contingency leadership theories as summarised by Roya Ayman (2004) are Fiedler’s

(1978) contingency model, which is based on the relationship between the leader’s traits and outcomes. The

leader’s perceived behaviours to the outcome, such as the normative decision-making model (Vroom-Yetton,1973)

and House (1971) path-goal theory focused on the leader’s role in clarifying the paths that would lead followers

goals. Situational leadership theory proposed by Hersey-Blanchard (1969).purports four leadership behaviours –

telling, selling, participating, and delegating. Both path goal theory and situational leadership theory focus on the

subordinates’ perspective.

Distributed

Leadership

Distributed leadership highlights leadership as an emergent property of a group or network of interacting

individuals. This contrasts with leadership as a phenomenon which arises from the individual. Gronn (2002)

identified concerted action which is about the additional dynamic which is the product of conjoint activity. Where

people work together in such a way that they pool their initiative and expertise, the outcome is a product or energy

which is greater than the sum of their individual actions’. Additionally, distributed leadership suggests openness of

the boundaries of leadership...and entails the view that varieties of expertise are distributed across the many, not

the few (Bennett, Nigel; Wise, Christine; Woods, Philip A and Harvey, Janet A, 2003).

Authentic

Leadership

Development

theory

The term “authentic” was coined by popular writers to describe a type of leader who is courageous (Terry, 1993),

principled and able to navigate his or her organisation through turbulent and chaotic times (Abdullah, 1995), build

lasting organisations (George, 2003), and develops others (Villani, 1999).

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Leadership

Theories

Description

Cont: Authentic

Leadership

Avolio, Gardner, and Walumbwa (2005, p. 12) defined authentic leadership development as a process that “draws

from both positive psychological capacities and a highly developed organisational context to foster greater self-

awareness and self-regulated positive behaviours on the part of leaders and associates, producing positive self-

development in each”. According to Avolio, Gardner, and Walumbwa (2005) such leaders know who they are and

what they believe in, display transparency and consistency between their values, ethical reasoning, and actions,

focus on developing positive psychological states such as confidence, optimism, hope, and resilience within

themselves and their associates, and are widely known and respected for their integrity. Through increased self-

awareness, self-regulation, and positive modelling, authentic leaders foster the development of authenticity in

followers.

Ethical

Leadership

Ethical leadership is leadership that is involved in leading in a manner that respects the rights and dignity of others.

Leaders who are ethical demonstrate a level of integrity that is important for stimulating a sense of leader

trustworthiness, which is important for followers to accept the vision of the leader. These are critical and direct

components to leading ethically. The character and integrity of the leader provide the basis for personal

characteristics that direct a leader’s ethical beliefs, values, and decisions. (Trevino, Brown, & Hartman 2003).

http://en.wikipedia.org/wiki/Dignity

http://en.wikipedia.org/wiki/Moral_character

http://en.wikipedia.org/wiki/Integrity

http://en.wikipedia.org/wiki/Beliefs

http://en.wikipedia.org/wiki/Values

http://en.wikipedia.org/wiki/Decision_making

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Multi-Level Theories

As noted above, domestic leadership theories tend to have a different focus than global

leadership theory in that they focuses on singular concepts such as traits and behaviours

where as global leadership theory is emerging as an integration of concepts – a multiple-

level approach to leadership that takes into account cross-cultural contexts.

This research explores how leaders incorporate three constructs of diversity (i.e.

structural, cognitive and behavioural) across various dimensions of the organisations (i.e.

strategic, structure, processes and systems), in relation to their capabilities. As such, the

researcher sought leadership models that demarcate leadership performance in this way

and denotes a multi-level dimensional perspective. Two models that utilise this multiple-

level approach are the ‘Leaderplex Model’ and the ‘Strataplex Model’. Rather than

compartmentalise leadership into personality types, or situations and contexts, these

models place emphasis on behavioural aspects and skills of a leader who is required to

deal with a multi-faceted working environment.

Leaderplex Model

This theory was developed in response to the increasing complexity of the global work

landscape particularly with reference to the fast pace and increasing speed of change

and its impact on changes to organisational structures and cultures. Developed by

Hooijberg, Hunt, & Dodge (1997) the Leaderplex Model “integrates behavioural

complexity, cognitive capacity and social intelligence into a multi-level leaderplex theory”

(Yammarino et al, 2005:901). They assert a more holistic leadership perspective that

“challenges the way we think about the role of leadership, along with the contextual

factors that contribute to the (im)possibility of prescribing leadership responses for all

possible contingencies, and the relationship between leadership and organisational

effectiveness” (Hooijberg, Hunt, & Dodge, 1997:376). The model takes into account the

diverse nature of stakeholders that leaders have to engage with and looks at how leaders

function effectively across a wide variety of situations and apply, cognitive, social and

behavioural complexity/aspects in the pursuit of organisational effectiveness. In the

model cognitive and social variables are precursors to behavioural complexity and

behavioural complexity is a precursor to leader and organisational effectiveness.

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Cognitive complexity or capacity assumes that cognitively complex individuals process

information differently from and perform selected tasks better than cognitively less

complex people because they search for more information and spend more time

interpreting it. The authors differentiate between ‘cognitive integration’ (the extent to

which individuals can relate two or more orthogonal dimensions to produce an outcome

that is determined by the joint demands of each dimension, system, or subsystem

involved – Streufer & Swezey, 1986), and ‘cognitive differentiation (the number of

dimensions and the number of categories within dimensions that are used by individuals

in the perception of the physical and social environment – Goldsten & Blackman, 1978).

Cognitive complexity refers to how they think in terms of constructing meaning or

organising information. Cognitive capacity (Jacobs & Jaques, 1987) connotes how they

utilise their mental processes with regard to analysing, interpreting, organising, reasoning,

judging, deciding, planning, acting, and drawing conclusions.

Social intelligence is the ability to appropriately apply interpersonal skills such as

empathy, motivation and communication within a thorough understanding of one’s social

setting. That is, to notice and make distinctions among other individuals – in particular,

among their moods, temperaments, motivations, and intentions. Hooijberg, Hunt, &

Dodge, (1997:382) define social complexity “as the managerial leader’s capacity to

differentiate the personal and relational aspects of a social situation and integrate them in

a manner that results in increased understanding or change action-intention valences.”

Again, the researchers make a distinction between social differentiation and social

integration.

According to Hooijberg, Hunt, & Dodge (1997:372), “social differentiation is the ability to

discriminate and recognise the various facets, aspects, and significances of a given social

situation over time.” In particular, much emphasis is given to the leader’s ability to

‘differentiate emotions in self and others’ as emotions have the potential to affect leader

cognition and behaviour. Additionally, within the sphere of emotions are values which

may also impact upon a leader’s cognition and their ability to differentiate social context.

Also social differentiation speaks of a leader being able to discriminate and recognise

patterns of social relationships; the number and degree of independence of a leader’s

value preferences; and the leader’s level of self-complexity.

Social integration is described by Hooijberg, Hunt, & Dodge, (1997:385) as “the leader’s

capacity to synthesise the various components of a social situation in a manner that leads

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to increased understanding or changed action-intention valences (cf. Rosnow et al, 1994)

This aspect allows the leader to develop and use social capital (Coleman, 1988; Brass

1996), manage leader-member transactional exchanges (Graen & Uhl-Bien, 1995;

Scandura & Lankau, 1996) and other types of social exchanges (Blau, 1964; Hollander,

1979; Jacobs, 1970), uncover gaps in existing social structures (Burt, 1992), evolve

strategies to fill them (Sayles, 1993: Sayles & Stewart, 1995) and display appropriate

emotional expression in adult social interaction (Clark, Pataki & Carver, 1996)”.

As mentioned above, The Leaderplex Model indicates that the impact of cognitive and

social complexity on leader effectiveness is mediated by behavioural complexity.

Behaviour complexity addresses the impossibility of specifying the appropriate leadership

role for all possible contingencies, the implicit assumption that all followers are

subordinates; and the need for leaders, especially in organisational settings, to meet the

expectations of stakeholders other than the followers. Again the researchers distinguish

two key components, namely, behavioural repertoire (the portfolio of leadership roles that

s/he can perform) particularly in relation to interacting with multiple stakeholders and

behavioural differentiation (the ability of leaders to perform their roles in an adaptive,

flexible, appropriate, individual, situation specifically) depending on the organisational

situation. The concept suggest that leaders who vary their performance depending on

the relationship they have with the people with whom they interact, will function more

effectively than those who do not. In other words, there is a need for leaders to behave

differently with a range of stakeholders that satisfies their expectations. In this model

behavioural complexity is represented by the eight roles in the Competing Values

Framework (Quinn, Faerman, Thompson, & McGrath, 2003).

The link between cognitive, social complexity and behavioural complexity to a leaders

ability to manage diversity is that it embraces a role-theory perspective and importantly it

highlights the needs for leaders to have appropriate cognitive capabilities, social

knowledge and behavioural repertoires to function effectively with a demographically

diverse employee population (Scandura and Lankau, 1996; Hooijberg and

DiTomaso,(1996) in the international arena (Hofstede, 1993; Thomas, 1996; and Adler,

1996), as well as, in the leadership of teams (Manz & Sims, 1987, 1991).

Further, Avolio and Chan (2008:214) say that “from a leadership development

perspective, the notion of complexity is interesting, because complexity is related to

growth and development, to one’s capacity for leadership effectiveness, and also forms

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the building blocks of self-awareness and adaptiveness in leadership (Day & lance,

2004)”.

From a diverse employee perspective it is suggested that leaders need to be cognisant of

how minority employees are introduced to and accepted by other employees (DeMatteo

et al., 1996) as well as, an understanding of the differences between mixed-race groups

and all-white groups (Cox et al., 1991).

Rosabeth Moss Kanter (2009:606) drew a conclusion that supports this model when she

noted that “leaders need intellectual skills in pattern recognition, seeing similarities and

differences, systems thinking, and framing and conceptualising and leaders need

emotional skills in empathy, self-awareness, warmth and respect, and ego management.”

Strataplex Model

The Strataplex model focuses on the skills required of leaders in order to deal effectively

with complex multifaceted landscapes and thus the focus is on the job the leader and the

skills it requires rather than on the characteristics of leaders. Mumford, Campion &

Mogeson (2007) derive the term strataplex from the term ‘strata’ meaning having a

number of layers or levels in an organised system, and the term ‘plex’ which comes from

the word ‘complex’ meaning divided into a specified number of parts within each layer.

To this extent, Mumford et al., built on stratified systems theory (Jacobs & Jaques, 1987;

Jaques, 1976) to identify a typology of four major segments of leadership skill

requirements that emerge differentially across organisational levels. Namely, cognitive

skills, interpersonal skills, business skills and strategic skills – that varied quantitatively

and in qualitatively different combinations across organisational stratas.

Mumford, Campion & Mogeson (2007:156) assert that ‘cognitive skills’ are the foundation

of leadership skill requirements and comprise of those skills related to basic cognitive

capacities, such as collecting, processing, and disseminating information (Lau & Pavett,

1980); Mintzberg, 1973, Zaccaro, 2001) and learning (Mahoney et al., 1965) and are the

fundamental skills required for a large portion of the activities in which leaders are

engaged such as oral communication, active listing, writing, active learning and critical

thinking.”

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The second category of skills is referred to as ‘interpersonal requirements’ and this

involves the social skills relating to interacting with and influencing others such as

coordination, negotiation and persuasion (Katz, 1974; Mumford, Marks et al., 2000). This

skill corresponds to the Social Complexity aspect of the Leaderplex model. It also grows

out of research by Mumford, Marks et al., (2000) on Social Judgement and Katz & Khan’s

(1978) on Human Relations. They also include what the authors term ‘social

perceptiveness,’ which entails having empathy for and awareness of other people.

The third category, ‘business skills requirements’ involves skills related to specific

functional areas that create the context in which most leaders work and include

management of material, financial and personnel resources (Katz, 1974; Copeman, 1971;

Luthans et al., 1988 Mahoney et al., 1963, 1965), and operation analysis (Hoffman &

Hegarty, 1993).

‘Strategic skills requirements’ are normally attributed to the highest levels in the

organisation due to the high degree of abstract/conceptual skills needed to take a

systems perspective to understand complexity, deal with ambiguity, and to effect

influence in the organisation (Hooijberg et al., 1997 Mahoney et al., 1965; Zaccaro,,

2001). Jaques (1978) in his Stratified systems Theory (SST) shows that at the fifth level

in his framework, the senior manager must deal with ambiguities and complexities in the

environment through establishing priorities and managing external relationships.

Activities within this area would be visioning (Conger & Kanungo, 1987), environmental

scanning in terms of causal relationships and outcomes (Cox & Cooper, 1988; Kanungo

& Misra, 1992; Mumford, Zaccaro et al., 2000), problem identification (Cox, & Cooper,

1988; Yukl, 1989), and solution appraisal and objective evaluation skills (Mumford, Marks,

et al., 2000).

They further propose that higher-level skills build on each other. Thus, in their typology,

the authors identify that cognitive skills are required more often/in greater amounts,

followed by interpersonal then business skills, while strategic skills are required in the

least amounts. Their typology also reveal that with regard to organisational levels, the

higher within an organisation a leader is positioned, the more of each skill he or she will

require.

These skills are seen as necessary as leaders increasingly have to be innovative,

creative, engage, negotiate, and develop and build relationships with their employees and

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with stakeholders as they embrace globalisation. At the heart of globalisation is the

concept of diversity, which in itself is multi-layered.

Cross-Cultural Studies

Country Culture

Key strategic activities that are central to diversity include mergers and acquisitions,

strategic alliances, joint ventures and the capitalisation of market opportunities. These

activities will often be characterised by expansion into new geographies and

consequently, new cultures. As a result, organisations have to embrace and adapt to

new behaviours, styles, and ways of working. It will also mean that workforces will no

longer be homogeneous but rather, representative of a variety of nationalities in which the

organisation operates. As such issues around risk, people, financial performance

structures, cultural differences, and communications all come into play.

In this scenario Alder (1991); Boyacigiller (1990); Harris and Moran (1992); Hendon,

Hendon and Herbig (1996), have found that “attempts to successfully operate multiple

business units in diverse cultural contexts may be frustrated by conflict and frictions within

the firm, lack of cohesion and misunderstandings amongst key decision makers, and

communication breakdowns between boundary spanners.” (Gomez-Mejia,Luis &

Palich:312).

Gomez-Mejia,Luis & Palich (1997:327), go on to say that “on the positive side,

Cox,(1991) believes that increasing cultural heterogeneity leads to greater creativity and

innovation and more successful marketing to different types of customers. Others have

argued that diversity may be coupled with better environmental scanning (McCann and

Galbraith 1981) and greater flexibility to respond to environmental changes because

members of diverse teams are more likely to disagree with each other and find fault with

the status quo (Glick, Huber, Miller, Doty, and Sutcliffe, 1990).”

So how do both these positive and negative issues of diversity impact on the performance

of global leaders? The challenge for effective leaders is to take the organisational context

into account (Shamir & Howell, 1999; Tosi, 1991), but increasingly that context is more

complex in nature, being multi-layered, spanning diverse cultures and nationalities.

Moreover, multiple individual, organisational, and national identities are at play.

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According to Den Hartog and Dickson (2004:250) “when looking at leadership cross-

culturally, it is important to remember that such fundamental organisational concepts as

participation, control, and cooperation do not necessarily mean the same in every cultural

context. For instance, in the West, participation usually refers to having influence on the

outcome of a decision by taking part in it in one form or another (Heller, Drenth,

Koopman, & Rus, 1988). In Java, for example, the concept refers to a cooperative form

of decision making; in Japan, to the consensus-orientated approach through the bottom-

up procedures and lobby-consultations of the ringi-system (Heller & Misumi, 1987). In

other words, different connotations, perceptions, and attitudes can lie hidden behind the

same terms.”

This is exactly what the organisational change literature presents – organisational

members, like team members, share mental models and implicit theories about the

functioning and leadership of organisations. And, this is exactly what Bass (1990) argued

when he indicated that most people of the same culture hold a common set of beliefs

about the attributes of a typical leader. This probably results from repeated exposure to

common organisational policies, practices, and procedures that were in place partially

because of the founder’s beliefs and values (Kraiger & Wenzel, 1997).

Shaw (1990) suggested that much of the cross-national literature indicating differences in

managerial beliefs, values, and styles can be interpreted as showing culturally influenced

differences in leader belief systems. Specifically, Shaw (1990:672) theorised that cultural

values would affect the content, structure, and automaticity of leadership prototypes. His

theory stems from a study by O’Connell, Lord, and O’Connell (1990) which found that

culture plays a strong role in influencing the content of leader attributes and behaviours

perceived as desirable and effective by individuals in that culture. A study by Gerstner

and Day (1994) also provided evidence that ratings of effective leadership attributes and

behaviours vary across cultures. Studies by O’Neill and Hanges (2001) and Hanges and

colleagues (2001) provide support for Shaw’s prediction that culture affects the structure

of leadership belief systems.

House et al., (2004:60) state that “this occurrence of modal leader behaviour patterns

differing widely across countries has been verified in several studies in their emphasis on

individualistic versus team orientation; particularism versus universalism (Dorfman, 1998;

Dorfam & Howell, 1988; Smith et al, 1996,); performance versus maintenance orientation

(Shenkar, Ronen, Shefy & Chow, 1998; Smith, Misumi, Tayeb, Peterson & Bondon 1989;

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Smith, Peterson, Misumi & Bond, 1992); authoritarian versus democratic orientation (Al-

Hajjeh, 1984; Stening & Wong, 1983); paternalism (Redding & Casey, 1975) reliance on

personal abilities, subordinates, or rules (Smith & Peterson, 1995); leader influence

processes (Rahim, Kim, & Kim 1994; Schmidt & Yeh, 1992); and consensual decision

making and service orientation (Bass et al., 1979).”

Antonakis et al., (2004:250) say that “these differences in meaning are even relevant for

the term leadership itself which can be interpreted somewhat differently across cultures.

Leader and leadership have a positive connotation in Anglo-Saxon countries, conjuring

up heroic images of outstanding individuals. Meindl’s work on the “romance of

leadership” shows the American “romantic” attachment to – and in some cases

overestimation of – the importance of the leadership role (e.g. Meindl, 1990; Meindl,

Ehrlich, & Dukerich, 1985). However, this does not hold for all direct translations of the

term. The direct translation of leader to German is Führer. Obviously, the historically

laden connotation of this term is rather negative. Similarly, in some other countries literal

translations of the word leader conjures up images of recent dictatorship. In such

countries, the term manager often takes on the positive connotations leader has in

English (Den Hartog & Koopman, 2001).”

One attempt at defining leadership cross-culturally comes from the Global Leadership

and Organisational Behaviour Effectiveness (GLOBE) Project, which is a large-scale

multi-phase, multi-method research project designed to assess both similarities and

differences in the cultural semantic definition of leadership in the 60 participating

countries. The research built on the foundation of implicit leadership theory and culturally

endorsed implicit leadership theory to present a theoretical framework linking societal

culture, organisational culture and practices and organisational leadership. GLOBE

researchers defined leadership “as the ability of an individual to influence, motivate, and

enable others to contribute toward the effectiveness and success of the organisation of

which they are members” (House, Hanges, Javidan, Dorfman, and Gupta (2004:15). This

rather abstract definition of leadership was acceptable to representatives of a wide range

of cultures. Still, the evaluative and semantic interpretation of the term leadership, the

cognitive prototypes characterising leadership, and the culture-specific enactments of

leadership are likely to vary by culture studied (e.g. Hanges, Lord, & Dickson, 2000;

House et al., 1999). Thus, what is seen as effective leader behaviour may vary in

different societies, resulting in different leader behaviours and leadership practices.

Further findings from GLOBE will be extended upon later in this chapter.

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Another issue for leadership studies that the researcher was cognisant of are the views

shared by Adler, Bass, Hofstede and House who recognised the strong North American

bias in leadership theories, models, and measures that are used and published in

mainstream social science literature. Adler (1984) suggested that “much of the empirical

cross-cultural research in the past 30 years has been ethnocentric (research designed

and tested in one culture and replicated in another culture) rather than truly comparative

(designed to test similarities and differences across two or more cultures)” (p, 60). Bass

(1990) highlighted that there was “a dearth of studies based on more than three or four

countries and that many studies make use of existing standardised U.S. instruments that

may not fully capture non-Western or non-U.S. conceptualisations of leadership.” (p, 57).

Hofstede (1993) stated that U.S. management theories contain several idiosyncrasies

(e.g. stress on market processes, a stress on the individual, and a focus on managers

rather than workers) not necessarily shared elsewhere. And House (1995) noted that

“theories of leadership and most empirical evidence leans towards North American

characteristics, in that its focus is on ‘individualistic’ rather than ‘collectivistic’;

emphasizing assumptions of rationality rather than ascetics, religion, or superstition;

stated in terms of individual rather than group incentives; stressing follower

responsibilities rather than rights; assuming hedonistic rather than altruistic motivation

and assuming centrality of work and democratic value orientation” (Den Hartog, et al.,

(1999:227-228). Such assumptions have an effect on what is seen as effective

leadership.

Although few leadership research programs exist outside the West there are three non-

Western theorists that stand out in importance. The first two researches – Misumi’s

performance-maintenance theory of leadership (1985) and Sinha (1980, 1984) Nurturant-

task oriented model (NT) emphasise the importance of context as determining which

processes of leadership are considered effective and which are not (Smith, 1997).

A third piece of research that somewhat goes against the grain of the two above was

conducted by Xin and Tsui (1996) who compared the influence styles of Asian American

and Caucasian American managers. They found only minor differences between the two

groups, and ethnic background only accounted for little variance in their measures. Their

study reminds us that we should not take for granted that people will behave differently in

leadership roles solely based on their ethnicity or country or origin. Also, although

cultural values that are shared in a given group are expected to influence individual

behaviour, large individual differences may also exist.

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One way to address the study of leadership cross-culturally is through the identification

and measurement of dimensions of culture. Two studies that address this is Hofstede’s

framework (1980,1991, 2001) and the afore mentioned GLOBE Project. Hofstede argues

that societies are differentiated by values whereas organisations are differentiated by

practices, and that a different set of dimensions of practice will be more useful for

differentiating organisations than the set of dimensions of values that best differentiate

societies (e.g. Hofstede, Neuijen, Ohayv, & Sanders, 1990; Hofstede & Peterson, 2000).

Hofstede’s framework identified five cultural dimensions: individualism-collectivism,

masculinity-femininity; uncertainty avoidance, power distance and future orientation. His

work is criticised on three levels because it presents an overly simplistic 4/5 dimension

conceptualization of culture, that the original sample came from a single multinational

corporation (IBM), that culture is malleable over time, and that his work ignores within

country cultural heterogeneity (see Sivakumar & Nakata, 2001. See McSweeney, 2002;

Schwarts, 1994; Smith, 2002; Smith & Bond, 1999; Kirkman, Lowe, & Gibson, 2003).

The dimensions of Hofstede’s cross-cultural study that particularly correlate with the

concepts of diversity and global leadership are: individualism-collectivism, power distance

and future orientation. Individualism vs. collectivism is about the relation between an

individual and his or her fellow individuals. That is cultures where people tend to look

after his or her self-interest as opposed to societies in which the ties between individuals

are very tight.

Aligned with this theory, Cox, Lobel and McLeod (1991) show that groups composed of

people from collectivist cultural traditions would display more cooperative behaviour than

groups composed of people from individualistic cultural traditions. To this extent, at an

individual level, Asian, Black, and Hispanic individuals had a more collectivist-cooperative

orientation to a task than Anglo individuals. These differences originate from differences

in the national cultures in which the various groups have cultural roots.

Cox, Lobel and McLeod (1991:840) say that the implication is “if organisations of the

future are composed of more members from these groups then it is likely that it will

influence the way organisations work with regard to cooperativeness.” Cooperative work

behaviour is increasingly viewed as necessary to improve the competitiveness of firms

(Bassin, 1988; Galagan, 1986; Hatcher &, Ross, 1985; Levine, 1987; Markowich, 1987;

Raudsepp, 1988; Scott & Cotter, 1984)”.

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Another view is given by Jackson (2002:455) who has shown that there is potential for

conflict between the world of work and that of home and community life – “the cultural

perception that human beings are a resource to be used in the pursuit of shareholder

value may be challenged by a view that people have a value in their own right” (Jackson,

2002; Jackson & Bak, 1999).

The second dimension of culture that correlates closely to this research is that of power

distance. Hofstede (1983:81) defined power distance as the extent to which a society

accepts and embraces the fact that power in institutions and organisations is distributed

unequally. “The fundamental issue involved is how society deals with fact that people are

unequal. All societies are unequal, but some are more unequal than others”. This

degree of inequality is measured by the Power Distance scale.

In organisations, the level of Power Distance is related to the degree of centralisation of

authority and the degree of autocratic leadership (Hofstede, 2001). In high power

distance countries such as China, Mexico, and the Philippines, more autocratic decision

making is likely to be accepted with subordinates typically more reluctant to challenge

their supervisors than are employees in low power distance countries like Finland, the

Netherlands, Israel, and the United States. Employees in high power distance cultures

have also been found to be more fearful in expressing disagreement with their managers

(Adsit, London, Crom, & Jones, 1997). Hofstede (2001) reported that subordinates in

high power distance countries saw their managers primarily as well-meaning autocrats,

whereas subordinates in low power distance countries saw them primarily as resourceful

democrats. Gladwell (2008) has stated that Asian cultures are typically hierarchical (high-

power-distance culture) whereby people are obliged to be deferential toward their elders

and superiors in a way that would be unimaginable in the U.S. which has a low power

distance culture.

With reference to leadership style across developing societies there appears to be a

preference for a leadership style that is high on status orientation, high on involvement in

non-work lives, and highly directive. This is often referred to as a paternalistic style of

leadership (e.g., Dorfman & Howell, 1988; Dorfman et al., 1997; Kanungo & Mendonca,

1996a), and given the relationship that currently exists between differentiated gender

roles and societal economic development (Emrich, Denmark, & Den Hartog, 2004), this

masculine term (rather than the more gender-neutral parentalistic) seems appropriate.

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The paternal leader typically shows a strong concern for the well-being of the subordinate

as well as his or her family (Aycan, 2002) where these societies’ organisations are

expected to take care of their workers as well as the workers’ families. Leaders in

organisations tend to establish close interpersonal relationships with subordinates as well

as with people in higher authority. Subordinates expect personalised relationships,

protection, close guidance, and supervision. Leaders are willing to assume responsibility

for their followers, and in return, demand followers’ loyalty.

The third cultural dimension that relates to diversity and leadership is the concept of

future (control) orientation. An extreme assumption is that nature is powerful and

humanity subservient to nature. This implies a kind of fatalism, as one cannot influence

nature, and must therefore accept one’s destiny and enjoy what one has. The Moslem

phrase “Insh’allah” (God willing) is reflective of a culture characterised by a subjugation.

In contrast, the phrase “may the best person win” is an example of the value of control,

dominance, and competitiveness (Dofrman & Javidan, 2004; Schneider & Barsoux,

1997).

House et al., (2004:63) provide a further illustration from the Arabic world of the Middle

East relating to control orientation which they say lies in the pervasive influence of the

Islamic religion and is a key to understanding the Arab world and, presumably, leadership

in the Arab world (Hagan, 1995). “In Arabic, the word for leadership is al kiyada, which

refers to officers in the military or high-ranking members of the government. Historically,

a leader is a great hero who leads warriors into battle, and therefore not unexpectedly,

the concept of leadership is rooted in traditional military concepts of leadership (Scandura

et al., 1999). Modern Arab management practices have been influenced by Islamic

religion, tribal and family traditions, the legacy of colonial bureaucracies, and contact with

Western nations (Ali, 1990).” Given the strong role of Islam in the Arabic world, led to

leadership effectiveness not being related to the supervisor’s level of consideration, but

rather to the supervisor’s strong directive behaviour (Scandura, Von Glinow, & Lowe,

1999). House et al., go on to say “that the combination of family and tribal norms in

addition to bureaucratic organisational structures fosters authoritarian management

practices that may be characterised as ‘sheikocracy’ leadership style (Al-Kubaisy, 1985).

This style is characterised by a patriarchal approach to managing that includes strong

hierarchical authority, subordination of efficiency to human relations and personal

connections, and sporadic conformity to rules and regulations contingent on the

personality and power of those who make them.”

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In Antonakis et al., (2004:264) Trompenaars and Hampden-Turner (1997) hold that

societies that conduct business “either believe they can and should control nature by

imposing their will upon it, as in the ancient biblical injunction ‘multiply and subdue the

earth,’ (internal cultures) or they believe that man is part of nature and must go along with

its laws, directions and forces (external cultures)”. Culture-related differences exist in the

degree to which people they have control over (i.e. internal control) or are controlled by

(i.e. external control) external forces. Internal cultures have a dominating and controlling

attitude toward nature. Conflict and resistance are taken to mean that you have strong

convictions. In contrast, in external cultures being at ease with the natural shifts and

cycles of nature, the willingness to compromise, and seeking harmony and

responsiveness are seen as sensible and desirable characteristics for leaders. In internal

cultures, the focus is on the self and one’s own organisation and playing ‘hard ball’ is

legitimate to test the resilience of an opponent. In contrast, in external cultures the focus

is on the ‘other’ (customer, partner, colleague), and softness, persistence, politeness, and

patience are needed to succeed. In Internal societies, a strong belief in the value of

competition and competitiveness exists. Bonta (1997) showed that in most nonviolent or

peaceful societies, a strong opposition to competition and a strong support for

cooperation constitute basic cultural beliefs.

Similarly, Schwartz (1999) noted that “a society has to decide to what extent people are

autonomous versus embedded in the group. In cultures high on embeddedness, people

are perceived as part of the collective and find meaning and direction in life through

participating in the group and identifying with its goals. Organisations tend to take

responsibility for their members in all domains of life and in return expect members to

identify with and work toward organisational goals. In contrast, individuals in autonomous

cultures are perceived as autonomous entities that find meaning in life through their

uniqueness. Schwartz (1999) further distinguished between intellectual autonomy (i.e.

individuals are encouraged to follow their own ideas and intellect) and affective autonomy

(i.e. people are encouraged to independently find positive experiences for themselves).

In cultures that emphasise intellectual autonomy, organisations are likely to treat their

members as independent actors with their own interests, preferences abilities, and

allegiances. Employees are typically granted (some) autonomy and are encouraged to

generate their own ideas and act on them (Gomez, Brannen, Sagiv, & Romani, in press;

Sagiv & Schwartz, 2000). In a 47 nation study, Schwartz and Sagie (2000) found that

socioeconomic development as well as democratisation increased the importance of

independent thought and action, openness to change, concern for the welfare of others,

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self-indulgence, and pleasure and decreased the importance of conformity, tradition, and

security” (Antonakis et al., 2004:259).

As previously referred to, the GLOBE study (2004) sought to understand the very nature

of cross-cultural forces relevant to effective leadership and organisational practices. In

the first phase, the GLOBE research program aimed to identify leader attributes that were

endorsed as universally positive or negative or as culturally contingent in 60 countries. In

the second phase, the overall hypotheses that were tested concern relationships between

societal culture dimensions, organisational-culture dimensions, and CLTs (culturally

endorsed implicit leadership theories), as well as relationships specified by structural

contingency theory of organisations.

Three propositions are tested in Project GLOBE. The first proposition is labelled ‘cultural

congruence’ that asserts that cultural forces affect the kind of leader behaviour that is

usually accepted, enacted, and effective within a collective. The second proposition is

labelled ‘cultural difference’ that asserts that increased task performance of followers,

organisations, and institutions in societies will be induced by the introduction of selected

values, techniques, and behaviour patterns that are different from those commonly valued

in the society. The third proposition ‘near universality’ asserts that there are some leader

behaviours that are universally, or near universally, accepted and effective.

GLOBE researchers provided empirical evidence that both organisational and societal

cultural values are predictive of specific global leadership dimensions and the study

defined six global leader behaviours of culturally endorsed implicit theories of leadership

(CLTs) as ‘charismatic/value-based leadership (e.g. visionary, inspirational, having

integrity and decisive); team-oriented leadership (e.g. collaborative, integrating, and

diplomatic); participative leadership (e.g. non-autocratic, allowing participation in decision

making); autonomous leadership (e.g. individualistic, independent, and unique); humane

leadership (e.g. modesty, tolerance, and sensitivity); and self-protective leadership (e.g.

self-centred, status conscious, and a face-saver)’.

Charismatic/value-based and team-oriented attributes were perceived as culturally

contingent. These behaviours come under the umbrella of transformational/charismatic

leadership. In particular, “Visionary” is seen as a positive leader attribute in most

cultures, but what one needs to do to be seen as visionary varies from one culture to

another (variform universal). For instance, effective styles of communicating visions may

differ. Whereas macho-oratory is linked to effective communication in some cultures, Fu

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(2003) states that a vision in China is normally expressed in a non-aggressive manner.

Confucian values (e.g. kindness, benevolence) may play a role in making people wary of

leaders giving pompous talks without engaging in specific action, and lead the people to

dislike leaders who are arrogant and distant. In Antonakis et al,.(2004:271), Chokkar

(2003) holds that although Indian leaders must be flexible in this regard, bold, assertive

styles are generally preferred to quiet and nurturing styles (Den Hartog et al., 1999).

Much greater variation among cultures and culture clusters was found for self-protective

and participative leadership. Self protective leadership seems to have culturally specific

consequences and was perceived to be an inhibitor of effective leadership everywhere

particularly in the Nordic, Germanic, and Anglo clusters and less so in the Middle Eastern,

Confucian, and Southern Asian clusters.

Similarly, participative leadership was reported to contribute to effective leadership for all

culture clusters; however, considerable variation exists. The GLOBE results suggests

that the Germanic, Anglo, and Nordic clusters were particularly attuned to participative

leadership, that is , participative leadership is viewed as a more effective leadership style

in societies that have more egalitarian cultures. whereas the Middle Eastern, East

European, Confucian, and Southern Asian clusters were not attuned to participative

leadership.

Other leader characteristics that varied strongly across cultures in the GLOBE results

seem to reflect uncertainty avoidance, which as a culture dimension refers to the

tolerance for ambiguity in society. Being risk taking, habitual, procedural, able to

anticipate, formal, cautious, and orderly impede outstanding leadership in some countries

and enhance it in others. Also, being autonomous, unique, and independent are found to

contribute to outstanding leadership in some, but to be undesirable in other cultures.

Attributes that are universally viewed as ineffective or impediments to outstanding

leadership include being a loner, being non-cooperative, ruthless, non-explicit, irritable,

and dictatorial (Den Hartog et al, 1999)

A further aspect of leadership studies is how followers follow leaders. Research has

shown that being perceived as a leader is a prerequisite for being able to go beyond a

formal role in influencing others (Lord & Maher, 1991a). In other words, to be successful,

leaders need to first have characteristics or show behaviour that people in a given context

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recognise as “leadership”. Thus, perceptual processes on the part of followers play a

crucial role in the leadership process as well as in researching leadership.

Antonakis et al.,.(2004:59-60) write that for instance, it has been found that “followers

differ by nation in their preferences and acceptance for intensity and kind of

communication with leaders (Earley, 1984), task versus person orientation (Blake &

Mouton, 1970; Misumi, 1974; Scandura, Von Glinow, & Lowe, 1999), and responses to

organisational development efforts (Deyon, 1978). They also differ regarding preferences

for close versus general supervision, democratic versus autocratic leader behaviour,

importance of morality (Hui & Tan, 1999), and emphasis placed on interaction facilitation

(Gibson, 1995).”

An example of these differences can be found through the pattern of communication in

organisations in the developing world which is often indirect, non-assertive, non-

confrontational, and usually downward. Negative feedback is often avoided or given very

indirectly as it is quickly seen as destructive and disruptive to group harmony. In Eastern

cultures such as China, Japan, and the Philippines, the loss of face, or public humiliation,

can result from receiving negative feedback (Earley, 1997).

All the above theories and perspectives are significant as it demonstrates that global

leaders are increasingly tasked with integrating or balancing corporate culture and

national cultures in host countries. These findings also have important implications for

global leaders. At its core, the role of global leaders is to influence individuals, groups,

and organisations from other parts of the world. Some of these stakeholders may belong

to the global leader’s organisations (e.g. employees), while others may be independent

(e.g. clients; customers; regulatory agencies). Javidan et al, (2010:370) say that “it is the

diversity of the targets of influence that signifies and distinguishes the task of global

leaders.” They go on to say that “it is therefore incumbent upon global leaders to

understand the cultural lens that is used to assess them in different parts of the world and

leverage it in building a strong relationshipwith their stakeholders (Beechler and Javidan,

2007)”.

A corresponding argument posed by Hambrick (1998:1) suggests that national culture

(cognitive systems and behavioural repertoires that are shaped as a result of individuals’

common experiences ) “affects a person in numerous interconnected ways, ranging from

the deeply underlying to the readily apparent: values, cognitive schema, demeanour, and

language. These nationality-derived qualities, in turn, affect a person’s behaviour, as well

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as how the person is perceived in a multi-national organisation.” Given this, the

organisations chances of being effective depend on factors such as the magnitude and

type of nationality-derived diversity among members. Secondly, the nature of the group’s

task – i.e. some types of nationality-derived diversity serve as endowments for the group,

while other types of diversity create great difficulties. Whether diversity is an asset or a

liability, in turn, depends on what the group is trying to accomplish.

This particular argument holds sway with one of the principles underlying this research –

the necessity for global leaders who operate across cultures to practice flexibility in their

leadership style with regard to different ways of working, interacting and communicating.

In summary, cultural dimensions among developing countries tend to be somewhat more

collectivistic and somewhat higher on power distance. They also tend to be externally

oriented. Relationships and networking sustain them with interdependence fostered as a

cultural value. Self-reliance has a negative connotation, as it is seen as deserting the

group. Thus, personal achievement is less stressed, and getting along is more important

than getting ahead (Abdalla & Al-Homoud, 2001). For example, a study on Human

Resource Management (HRM) in China showed that few companies have implemented

individual-based rewards, because these types of rewards are believed to lead to “red

eye disease” among workers (jealousy) (Verburg, 1996).

Second, universally culturally endorsed characteristics (CLTs) for leaders have been

identified as charismatic and team-oriented whilst greater variation among cultures and

culture clusters was found for self-protective and participative leadership.

Organisational Culture

Culture refers to a set of shared values that are held by members of a collectivity. In

Antonakis et al., (2004:273), Denison (1996) describes organisational culture as follows:

“Culture refers to the deep structure of organisations, which is rooted in the values,

beliefs, and assumptions held by organisation members. Meaning is established through

socialisation to a variety of identity groups that converge in the workplace. Interaction

produces a symbolic world that gives culture both a great stability and a certain

precarious and fragile nature rooted in the dependence of the system on individual

cognition and action. (p. 624).”

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Leaders of organisations embed and transmit culture in the thinking, feeling, and

behaviour of the group. “Schein (1992) holds that one of the most decisive functions of

leadership is the creation, the management, and sometimes even the destruction of

organisational culture.” (p.274) The “leader initially creates something, which is

differentially attractive to outsiders and eventually the interactions of the individuals in the

organisation refine and modify the initial culture established by the organisations founder

but the founder does nonetheless establish the initial culture (Giberson, Resick &

Dickson, 2002; Schenider, Goldstein, & Smith, 1995).” (p.274)

Schein (1992), states that “leadership is originally the source of the beliefs and values

that get a group moving to deal with its internal and external problems. If what a leader

proposes works and continues to work, what once was only the leader’s assumption

gradually comes to be a shared assumption” (p. 274). This view highlights the impact the

founder of the organisation can have on organisational culture.

Aside from the complexity of the business environment that leaders face is the concept of

values and beliefs and the ‘way we do things here’ and how these concepts contribute to

leadership performance and thus organisational effectiveness. Today values are

acknowledged as the bedrock of corporate culture and organisational vitality (Deal and

Kennedy 1982; Posner 1991; Schein 1985). Increasing emphasis has been placed on

the ‘fit’ between organisation members’ personal values and those of the organisation

(Meglino et al. 1989; Posner 1992; Posner et al. 1985, 1987).

Personal values held by managers have increasingly been shown to have an impact on

their behaviour and performance and, ultimately, on organisational effectiveness. These

core cultural values are part of the personal values set of individuals within a culture and

are deep-seated, unreflexively held and pervasive in people’s orientations to many

aspects of their lived experience. As members of a distinctive culture their personal value

systems will include elements of the core values prevalent in that culture. But, it will also

include other values derived from their particular experiences and the roles they have

come to occupy.

Agreeing with this view, Dickson, Smith, Grojean, and Ehrhart (2002) also argue that the

ethical climate in a firm is linked to personal values and motives of founders and early

leaders. The founder plays a crucial role in culture formation by choosing the basic

mission, the group members, the environmental context in which the new group will

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operate, and the initial responses the group makes in order to succeed and integrate

within this environment.

Building on this view, Schein (1992) says that culture can spring from two other

resources: the beliefs, values, and assumptions of founders or organisations; the

learning experiences of group members as their organisation evolves, and new beliefs,

values and assumptions brought by new members and leaders. Schein (1992) goes on

to assert that “leaders have several primary ‘culture embedding’ mechanisms which

include what the leaders regularly pay attention to, measure, and control; how leaders

react to organisational crises and critical incidents, and their role modelling, teaching, and

coaching. He also described several secondary ‘culture articulation and reinforcement’

mechanisms. These are secondary, in the sense that they work only when they are in

line with the primary mechanism. They include: organisational design, structure, systems

and procedures; stories, legends and myths about people and events; rites and rituals;

design of physical space, and formal statements of organisational values, philosophy, or

creed.” (Antonakis et al., 2004:275).

“Trice and Beyer (1991, 1993), go further by differentiating between ‘cultural innovation’

and ‘cultural maintenance’ leaders. Both types of leaders create an impression of

competence, articulate ideologies, communicate strong convictions, show confidence in

followers and high expectations, serve as role models, and strengthen follower

commitment to the organisation.” (Antonakis et al., 2004:276). However, they types of

leadership differ in other areas: Cultural maintenance leadership is aimed at reinforcing

the existing values and traditions insofar as they are effective to help the organisation

reach its goals. If changes in strategies are made, they are incremental changes.

Cultural innovation leadership, on the other hand, is aimed at creating a new culture or

making drastic changes in the existing culture. These leaders articulate a radical

ideology with new values and strategies, often to deal with serious crises. Cultural

innovation leaders need to be dramatic and expressive than cultural maintenance leaders

and must show more extraordinary qualities in dealing with crisis.

In conclusion, Brooks (1996) suggests that the softer, more symbolic and less tangible,

aspects of leadership are every bit as important in securing speedy transformation as the

more tangible hard structures and systems changes. Softer aspects include attention to

involvement (i.e. walkabouts), extensive and conscious use of symbols, development of

rites of legitimacy (rituals), organisational stories, displaying behaviours and attention to

personal and shared values and renewal and sensemaking.

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Global Leader Competencies and Mindset

Global leader competencies

Global leadership, a new term reflecting the importance of the global economy, is defined

as “influence across national and cultural boundaries” (Mobley & Dorfman, 2003). (p. 155)

At the heart of this literature is the concept of competencies. Mendenhall (2008) says

that whilst some scholars concede the point that while most – if not all – competencies

associated with leadership from the traditional or domestic leadership literature are

necessary to lead globally, the global context places such high demands on the

deployment of those competencies that for all intents and purposes the skill level and

deployment demands render the phenomenon so different in degree that it makes sense

to address it as being different in kind to traditional leadership.

Osland and Bird (2006) say that “it can be argued that global leadership differs from

domestic leadership in degree in terms of issues related to connectedness, boundary

spanning, complexity, ethical challenges, dealing with tensions and paradoxes, pattern

recognition, and building learning environments, teams, and community and leading

large-scale change efforts – across diverse cultures”. (p.16). Rosen (2000) stated that

the globally literate leader is a leader who develops their own potential and that of others,

who cultivate collaborative relationships, and who manage their culture and the culture of

others. In essence new mental software and systems must be put in place to deal with

globalisation.

A key aspect of a global leader’s role is dealing with cultural differences. Interpersonal

barriers rooted in cultural differences may impede the efficient coordination of human

resources and the accurate flow of information on a corporate wide basis. As such, it is

crucial that companies have leaders who are culturally adaptable and able to operate

competently across borders. The new organisations paradigm requires cross-function

and cross-cultural process skills. These competencies are essential because global

leaders must rise above the particularities of many regions and national cultures while at

the same time meeting the expectations of followers in those different cultures. Cultural

knowledge in international management requires understanding differences within a

culture as well as across cultures. The barrier that hinders effective cross-cultural

interactions is not just the average distance between national cultures, it is also the

outsiders’ lack of comprehension of the diversity within a given culture, because they do

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not understand the historical, political, and social context of “within-culture” differences. It

is in this context that global leadership models have been developed.

Allen Morrison (2000) reviewed two global leadership competency models. The first

model proposed by Brake (1997) presents a model of global leadership that he calls the

“global leadership triad”. Three characteristics highlighted in the model are relationship

management, business acumen and personal effectiveness. Within each of these three

characteristics are five separate components or competencies. At the centre of the triad

is the “transformational self” or the “drive toward meaning and purpose through activity

strengthened by reflection, personal mind management, and openness to change”

(Brake, 1997, p. 44). However, Brakes work has shortcomings concerning methodology,

sample (in that his examples are of U.S. companies and U.S. managers) and his notion of

transformational leadership which is based on a U.S. perspective of leadership.

The second model proposed by Rhinesmith (1996) asserts that global leaders need a

combination of 24 distinct competencies. These competencies are structured around

what he believes are the three main responsibilities of global leaders: strategy and

structure, corporate culture and people. Within each of these responsibilities, Rhinesmith

identifies two characteristics, two skills, two actions and two mindsets. E.g. in terms of

managing strategy and structure, global leaders need to be both knowledgeable and

analytical (characteristics), manage both complexity and competition (skills), have drive

and balance (action) and embrace both a broad global picture and a balanced picture

(mindset). His model has been criticised for being problematic as it is difficult to

differentiate between what is a responsibility, characteristic, skill, action and mindset.

Also, missing is a sense of hierarchy, internal homogeneity, or exclusivity in the

dimensions identified.

Black, Morrison, and Gregersen (2000) conducted robust research across 50

multinational corporations throughout North America, Europe, and Asia, and concluded

that “about two-thirds of the characteristics of effective global leaders are generalizable.

The other third are idiosyncratic or context-specific.” In addition to idiosyncratic

competencies they concluded that every global leader needs a core set of characteristics

that operate irrespective of context. These characteristics are relevant to leaders

regardless of the company they work for, the position they hold, their country of origin, or

their functional orientation. In particular, “the authors identified three distinct

characteristics of effective global leaders as demonstrating savvy, exhibiting character

and embracing duality.” (p. 124).

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Sheridan (2005) found three clusters of leadership competencies that define inter-

culturally competent leaders: intrapersonal competencies, interpersonal competencies

and social competencies. Within these clusters are the competencies of capability, care,

connection, consciousness, context, contrasts and cultural immersion.

Leimbach and Muller (2001) have developed a global competency model and identify the

following themes related to global leadership: ‘understanding the business from a global

perspective; assimilating and acting on large amounts of complex or ambiguous

information; driving change based on global strategy; commitment to learning;

communication in an effective manner cross-culturally; establishing personal connections

readily across cultural boundaries.’

Moran and Riesenberger (1994) identified 12 competencies of a global leader: ‘attitudinal

core competencies (possesses a global mind-set, works as an equal with persons of

diverse backgrounds, has a long-term orientation); leadership core competencies

(facilitates organisational change, creates learning systems, motivates employees to

excellence; interaction core competencies (negotiates and approaches conflict in a

collaborative mode, manages skilfully the foreign deployment cycle, leads and

participates effectively in multicultural teams) ; cultural core competencies (understand

their own cultural values and assumptions, accurately profiles the organisational and

national culture of others, avoids cultural mistakes and behaves in an appropriate manner

in other countries.’

Goldsmith, Greenburg, Robertson, and Hu-Chan (2003) state the qualities of effective

leadership as “communicating a shared vision, demonstrating integrity, focusing on

results, and ensuring customer satisfaction.” (p.205) They identify five critical factors that

are important for the future leaders: thinking globally, appreciating cultural diversity;

developing technological savvy; building partnerships and alliances, and sharing

leadership. They say that when operating in the global marketplace it is imperative that

we be informed about these three cultures of our customers, competitors, venture

partners, suppliers, or government officials.

With regard to expatriation from a practical level Lobel (1991) in her review of global

leadership competencies found that one of the main challenges is the ability of individuals

to step out of their comfort zone. Other challenges evolve around communication in

terms of learning new languages or changing one’s own style of communication to suit a

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listener as well as their willingness to analyse their own ‘cultural baggage’. A final

challenge is sustaining a commitment to continuous improvement in intercultural learning.

Harrison and Hopkins (1967) suggested that among the requisite soft skills associated

with effective cross-cultural experiences, the expatriate must master the abilities to

communicate verbally and nonverbally, to take action with insufficient, unreliable, and

conflicting information, to inspire trust and confidence, and to view problems solving as a

social process involving consensus and interpersonal influence rather than correct

answers.

Medenhall and Oddou (1985) reported that adjustment to a foreign country depends on

being able to understand the behaviour of foreigners, which in turn, is predicated on being

non-judgemental. Finally, Ronen (1990) describes relational characteristics (tolerance for

ambiguity, behavioural flexibility, non-judgmentalism, interpersonal skills, cultural

empathy, and low ethnocentrism) and motivation (interest in overseas experience,

interest in the specific host-country culture, and willingness to acquire new patterns of

behaviour and attitudes) as among the important predictors of expatriate success.

Global mindset

In the GLOBE study, Hanges et al (2004) state that due to the complexity of mastering

cross-culturally, global leaders need to navigate across a wide range of culturally

endorsed implicit leadership theories. An important tool to help such navigation is what is

referred to as the global mindset. This is defined as a set of individual attributes that

enable global leaders to influence those that are different from them. Their construct of

global mindset consists of three major ingredients: intellectual capital, psychological

capital, and social capital.

Many other theorists agree with this view. For example, Gupta & Govindarajan (2002)

and Murtha, Lenway, & Bagozzi (1998) contend that contemporary leaders are in greater

need of global mindsets. Leaders with global mindsets, also known as “transnational

mentality” (Bartlett & Ghoshal, 1998), are willing to learn and are able to adapt more

readily to environmental changes (Estienne, 1997). They possess high levels of

conceptualisation skills, such as the ability to handle complexity and appreciate the

impact of cultural and social forces on business (Kefalas, 1998; Tichy et al., 1992). In

addition, they are visionary (Harveston, Kedia, & Davis, 2000), have high levels of

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problem-solving skills and abilities, and can make sense of ambiguous or ill-defined

situations (Mumford & Connelly, 1991; Mumford et al., 2000; Schwandt, 2005).

Similarly, De Jager, Cilliers F & Veldsman (2003:85) suggest that “the New Economy

drivers are placing increased change and transformation pressure on organisations to

remain competitive and sustainable. These drivers are: globalisation and increased

international competitiveness (Magretta, 1999; Moon & Bonny, 2001), the war for talent

and an international skills shortage (Burton-Jones, 2001; Johnson, 2002; Sullivan, 2000),

the democratisation of the workplace (Ackoff, 1981; 1994; Gibson, 1998), information

technology networks (Magretta, 1999; Moon & Bonny, 2001). The drivers lead towards

increased chaos (Conner, 1998) and complexity (Stacey, 1996) in the taking up of

leadership roles, and results in a high failure rate of leaders and executives in

organisations acting as social systems (Hesselbein, Goldsmith & Beckhard, 1996; 1997;

Kets de Vries, 1991; 2001).”

De Jager et al., (2003:85) remark that “leadership in the New Economy network

organisation is in the midst of an emerging mindset (Anderson & Anderson, 2001;

McFarland, Senn & Childress, 1993), characterised by continuous change and

transformation that cannot be controlled, nor predicted (Beer & Nohira, 2000; Gouillart &

Kelly, 1995). ...that the emerging mindset requires leaders to take up conscious change

leaders roles (Anderson & Anderson, 2001, Beer & Nohira, 2000), to successfully lead

change and transformation (Fullman, 2001) towards the democratisation of the

workplace, participation, demise of positional power (Ackoff, 1981; 1994), the taking up of

personal authority (Hirschorn, 1998), disappearing boundaries between business units

(Eisler & Mountouri, 2001; Hass, 1993), an imploding world of work (Hirschorn & Barnett,

1999) moving towards a systemic whole (Oshry, 1995).”

In a similar vein, Rosabeth Moss Kanter (2009:575) summarised four contrasting

phenomena of globalisation – that of Uncertainty (more frequent, rapid, unexpected

change), Complexity ( more moving parts, more variables in play simultaneously),

Diversity (more variety of people and organisations, more dimensions of difference

among those in contact) and Transparency (more information known about more people

and organisations in more places). She further states that ‘three big tasks follow from

three of these conditions: that of institutional work to deal with uncertainty; integrative

work to deal with complexity – and identity work to deal with diversity’.

Kanter (2009:575-576) goes on to say that “top leaders perform this work personally, on

behalf of the organisation and they set the framework for many people throughout the

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organisation to do this work in addition to their technical tasks. Particularly at the top,

leaders operate through the messages they espouse (what they say), the models leaders

exemplify (what they do), and the mechanisms they establish (what leaders enable others

to do)”.

Particularly relating to this research is the task of leading under diversity that involves

identity work. Globalisation has heightened attention to workforce composition. within

companies, and today’s global leaders must acknowledge and contend with much greater

heterogeneity. Kanter (2009:599) says that leaders must become adept at identity work.

“Identity work involves shaping awareness and action in terms of both differentiation

(acknowledging differences) and inclusion (finding points of commonality). What is called

‘identity politics’, which consists of hostility and conflict, occurs when neither of these

conditions are met – when people feel that their differences go unacknowledged and yet

they do not feel membership in the wider group.”

In essence global leaders must confront identity issues in a way that unites people while

acknowledging individuality. Leaders must become much more interpersonally aware

than was the norm. Home-country nationals can no longer claim superiority, and they

must create relationships of reciprocity in order to work effectively across borders and

boundaries. To this extent a leader must develop their consciousness about others,

practice empathy, attempt to read others and put them at ease by managing their

perception of the situation, demonstrate gestures of respect and inclusion, hold one’s own

ego in check in order to honour something important to others, instil the importance of

listening and adapting one’s own style, give permission for people to talk to one another

more openly, to learn what it is like for other people with different life experiences and be

sensitive to cultural differences within countries – e.g. north versus south in Brazil, India

etc.

Kanter (2009) concludes that the main leadership work is on the emotional side – ‘emotional

integration’. That is, to forge a common identity, a common feeling of membership, above

and beyond the ability to conduct transactions. Instilling a sense of community which comes

from being included as a whole person, having the opportunity to form emotional bonds with

others, and experiencing a kind of shared consciousness, which helps people feel that they

can understand each other. Global leaders must not only emphasise a common identity, but

also take active steps to reinforce it against all the centrifugal forces of fragmentation.

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Thus the evidence presented above shows the weight that a global leader must bear

upon their shoulders. A consistently acknowledged downside of globalisation is

continuous change and transformation. This can lead to increased leadership anxiety

(Hirschorn & Barnett, 1994; Obholzer & Roberts, 1994). In turn, this leads to the

emergence of power games, projection, splitting and scapegoating (Coleman, 1995;

Hirschorn & Barnett, 1999; Kernberg, 1998). Therefore a global leader must be adorned

with the most appropriate tools in their amoury. Rather than solely looking at an

individual leaders behaviour, the systems psychodynamic paradigm addresses the

systemic group and organisational behaviour influencing various systems, such as the

individual (Miller, 1989; Neuman, Kellner & Dawson-Shepard, 1997; Obholzer & Roberts,

1994; Stapley, 1996). This approach offers a balanced perspective of guiding leaders

and their organisations through change, complexity and transformation.

Conclusion

This chapter aimed to tell a story on leadership. It began by presenting an overview of

domestic leadership theories including: Great man/Trait; Contingency/Situational;

Transactional/Leader Member Exchange; Behavioural; Participative; Authentic

Leadership Development; Distributed and Ethical.

These underlying concepts of these domestic theories filter through and are extended

upon in Multiple Level Leadership theories such as Leaderplex and Strataplex. It was

argued that these multiple level leadership theories are best suited to the complexity and

diversity of influences and scenarios across geographies that global leaders now have to

contend with.

The concepts in domestic leadership theories also underscore our understanding on what

the influence of national culture on shaping a leaders beliefs, values and styles and the

impact that this can have when leading a global organisation across cultures.

An argument was posited to suggest that if organisations are shaped by leaders who in

turn are inherently shaped by their national culture beliefs and values how will this

permeate through the culture of the organisations? As such, can there be universal

culturally endorsed characteristics for leaders? And what might be the implications in

terms of mindset for leaders in an increasing globalised world? This fed into the last

section which reviewed a selection of global leadership competencies and the traits of a

global mindset.

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Chapter Three: Literature Review – Diversity

Introduction

Organisations typically define their diversity efforts in terms of the six strands of diversity

– age, gender, race, ethnicity, disability and religion – and surprisingly, give little attention

to other factors of diversity that leaders operating in a globalised world now have to

contend with. This is a concern as globalisation naturally moves the workforce from a

homogeneous space to one that is increasingly heterogeneous. These diverse

workforces very often have different ways of thinking, working and being. Thus, by

implication, leading and operating in this complex scenario demands leaders to widen

their traditional focus of diversity from the guardians of ethnic representation and social

well-being to a broader more strategic factor so as to achieve competitive advantage and

sustain business success.

Added to this, through its evolution as a concept, diversity has somewhat become

muddied and tarnished. Muddied in terms of what it stands for and tarnished with the

assumption of the intangible business value that it adds to the business.

This literature review will present a story by chronicling the history and associated

definitions of diversity so as to provide context and awareness of the scope of diversity. It

will review the theoretical foundations underpinning diversity in order to understand and

extract how global leaders can develop and build on the value of diversity agenda.

Following on, it will seek to identify the role that global leaders may play in driving

diversity in their organisations and, in tandem, seek to understand the organisational

factors that leaders attune to so that diversity is embedded in the DNA of their

organisations.

Lastly it will offer an array of arguments for the benefits that diversity brings to an

organisation as well as, the criticisms often levied at diversity.

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Chronicling the journey of diversity

Although, in the main, the definitions for diversity centre on the notion of “difference”, over

the years the concept has evolved and has been redefined according to the ethos,

philosophy and responses of Governments and Organisations. In this sense, Maltbia &

Power (2008) identified five waves of diversity based on five common organisational

responses (or orientations) to diversity in the workplace that has been found in the

literature. Each wave differs along a number of key variables such as goals, motives,

area of focus, benefits and challenges and consequently differing definitions for diversity

have emerged.

The 1st Wave (1950s and 1960s) of diversity began with ‘The Civil Rights Era’ whose

focus was on Social Action; Civil Rights Movement; and A Moral Imperative. The impact

of this was that organisations became increasingly aware of workplace fairness and

equity issues and increased hiring of minorities and women.

The 2nd wave (1970s) was an era that proposed Affirmative Action (AA) & Equal

Opportunity Employment (EEO). Its focus was primarily associated with legal remedies:

relating to opening doors and representation. The impact of this wave was that

organisations worked to move beyond the social and legal imperative and sought more

proactive strategies to address the potential financial loss associated with inequities.

However, although many organisations embraced the notion of diversity, they only did so

to varying degrees (Frase-Blunt, 2003) and although affirmative action (AA) created

opportunities for women and minorities, it did not foster the type of thinking that was

needed to effectively manage diversity (Slaughter, Sinar, & Bachiochi, 2002; Thomas,

1990). So, in response to some of the negative perceptions of AA the ethical perspective

became popular in the 1980s.

The 3rd wave – the ethical perspective – was about valuing diversity and emphasised

awareness, recognition, understanding and appreciation of human differences

(Gardenswartz & Rowe, 1993). It involved creating an environment in which everyone

feels valued and accepted. It signified an era of inclusion – a shift to “inclusiveness” as a

strategy for unleashing the power of diversity to generate business value”.

“This increasing diversity within organisations brought with it renewed calls for fair and

just treatment of individuals in organisations (Strachan and Burgess, 2001) and the term

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‘equity management’ is used to refer to all the practices and processes utilised in

organisations to ensure fair and just treatment of diverse individuals (French, 2000;

Strachan and Burgess, 2001; Ng and Chiu, 2001)” (p.35). Equity Management focuses

on identity-conscious decision structures, (Konrad and Linnehan, 1995) anti-

discrimination; policy types: social structural, temperamental and role-related affirmative

action (Kanter,1997). However, it has since been shown that policies that change

structure and processes do not increase diversity and may have a negative effect on

equity management (French and Maconahie 2004).

French (2005:36) says that “the distinction between equality and equity is further

compounded by the issue of addressing any disparity between groups in the workplace.

Deutsch (1985) noted that the use of equity or equality as the principle of distributive

justice is associated with different social contexts and psychological orientations.

(Equality is a distributional notion based on the equal value of individuals and their right to

benefit equally in any benefits and burdens. Equity is concerned with distribution based

on individual inputs as well as opportunity)”.

To address this, Easley (2000) suggested an organisational development approach to

equity and diversity management that acknowledges differences in culture, behaviour and

leadership through the use of strategic interventions as essential for effective change.

Burnett and Kettleborough (2007:103) agree. They say that “diversity is often a game of

percentages, a game where the rules state that organisations must frantically hire visibly

different people in order to hit targets or quotas. Inclusion takes the journey further.

Inclusion is about creating environments where all people can prosper and progress

irrespective of race, colour, gender, physical ability, age, religion, sexual orientation or

belief.” Inclusion involves all people and is about the culture, environment and processes

operated by an organisation. It is measured by how people feel and needs a high degree

of effort to be achieved.”

April and Shockley (2007:35) say that “an added advantage of valuing diversity in this

way was that it could provide superior services, simply because it enabled organisations

to better understand customers or citizens needs (Wentling and Palma-Rivas, 2000),

enabled organisations to tap into niche markets (Mueller, 1998), enhanced flexibility

through diversifying market segments (Fleury, 1999), and gave them capability to

respond to change more quickly (Adler, 1997; Jackson et al., 1992).”

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The 4th Wave (1990s) is often labelled the Managing Diversity Era whose focus is on

utilisation and opening systems The emphasis is of workforce utilisation through

integrated systems alignment (i.e. performance management, succession planning and

compensation to drive behaviour in organisations).

Cox and Blake (1991) state that managing diversity enhances organisational flexibility.

There are two primary bases for this assertion. First there is some evidence that women

and racioethnic minorities tend to have especially flexible cognitive structures. (e.g.

women have a higher tolerance for ambiguity than men). Also, bilinguals have higher

levels of divergent thinking and cognitive flexibility.

The second way that managing cultural diversity may enhance organisational flexibility is

that as policies and procedures are broadened and operating methods become less

standardised, the organisation becomes more fluid and adaptable. The tolerance for

different cultural viewpoints should lead to greater openness to new ideas in general.

One difference between equal opportunities (EQ) and managing diversity relates to the

force for change. Equal opportunities tends to be driven by external forces such as the

need for legislative compliance (Wilson, 1996; Wilson and Iles, 1999); social justice

(McDougall, 1996); ethical and human rights (Wilson & Iles, 1999), and a concern that

people should be treated in an equal way (Wilson, 1996; Wilson and Iles, 1999). In

contrast, managing diversity is driven internally (Ross and Schneider, 1992; Wilson,

1996; McDougall, 1996) and is directly linked to the bottom line (Carnevale and Stone,

1994). This rests on “business case”, instrumental arguments which contend that a

diverse workforce will aid profitability (Wilson and Iles, 1999).

Also, equal opportunities can be largely perceived as an operational issue (Wilson, 1996;

Wilson and Iles, 1999), which is likely to be the concern of personnel departments or

human resource specialists (Kandola and Fullerton, 1994; Kandola, 1995; McDougall,

1996; Wilson, 1996; Wilson and Iles, 1999). However, managing diversity can be

regarded as a strategic issue in the widest sense, which is viewed as being crucial for

economic and competitive success (Wilson, 1996; Wilson and Iles, 1999). Diversity

management requires top leadership support, commitment and above all, direction

(Carnevale and Stone, 1994) as it should theoretically extend beyond the more legal

compliance-orientated equal opportunities.

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A third distinction concerns the focus. While EQ primarily concentrates on issues of

discrimination (Kandola and Fullerton, 1994; Kandola, 1995), with a focus on positive

action initiatives (Kandola and Fullerton, 1995; McDougall, 1996), managing diversity is

concerned with ensuring that all people maximise their potential (Kandola and Fullerton,

1994; Kandola, 1995, McDougall, 1996). Managing diversity engages with a wider focus

(McDougall, 1996), encompassing a range of broader issues (Iles, 1995) and people

(Kandola, 1995).

Lastly, a managing diversity perspective brings with it an emphasis on organisational

culture (Ross and Schneider, 1992, Kandola, 1995; McDougall, 1996) and management

style (Iles, 1995) which are not traditionally part of the EQ approach.

Today, a number of diversity proponents argue that a culturally diverse workforce leads to

sustainable competitive advantage and ultimately superior performance (Barney &

Wright, 1998; Cox & Blake, 1991; Johnson, 1999; Richard, 2000; Triandis, Kurowski, &

Gelfand, 1994). As such, companies today increasingly strive for a diverse workforce as a

matter of enlightened economic self-interest (Coil & Rice, 1993). This is the business

necessity perspective. Thus we arrive at the 5th Wave (2000+): Leveraging Diversity –

where the focus is on collective impact (e.g., attracting and retaining talent, multicultural

marketing); This emerging diversity paradigm seeks to recognise the strengths and

limitations of the previous approaches by focusing on the individual, group and

organisational level outcomes that can be realised by leveraging diversity.

Thomas and Ely (1996) present another historical perspective on diversity and walk us

through the recent history in terms of three paradigms – The first paradigm –

discrimination and fairness is based on the notion of “sameness”; The second paradigm –

access and legitimacy is whereby niche markets need niche employees to represent

organisation in their respective communities; The third paradigm – learning and

effectiveness transcends assimilation and differentiation by promoting equal opportunity

and valuing cultural differences. In this integration paradigm employees use their

differences to shape new goals, processes, leadership approaches, and teams, they

bring more of themselves to work. They feel more committed to their jobs – and their

companies grow.

Thomas & Ely (1996) say that organisations usually take one of two paths in managing

diversity. In the name of equality and fairness, they encourage women and people of

colour to blend in. Or, they set them apart in jobs that relate specifically to their

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backgrounds, assigning them, for example, to areas that require them to interface with

clients or customers of the same identity groups.

What they suggest is that diversity should be understood as the varied perspectives and

approaches to work that members of different identity groups bring. They just don’t bring

insider information. They bring different, important, and competitively relevant knowledge

and perspectives about how to actually do work – how to design processes, reach goals,

frame tasks, create effective teams, communicate ideas, and lead. Members of these

groups can challenge basic assumptions about the organisation’s functions such as

strategies, operations, practices, and procedures.

Worman (2005:4) notes “...definitions for diversity are almost as diverse as the subject

itself” and she describes three types of diversity: “Social diversity which includes

demographical profiles: age, race, gender and ethnicity. Values diversity which includes

psychological differences based on personality and attitudes; and, Informational diversity

which includes organisational differences in educational expertise, tenure, and function”.

Hubbard (2004:8) suggests that diversity can be organised into four interdependent and

sometimes overlapping aspects: He identifies ‘workforce diversity’, ‘behavioural

diversity’, ‘structural diversity’ and ‘business and global diversity’. “Workforce diversity

encompasses group and situational identities of the organisation’s employees (i.e.

gender, race, ethnicity, religion, sexual orientation, physical ability, age, family status,

economic background and status, and geographical background and status). It also

includes changes in the labour market demographics.”

Behavioural diversity encompasses “work styles, thinking styles, learning styles,

communication styles, aspirations, beliefs/value system, as well as changes in

employee’s attitudes and expectations.” (p.8)

Structural diversity covers “interactions across functions, across organisational levels in

the hierarchy, across divisions and between parent companies and subsidiaries, and

across organisations engaged in strategic alliances and cooperative ventures”. (p.8).

Hubbard suggests that as organisations attempt to become more flexible, less layered,

more team-based, and more multi- and cross-functional, measuring this type of diversity

will require more attention.

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Lastly, Business and Global diversity that take in “the expansion and segmentation of

customer markets, the diversification of products and services offered, and the variety of

operating environments in which organisations work and compete (i.e., legal and regulatory

context, labour market realities, community and societal expectations/relationships,

business cultures and norms)”. (p.8).

Perhaps the most influential framework within a UK context is Liff’s (1996) typology of

four diversity policy approaches – dissolving differences, valuing differences,

accommodating differences and utlilising differences – and lies at the heart of the

question as to why is diversity management so essential? Liff suggests that diversity

management drives employee engagement across all groups, regardless of

race/ethnicity, gender, age, sexual orientation, disability and religion and that

engagement fosters productivity and innovation, which are crucial to sustainability.

April and Shockley (2007:4) say that many experts opt for holism that integrates the

characteristics of diversity with the processes of the business (Rijamampianina and

Charmichael, 2005; Thomas and Ely, 1996; Worman, 2005).

Driven by the definitions above and the varying perspectives of diversity, many

organisations still frequently view diversity from a single lens. That is, there is a tendency

for organisations to primarily focus their diversity efforts and actions on one sole construct

– identity (e.g. the composition of its workforce – race, gender, age, disability etc.).

Historically, this focus has been primarily compliance driven and is often linked to the

laws providing protected status to certain groups. As such, according to Kossak and

Lobel (1996) diversity initiatives do not create lasting change or sustainable advantage

and critically, Kandola (2009:2) ascertains that “diversity has lost its energy ...it’s been

legalised, proceduralised, standardised... the true meaning of diversity – the quality of

human relationships – has drained away.”

To this end, April & Shockley (2007) assert that if diversity is looked at from a range of

perspectives that push the conceptual edges of diversity on a continuum scale from

global to local’ then the value of diversity will be realised. This is aligned with the

definition of diversity used in this study which is “the value added from different ways of

being, doing, and thinking”.

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Theoretical Foundations

Resource-Based Theory

The discipline of resource-based theory and knowledge management straddle the crucial

area of diversity management within social and corporate structures. According to Mario,

Ghiggino (2007:97), “having the right people in the right place, at the right time, with the

right knowledge and generating value-adding ideas, is paramount for the success of any

organisation. Managers need to build organisational capabilities in order to retrieve and

explore knowledge and talent resources hidden within their diverse workforce, thereby

elevating the issue of racial barriers to one of multi-cultural strength and potential.”

Chavan (2005:43) explains that the resource-based approach “can be viewed as a

continuing search for competitive advantage by the creation, acquisition and utilisation of

unique firm resources (Barney, 1991). This is reinforced by the underlying assumption

that resources heterogeneity exists across firms. However, heterogeneity by itself is not

sufficient for sustained competitive advantage (Petraf, 1993) unless resources are also

imperfectly mobile across firms (Barney, 1991). It is this heterogeneity that creates the

need for emphasis upon resources in strategic management research. The resource

based strategic research emphasises that valuable, rare, imitable, or non-sustainable firm

specific capabilities (e.g. tangible and intangible assets, skills, competencies and learning

mechanisms) are the fundamental determinants of performance (Barney, 1991, Teece,

Pisano & Shuen, 1992) and sustained competitive advantage (Lado, Boyd & Wright,

1992). Ultimately, the resource-based view of strategy is an introspective approach

whereby firms seek to create and sustain competitive advantages by developing their

internal strengths and/or acquiring complementary resources that are both imperfectly

mobile and imperfectly imitable.”

The relationship challenge between diversity and resource-based theory, lies in ‘treating

diversity as a resource rather than a threat that is essential for responding to the

demands of a global market economy, for reaping the full benefits of cross-border

alliances, and for enhancing organisational learning’ (Schneider and Barsoux, 1997).

Theories/Studies underlying Structural Diversity

Maltbia and Oher (2006:4) present the diversity as dimensions framework which provides

“a model for examining the unique mixture of similarities and differences characteristic of

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human existence, each with a unique theoretical foundation (Gardenswartz & Rowe,

1993; Loden, 1996; Thomas, 1991).” First, primary dimensions of diversity (also known

as social category diversity) encompass ‘inborn characteristics generally determined early

in the life span’ (Jehn, 1999). The elements (i.e. race, ethnicity, country of origin, gender,

age, physical and mental ability, and sexual orientation) that make up the primary

dimensions of diversity form an interdependent core of one’s identity. The theoretical

foundations for primary dimensions of diversity include the self-categorization theory (e.g.

Turner, 1982), the social identity theory (e.g. Tajfel, 1978), the similarity-attraction

paradigm as articulated by Byrne (in Thatcher, 1999), and the racial identity theory (Jehn,

1999). These theories touch on the importance for individuals identifying, and belonging

to groups similar to them and establishes whether you are part of an in-group or out-

group.

Secondary dimensions of diversity (i.e. experience-based or informational diversity) can

be viewed as ‘mutable differences that are acquired, discarded, and/or modified

throughout the life-span ‘(Jehn, 1999) and, as a result, are less salient to one’s core (e.g.

education, occupation, income, parental status, etc).

‘Organisational dimensions of diversity resulting from one’s work role are influenced by

such factors as organisational level, classification (i.e. exempt, hourly, etc.), line of

business, work content, location, seniority, organisational type, mergers/acquisitions, and

union affiliation; all contribute to differences related to underlying work values and goals

(Jehn, 1999).’

Personal dimensions of diversity also exist and include one’s psychological type, thinking

and work styles, motivational profile, conflict style, use of power, value orientation, and

learning style. The sum total of the four dimensions of diversity shape people’s identities,

the frame or lens through which they view, experience, and act in the world.

April & Shockley (2007:281) state that “the psychological literature indicates that

individuals, through social comparison (Bearden and Rose, 1990), may differ in their self-

concept, self-knowledge, self-perception and self-thought (Craik and Lockart, 1972;

McGuire et al., 1978; Shavitt and Brock, 1984), which will influence their information

processing and emotional responses (Markus and Oysermen, 1988; Wange and Mowen,

1997), which ultimately leads to the activation of their categorisation – a subjectification of

self, or self-referencing (Debevec and Iyer, 1988; April et al., 2000).”

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A further element within the structural diversity dimension relates to how organisations

forge and develop external relationships. Many organisations have come to recognise

the strategic advantage of being socially responsible and investing in their local

communities. An organisations relationship with the community must be reciprocal.

Communities provide organisation with their workforce, customers, suppliers, and

distributors. In a similar vein, capitalising on diverse partnerships with people different

than the dominant group will be the challenge for organisations looking to compete on a

global scale in the twenty-first century and beyond. This requires a new set of skills,

interactions and competencies.

Theories/Studies underlying Cognitive Diversity

Cognitive diversity refers to “variation in beliefs concerning cause-effect relationships and

variations in preferences concerning various goals for the organisation (Miller, 1990) such

variation underlies differences in perspectives that tend to endure through time.” (Miller,

Burke & Glick, 1998:41)

At least three arguments suggest that cognitive diversity positively influences

comprehensiveness and extensiveness. The first of these concerns disagreements as a

basic resource. When there are many disagreements surrounding an immediate

opportunity or threat, or a long-range plan, upper echelon executives as a group and as

individuals are aware of more issues, more ways of viewing each issues, and more

alternative courses of action (Bantel and Jackson, 1989; Lant et al., 1992; Wiersema and

Bantel, 1992) thus increasing awareness of issues and options. If there are no

disagreements at the outset, upper-echelon executives are less likely to consider a wide

range of issues and options because they simply would not think of many of them. As

Lant et al.(1992:41) point out, disagreements can ‘result in more extensive discussion of

strategic options, more learning opportunities, and, thereby, reduce the likelihood of a

groupthink-type phenomenon occurring’.

The second argument put forward by Fredrickson and Mitchell (1984), Glick et al. (1993),

and others concerns costs. “When there are many disagreements in strategic decision-

making, upper-echelon executives are more likely to expend the resources necessary for

more analyses, more consultants, and more discussions. In other words, the need to

resolve disagreements or at least partially reconcile divergent positions in order to move

forward leads to a greater willingness to expend the resources necessary for high

comprehensiveness and extensiveness” (Miller, Burke & Glick, 1998:41).

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The third argument suggests that disagreements affect upper-echelon cohesion.

Cohesion, in turn, is expected to affect comprehensiveness and extensiveness. Thus,

cohesion is expected to mediate partially the effects of cognitive diversity on

comprehensiveness and extensiveness. Cohesion is defined as the extent to which

upper-echelon executives like one another and stick up for each other. It is related to

Hambrick’s (1994) concept of behavioural integration. Social psychological arguments

related to interpersonal attraction and inferred evaluations suggest that cognitive diversity

negatively influences cohesion. Through a process of inferred evaluation, individuals

assume that a person who agrees with them also likes them. This process combined with

the frequent observation that individuals tend to like those who like them yields the

expectation of a negative relationship between cognitive diversity and upper-echelon

cohesion. Stated simply: ‘individuals will feel closer to and identify with persons who

share similar beliefs and values’ (Wagner, Pfeffer, and O’Reilly, 1984).

Cognitive intelligence & emotional intelligence

Maltibia & Oher (2006:1), say that “since the inclusion of workplace diversity on the

executive agenda during the early 1980s, leaders are beginning to recognise that their

ability to operate effectively in today’s competitive, complex and increasingly global

workspace requires not only the acknowledgement of various differences, but also the

ability to unleash the talent and potential of the entire workforce”. Talent must be broadly

defined to include both cognitive intelligence and emotional intelligence.

More recently, April and Shockley (2007:363-64) expand the ‘inclusion’ philosophy

“beyond a mere cultural focus, to the behavioural manifestations of neurological and

biological circuitry – the “self-leadership” philosophy, which challenges individuals to

manage/lead themselves, manage their own prejudices and stereotypes, seek awareness

into the ways in which they subtly damage the self-confidence and self-esteem of those

with whom they work and live, to understand the influence of their own intentions on lived-

behaviour, to deconstruct the way in which they negotiate their identities as individuals in

networks of power, and constantly expose their own views, and their view of others, to

challenge and debate – metaskills – a type of cognitive intelligence, as well as emotional

intelligence (Goleman, 1998; April et al., 2000).”

According to Duxbury and Anderson (2000), it is crucial to build on Goleman’s emotional

intelligence skills related to personal competence (self-awareness, self regulation and

motivation) and social competence (empathy, building bonds, cooperation, conflict

management, influence and the ability to catalyse change). According to Schoem et al.,

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(1995), diversity increases individuals ways of knowing, enabling them to reread a

particular meaning and uncovering new meanings – perspectives that we could not

previously see; and these further enable the necessary flexibility, creativity and

innovation, so dearly cherished by many organisations

Hoffman and Maier (1961) also contend that diversity enhances the breadth of

perspective, cognitive resources, and overall problem-solving capacity of the group.

Innovation

Cox (1991:327) believes that increasing cultural heterogeneity leads to “greater creativity

and innovation and more successful marketing to different types of customers”. Glick

(2007) believes that it is necessary to ‘diversify the brain pool’ by building systems that

incentivize cross-departmental, cross-organizational collaboration as well as, bringing in

your stakeholders to contribute to the process. Glick adds that it is increasingly

necessary to focus not only on idea generation, but on the full innovation process, and

look at what can leaders do to nurture the full lifecycle of innovation in organizations.

Lastly, due to globalisation particularly in the emerging markets innovation is about

reconfiguration and rebundling of products and processes (Henderson and Clark, 1990)

to fulfil needs at lower cost and at economies of scale. A diverse workforce allows

companies to understand and respond better to the needs of ever growing complex

markets. As such, the need for employing a diverse workforce that can innovate, deliver

and service different income stratified consumers also increases. A company that can

match its own internal diversity with the external diversity of its customers is going to

satisfy more people more of the time, and prosper in the process.

Organisational Learning

One critical aspect of learning that is needed for managerial and leadership effectiveness

in today’s changing business environment is diversity and cultural competence. That is,

the ability to construct competent responses to the challenges, complexity, and

opportunities associated with situations involving diversity and cultural differences.

Maltbia & Power (2009) say that a review of diversity work in pioneering companies

reveals three common components associated with the learning and change processes

focused on creating an environment that attracts, understands, values, and leverages

diversity: The first is ‘opening doors’ (i.e. representation, workforce and executive parity

focused). The second is ‘opening minds’ (i.e. organisational culture, diversity training,

and other educational and climate monitoring strategies including bias-based complaints

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or legal claims). The third, ‘opening systems’ (e.g. people processes from selection,

performance management to succession planning).

Soderberg & Holden (2002) propose the definitions of what constitutes a learning

organisation as one capable of transforming ‘tacit knowledge’ into a hard-to-imitate

strategic resource (Barney, 2001) or as one that is ‘skilled at creating, acquiring, and

transferring knowledge, and at modifying its behaviour to reflect new knowledge and

insights’ (Garvin, 1998). In practice this means acquiring and exploiting knowledge from

any source, for knowledge is ‘the one sure source of lasting competitive advantage’

(Nonaka, 1998). The key engine of learning is the multicultural team, out of whose

diversity comes ‘an eclectic set of perspectives, a set of interchangeable lenses’ (Hamel

and Prahalad, 1996), without which there can be no genuine facilitation of knowledge-

sharing in a globally dispersed organisation.

The literature on diversity and the learning organisation can be viewed as complimentary

since both aim to release the potential of employees for the benefit of the organisation,

and both rely on a supportive culture and supportive infrastructure. The learning

organisation, in fact, enables the full utilisation of all potential and if the organisation is not

diversity-oriented, there is a risk that the available pool of potential will be narrow.

Hubbard (2004) suggests that a diverse workforce, given proper attention to

development, mentoring, growth-enabling assignments, flexibility, and the like, can create

a whole new level of competitive performance and innovation in a diverse, global

marketplace. Developing, training, and implementing competency models for diversity is

an important first step in the evolution of a high-performing, diversity-enriched

organisation.

Lastly, in relation to organisational learning, how a global organisation manages the

transfer of activities and knowledge between divisions to maximise their firms’ efficiencies

will better exploit the benefits of cultural synergies (Palich and Gomez-Mejia, 1999). As

mangers acknowledge diversity and become sensitive to national differences, Harris and

Moran (1981) posit that such differences can actually be managed to provide “cultural

synergies”. In other words, the differences people bring to the intercultural experience

can lead to growth and outcomes that exceed the sum of individual contributions. As

Adler (1980) reports, “Culturally synergistic organisations create new forms of

management and organization that transcend the individual cultures of their members.”

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Absorptive Capacity

In order to integrate diversity elements within the strategy process, an organisation needs

to consider those diversity attributes that are crucial to competitive strategy such as

learning outcomes. A learning outcome establishes a link between the concepts of

‘diversity’ and the ‘learning organisation’. This helps build a richer picture of the way that

diversity can contribute to competitive advantage and innovation in organisation. In this

context, the concept of ‘absorptive capacity’ (Cohen and Levinthal, 1990; Zahra and

George, 2002) is used to indicate how ‘diversity density’ and a ‘diversity mindset’ can

make knowledge derived from diverse markets intelligible.

David (2010:22) says that Hopkins et al (2008) offers a well articulated definition of the

terms ‘diversity density’ and ‘diversity mindset’. The concept of diversity density refers

“not only to the percentage of diverse employees in an organisations workforce, but also

to the extent to which individuals from these diverse groups are represented at all levels

of the organisation”. The concept of ‘diversity mindset’ refers to “the extent to which an

organisations senior executives view diversity as a business strategy rather than a

management issue.”

Diversity is a contributor to absorptive capacity which describes the extent to which an

organisation can absorb scientific or technological information and refers to an

organisations ability to recognise the value, assimilate, and apply new, external

knowledge from the environment and make strategic choices that contribute towards

competitive advantage. Learning capabilities involved the development of the capacity to

assimilate existing knowledge, while problem-solving skills represent a capacity to create

new knowledge. Therefore it follows that a diverse background provides a more robust

basis for learning in uncertain situations and stimulates creativity by associating to more

linkages. Cohen and Levinthal (1990) also make the point that ‘diversity across individual

absorptive capacities connects diverse knowledge structures and elicits the sort of

learning and problem solving that yields innovation. It increases the chance for more

novel linkages’.

Hopkins et al., (2008) stress that ‘the presence of diversity knowledge in an organisation

does not, of itself, guarantee that this knowledge will be leveraged by the organisation for

competitive advantage. For the absorption process to begin, they argue, the senior

executives in an organisation must play a key role in judging the potential of new

knowledge’. This provides a ‘diversity mindset’.

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Global mindset

Global Mindset (Laczniak and Lusch, 1997; Gupta and Govindarajan, 2002; Paul, 2008) –

generally defined as the ability of an organisation’s senior executives to demonstrate

openness to and awareness of diversity across cultures and markets. Todorova and

Durisin (2007) contended that “the cognitions of an organisations executives play a key

role in judging the potential and thus value of new knowledge” (David,2010:30). And

Murtha, Thomas, Lenway, & Bagozzi (1998) show that the process of organisational

learning links managers' mind-sets with senior managers' intentions in the course of

proactive international strategic change. Contributors from diverse disciplines have

argued that key aspects of international strategic capabilities derive from managers’

cognitive processes that balance competing country, business, and functional concerns

(Kindleberger, 1969; Perlmutter, 1969; Prahalad and Doz, 1987; Kogut, 1985; Hedlund,

1993; Bartlett and Ghoshal, 1989). Bartlett and Ghoshal referred to this concept as a

‘matrix in the minds of managers’.

Prahalad and Doz (1981, 1987) suggested that global competition requires a multi-

national to continually balance national responsiveness and global integration. These

organisations therefore have ‘to be organised to act on both dimensions simultaneously

by subdividing their productive activities among as many countries as possible, taking

technological divisibility and scale efficiencies into account (Kogut, 1985; Bartlett, 1986;

Porter, 1986; Prahalad and Doz, 1987; Bartlett and Goshal, 1989). As such,

organisations’ capabilities to exploit these complex systems full strategic potential

depended on managerial ‘mind-sets’ that equilibrate integration and responsiveness

rather than predispose decisions in favour of one dimension at the expense of the other

(Prahalad and Doz, 1987). Bartlett and Ghoshal (1989) defined their ‘transnational

mentality’ in these terms. Perlmutter’s (1969) ‘geocentric’ cognitive orientation was also

consistent with this formulation.

Gupta and Govindarajan (2002) explain how research in cognitive psychology has also

revealed that mindsets exist in the form of knowledge structures and that the two primary

attributes of any knowledge structure are differentiation and integration. Differentiation

refers to the narrowness versus. breadth of knowledge that the individual or organisation

brings to the particular context. Integration refers to the extent to which the person or

organisation can integrate disparate knowledge elements.

A person who seeks and values multiple opinions but then is able to develop an

integrative perspective has a combination of high differentiation and high integration (High

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D – High I) and they define global mindset as a ‘High D – High I’ mindset in the context of

different cultures and markets. More concretely, they would define a global mindset as

one that combines an openness to and awareness of diversity across cultures and

markets with a propensity and ability to synthesise across this diversity. The benefit of a

global mindset derives from the fact that, while the company has a grasp of and insight

into the needs of the local market, it is also able to build cognitive bridges across these

needs and between these needs and the company’s own global experience and

capabilities.

Building on ideas from cognitive psychology and organisation theory regarding

development of knowledge, Gupta, and Govindarajan (2002) contend that the speed with

which any individual or organisation can cultivate a global mindset is driven by four

factors: ‘curiosity about the world and a commitment to becoming smarter about how the

world works; an explicit and self-conscious articulation of current mindsets; exposure to

diversity and novelty; and a disciplined attempt to develop an integrated perspective that

weaves together diverse strands of knowledge about cultures and markets’.

Theories/Studies underlying Behavioural Diversity

According to Garvin (1998) all business activities depend on communication practices at

whose core lie relationship management among employees and external stakeholders,

organisational learning, and networking based both on interpersonal interactions and on

global connectivity mediated via IT. But getting the ideas is only the first step. The

second step challenges firms to ‘become adept at translating new knowledge into new

ways of behaving’.

Behavioural integration, cross-cultural studies and social intelligence

Cross-cultural management studies the behaviour of people in organizations around the

world and trains people to work in organizations with employee and client populations. It

describes organizational behaviour within countries and cultures; compares

organizational behaviour across cultures and countries: and perhaps, most importantly,

seeks to understand and improve the interaction of co-workers, clients, suppliers, and

alliance partners from different countries and cultures. Cross-cultural management thus

expands the scope of domestic management to encompass the international and

multicultural spheres.

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Morosini (1998) and Gertsen and Soderberg (2000) argue that managers and employees

involved in international mergers and acquisitions are often forced to reflect on their

cultural identifications and the organisational practices developed in a certain local

context. The interlocking of these identifications and practices with those emanating from

the new business context can contribute to new insights from ‘the other side’, and

gradually cultural identifications with the new merged organisation may emerge.

Hofstede (1980) says that culture is the ‘software of the mind’ that individuals acquire in

their childhood and in educational institutions through ‘mental programming’. Moreover,

culture is seen as something that members of a community ‘have’ or ‘belong to’. As

referred to in leadership literature review, Hofstede’s highly recognised framework (1980,

1991,2001) identified five cultural dimensions and the dimensions of individualism -

collectivism, power distance and future orientation link strongly to behaviours. Stemming

from this framework and previously referred to, Cox, Lobel & McLeod (1991:840) suggest

that groups composed of people from collectivist cultural traditions would display more

cooperative behaviour than groups composed of people from individualistic cultural

traditions. Their study found “that at an individual level, Asian, Black, and Hispanic

individuals had a more collectivist-cooperative orientation to a task than Anglo individuals”

(p.839) and suggest that if organisations of the future are composed of more members

from these groups then it is likely that it will influence the way organisations work with

regard to cooperativeness. From another angle, cooperative work behaviour is

increasingly viewed as necessary to improve the competitiveness of firms (Bassin, 1988;

Galagan, 1986; Hatcher &, Ross, 1985; Levine, 1987; Markowich, 1987; Raudsepp,

1988; Scott & Cotter, 1984).

Another widely recognised study was conducted by Fons Trompenaars and Charles

Hampden-Turner (2004) who looked at the issue of global convergence versus

localisation and diversity and identified seven dimensions of difference (see chapter two)

and suggest that due to these differences leaders face a series of dilemmas with regard

to their leadership style. They need to be mindful of how their behaviours are reflected

and translated through the organisation in relation to participation, directing,

communicating, thinking and serving.

Søderberg, and Holden (2002) argue that the management of multiple cultures involves

knowledge transfer, organisational learning and networking. They therefore proposed a

new working definition of cross cultural management: “the core task of cross cultural

management in a globalising world is to facilitate and direct synergistic interaction and

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learning at interfaces, where knowledge, values and experience are transferred into

multicultural domains of implementation.” (p.113).

Another issue relating to behavioural integration across cultures is how a global leader

adapts practices effectively from one culture to another. For example, leaders could ask

themselves what could be learned from the humanism of South Asia and from Africa in

managing global enterprises successfully? In this light, Jackson (2002:455) suggests that

leaders need to be conscious that the wholesale adoption of Western HRM methods

transferred to an Eastern culture say, ‘may ultimately be ineffective and therefore there is

a need to be aware of the different perceptions of human value within organisations

across cultures’.

A further issue pertaining to behaviour is titled, ‘micro-inequities’. Micro-inequities occur

wherever people are perceived to be ‘different’ and is a term that was coined by Mary

Rowe (1990). Rowe describes micro-inequities as a subtle form of discrimination

involving a perpetrator and a victim and are characterised by slight, verbal, or non-verbal

personal assaults that are often ephemeral and covert. These messages can take the

shape of looks, gestures or even tones...they result in hard-to-prove events embedded in

a history of superiority and inferiority dynamics among identity group members such as

White and Blacks or between men and women. Further perpetrators are generally

unaware that they commit micro-inequities. When confronted, their typical response is

that of being “surprised,” seeing the “other” as “overreacting” or being “highly sensitive”,

or at best, they say the perceived assault was unintentional. Micro-inequities can induce

disillusionment, self-doubt, guilt, confusion, and loss of hope because such experiences

tend to eat at an individual’s core and self-confidence over time. Micro-inequities may

also have a negative Pygmalion quality. That is, the expectation of poor performance, or

the lack of expectation of good performance, may do damage because managers and

students and employees have a strong tendency to do what is expected of them.

Looking at this phenomenon in the context of what we know from behaviour modification

theory, as an intermittent, unpredictable, “negative reinforcement”, micro-inequities have

peculiar power as a negative learning tool. Moreover, because one cannot change the

provocation for negative reinforcement (e.g. one’s race or gender), one inevitably feels

some helplessness.

Overall, Stephen Young (2007) states that a micro-inequity devalues, discourages and

ultimately impairs performance in the workplace. The cumulative effect of micro-

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inequities often leads to damaged self-esteem and, eventually, withdrawal from co-

workers in the office. Most companies diversity efforts focus on what is most obvious.

They focus on what you can see, touch or put your hands around says Young. However,

according to Young, semiconscious messages that are set out are far more persuasive

and potentially damaging.

Interculturalism, and Intercultural Communication

Milton J. Bennett (1998), offer guidance to leaders and practitioners for navigating the

learning and change process associated with leveraging diversity in organisations. He

suggests that it is not simply about ‘working to transform a mono-cultural organisational

climates to a more inclusive, multicultural work environment. Rather, he suggests that “to

be comprehensive, the learning and change process must focus on individual, group and

system level transformation”.(p.5). Similarly, Maltbia (2001) suggests that leaders need

to engage in a continuous process of self work regarding understanding the origins of

one’s personal assumptions about dealing with, and responding to difference along the

various dimensions of diversity and this self-work involves exploring the origins of one’s

cultural programming that influence our thinking, feelings and actions.

With regard to behaviours relating to communication, Mishler (1965) reports that in

international exchanges: “The greater the cultural differences, the more likely barriers to

communication and misunderstandings become” and ‘attempts to successfully operate

multiple business units in diverse cultural contexts may be frustrated by conflict and

frictions within the firm, lack of cohesion and misunderstandings amongst key decision

makers, and communication breakdowns between boundary spanners’ (Alder, 1991;

Boyacigiller 1990; Harris and Moran 1992; Hendon, Hendon and Herbig 1996). (p.312) In

summary, Barkema et al (1996) say that interpersonal barriers rooted in cultural

differences may impede the efficient coordination of human resources and the accurate

flow of information on a corporate wide basis.

The Leaders Role

Nancie Zane (2002:335) attests that “while theories on organisational change have

focused on the benefits of having a diverse workforce (Cox, 1993; Cross, 2000; Katz &

Miller, 1986; Meyerson & Fletcher, 2000; Thomas, 2001; Thomas & Ely, 1996), there are

few longitudinal studies focused on the role that both leadership and organizational

groups play in co-constructing the meaning of diversity for the system as a whole (Barrett

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et al., 1995; Bartunek & Moch, 1992)”. That is, the way in which diversity is discussed

can impact organisational structures and culture across time and so “leaders need to

understand the dynamics of inclusion and exclusion, fairness, and partiality” and “need to

co-construct a common understanding of what they mean when they are talking about

‘diversity’ ”.

April and Shockley (2007) suggest that leadership defines the future of diversity. Miller

and Katz (2002) believe that the most critical component of any effort to change culture is

positioning the organisation and its leaders to create and support the change. This

change must be led from the top and suggest that ‘when the organisation recognises that

leveraging diversity and inclusion is crucial to its overall success, it moves the effort from

a loose collection of best practices to an organisational strategy to improve performance.

It becomes a way of life in the organisation.

Zane (2002:342) says that, how leaders address and discourage the thinking of senior

white men who talk about diversity as “distracting the corporation from attending to the

bottom line” or make comments such as “it seems like we’re trying to be a social service

agency, paternal and benevolent...but we’re a business...is not going to solve the world’s

problems” is of paramount importance.

Gómez-Mejia and Palich, (1999) assert that a multi-level approach to diversity has not

been thoroughly integrated as an important construct in strategic management studies of

globalisation and leadership. At the same time the literature on cultural diversity has

generally focused on domestic models, ignoring the effects of a firm’s exposure to

multiple national cultures on a leader’s performance.

As with most change processes diversity and inclusion will only impact and become part

of the fabric of an organisation if leaders demonstrate commitment. Therefore the level of

leadership commitment to diversity will inevitably impact on what the organisation is

prepared to take seriously. As suggested by Kandola (2009:125) “this dominant group

projects the moral boundary of the organisation, using its own preferences and interests

as a template.” He further suggests that senior management need to be role models for

diversity and ‘walk the talk’ otherwise it becomes known as a ‘window dressing’ exercise.

They should display behaviours that develop people, value individuals, champion

diversity as well as give diversity a strategic focus.

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This view is backed up by Miller and Katz (2002) who suggest that there should be

demonstrated behaviours by the senior leadership team, consistent with their

‘declarations of purpose.’ They propose that leaders must also enrol the workforce,

develop a diverse leadership group, and hold themselves accountable for their own

performance in their interactions with others as well as the organisation’s collective

actions.

In sum, for any change effort to be effective, have a lasting effect on an organisation and

be truly transforming it must be led and modelled from the top so that the rest of the

organisation does not continue to follow old ways of working and being. Miller & Katz

(2002) further state that only the organisation’s senior executives can provide the

commitment, resources, and credibility required to convince people in the organisation to

stop behaving in the ways they have always behaved and to start adopting new,

unfamiliar ways that may initially feel awkward, embarrassing, and risky.

Kirton and Greene (2005) agree and say that it is senior people who are in a position to

manipulate the cultural signals and messages that the organisation projects both

internally and externally. This is how the espoused values of the dominant group come to

be seen as the reality of the organisational culture.

The examples provided above and many more suggest that a senior leader’s response to

diversity greatly influences the collective organisational response and Milton Bennett

(1998) suggests that a leader’s denial, or defensive response to diversity spreads this

response across the organisation and impacts the entire workplace culture and climate.

The net impact is an organisational climate where differences are suppressed and

“outsiders” must assimilate to “fit in”. They go on to say that leaders who accept

difference and adapt their behaviour in interactions with others different from themselves

fosters an inclusive organisational climate and enables a more conducive environment for

creativity and innovation, as well as growth and renewal.

Maltibia and Power (2009) share this view and assert that as chief architects of

organisational culture, the daily actions and decisions of individuals in senior leadership

positions directly influence the diversity climate of a given organisation and related

outcomes. Maltbia and Power apply Heifetz and Linsky’s (2002) theory of distinguishing

between operational and adaptive leaders to diversity. “Operational diversity work

focuses on the “what, where, and when” of various trends and applying current “know-

how” to respond to changes in the external environment or internal requirements” whilst

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“adaptive diversity seeks to address broad questions that take the form of the “why”

behind the “what, where, when, and how” of various diversity dynamics. It calls for more

revolutionary, transformational change in individuals and their organizations.” (p.:56) The

diversity change process requires new learning, experimenting and adaptation across the

organisation.

Heifetz and Linsky (2002:13) state that “without learning new ways – changing attitudes,

value, and behaviours – people cannot make the leap necessary to thrive in a new

knowledge-based economy that is increasingly diverse and global”. Therefore, according

to Maltbia & Power (p.57) “adaptive challenges require that people across the

organisation internalise and co-create productive responses to diversity’s challenges and

opportunities.” In essence, enacting the diversity learning and change process often

involves the transformation of self, others, organisational systems and structures.

Connected to this is the awareness that a leader has in appreciating how their “ability to

leverage diversity is directly influenced by their ability to be engaged and to engage a

diverse mix of employees in their efforts” (Jesuthasan, 2000; Towers Perrin, 2003) (p.18)

and whilst employee engagement involves both rational and emotional factors leaders

should aim as a first step to establish a compelling rationale for leveraging diversity.

Cox & Blake (1991) strongly advocate the crucial need for top management’s support and

genuine commitment to diversity. They suggest that champions for diversity are needed

– people who will take strong personal stands on the need for change, role model the

behaviours required for change, and assist with the work of moving the organisation

forward. Commitment must go beyond sloganism so that human, financial, and technical

resources are provided to support the work of diversity. They suggest that diversity be an

item that is prominently featured in the corporate strategy and consistently made a part of

senior level staff meetings and that that through performance reward systems diversity is

tied to executive bonuses. Lastly, they contend that there must be a willingness to keep

mental energy and financial support focused on diversity over a period of years. For Cox

and Blake, this is the commitment needed by leaders.

Hubbard (2004) says that leadership is the first requirement for a diversity change

initiative and the Diversity Leadership Commitment Perspective of the diversity scorecard

gauges the degree to which the organisation’s leaders are ‘utilising behaviours that set

the vision, direction, policy, and a personal model for the diversity effort through

demonstrated actions’.

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Maltbia & Power (2009) say that in addition to creating a clear and explicit leadership

structure to guide the diversity change process, clarifying various leadership roles and

demonstrating commitment to diversity through their behaviours, the true leadership

challenge is how a leader aligns systems to reinforce strategic focus. As such it is

imperative that a leader identifies a set of potential strategic priorities related to diversity

with related success indicators and measures and put in place a accountability system to

track and generate results.

Miller & Katz (2002) offer another perspective and suggest that it is also important for the

leader to distinguish between organisational capabilities and individual competencies in

the development and implementation of a strategic diversity agenda. Organisational

capabilities include the kind of work environment and policy structure needed to support

the organisation’s strategic objectives and direction. Individual competencies included

what was required of each person to create and support the organisational capabilities.

They further suggest that it is essential that all aspects of the organisation’s policies and

practices be aligned with the new set of competencies.

To summarise, leadership is the first requirement for a diversity change initiative. To be

fully effective, leadership must start at the top in creating a high performing diverse

organisation that is steeped in skills for effective diversity management. In the context of

organisational change, leadership is a behaviour that establishes a direction or goal for

the diversity change initiative (a vision), provides a sense of urgency and importance for

the vision, facilitates the motivation of others, and cultivates necessary conditions for

achievement of the vision.

Benefits of Diversity

There are good reasons to think that globalisation will advance diversity as interaction

across boundaries leads to the continuance of the mixing of cultures and diversity has

itself become a global value. Indeed, cultural diversity is now a prominent business

strategy in most multinational companies as they operate in rapidly changing domestic

and global markets that challenges them to continually strive for advantage over their

competitors. To address this scenario, arguments for competitive advantage through

strategic human resource management (HRM) have been forthcoming and one such

contemporary HRM strategy is the increase of employee diversity.

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Researchers who have studied cultural diversity in groups suggest that if organisations

are to be successful, there is a need for managers to have knowledge of the impact that

increasing cultural diversity in the membership of groups might have on group

effectiveness (Erez & Somech, 1996; Hambrick, Canney-Davison, Snell, & Snow, 1998;

Neale & Mindel, 1992, Wentling & Palma-Rivas, 2000).

Kossek & Zonia (1993) have found that many firms have increased their emphasis on

hiring, promoting, and retaining individuals of ethnically, racially, and gender diverse

backgrounds. Towards this end, organisations have instituted multicultural training and

activities to modify organisational systems and address root cause of institutional racism

and sexism (Thomas, 1990; Cox, 1991). Typically, multicultural efforts seek to enhance

relations between members of different ethnic and racial groups by finding ways to

sensitise to intergroup differences (Ferdman, 1992; Thomas, 1990).

A common rationale used to justify fostering diversity in multicultural organisations is that

this will result in many benefits, such as better decision-making, greater creativity and

innovation, and increased business competitiveness (Houghton, 1988; McIntyre, 1989;

Cox, 1991). However, changing organisations toward the multicultural model means

changing the way in which power and rewards are currently distributed in organisations

across gender, racial and ethnic groups.

Therefore a leader’s effort to enhance diversity can be more embraced when there is a

business case for a strategic diversity agenda that is linked to changing demographics,

social changes, and strategic organisational objectives. According to Mike Bagshaw

(2004), this gives diversity a context that places it at the core of strategic conversations

on ‘cost reduction (business competitiveness), market access and customer service

(faster implementation), the war for talent, globalisation, learning and innovation (better

decisions and creativity), creative abrasion (encouraging robust debate), un-discussable

and hidden agendas (harnessing the differences), breaking down groupthink and

fostering collective wisdom. These are essentially the value added outcomes of diversity.

Hubbard (2004:275) quotes NPR (2001) who say that “diversity is more than a moral

imperative; it is a global necessity and an essential component of any civil society”.

Benefits to the organisation have been listed as:

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Reduced inter-group conflict (Kandola and Fullerton, 1998) and maintenance of inter-

organisational relationships (McEnrue, 1993)

Reduced labour costs, positive consequences for recruitment and retention, and

improved employee relations (Baldiga, 2005; Lockwood, 2005; McEnrue, 1993)

Effective talent management (Kandola, 2009)

Better ‘diversity mindset’ within the senior management team (Hopkins et al., 2008)

Improved ‘absorptive capacity’ (Cohen and Levinthal, 1990; Zahra and George, 2002)

Better strategic planning (David et al., 1999)

Improved innovation capability and greater creativity (Nieto and Quevedo, 2005; Cox,

1991) through more imaginative ideas (Bantel, Jackson, & Source, 1989) leading to

increased productivity (Miller & Katz, 2002; Jackson, 1993)

Improved customer satisfaction, loyalty and understanding of client needs by being

more responsive and having more effective customer services. As well as, increased

market share and penetration into new markets through successful marketing to

different types or customers (Miller & Katz, 2002; Day and Van den Bulte, 2002; Cox,

1991; Rigby, 2006)

Broader perspectives (Lockwood, 2005)

Enhanced brand reputation and public image (Kandola, 2009; McEnrue, 1993)

Increased flexibility to deal with changing environments (Lowell and Znini, 2005)

because members of diverse teams are more likely to disagree with each other and

find fault with the status quo (Glick, Huber, Miller, Doty, and Sutcliffe 1990)

Improved ‘corporate agility’ (Sambamurthy et al., 2003; Mathiyalakan et al., 2005)

Better environmental scanning (McCann and Galbraith 1981)

Higher quality and comprehensive decision making ((McLeod & Lobel, 1996; Watson,

Kumar & Michaelsen, 1993; Miller, Burke, & Glick, 1998; Lawrence, 1997)

Engage in more creative problem solving (Nemeth & Wachter, 1983; Triandis, Hall &

Ewan, 1965)

The above benefits also provide justification for asserting that firm diversity is

economically beneficial (Ferlie, Hartley, & Martin, 2003). For example, researchers who

have studied top management team diversity have found that they experienced more

positive financial returns than more homogeneous teams (Korn, Milliken, & Lant, 1992).

Also, diverse educational training and education among top management team members

has been shown to positively influence return on investment, sales growth (Smith, Smith,

Olian, Sims, O’Bannon, & Scully, 1994), and adaptability (Wiersema & Bantel, 1993).

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DiversityInc say that ‘in the past decade, diversity management has grown from a

compliance-based offshoot that only examined racial and gender diversity in the

workplace to what organizations increasingly consider the most vital aspect of their ability

to be competitive in the war for talent and for customers/clients, suppliers and vendors’.

So much so that in 2010 twenty-eight percent of chief diversity officers in the DiversityInc

Top 50 report directly to their CEOs, compared with 18 percent in 2005. In 2010, all of

The DiversityInc Top 50 Companies for Diversity had employee-resource groups,

compared with 70 percent in 2005. And of these Top 50 companies, 84 percent of CEOs

meet regularly with leaders of these groups, compared with just 34 percent in 2005.

Critiques of Diversity

Heterogeneity vs. Homogeneity

Although this stream of research is still embryonic one of the main critiques of diversity

focuses on heterogeneity, which is a central construct in the literature on top

management. Heterogeneity is important in competitive decision making, conferring

breadth of perspective, on one hand, but with the potential for team disensus and

inefficiency, on the other hand (Jackson, 1992).

Studies that have found negative effects from top team heterogeneity include O’Reilly and

Flatt (1989) and O’Reilly, Snyder, and Boothe (1993) who showed that company

innovation and adaptive change was negatively related to team heterogeneity in firm

tenure in a wide cross section of firms as well as negatively associated with a multi-item

measure of team rapport.

Also, although heterogeneity may provide wider cognitive resources by having teams who

have multifaceted backgrounds and orientations and thereby have more extensive

external contacts that encompass a wider field of vision having the potential to observe

more opportunities, threats, and overall stimuli on multiple fronts with a broader potential

repertoire for generating actions than does a homogeneous team (Hoffman and Maier,

1961; Jackson, 1992) it may also create gulfs or schisms that make the exchange of

information difficult (Ancona and Caldwell, 1992). Ancona and Caldwell (p, 663) found

that in some instances, “heterogeneity may engender outright distrust and acrimony, as

widely dissimilar group members may have different vocabularies, paradigms, and even

objectives. Thus their aggregate cognitive endowment can become a net liability, with

organisational innovation and performance suffering.”

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Wagner, Pfeffer, and O’Reilly (1984) found that heterogeneity in firm tenure was

associated with higher turnover in top management teams, and the more distant an

individual executive was from the average of the other group members, the more likely he

or she was to depart.

Similarly, Smith et al. (1994) found that heterogeneity in tenure was negatively associated

with informal communication within the team but had no association with social

integration or communication frequency.

In addition, a number of studies have found that diversity can negatively affect

organisational processes and performance. Group heterogeneity has been associated

with stereotyping in-group/out-group effects, affective conflict, and turnover (e.g., Jehn,

Northcraft & Neale, 2000; Pelled, 1996; Tsui, Egan, & O’Reilly, 1992). Tsui and

associates (1992) found that diversity may lead to organisational detachment among

white male employees while the research of Thomas and Ely (1996) suggests that

increasing demographic variation within firms did not in itself increase organisational

performance. Williams and O’Reilly (1998) conclude that mismanaged diversity initiatives

can negatively affect both processes and outcomes.

With regard to cohesion and challenge, Miller, Burke, & Glick (1998) suggest that

cohesion negatively affects comprehensiveness and extensiveness (strategic processes)

primarily because there is a natural desire for amicable relations among executive teams.

In contrast, executives in teams that are not cohesive are more likely to challenge

opinions put forth by their colleagues as they are more likely to encourage debate and

initiate investigations designed to uncover flaws in their colleagues’ reasoning (see

benefits previously referred to – e.g. (McCann & Galbraith, 1981), and Glick, Huber,

Miller, Doty, & Sutcliffe, 1990).

Consistent with this reasoning, Janis has argued that extremely high levels of cohesion

can lead to groupthink –‘a deterioration of mental efficiency, reality testing, and moral

judgment that results from in-group pressures’ (1972). Group members are thought to

value group membership to the point where fear of ostracism and fear of membership

loss result in conformity and unquestioned acceptance of ideas from an early decision

contributor or from a group leader. Particularly problematic is the fact that the group as a

whole often refuses to seek or accept input from outsiders.

In conclusion Maier (1967) says that disagreement in a group can either be an asset or a

liability depending upon how the group leader handles the diversity. Further, these

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findings fully align with prior theory positing several consequences of group

heterogeneity: Broader gathering of information, creativity and boldness, but friction and

slowness in decision making and action. Further, Kwak (2003) noted that diversity can

either help or hinder firm performance depending on the organisation’s culture, its

strategies, and its human resource practices.

Globalisation and cultural identity

A further critique levelled at diversity is proposed by Keith Denton (1997) who suggests

that diversity may promote innovation and fresh viewpoints but will ultimately destroy

cultural identity. He argues that associating or defining ourselves with a particular race is

dangerous as it has the potential to undermine our culture. He says that culture helps

define ‘who we are’ and therefore the challenge is to understand how to recognise

diversity while still maintaining some of our own identity.

His argument rests on a premise that suggests that globalisation does not always involve

a greater degree of communication or exchange of ideas among different cultures on an

equal footing. Rather, it often displays a tendency to impose one culture on another,

which may end up creating a homogeneous model that affects them all. This may then

lead to a certain process of cultural homogenisation. Interestingly this effect can normally

be observed by the wholesale adoption of Western methods into non-western cultures.

Organisational issues

A third critique of diversity centres on how diversity can threaten the perceived natural

order of organisational life. Miller & Katz (2002), say that some organisations avoid the

necessary commitment to a diversity strategy because they fear it will be divisive, pitting

groups or cultures against one another and alienating the dominant group with no benefit

to anyone. This is essentially so because most organisations are filled with barriers that

are expressed in conscious and unconscious behaviours, as well as routine practices,

procedures, and bylaws.

They further express that other organisations see diversity as an issue to be managed,

shaping it and getting it to ‘fit’ in the existing structure of the organisation. Still other

organisations see diversity as a value and end in itself, unrelated to the mission, vision

and purpose of the organisation. The result: either a singular focus on representation and

awareness or ignoring the issue altogether. To this end, diversity is often marooned in

one part of the organisation – most likely, in HR. Therefore other business areas absolve

themselves from accountability.

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From a Human Resources standpoint issues around retention involve an organisation not

knowing quite what to do with a diverse individual once they have recruited them. They

may have been recruited to fit into a job or help the organisation’s image not to help the

organisation redefine its way of doing business. This lack to embed a diverse individual

within the culture will often activate a strong reaction to diversity initiatives and “have

implications for intergroup relations which are embedded in an organisational context

(Alderfer and Smith, 1982).” (p, 62).

Accordingly, Kossek & Zonia (1993) purport that change activities have differing

ramifications for groups, each with interest that may or may not overlap, thereby

heightening intergroup conflict by creating increased; competition for resources, and

accentuating differences in goals, values and power (Smith, 1982; Berg and Smith,

1990). Changing organisations to become more multicultural is likely to adversely affect

the current dominant group (white men) by altering the distribution of power and

resources, and the dominant goals and values of the firm. (p. 62).

Diversity’s value to bottom-line performance of an organisation also remains elusive and

an organisation whose culture is ‘performance’ driven is more likely to perceive diversity

as a ‘soft’ option that has no major impact on the financial objectives of the firm. This

results in diversity management being attacked from organizations that fail to understand

its long-term impact on corporate sustainability.

However, DiversityInc (2010) has provided evidence to debunk studies that question the

value of diversity. For example, The Wall Street Journal erroneously claimed "the death

of diversity" based on a Rand Corp. study that used obsolete data, which the lead author

admitted wasn't relevant anymore and Business Week published a "study" on the failure

to promote diversity in senior management that was actually based on a pop-up web-site

quiz with anonymous respondents.

Conclusion

This chapter has sought to define diversity by charting the fives waves of diversity over

the years on order to provide a context on the root causes for diversity and to outline the

scope of progression of diversity. The 1st Wave (1950s and 1960s) of diversity began

with ‘The Civil Rights Era whose focus was on Social Action; Civil Rights Movement; and

A Moral Imperative’. The 2nd wave (1970s) was an era that proposed Affirmative Action

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(AA) & Equal Opportunity Employment (EEO). The 3rd wave – the ‘Ethical Perspective’ –

was about valuing diversity and emphasised awareness, recognition, understanding and

appreciation of human differences (Gardenswartz & Rowe, 1993). The 4th Wave (1990s)

is often labelled the ‘Managing Diversity’ Era whose focus is on utilisation and opening

systems. And the 5th Wave (2000+) – ‘Leveraging Diversity’ focuses on collective impact

(e.g., attracting and retaining talent, multicultural marketing).

This was followed by establishing the broad theoretical underpinnings of diversity so as to

grasp and confirm the robustness and principles of the various strands and dimensions of

diversity and how they tie in with the structural, cognitive and behavioural dimensions of

diversity. in a global leaders role to develop and build a strategic diversity agenda.

Following on, it sought to determine the role and the significance of that role that a global

leader plays in driving diversity in their organisations and, in tandem, seek to understand

the organisational factors that leaders may need to attune to so that diversity is

embedded in the DNA of the organisation.

Finally, it presented the benefits that diversity brings to an organisation as well as, the

critiques often directed at diversity which is best articulated by Sylvia Vriesendorp

(2007:14-15) who says that “diversity can pit people against one another when prejudice

and fear dominate, or it can start new friendships across boundaries, stimulate rich

conversations, bring forth new views and ideas and blend the best parts of groups

formerly divided along racial, ethnic, age, or gender lines.” She suggest that “like a

diamond, diversity has many facets reflecting back to us different stories relating to socio-

political change, cultural differences, organisational attempts to comply or profit from

diversity, communities separated and joined, and finally about powerful personal

experiences.”

To conclude, Lovemore Mbigi (2007:302) nicely emphasises the value of diversity by

attributing diversity to the positives of each continent. He says that “the genius of

European (North) leadership traditions lies in planning and technical innovation; The

genius of the American (West) leadership tradition lies in entrepreneurship and a bias for

action; The genius of Asian (East) leadership tradition lies in process innovation to attain

quality and perfection; The genius of African (South) leadership tradition lies in Ubuntu –

the interdependence of humanity, by emphasising human dignity and respect through

consensus democracy and people mobilisation, solidarity and care.”

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Therefore the real frontiers in diversity management may just be committed leaders,

driving employee engagement and inclusion, seeking collaboration, across stakeholder

groupings and through varying dimensions of diversity that correspond to focused

interventions that ultimately achieve a return on investment, encourage cross-cultural

learning that ultimately leads to sustained change.

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Chapter Four: LEAD³Framework

Introduction

From the researchers review of the literature on leadership and diversity it was clear that

no structured framework existed that offered an integrated approach to diversity and

evidenced for business leaders how diversity could impact upon their performance.

Indeed this is recognised by Palich & Gómez-Mejia (1999) who assert that research on

cultural diversity has not kept up with the pace of globalisation and as such “diversity has

not been thoroughly integrated as an important construct in strategic management

studies” (p, 590). This is borne out through the literature on cultural diversity that has

generally focused on domestic models, ignoring the effects of a firm’s exposure to

multiple national cultures.

Comments by Nancie Zane (2002, pp 335) also suggests that “while theories on

organisational change have focused on the benefits of having a diverse workforce (Cox,

1993; Cross, 2000; Katz & Miller, 1986; Meyerson & Fletcher, 2000; Thomas, 2001;

Thomas & Ely, 1996), there are few longitudinal studies focused on the role that both

leadership and organizational groups play in co-constructing the meaning of diversity for

the system as a whole (Barrett et al., 1995; Bartunek & Moch, 1992).”

Added to this, diversity as a strategic intervention is often perceived as a nemesis of

organisations. It seems that over the years diversity has somewhat become muddied and

tarnished. Muddied in terms of what its purpose is (i.e. a strategic intervention vs. a

bolted-on / ‘nice-to-do’ activity), and tarnished because the delivery of its benefits are

perceived to be intangible and difficult to measure and therefore alleged not to add

financial value to the business. Given this, the one dimension that is considered to be

measurable and therefore tends to be a primary focus of an organisations diversity effort

is workforce/identity diversity.

This way of leading and implementing a diversity strategy and agenda can have an adverse

effect of establishing a tone of “them” and “us” thus immediately creating a divide that

focuses diversity firmly on differences. Subsequently, actions by leaders are often rooted in

defending diversity initiatives rather than conveying the value of diversity. LEAD³ was

conceived and developed to address this issue by demonstrating how an integrated

approach to diversity can significantly add value to an organisation.

Consequently, this chapter will present LEAD³ and show how the framework was derived

from the literature reviewed in chapters two and three. The researcher has

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conceptualised and presents an integrated framework that takes into account the whole

organisational system so that diversity is implemented as a change process allowing

multiple organisational levels and needs of the organisation to be accounted for. It

encapsulates key organisational elements within an organisational development change

approach to diversity and global leadership performance and explains what they mean

and why they fit together. This framework has several intentions:

The first intention is to broaden the scope of global leadership characteristics that are

required and relevant to operating in the complex global environment of the 21st century

and beyond. They key leadership characteristics fall within the cognitive, social,

behavioural space. Included within these three characteristics are the skills to think and

act strategically with a business focus

Secondly, it advances the key performance organisational variables that are deemed

most appropriate for driving diversity in a global organisation. These are inclusion and

engagement, collaboration and strategic alignment

The third intention accounts for all stakeholder groupings that consider internal and

external relationships so that the direction of diversity efforts is focused and, developed

and implemented effectively across the organisation.

Fourthly, the framework will draw on literature from other subject areas (i.e. cognitive and

social psychology, complexity theory, business strategy etc.) that provides evidence and

support to widen the concept of diversity and thereby address differing organisational

needs to ensure that diversity adds both implicit and explicit value to the organisation.

The fifth intention is that diversity be a more focused effort so that exacting interventions

can be matched appropriately to stakeholder needs and organisational objectives. This is

a key output which operationalises the framework into a working tool.

Finally the ethos and rationale of the framework is that it offers a business case for a

strategic performance to be aligned to organisational outcomes and suggests that these

outcomes correspond with the traits of high-performing organisations. Therefore,

financially, diversity should be able to show what the value-add or return on investment

has been for the company. Diversity should both encourage and leverage organisational

learning and ultimately, all diversity change efforts are sustained so that they become

embedded into the fabric of organisational life.

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The Tool – LEAD³

Figure 1

© S Storey 2012

KEY

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The following two sections of this chapter will show how the components of the LEAD³ tool

have been derived and conceptualised from the literature presented in chapters two and

three.

The first section will demonstrate how the tool is underlined by theoretical rigour drawn from

academic theories. The second section will describe each dimension that makes up LEAD³

and the rationale for their inclusion.

Theoretical foundations that support LEAD³.

Contingency / Situational Theory:

Contingency theories are a class of behavioural theory that contend that there is no one

best way of organising and leading and, that an organisational and/or leadership style

that is effective in some situations may not be successful in others. In other words, the

optimal organisation / leadership style is contingent upon various internal and external

constraints and different leaders have different characteristics and the leader should be a

match to the organisation’s needs (Fiedler, 1978; Vroom-Yetton, 1973; Hersey-

Blanchard, 1969 House, 1971).

In all these theories, the distinguishing feature of the contingency perspective is the

interaction of the leader with the follower(s) and the situation – i.e. a person-situation fit.

This theory represents the beginning of examining leadership from a multi-level view or

perspective as it brings together a number of concepts and therefore is the most suitable

of the earlier theories on leadership in attempting to understand the role of the global

leader.

Cultural Implicit Leadership Theory:

Drawing on an information processing perspective, implicit theories are cognitive

frameworks or categorisation systems that people use during information processing to

encode, process and recall specific events and behaviour (Shaw, 1990). Progressing this

theory and on the basis of the Organisational Change literature, Bass (1990) argued that

organisational members, like team members, share mental models and implicit theories

about the functioning and leadership of organisations and that most people of the same

culture hold a common set of beliefs about the attributes of a typical leader.

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Theorists went on to propose that societal culture has an important impact on the content

and development of leadership prototypes and implicit leadership theories and refer to

these shared beliefs as culturally endorsed implicit leadership theories (CLTs). Theorists

name these shared beliefs as “connectionist schemas” and argue that leadership and

culture both serve to give initial guidance to people about how to perceive and how to act

in novel situations, and over time these patterns of perception and behaviour become well

established (Lord & Maher, 1991; Bass,1990; J.G. Hunt, Boal, and Sorenson, 1990;

Shaw, 1990; O’Connell, Lord, and O’Connell, 1990; House et al., 1999; Hanges et al.,

2000; Hanges & Dikson, 2004).

Multi-Level Leadership Theory:

Multi-level leadership theories were developed in response to the increasing complexity

of the global work landscape that leaders now habituate. These theories take into

account the three consistent scenarios of globalisation: the fast pace and increasing

speed of change and its impact on changes to organisational structures and cultures; the

diverse nature of stakeholders that leaders have to engage with; how leaders function

effectively across a wide variety of situations and the skill required of leaders in order to

deal with complex multi-faceted environments whilst pursuing organisational

effectiveness.

Developed by Hooijberg, Hunt, & Dodge (1997) the Leaderplex Model integrates

behavioural complexity, cognitive capacity and social intelligence into a multi-level

leaderplex theory (Yammarino et al, 2005:901). The link between cognitive, social

complexity and behavioural complexity to a leaders ability to manage diversity is that it

embraces a role-theory perspective and importantly it highlights the needs for leaders to

have appropriate social knowledge and behavioural repertoires to function effectively with

a demographically diverse employee population (Scandura and Lankau, 1996; Hooijberg

and DiTomaso (1996) in the international arena (Hofstede, 1993; Thomas, 1996; and

Adler, 1996), as well as, in the leadership of teams (Manz & Sims, 1987, 1991). (see

further explanation in next section).

The Strataplex model focuses on the skills required of leaders in order to deal effectively

with complex multifaceted landscapes and thus the focus is on the job of the leader and

the skills it requires rather than on the characteristics of leaders. Mumford, Campion &

Mogeson (2007) built on stratified systems theory (Jacobs & Jaques, 1987; Jaques,

1976) to identify a typology of four major segments of leadership skill requirements that

emerge differentially across organisational levels. Namely, cognitive skills, interpersonal

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skills, business skills and strategic skills – that varied quantitatively and in qualitatively

different combinations across organisational stratas.

Cultural Dimensions Theory:

The challenge for effective leaders is to take the organisational context into account

(Shamir & Howell, 1999; Tosi, 1991), but increasingly that context is more complex in

nature, being multi-layered, spanning diverse cultures and nationalities. Moreover,

increasingly multiple individual, organisational, and national identities are at play. These

theories recognise that different cultures have different ways of being/working and which

inevitably can affect the processes involved in business and managing across cultures. It

dispels the idea that there is only one way to manage and encourages us to understand

our own cultures and well as affording us insight into others cultures so that we better

embrace cultural differences and become ‘transculturally competent’. The theorists who

purport these views are Hofstede (1980) whose most notable work has been in developing

cultural dimensions theory in which he identified five dimensions of culture – Power

Distance, Individualism/Collectivism, Uncertainty avoidance, Masculinity/Femininity, and

Long Term Orientation. Other theorists who propose cultural dimension theory are

Hampden-Turner & Trompenaars (1993) who identified seven cultural orientations –

Universalism vs. Particularism, Analysing vs. Integrating, Individualism vs.

Communitarianism, Inner-directed vs. Outer-directed, Time as sequence vs. Time as

synchronisation, Achieved status vs. Ascribed status, and Equality vs. Hierarchy.

Resource Based Theory:

The resource based strategic research emphasises that valuable, rare, imitable, or non-

sustainable firm specific capabilities (e.g. tangible and intangible assets, skills,

competencies and learning mechanisms) are the fundamental determinants of

performance (Barney, 1991, Teece, Pisano & Shuen, 1992) and sustained competitive

advantage (Lado, Boyd & Wright, 1992).

Ultimately, the resource-based view of strategy is an introspective approach whereby

firms seek to create and sustain competitive advantages by developing their internal

strengths and/or acquiring complementary resources that are both imperfectly mobile and

imperfectly imitable.

Identification Theories

Theoretical foundations for primary dimensions of diversity include the self-categorization

theory (e.g. Turner, 1982), the social identity theory (e.g. Tajfel, 1978), the similarity-

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attraction paradigm as articulated by Byrne (in Thatcher, 1999), and the racial identity

theory (Jehn, 1999). These theories touch on the importance of individuals identifying,

and belonging to groups similar to them and establish whether you are part of an ‘in-

group’ or ‘out-group’

Dimensions of LEAD³

The LEAD³ tool comprises of the following components: Leadership Dimensions,

Performance Drivers, Stakeholder Groupings, Diversity Dimensions (change levers),

Organisational Activities (change interventions) and Performance Outcomes. These have

been developed based on the theoretical studies and views presented below:

Leadership Dimensions

April & Shockley (2007) assert that leadership defines the future of diversity and Miller &

Katz (2002:25) believe that “the most critical component of any effort to change culture is

positioning the organisation and its leaders to create and support the change.” Hence,

how a leader performs on a global platform sits at the heart of this model and takes into

account the level of complexity that a leader faces on a daily basis. The multi-faceted

level of leadership characteristics, ability and skills to support this level of complexity are

represented in this model through the cognitive, social and behavioural leadership

dimensions.

Cognitive, Social and Behavioural

In LEAD³ I have adopted the ‘Leaderplex Model’ developed by Hooijberg, Hunt, & Dodge

(1997. The model looks at how leaders apply cognitive, social and behavioural skills in

the pursuit of organisational effectiveness. In the model cognitive and social variables

are precursors to behavioural complexity and behavioural complexity is a precursor to

leader and organisational effectiveness and the model embraces a role-theory

perspective.

Cognitive complexity or capacity assumes that cognitively complex individuals process

information differently from and perform selected tasks better than cognitively less

complex people because they search for more information and spend more time

interpreting it.

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Social complexity is the ability to appropriately apply interpersonal skills such as empathy,

motivation and communication within a thorough understanding of one’s social setting.

That is, to notice and make distinctions among other individuals – in particular, among

their moods, temperaments, motivations, and intentions. Hooijberg, Hunt, & Dodge

(1997) define social complexity “as the managerial leader’s capacity to differentiate the

personal and relational aspects of a social situation and integrate them in a manner that

results in increased understanding or change action-intention valences.”

Lastly, The Leaderplex Model indicates that the impact of cognitive and social complexity

on leader effectiveness is mediated by behavioural complexity. Behaviour complexity

addresses the impossibility of specifying the appropriate leadership role for all possible

contingencies, the implicit assumption that all followers are subordinates; and the need

for leaders, especially in organisational settings, to meet the expectations of stakeholders

other than the followers.

LEAD³ also takes into account the theory offered by Mumford, Campion & Mogeson

(2007) who developed ‘The Strataplex Model’. This model focuses on the skills required

of leaders in order to deal effectively with complex multifaceted landscapes and identified

a typology of four major segments of leadership skill requirements that emerge

differentially across organisational levels. Namely, cognitive skills, interpersonal skills,

business skills and strategic skills. In LEAD³ the assumption is that business and

strategic skills are inherent factors within the cognitive, social and behavioural

components as well as, a part of decision making in strategic alignment.

Performance Drivers

The prerequisite qualification for selecting the performance drivers depicted in LEAD³ is

that the literature reviews indicate that these concepts provide a solid base for building

and achieving sustainable and robust performance and are grounded in organisational

best practice. In other words, these drivers are characteristic of high-performing

organisations. Further, they are seen as fundamental behaviours and attributes linking

the impact of diversity to a global leader’s performance. These drivers are Inclusion &

Engagement, Collaboration and Strategic Alignment.

Inclusion & Engagement

According to Burnett and Kettleborough (2007:103) “diversity is often a game of

percentages, a game where the rules state that organisations must frantically hire visibly

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different people in order to hit targets or quotas”. Inclusion takes the journey further.

Inclusion is about creating environments where all people can prosper and progress

irrespective of race, colour, gender, physical ability, age, religion, sexual orientation or

belief. Inclusivity is demonstrating a genuine openness to all people, at all levels

regardless of visible, differences, different ways of thinking and different ways of behaving

despite the organisations culture and in the pursuit of attainment of organisational goals.

Ultimately, all employees feel that they are valued, respected and engaged.

Underlying inclusivity is the issue of heterogeneity versus homogeneity. In general, like

attracts like and as such people tend to prefer to want to work with people who are most

like them. That is, people who share similarities in terms of physicality and backgrounds

(structural), people who share their ideologies and their ways of thinking (cognitive), and

people who are similar in their ways of behaving (behavioural). If people are to feel

included it is essential that the organisation is open to a heterogeneous environment.

Miller & Katz (2002) affirm this view and suggest that an inclusive organisational culture

leverages diversity by creating an environment with a broader bandwidth of acceptable

styles of behaviour and appearance.

Engagement is about providing the conditions under which employees will work more

effectively. That is, it is about releasing employees’ discretionary behaviour.

Engagement involves being emotionally, cognitively and physically engaged and the

MacLeod review (2009) concludes that leadership, line management, employee voice

and integrity are key enablers of engagement and that ‘the correlation between

engagement, well-being and performance is repeated too often for it to be a coincidence’.

Studies by Jesuthasan (2000) and Towers Perrin (2003) also confirm that there is a

strong correlation between a leader’s ability to leverage diversity and to engage and be

engaged by a diverse mix of employees so that their voice is heard. Together, inclusivity

and engagement is linked to motivation which in turn is linked to increased productivity

and innovation (Nieto & Quevedo, 2005; Miller & Katz, 200; Cox, 1991).

Collaboration

An activity that closely correlates to inclusion and engagement is collaboration – and as

cited in the literature review, it is a behaviour that is widely credited as being a crucial

characteristic of high performing organisations. In an ideal world, individuals and teams

would collaborate easily and effectively across all functions, divisions, subsidiaries and

areas of expertise etc. Collaboration provides opportunity for employees regardless of

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their level or where they work (division) or their expertise (function) to collaborate across

these boundaries in a way that permits learning, flexibility and agility throughout the

organisation. A view reiterated by Hamel and Prahalad (1996) who say that “the key

engine of learning is the multicultural team, out of whose diversity comes an eclectic set

of perspectives and a set of interchangeable lenses without which there can be no

genuine facilitation of knowledge-sharing in a globally dispersed organisation.” (p. 110).

Thus, collaboration affords the opportunity to better understand different ways of working

and therefore lends fortuitously towards better ways of working between countries in

emerged and emerging markets to work more harmoniously together. Divisions and/or

Strategic Business Units (SBUs) that persist in operating in a siloed way and thus

fostering homogeneity will not benefit from the value of collaboration. Relationship

management (Brake,1977) and cultivating collaborative relationships (Rosen,2000) were

viewed as essential skills of a global leaders repertoire.

Further, a collaborative way of working is increasingly viewed as necessary to improve

the competitiveness of firms (Bassin, 1988; Galagan, 1986; Hatcher &, Ross, 1985;

Levine, 1987; Markowich, 1987; Raudsepp, 1988; Scott & Cotter, 1984) as it is also a key

way of working for countries that operate from a ‘collectivist’ paradigm. Consequently, as

markets across the globe step up their business growth activities collaboration across

cultural boundaries is paramount.

This component in the performance drivers is further supported in the literature by Osland

and Bird (2006:16) who say that ‘it can be argued that global leadership differs from

domestic leadership in degree in terms of issues related to connectedness and boundary

spanning, building learning environments, teams, and community and leading large-scale

change efforts – across diverse cultures. Thus, collaborative behaviour is intrinsically tied

to the level of influence an individual has. For instance, due to decentralised structures

and subsidiaries the parent company may not be able to impose policies and maybe

unable to assert the level of influence and control that is needed to execute policies. This

in turn, can disrupt the uniformity and consistency in pursuing and implementing diversity

activities across the organisation. (e.g. Evans, 1986; Forsgren and Pahlberg, 1991;

Hofstede, 1981; Rosenzweig and Singh, 1991; Trompenaars, 1993). However, were

leaders to pursue a strategy of collaborating with a wider network of employees then their

level of influence are likely to increase.

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Both the inclusion and engagement driver and the collaboration drivers directly feeds into

and links with the social and behavioural leadership dimensions.

Strategic Alignment

The final performance driver deemed to be important is strategic alignment.

Understanding of the business from a global perspective so that there is tight alignment of

the business strategy with the organisational change strategy and thus the attainment

and embedment of organisational and business goals was seen as vital driver in enabling

an integrated and joined-up approach to diversity and therefore a key imperative of a

global leader’s role.

It enables diversity to become a way that we do things around here and to this end be

ingrained in the fabric of operations for the organisation. As with all strategic processes,

strategic resources and capabilities must also be put in place to serve the diversity

agenda as well as diversity measures to measure contribution and value add.

This view is backed up by Maltbia & Power (2009:166) who say that “high-performing

organisations align systems to reinforce strategic focus and diversity must be treated in

the same manner” and Miller & Katz (2002:ix) who also suggest that there should be “a

tight alignment of the culture change strategy with the business or organisational

strategy”’. So that accountability of the leaders performance in their interactions with

others as well as the organisation’s collective actions is achieved.

Further, if the leader pays equal attention to diversity in the same way as she/he attends

to strategy then it is foreseen that diversity as an intervention would be taken seriously

and prioritised – a view shared by Cox & Blake (1991) and Schein (1992).

Stakeholder Dimensions

If the organisational goal is to leverage diversity (Maltbia, 2001; Maltbia & Power, 2008)

where the focus is on collective impact (e.g., attracting and retaining talent, multicultural

marketing etc.) then LEAD³ is designed to differentiate between the needs of individual,

team and organisation stakeholder groupings in order to enhance focus. So that a

change management process is both effective and sustainable it is imperative that all

stakeholder groups are considred and subsequently, organisational activities are tailored

to meet their specific needs so that performance outcomes are enhanced.

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That is, at a systemic level, diversity must be present at all levels in the organisation. At

an individual level where capability is retained and further developed and where

employee contribution is valued and all are given an equal chance of progression. At a

team level where opportunity for collaboration provides for greater innovation and

knowledge sharing. And at an organisational level through structures, systems and

processes that support diversity and creates an organisational platforms for harnessing

partnerships and strategic alliances with the external environment. It makes sense that a

particular intervention may fit the needs of an individual but not be appropriate for

implementation at an organisational level and vice versa.

Similarly the needs of external stakeholders such as suppliers and Government bodies

will differ from the needs of internal stakeholders. A critical factor for future leaders to

attend to concern activities that centre on ‘building partnerships and alliances’, and

‘ensuring customer satisfaction’ (Goldsmith, Greenburg, Robertson, & Hu-Chan, 2003,

Miller & Katz, 2002). Therefore actions that focus on gaining an ‘improved understanding

of client and customers needs’ (Day & Van den Bulte, 2002; Wentling & Palma-Rivas,

2000), ‘allowing organisations to tap into niche markets’ (Mueller, 1998), enhancing

flexibility through diversifying market segments (Fleury, 1999), and establishing capability

to respond to change more quickly through improved responsiveness (Adler, 1997;

Jackson et al., 1992; Rigby, 2006) are considered more apt at addressing the needs of an

external audience.

Diversity Dimensions (Change Levers)

The core of the LEAD³ model identifies three diversity dimensions/constructs that it

recommends be taken into account by leaders as they seek to integrate and leverage

diversity in their organisations. The proposed three constructs are ‘Structural Diversity’

(workforce demographics and processes), ‘Cognitive Diversity’ (the way people think),

and ‘Behavioural Diversity’ (the way people behave).

These three constructs provide leaders of organisations with a multi-faceted approach to

diversity so that the value of diversity can be embedded and infused into every aspect of

organisational life. It also addresses the need identified by Zane (2002) to develop the

role that both leadership and organizational groups play in co-constructing the meaning of

diversity for the system as a whole. Focusing on differing aspects of diversity allows for

adaptability and flexibility in an ever complex world and further reinforces definition of

diversity which this thesis embraces: “the value of different ways of being, doing, and

thinking”.

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Structural

Structural diversity is widely recognised and embraced by organisations whose diversity

agenda and corresponding activities tend to be geared towards achieving demographic

equilibrium. It encompasses all elements that contribute to the structure of the

organisation and is explained through four dimensions:

‘Inborn characteristics’ also known as the primary dimension (Jehn, 1999) such as

gender, age/generation, religion, race, ethnicity, country of origin, physical ability,

sexual orientation, etc. (also known as social category diversity) form an

interdependent core of one’s identity..

Secondary dimensions of diversity (i.e. experience-based or informational

diversity) can be viewed as mutable differences that are acquired, discarded,

and/or modified throughout the life-span (Jehn, 1999) and, as a result, are less

salient to one’s core (e.g. education, occupation, socio-economic status, etc).

Organisational dimensions of diversity resulting from one’s work role are

influenced by such factors as organisational level, classification (i.e. exempt,

hourly, etc.), line of business, work content, location, seniority, organisational type,

mergers/acquisitions, and union affiliation; all contribute to differences related to

underlying work values and goals (Jehn, 1999).

Lastly, structural diversity also includes systems, processes and governance, as

well as, ‘interactions across functions, organisational levels, division and between

parent companies and subsidiaries, strategic styles and stakeholder engagement’

(Hubbard, 2004, David, 2010).

Most companies focus their diversity efforts on the primary dimensions of diversity

because these elements are easily measured and perceived to be tangible.

Cognitive

Cognitive diversity is a key driver for organisations pursuing their quest to secure

competitive advantage in different markets and in differing segments. Therefore this

dimension is increasing in popularity amongst leaders of organisations who seek to

differentiate and add value to their service offerings as well as, enabling the identification

of talented employees.

The rationale behind cognitive diversity is that we all think differently. Individuals have

different ways of perceiving, interpreting, experiencing, categorising, organising,

processing, reflecting, adapting and communicating. As such, cognitive diversity is

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associated with innovation and creativity within the organisation and innovation is an

attribute of cognitive diversity that is crucial to competitive strategy.

Also associated with innovation is the concept ‘absorptive capacity’ (Cohen and Levinthal,

1990; Zahra and George, 2002). “Diversity is a contributor to absorptive capacity which

describes the extent to which an organisation can absorb scientific or technological

information and refers to an organisations ability to recognise the value, assimilate, and

apply new, external knowledge from the environment and make strategic choices that

contribute towards competitive advantage.” (David 2010). Concurring with this view,

Cohen and Levinthal (1990) make the point that ‘diversity across individual absorptive

capacities connects diverse knowledge structures and elicits the sort of learning and

problem solving that yields innovation’.

Lastly, a way for a company to sustain its performance is to integrate cognitive diversity

elements within the strategy process, and to this extent the organisation needs to

consider teams with a capacity for diverse thinking and paradigm-shifting ideas and the

presence of a ‘diversity mindset’ in the senior management group (Hopkins et al., 2008;

Moss, 2009) and an appropriate level of diversity density within the organisation (Hopkins

et al., 2008). This is the essence of cognitive diversity.

Having a cognitively diverse workforce is congruent to achieving a company’s ambitions

by focusing on quality problem solving and decision making, knowledge transfer and best

practice, strategic planning, organisational learning and organisational flexibility. As such,

it is vital that a cognitively diverse mindset is cultivated.

Behavioural

Despite the numerous models that attempt to box us into personality types or portray

characteristics of leadership types we individually all have our own behavioural DNA. To

this extent we interact with each other differently depending on who we are speaking too

or, the situation that we are in – that is differing contexts. Our values and beliefs will also

shape our behaviour and interactions as a result of our cultural and national heritage.

This impacts on our interpersonal skills such as the ability to empathise, be sensitive,

engage, be motivated and act with integrity etc. This is the essence of behavioural

diversity.

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Behavioural diversity is the least explored element when organisations consider their

diversity agenda and yet it infiltrates key organisational activities that can challenge

employees at ever level. For instance:

The challenge of communicating across borders with respect to different

languages, or misinterpretations or changing one’s own style of communication to

suit the listener (Lobel, 1991) as well as mastering the ability to communicate

nonverbally in different cultural contexts (Harris and Hopkins, 1967);

The challenge for leaders to demonstrate behaviours consistent with their

declarations of purpose so that they ‘walk the talk’ (Miller and Katz, 2002;

Kandola, 2009);

The challenge for leaders to shape and influence organisational culture across

cultural boundaries (Miller & Katz, 2002; Giberson, Resick & Dickson, 2002;

Schenider, Goldstein, & Smith, 1995; Schein, 1992);

How you respond to behaviours that challenge your values and beliefs and, the

way in which a leader approaches conflict either by stimulating or diffusing it

(Alder, 1991; Mishler, 1965; Boyacigiller, 1990; Harris & Moran, 1992; Hendon,

Hendon and Herbig, 1996) are all examples of where employing varying

behavioural skills infiltrate crucial organisational activities.

The challenge of flexing behavioural style as a way of behaving that is acceptable

in a divisional culture may not be acceptable in the overall company culture.

The challenge at an international level of the impact of cultural differences in post-

merger integration processes as the way employees behave (style and practices)

in one organisational culture may not fit with the behaviours in another

organisational culture leading to communication breakdown and un-integrated

ways of working (Morosini, 1998; Gertsen & Soderberg 2000).

The important point to draw on is the need to be cognisant of as well as address a variety

of behaviours.

Organisational Activities (Change Interventions)

There are several failings of diversity programmes. The first failing is that they can often

be series of activities randomly deployed in organisations that are not aligned to strategic

objectives, nor integrated or coordinated in a unified manner, nor facilitate a joined-up

way of working. The second failing is that most diversity programmes are one-

dimensional – that is they have a singular focus which primarily revolves around one area

of diversity - identity. These failings are rooted in a host of factors such as a pressure to

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follow trends, a need to be legally compliant, a desire to secure brand reputation with

prospective customers and employees alike etc.

The key feature, differentiator and value of the LEAD³ tool is that it address these failings.

LEAD³ is a workable and interactive tool that can be operationalised to enable focus. It

allows differing parts of the organisation to employ activities that suit their particular

needs and therefore affords flexibility. These ‘organisational activities’ are the change

interventions that can be employed when an organisation wants to focus on a particular

aspect of diversity. That is, the organisation can choose to focus on each one of the

diversity dimensions and link them to one of the stakeholder groupings and then match

an intervention that is most suitable and applicable to this combination. This results in a

more measurable and sustainable outcome that recognises the differing attributes of

leadership and diversity resulting in a holistic and integrated approach to diversity.

Performance Outcomes

The performance outcomes dimension of LEAD³ is representative of how organisations in

general tend to measure both their capability to grow and their success. These

measurements are typically financial (return on investment), how they innovate, create

and grow (organisational learning), and how they are able to maintain and improve their

performance in these areas based on a sustainable change process.

Return on Investment

Notoriously, organisations are judged by how profitable they are and subsequently a

leader’s performance in relation to diversity must be shown to impact positively on the

bottom line. Numerous researchers including Ferlie, Hartley, & Martin (2003), Korn,

Milliken, & Lant, (1992), and Stevens (2010) provide evidence that diversity does

contribute to what executives would decree a return on investment in terms of growth and

profitability. More so, diversity can now be measured for return on investment by

employing the diversity scorecard (Hubbard, 2004).

Other outcomes that show value is added to the organisation through diversity activities

are diverse educational training and education among top management team members

has been shown to positively influence return on investment, relating to sales growth

(Smith, Smith, Olian, Sims, O’Bannon, & Scully, 1994), and adaptability (Wiersema &

Bantel, 1993). Other researchers found that diverse groups make higher quality

decisions (McLeod & Lobel, 1996; Watson, Kumar & Michaelsen, 1993; Miller, Burke, &

Glick, 1998; Lawrence, 1997), generate more imaginative ideas (Bantel, Jackson, &

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Source, 1989), engage in more creative problem solving (Nemeth & Wachter, 1983;

Triandis, Hall & Ewan, 1965) and have the potential for increased productivity (Jackson,

1993).

Organisational Learning

The second component of performance outcomes is organisational learning. How

organisations acquire, facilitate, transfer and develop knowledge is a key aspect of

organisational learning and an organisations capability to embrace learning is often

correlated to improved innovation capability (Nieto and Quevedo, 2005); enhanced

productivity and increased employee motivation (Miller & Katz, 2000); competitive

advantage (Cox, 1991); improved ‘absorptive capacity’ (Cohen and Levinthal, 1990;

Zahra and George, 2002); and improved strategic ‘diversity mindset’ and strategic

planning (David et al., 1999).

A learning organisation may be defined as one capable of transforming ‘tacit knowledge’

into a hard-to-imitate strategic resource (Barney, 2001) or, one that acquires and

transfers knowledge, and modifies its behaviour to reflect new knowledge and insights

(Garvin, 1998). The literature on diversity and the learning organisation can be viewed as

complimentary since both aim to release the potential of employees for the benefit of the

organisation, and both rely on a supportive culture and supportive infrastructure. The

learning organisation, in fact, enables the full utilisation of all potential and if the

organisation is not diversity-oriented, there is a risk that the available pool of potential will

be narrow.

One critical aspect of learning that is needed for managerial and leadership effectiveness

in today’s changing business environment is diversity and cultural competence. That is,

the ability to construct competent responses to the challenges, complexity, and

opportunities associated with situations involving diversity and cultural differences.

Sustainable Growth & Change

The LEAD³ model is underpinned by a continuous change process which is constantly

evolving to enable leaders to effectively drive a strategic diversity agenda targeted to

address specific organisational processes and actions. Hubbard (2004:328) says that

“organisational change is a process. Paradoxically, a business’s success depends on its

ability to remain stable while managing a complex, evolving series of changes. Change

without order and order without change can be equally crippling. To be effective, an

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organisation must be anchored in the past, yet immediately responsive and adaptable to

a paradigm-busting future in which success is written at its edge.”

The process for driving and achieving sustainable change weaves across the three

constructs measured in the interview. These constructs are leadership, diversity, and

organisational factors.

For diversity to be embraced as a sustainable change process and be truly transforming it

must be led and modelled from the top. Only the organisation’s senior executives can

provide the commitment, resources, and credibility required to deploy the performance

drivers, attend to all stakeholder groupings, adopt a segmented approach to diversity that

will enable activities to be tailored to the specific needs of the organisation and the

desired performance outcomes are achieved. Leaders need to demonstrate and

convince people in the organisation to behave in ways that are aligned to the principles of

diversity.

Leadership practices range from how a leader aligns systems to reinforce a strategic

diversity focus, how clearly they link the meaning of diversity to their organisation’s

strategic priority, to the composition of the executive team, as well as line-of-sight

accountability (Maltbia & Power, 2009; Miller & Katz, 2000), to how a leader conveys

diversity (Milton Bennett, 1989), to how a leader develops their employees (Rosen, 2000;

Mumford, Campion & Mogeson, 2007) to how they allocate resources and prioritise (Cox

& Blake, 1991; Schein, 1992; Gupta and Govindarajan, 2002), to how they adapt strategy

to cultural contexts and environments (Shamir & Howell, 1999; Tosi, 1991; Trompenaars

& Hampden-Turner, 2004; Prahalad & Doz, 1981, 1987; Rosen, 2000) to how the leaders

ability to influence in a matrix or decentralised organisation (Johanson and Vahlne, 1977,

1990; Nohria and Ghoshal, 1994; Evans, 1986; Forsgren and Pahlberg, 1991; Hofstede,

1981; Rosenzweig and Singh, 1991; Trompenaars, 1993; and the GLOBE study, 2008)

will all impact how diversity as a change process is realised.

Sustainable change for diversity can also be achieved through diversity best practices in

recruitment, retention and engagement (Diversity Inc) and there are several benefits to

the organisation for implementing diverse practices cited by researchers including

positive consequences for recruitment and retention (Baldiga, 2005; Lockwood, 2005);

and reduced labour costs, recruitment, turnover and training (McEnrue, 1993).

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Lastly, sustainable change is realised when an organisation makes every effort to be

mindful of its internal and external practices and relationships. So for example, how it

embraces and adopts learning practices through training, mentoring, secondments,

cultural immersion, cross fertilisation of knowledge etc. will enhance sustainable change.

How it relates to and values its suppliers and customers alike will determine the longevity

and profitability of the business. Unless leaders are mindful of organisational factors then

sustainable change will be nominal.

Conclusion

This chapter presented the theoretical foundations that support the development of

LEAD³. It also describes the components of LEAD³ and the rationale for their inclusion in

the tool.

Following on, the research aims to test LEAD³ in relation to three areas:

The first area seeks to ascertain how pertinent the cognitive, social and behavioural

leadership dimensions are in relation to the impact of diversity on a leader’s performance.

This information will be derived from the first section of the questionnaire that focuses on

the top global leaders’ characteristics, performance measures, values and beliefs and

sphere of influence as deemed by the interviewees. It seeks to understand the impact of

leading and operating on a global stage. How adaptable, agile, open, curious and

sensitive are the leaders and their organisations to working with an increasingly

heterogeneous workforce across a multitude of cultural environments and contexts?

The second area seeks to understand how the performance drivers (inclusion and

engagement, collaboration and strategic alignment), stakeholder groups (individual, team

and organisation) and diversity dimensions (structural, cognitive and behavioural)

influence the leader’s position when driving a strategic diversity agenda. This information

will be derived from the second section of the questionnaire that focuses on the leaders

contribution and engagement, strategic alignment and intent, and performance measures,

and key performance indicators. It is often stated that a diverse workforce will increase

your business competitiveness making it a business necessity but what is the evidence of

the leadership necessity perspective on diversity?

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Thirdly, given the increasingly globalised working environment how do leaders leverage

diversity and influence diversity outcomes? This information will be derived from the third

section of the questionnaire that focuses on organisational factors such as, organisational

culture, global/local integration issues, diversity policies and initiatives, managing conflict

and challenge to the status quo, organisational learnings, and issues that worry them or,

practices that require attention or should be introduced in relation to diversity. Thus,

addressing both the performance outcomes and organisational change activities

components of the model.

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Chapter Five: Methodology

Introduction

The underpinnings of this research deal with complex organisational phenomena and

processes. In particular, how people interpret and attach meaning to the phenomenon

and processes of diversity and global leadership. Stemming from phenomenology is the

interpretive paradigm, a philosophy that is concerned with the question of how individuals

make sense of the world around them. As such, the chief ingredient of an interpretivist

approach is on ‘understanding’ human behaviour rather than ‘explaining’ human

behaviour. Interpretivist studies highlight the way in which meaning making or

interpretive activities construct and shape organisational and management realities.

Therefore, at its simplest level, the research seeks to understand how through their

performance global leaders make sense of managing, valuing and leveraging diversity.

The title of this research – “The impact of diversity on the performance of a global leader”

– addresses intangible themes that need to be examined within an organisational context

so as to gain a complete understanding of the situation. Given the complexity of

organisational make-up this research sought to produce a multifaceted picture of

leadership and diversity that was global in nature and not prisoner to one sector or to one

culture. It explored three constructs (leadership, diversity, & organisational factors) and

within these constructs sat several concepts. For example: leadership style, the interplay

between national cultures and organisational cultures, workforce identity, globalisation

versus localisation, cultural adaptability, conflict, and innovation to name a few. A

thorough review of concepts within these constructs were investigated, explored and

analysed in depth through the pilot study.

Taking into account the rationale presented above the research methods are qualitative.

It embraces the interpretivist paradigm, and follows an inductive approach whereby

theory is the outcome of research. That is, the process of induction provided an

opportunity to explore issues in depth and in context and enabled a theoretical framework

to develop through the systematic piecing together of detailed evidence in order to test

models of broader interest.

This methodology also fits with the level of access across geographies available to the

researcher which allowed for a comparative leadership study to be conducted. In

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considering the methodology the researcher was cognisant of the views of Adler, Bass

and House. Adler (1984) suggested that much of the empirical cross-cultural research in

the past 30 years has been ethnocentric (research designed and tested in one culture

and replicated in another culture) rather than truly comparative (designed to test

similarities and differences across two or more cultures).

As written is chapter one, a review conducted by Bass (1990) highlighted that there was a

dearth of studies based on more than three or four countries. He found comparative

research is primarily conducted among the U.S.A., Western European, Latin American

and Asian nations rather than in the nations of Southern Asian, Africa, the Middle East,

and Eastern European. Tied to this is the fact that many studies make use of existing

standardised U.S. instruments that may not fully capture non-Western or non-U.S.

conceptualisations of leadership.

Lastly, House (1995. pp 443-444) acknowledged that there is a marked dearth of

comparative research “... there is a growing awareness of need for a better understanding

of the way in which leadership is enacted in various cultures and a need for an empirically

grounded theory to explain differential leader behaviour and effectiveness across

cultures” (see also Dorfman, 1996; Dorfman & Ronen, 1991).

In the main, the wholesale adoption of Western HRM methods globally may ultimately be

ineffective. As such, leading globally goes further than simply adapting practices

effectively from one culture to another. For example, Iguisi, (2004:608) asked “to what

extent is the leadership styles expressed in western management theorises consistent

with the African (work-related) values?”

Add to this, the differences within the growing markets of developing countries that can

be observed. Aycan (2002) and others have noted, that although many developing

countries share key elements in terms of historical background (e.g. autocratic rule,

colonialism), subsistence systems (e.g. reliance on agriculture), political environments

(e.g. volatility and instability, improper law and enforcement system), economic conditions

(e.g. resource scarcity, insufficient technological infrastructure), and/or demographic

makeup (e.g. young workforce, unequal opportunity to access high-quality education) and

these forces shape their cultures their exists substantial differences between them. For

example, differences in values could be regional, religious or reflective of ethnic

groupings.

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So, taking on board the interpretivists’ position and the need for comparative research

methodology this research strategy follows an exploratory multiple case study format.

The methodology employed for data collection was an in-depth semi-structured interview

and a blended approach to the analysis consisted of partial grounded theory methodology

and content analysis. What follows is an explanation as to why these qualitative methods

were chosen in order to pursue the objectives of the research.

Qualitative vs. Quantitative methods

The debate regarding the use and merits of quantitative and qualitative methodology in

research is on-going.

The philosophical stance behind quantitative design spans the ontological continuum of

positivism to relativists. That is, the social world exists externally, and the job of the

scientist is merely to identify this pre-existing reality. In other words, human interests

should be irrelevant, and explanations must demonstrate causality. From this perspective

this is more readily achieved through the design of experiments that eliminate alternative

explanations and allow key factors to be measured precisely in order to test

predetermined hypotheses. So for positivists, testing hypotheses through verification or

falsification and for relativists demonstrating the ways in which the results will build on or

add to existing theories. As such, objective methods, rather than subjective measures

are preferred and these measures centre on the concepts of reliability and validity. In

terms of a positivist design, the units of analysis are reduced to simplest terms, samples

tend to be large and selected randomly and measurements are usually via statistical

analysis. The outcome of this methodology is causality. In a relativist design the

assumed difficulty of gaining direct access to ‘reality’ means multiple perspectives will

normally be adopted, through both triangulation of methods and the surveying of views

and experiences of large samples of individuals will be selected and again, measurement

will normally be through statistical analysis.

The strengths of a positivist position are they can provide wide coverage, is potentially

fast and economical and is easier to provide justification of policies. An additional strength

of the relativist position is that it accepts the value of multiple data sources. The

weaknesses of these positions is that they are often inflexible and artificial, they are not

good for process, meanings, theory generation and reconciling discrepant information, it

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cannot accommodate institutional and cultural differences and its implications for actions

are not obvious.

In contrast the philosophy behind employing a qualitative approach is based on the

ontological stances of interpretivism and social constructionism whose approaches are

primarily chosen in order to develop new ideas and concepts. Their design entails the

observer to be a part of what is being observed and explanations should aim to increase

general understanding of the situation. The research progresses through the gathering of

rich data from which ideas are induced and concepts should incorporate stakeholder

perspectives. The unit of analysis may include the complexity of ‘whole’ situations

coding, interpreting and making sense of data and in the main small numbers of cases

are chosen for specific reasons. The outcome of this methodology is understanding.

The strengths of using interpretivism and social constructionism are that their processes

are flexible and good for meanings and theory generation and data collection is less

artificial. The weakness of adopting a social constructionist perspective is that access to

organisational data can be limited, research can be time consuming, analysis and

interpretations are difficult due to complexity and amount of data and it may not have

credibility with policy makers. Also from a ethical stance is the need to establish

voluntary participation and ensure that there is no danger that anyone will be harmed by

the research.

Given the above reflections on the value, merits and limitations of both quantitative and

qualitative designs this research is best suited to embody qualitative methodology as the

emphasis is on context and process. According to Cassell & Symon (2004) the main

advantage of applying qualitative methodology is being able to see through the eyes of

the people being studied. Other arguments for adopting a qualitative approach include its

suitability in understanding how complex, highly context-dependent processes unfold in

organisations, and how they impact on those involved.

Secondly, qualitative methods are presented as distinctive and valuable not only with

regard to the areas they enable us to investigate, but also for what they can offer

interviewees. Quantitative methods can be insensitive to context. Thirdly, because of its

sensitivity to context, qualitative research can provide insights and produce

recommendations that are highly relevant to the specific circumstances of participating

organisations. Organisations are aware of their own distinctiveness, and recognise that it

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can be lost in quantitative methods, which subsume their experiences within abstract,

general theoretical models.

Lastly, it is emphatically not the case that qualitative researchers are only interested in

producing localised explanations, which cannot offer insights beyond the immediate

context. On the contrary, most aim to provide understandings which have some kind of

generalisability or transferability to other settings.

“Länsisalmi, Peiró, and Kivimäki (2000) take the argument about the suitability of

qualitative methods to the study of organisational culture a step further. Citing Rousseau

(1997), they claim that current interest in social constructivist approaches may be a result

of the increased turbulence and change organisations face today. In essence, the nature

of contemporary organisational life may not be comprehensible from a positivist

perspective.” (King, 2000:590).

According to Morse (1994) the main elements of an analysis of qualitative data include

comprehending (gaining a full understanding of the setting, culture and topic),

synthesising (drawing together of different themes), theorising (constant development and

manipulation of malleable theoretical schemes until the ‘best’ scheme is developed) and,

recontextualising (process of generalisation so that the emerging theory can be applied to

other settings and populations).

However there are challenges to utilising qualitative methods. This centres primarily

around the data. The large amounts of data generated can be difficult to reduce,

structure and detextualise and as such, there may be either a tendency to force

theoretical explanations from data (theoretical sensitivity) or the researchers pre-

understanding may become a barrier to finding the true meaning of the data (theoretical

contamination). Moreover, clear-cut rules about how qualitative data analysis should be

carried out have not been developed although there are some general approaches.

There are also issues with interviewer and interviewee bias, access limitations,

replicability and generalization.

Other important concepts to consider are reliability and validity. The concepts of reliability

and validity are essentially concerned with the adequacy of measures which are a

primary concern of quantitative research. However, qualitative researchers question their

relevance for qualitative research. Lincoln and Guba (1985) propose two primary criteria

for assessing a qualitative study: trustworthiness and authenticity. Trustworthiness is

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made up of four criteria: credibility; transferability; dependability; confirmability; whilst the

criteria for authenticity is: fairness; ontological; educative; catalytic and tactical.

Hammersley (1992) in Bryman & Bell (2003:43) lies midway between the two positions

and proposes that “validity is an important criterion but reformulates its meaning to state

an empirical account must be plausible and credible and should take into account the

amount and kind of evidence used in relation to an account”. In proposing this criterion,

Hammersley shares with realism (and to an extent, pragmatism) the notion that there is

an external social reality that can be accessed by the researcher. Hammersley also

suggests relevance as an important criteria of qualitative research. “Relevance is taken

to be assessed from the vantage point of the importance of a topic within its substantive

field or the contribution is makes to the literature on that field.” (p. 43). More problematic

for qualitative researchers is whether and how such studies may be able to influence

theory and practice beyond the immediate setting.

A further reason why this research employs qualitative rather than quantitative methods is

that a primary source of analysing data concerns the changing aspects of organisational

and social nature. Bryman & Bell, (2007:174) say that typically, in quantitative analysis

“the measurement process possesses an artificial and spurious sense of precision and

accuracy” and “the reliance on instruments and procedures hinders the connection

between research and everyday life”. More so, “the analysis of relationships between

variables creates a static view of social life that is independent of people’s lives and in

particular, how people interpret and attach meaning to managing across cultures”.

To this extent it is important that the researcher pays close attention to the unit of analysis

when conducting research on diversity and global leadership. However, the researcher is

aware of the general ‘levels of analysis’ problem that bedevils many cross-cultural

research projects. In appropriately assuming that cultural-level characterisations and

relationships apply to individuals within these cultures is commonly labelled the

“ecological fallacy” error (Robinson, 1950). The “reverse ecological fallacy,” described by

Hofstede (2001), is said to occur if one compares cultures on measures created for use at

the individual level. The point is that cultures are not simply “king-sized individuals” and

cannot be understood simply on the basis of the internal logic of individuals. As such

measures should be constructed at the organisational and societal level of analysis

Finally, Meredith (1998:447) provocatively says that an extremely important philosophical

consideration in drawing research conclusions brought out by Richard and Cook (1979) is

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that ‘quantitative understanding presupposes qualitative knowing’. In other words,

researchers cannot benefit from their use of numbers if they cannot communicate, in

common sense terms, what their numbers mean.

Ontology and Epistemology

This research strategy and subsequent methods embodies elements of the social

constructionism (interpretivist), and relativist positions.

Easterby-Smith et al. (2008:58-59) state that the paradigm of social constructionism “stems

from the view that ‘reality’ is not objective and exterior, but is socially constructed and

given meaning by people.” Hence the task of the social scientist should not be to gather

facts and measure how often certain patterns occur, but to appreciate the different

constructions and meanings that people place upon their experience. The focus should be

on what people, individually and collectively, are thinking and feeling, and attention should

be paid to the ways they communicate with each other, whether verbally or non-verbally.

They go on to explain that the constructionist perspective starting from a viewpoint that

does not assume any pre-existing reality aims to understand how people invent structures

to help them makes sense of what is going on around them. “Consequently, much

attention is given to the use of language and conversations between people as they create

their own meanings. Furthermore, the recognition that the observer can never be

separated from the sense-making process means that researchers are starting to

recognise that theories which apply to the subjects of their work must also be relevant to

themselves. Such reflexive approaches to methodology are recognised as being

particularly relevant when studies are considering power and cultural differences

(Anderson, 1993; Easterby-Smith and Malina, 1999; Cunliffe, 2002).” (P, 63).

Easterby-Smith et al. (2008:58-59) remark that “social constructionism is one of a group

of approaches that Habermas (1970) has referred to as interpretive methods”.

Interpretivism is critical of applying a scientific model to the study of the social world. At

the heart of their argument and a chief ingredient of an interpretivist approach is on

‘understanding’ human behaviour rather than ‘explaining’ human behaviour. Interpretivist

studies highlight the way in which meaning making or interpretive activities construct and

shape organisational and management realities.

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Embracing the interpretivist paradigm is the inductive approach whereby theory is the

outcome of research. That is, the process of induction provides an opportunity to explore

issues in depth and in context thus enabling theory development to occur through the

systematic piecing together of detailed evidence in order to generate hypotheses and

build theories of broader interest.

As previously stated, the aim of the research strategy is to be able to interpret the social

world in relation to global leadership and diversity in the way that individuals experience it

and to this extent the researcher has to understand the symbolic world in which people

live. By symbolic world the researcher refers to meanings people apply to their own

experiences and meanings developed through patterns of behaviour which are distinctive

in some way by comparison to the external world.

A further ontology is the relativist position. This view, which draws inspiration from both

the positivist and constructionist positions, has been adopted widely by researchers using

case method. The ontological assumption is that specific practices and structures exist

which will lead to organisational learning taking place, and that it is possible for the

researcher to map these out. Also, the methodology involve semi-structured interviews,

which meant that, as far as possible, the same questions were asked in each of the

interviews. This provided a structure and standardise set of data from which associations

between variables could be investigated.

Easterby-Smith (2008:62) says that another variant of the relativist position is the idea of

critical realism, which starts with the realist ontology of Bhaskar and then incorporates

and interpretative thread (Sayer, 2000). Critical realism makes a conscious compromise

between the extreme positions: it recognises social conditions (such as class or wealth)

as having real consequences whether or not they are observed and labelled by social

scientists; but it also recognises that concepts are human constructions.

Research Strategy – Case Study

The researcher has chosen the case study strategy because it is suited to understanding

human behaviour from the participant’s own frame of reference. It lends itself towards

flexibility and is able to adapt to and probe areas of planned but also emergent theory.

Given the often emergent and changing properties of life in organisations case studies

are useful in capturing the transient nature of organisations. Consequently, their strength

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is the capacity to explore social processes as they unfold and they have the important

function in generating hypotheses and building theory.

Also, the aim of case study methodology is to provide an analysis of the context and

processes which illuminate the theoretical issues being studied. The phenomenon is not

isolated from its context but is of interest precisely because the aim is to understand how

behaviour and/or processes are influenced by, and influence context. The case study is

particularly suited to research questions which require detailed understanding of social or

organisational processes because of the rich data collected in context.

According to Eisenhardt (1989:534) “The case study is a research strategy which focuses

on understanding the dynamics present within a single setting” and in line with this,

Hartley (1994) suggests that it provides a detailed investigation, of one or more

organisations, groups within organisations, or individuals – with a view to providing

analysis of the context and processes involved in the phenomenon of interest.

In support of this strategy, Hartley (2000:325) suggests that “detailed case studies may

be essential in cross-national comparative research, where an intimate understanding of

what concepts mean to people, the meanings attached to particular behaviours and how

behaviours are linked is essential”. The choice of case studies is particularly crucial in

multiple-case design, to ensure illuminating contrasts and similarities across the context

and processes

Multiple cases may reduce the depth of study when resources are constrained, but can

both augment external validity, and help guard against observer bias. If multiple case

studies are to be used for research, then a vital question is the case selection or

sampling. Miles and Huberman (1994) state that sampling involves two actions. The first

is setting boundaries that define what you can study and connect directly to the research

questions. The second step is creating a sample frame to help uncover, confirm, or

qualify the basic processes or constructs that underpin the study. When building theory

from case studies, case selection using replication logic should be used. Each case

should be selected so that it either predicts similar results (a literal replication) or,

produces contrary results but for predictable reasons (a theoretical replication)

Hartley (2000) states that “a case study should not be defined through its research

methods but rather defined in terms of its theoretical orientation. Thus, emphasis is

placed on understanding processes alongside their contexts.” (p.324).

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As with most qualitative research methods, case study as a technique has been

frequently criticised with regard to its lack of rigour, and issues on internal/external validity

and feasibility, interviewer/interviewee bias, reliability, and replicability. Meredith

(1998:44) say that “a common misperception is that case research is not ‘rigorous’

because many of the variables may not be mathematically quantified and the

independent variables cannot be manipulated at will. But as Lee (1989), McCutcheon

and Meredith (1993), Bonoma (1985), Richardt and Cook (1979), and Yin (1994) among

many others, note the case study method is guided by the same overall principles and

follows as well-defined rules of evidence and proof as the rationalist methods.”

Robert Yin (2002) is the best known exponent of case method in the social sciences. His

concern is that case studies are vulnerable to a number of criticisms from more positivist

researchers and thus to demonstrate that case studies may contain the same degree of

validity as more positivist studies. In response to criticisms, Yin (1994) argues that it is

helpful to prepare for data collection by setting up a ‘chain of evidence’. This chain of

evidence moves along a continuum from case study questions, to case study protocol to

citations to specific evidentiary sources in the case study database to case study report.

Further, the case study research protocol makes explicit the theories being tested, the

propositions being explored, the data to be collected, the unit of analysis, links between

data and propositions, and procedures for interpretation of data through which methods

and with which informants, over what time period, and with what sampling of

organizational events and meetings.

The contrasting position, which is informed by a constructionist epistemology, is much

less concerned with issues of validity, and more concerned with providing a rich picture of

life and behaviour in organisations or groups. Robert Stake (2006) writes about

qualitative case studies, and distinguishes between instrumental and expressive studies.

The former involves looking at specific cases in order to develop general principles; the

other involves investigating cases because of their unique features which may, or may

not, be generalisable to other contexts.

A further approach to studying cases – the relativist position - has been developed

particularly through the work of Kathy Eisenhardt (Eisenhardt, 1989; Eisenhardt and

Graebner, 2007). This view, which draws inspiration from both the positivist and

constructionist positions, has been adopted widely by researchers using case method.

She is eclectic about her advice about methodology: using designs that are established at

the outset, but then being flexible about their adaptation; recommending data collection

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through using multiple methods, and conduction both within case and across case

analysis. Above all, Eisenhardt is concerned about building theory from case based

research, and this takes the form of developing hypotheses.

Eisenhardt recommends that hypotheses can be formed, or ‘shaped’ through three main

stages. The first stage involves sharpening up the basic constructs, and this is

essentially an iterative process of moving back and forth between the constructs and the

data. The second stage involves verifying that emergent relationships between

constructs fit with the evidence from each case. In this respect she comments that: “Each

case is analogous to an experiment, and multiple cases are analogous to multiple

experiments’ (1989). The third stage involves comparing the emergent

theory/concepts/hypotheses with the existing literature. In particular, she suggests

paying attention to literature that is contradicted by the evidence, both because any

evidence of having ignored contradictory findings is likely to reduce confidence in the final

conclusions, and because the highlighting of contradictory conclusions is likely to make

the original contribution from the research more explicit.

Case studies are demanding in both intellectual and emotional terms. Intellectually, the

need to create clear links between theory and data collection, and between data analysis

and theory, means that the research needs to be able to deal with theory and method

concurrently rather than sequentially. The opportunity to refine and develop the research

as new events and issues come to light through intensive study provides flexibility which

must be handled carefully and rigorously. Yin (1994:55) notes that the ‘demands on a

person’s intellect, ego and emotions are far greater than those of any other research

strategy’. Ethically, one may gain information about activities which are illicit, illegal, or

out of line with one’s own values. A researcher may hold privileged information, given in

interview, which could be damaging if made public, either directly or in response to others

in the organization. Stake (1995:60) argues that ‘the researcher should leave the

organisation having made no one less able to carry out their responsibilities’.

The strengths of theory building from cases are several. Firstly, is the likelihood of

generating novel theory because of its very process. That is, the constant juxtaposition of

conflicting realities tends to “unfreeze” thinking, and so the process has the potential to

generate theory with less researcher bias than theory built from incremental studies. A

second strength is that the emergent theory is likely to be testable with constructs that

can be readily measured and hypotheses that can be proven false. A third strength is

that the resultant theory is likely to be empirically valid. The likelihood of valid theory is

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high because the theory-building process is so intimately tied with evidence that is very

likely that the resultant theory will be consistent with empirical observation.

Weaknesses of theory building from cases include the intensive use of empirical evidence

can yield theory which is overly complex. A hallmark of good theory is parsimony, but

given the typically staggering volume of rich data, there is a temptation to build theory

which tries to capture everything. The result can be theory which is very rich in detail, but

lacks the simplicity of overall perspective. Theorists working from case data can lose

their sense of proportion as they confront vivid, voluminous data. Since they lack

quantitative gauges such as regression results or observations across multiple studies,

they may be unable to assess which are the most important relationships and which are

simply idiosyncratic to a particular case. Another weakness is that building theory from

cases may result in narrow and idiosyncratic theory. Case study theory building is a

bottom up approach such that the specifics of data produce the generalisations of theory.

The risks are that the theory describes a very idiosyncratic phenomenon or that the

theorist is unable to raise the level of generality of the theory.

Methodology – Grounded Theory

The purpose of grounded theory is to build theory that is faithful to and which illuminates

the area under investigation (Hussey & Hussey, 1997). Grounded theory analyst believes

that the social organisation of the world is integrated and the researchers’ job is to

discover these processes of socialisation. Grounded theory, therefore, provides new

insights into the understanding of social processes emerging from the context in which

they occur, without forcing and adjusting the data to previous theoretical frameworks

(Glaser, 1995, 1998). Grounded theory is powerful as it gives room for the interpretation

of ‘real’ experiences of the interviewees and also provides a systematic means to

efficiently analyse large quantities of unstructured qualitative data.

Researchers following the interpretivist paradigm employ grounded theory methodology

believe that human action is grounded in the actor’s interpretation of the situation and

consequently human action has an internal logic (culture). Because Interpretivists see

human action as purposeful and meaningful, rather than determined by social structures,

the environment, inherent needs etc.., explanation lies in gaining access to how people

interpret and attach meaning to their surroundings. As such, the process that grounded

theory methodology follows (the collection of data that is then explored and analysed to

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see which themes or issues to follow up and concentrate on so as to generate a

conceptual framework that alternates between inductive and deductive thought to guide

subsequent work) is best suited to uncovering meaning in relation to case study strategy

as the strategy is initially related to exploratory purpose.

Conceptualising, Coding and Categorising

Glaser and Strauss (1967) propose two main criteria for evaluating the quality of a theory.

Firstly, it should be sufficiently analytic to enable some generalisation to take place and

secondly, it should be possible for people to relate the theory to their own experiences,

thus sensitising their own perceptions. The basic elements of a grounded theory include

conceptual categories and their conceptual properties, and hypotheses about or

generalised relations between these categories and their properties. The first step in

theory buildings is conceptualizing. A concept is a labelled phenomenon. It is an

abstract representation of an event, object, or action/interaction that the researcher

identifies as being significant in the data. Grounded theory develops through constant

comparative analysis, where a specific coding scheme is used to ensure conceptual

development and density. With respect to data sources grounded theory often applies

triangulation, namely combines different types of data collected by interviews, observation

and analysis of documents. The data are gathered through theoretical sampling, which

means that the selection of samples is guided by the development of the concepts.

First formulated d by Strauss and Glaser (1967) and further developed by Strauss and

Corbin grounded theory methodology applies a specific coding process. Data are broken

down into discrete incidents, ideas, events and acts and are then given a name that

represents or stands for these. The name may be taken from the words of respondents

themselves – as in “in vivo codes” (Glaser & Strauss, 1967). As we continue with our

data analysis, if we come across another object, event, act, or happening that we identify

through comparative analysis as sharing some common characteristics with an object or

a happening, then we give it the same name, that is, place it into the same code.

Following an acrimonious debate between Glaser and Strauss, Strauss and Corbin

(1990) adopted a more relativist position, which emphasised systematic and reductionist

approaches to the analysis of data and they distinguished between three phases of

coding: open, axial and selective.

Open coding refers to a preliminary process of ‘breaking down, examining, comparing,

conceptualising and categorizing data’. Axial coding involves ‘a set of procedures

whereby data are put back together in new ways after open coding, by making

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connections between categories; Selective coding involves ‘selecting the core category,

systematically relating it to other categories, and filling in categories that need further

refinement and development.

Categories represent not one individual’s or group’s story but rather the stories of many

persons or groups reduced into, and represented by, several highly conceptual terms.

Although no longer the specific data of an individual, group, or organisation, categories

are derived by comparing data from each case; therefore, they should, in a general

sense, have relevance for, and be applicable to, all cases in the study. It is the details

included under each category and subcategory, through the specification of properties

and dimensions, that bring out the case differences and variations within a category.

The key differences between the two are in essence, Glaser now believes that

researchers should start with no presuppositions, and should allow ideas to ‘emerge’ from

the data (Glaser, 1978); whereas Strauss recommends familiarising oneself with prior

research and using structured, and somewhat mechanistic, processes to make sense of

the data (Strauss, 1987; Strauss and Corbin, 1998).

The debate is extended further by Kathy Charmaz (2000), who characterises the methods

of both Glaser and Strauss as ‘objectivist’. Her complaint is that both authors separate

the researcher from the experiences of the subjects of the study. She also feels that the

recommendations from Strauss and Corbin (1998) about detailed analysis of transcripts,

including line by line analysis and ‘fracturing of data’, reduces the ability to represent the

whole experience of individuals involved. In her view, a constructivist should recognise,

‘that the viewer creates the data and ensuing analysis through interaction with the viewed’

(2000). As such she is located a little further in the constructionist direction than Strauss

because she emphasizes the interaction between the researcher and the researched,

rather than between the researcher and the data. Charmaz (constructionist) goes further

in emphasising the primacy of the stories and experiences of her research subjects.

Theoretical Saturation:

A category is considered saturated when no new information seems to emerge during

coding, that is, when no new properties, dimensions, conditions, actions/interactions,

relationships or consequences are seen in the data or emerge in the analysis. As such a

category is saturated when no new or relevant data seem to emerge regarding a

category, or the category is well developed in terms of its properties and dimensions

demonstrating variation, or the relationships among categories are well established and

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validated. Theoretical saturation is of great importance. Unless a researcher gathers

data until all categories are saturated, the theory will be unevenly developed and lacking

density and precision.

Theoretical Sampling

‘Theoretical sampling’ is ‘the process of data collecting for generating theory whereby the

analyst jointly collects, codes and analyses his data and then decides what data to collect

next and where to find them, in order to develop his theory as it emerges’ (Glaser and

Strauss, 1967). Theoretical sampling seems to imply that categories or codes can be

created in direct response to the data, without resorting to or requiring much in the way of

mediation by prior theory. The data itself will dictate what categories are there to be

‘discovered’. The creative process lies in confrontation with evidence, allowing it to

invoke or provoke ideas without any particular preconceptions on the part of the analyst.

Grounded Theory involves a process of ‘theoretical sampling’ of successive sites and

sources, selected to test or refine new ideas as these emerge from the data. Sites and

sources are selected flexibly for their theoretical relevance in generating comparisons and

extending or refining ideas, rather than for their representational value in allowing

generalizations to particular populations.

Limitations

However, grounded theory is not without its limitations and there are four distinct

limitations. First, questions are often raised as to whether or not researchers can

suspend their awareness of relevant theories or concepts until quite a late stage in the

process of analysis.

Secondly, the method is prone to a researcher bias on relying on one researcher as the

primary analyst and creator of the essential categories of the grounded theory. Further

criticisms include the vagueness pertaining to the difference between concepts and

categories. Tied to this is the fact that as all interviews are conducted on a one-to-one

basis they are open to individual interpretation and thus minimise the emergence of

collective interpretations.

Thirdly, the context of the environments in which the findings evolved can impact

generalisability as each company is HQ in a different continent this may impact upon their

view of diversity. As such, specific implications for other contexts are questionable. Also,

the issue of number of cases may inhibit theory accumulation in the field and would

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perhaps have required more case organizations so that the theoretical sampling process

would have been enhanced. In practice, however, a researcher working with real

organisations rarely has an opportunity to implement text-book theoretical sampling

processes due to problems in gaining access to various companies and time restrictions

of interviewees in tandem with deadlines set for the thesis.

Lastly, due to the large quantity of data generated the practical difficulties of time taken to

transcribe tape recordings of interviews must be taken into account.

Methodology – Thematic Analysis

Thematic analysis is used in qualitative research analysis and focuses on examining

themes within data. According to Daly, Kellehear, & Gliksman (1977:3) “it is a search for

themes that emerge as being important to the description of the phenomenon”. This

method emphasizes organization and rich description of the data set. Thematic analysis

goes beyond simply counting phrases or words in a text and moves on to identifying

implicit and explicit ideas within the data. Through careful reading and re-reading of the

data it emphasizes pinpointing, examining, and recording patterns (or "themes") within

data.

The themes become the categories for analysis. Coding is the primary process for

developing themes within the raw data by recognizing important moments in the data and

encoding it prior to interpreting what it means to the overarching question. The analysis

of these codes can include comparing theme frequencies, identifying theme co-

occurrence, and graphically displaying relationships between different themes and

subsequently the process of coding establishes meaningful patterns.

The advantages of thematic analysis is that: it enables flexibility; it is well suited to large

data sets; it allows for multiple researchers; the interpretation of themes is supported by

the data; and, it is applicable to research questions that go beyond an individual’s

experience.

The primary disadvantage of this method relates to reliability as a wide variety of

interpretations are possible as well as applying the codes to large number of text.

Another concern of thematic analysis is that it may miss nuanced data. In other words,

slight differences between respondents may be missed.

http://en.wikipedia.org/wiki/Coding_(social_sciences)

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Methodology – Content Analysis

The technique of content analysis gained popularity in the 1960s by Glaser and is

referred to as “The Constant Comparative Method of Qualitative Analysis” in an article

published in 1964-65. Glaser and Strauss (1967) referred to their adaptation of it as

“Grounded Theory."

Qualitatively, content analysis can involve any kind of analysis where communication

content (speech, written text, interviews, images) is categorised and classified. It is a

research tool used to determine the presence of certain words or concepts within texts or

sets of texts. Researchers quantify and analyze the presence, meanings and

relationships of such words and concepts, then make inferences about the messages

within the texts, the writer(s), the audience, and even the culture and time of which these

are a part. To conduct a content analysis on any such text, the text is coded, or broken

down, into manageable categories on a variety of levels--word, word sense, phrase,

sentence, or theme--and then examined using one of content analysis' basic methods:

conceptual analysis or relational analysis.

In conceptual analysis, a concept is chosen for examination, and the analysis involves

quantifying and tallying its presence. Also known as thematic analysis [although this term

is somewhat problematic, given its varied definitions in current literature--see Palmquist,

Carley, & Dale (1997) vis-a-vis Smith (1992)], the focus here is on looking at the

occurrence of selected terms within a text or texts, although the terms may be implicit as

well as explicit. While explicit terms obviously are easy to identify, coding for implicit

terms and deciding their level of implication is complicated by the need to base judgments

on a somewhat subjective system. To attempt to limit the subjectivity, then (as well as to

limit problems of reliability and validity), coding such implicit terms usually involves the

use of either a specialized dictionary or contextual translation rules.

Conceptual analysis begins with identifying research questions and choosing a sample or

samples. Once chosen, the text must be coded into manageable content categories.

The process of coding is basically one of selective reduction. By reducing the text to

categories consisting of a word, set of words or phrases, the researcher can focus on,

and code for, specific words or patterns that are indicative of the research question.

Relational analysis, like conceptual analysis, begins with the act of identifying concepts

present in a given text or set of texts. However, relational analysis seeks to go beyond

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presence by exploring the relationships between the concepts identified. Relational

analysis has also been termed semantic analysis (Palmquist, Carley, & Dale, 1997). In

other words, the focus of relational analysis is to look for semantic, or meaningful,

relationships. Individual concepts, in and of themselves, are viewed as having no

inherent meaning. Rather, meaning is a product of the relationships among concepts in a

text. Carley (1992) asserts that concepts are "ideational kernels;" these kernels can be

thought of as symbols which acquire meaning through their connections to other symbols.

Content analysis offers several advantages to researchers who consider using it. In

particular, content analysis: looks directly at communication via texts or transcripts, and

hence gets at the central aspect of social interaction; can allow for both quantitative and

qualitative operations; can provides valuable historical/cultural insights over time through

analysis of texts; allows a closeness to text which can alternate between specific

categories and relationships and also statistically analyzes the coded form of the text; can

be used to interpret texts for purposes such as the development of expert systems (since

knowledge and rules can both be coded in terms of explicit statements about the

relationships among concepts); is an unobtrusive means of analyzing interactions; and,

provides insight into complex models of human thought and language use.

On the downside, content analysis suffers from several disadvantages, both theoretical

and procedural. In particular, content analysis: can be extremely time consuming; is

subject to increased error, particularly when relational analysis is used to attain a higher

level of interpretation; is often devoid of theoretical base, or attempts too liberally to draw

meaningful inferences about the relationships and impacts implied in a study; is inherently

reductive, particularly when dealing with complex texts; tends too often to simply consist

of word counts; and often disregards the context that produced the text, as well as the

state of things after the text is produced.

Methodology – In-Depth Semi-Structured Interviews

Cassell & Symon (2004:11) suggests that the purpose of a qualitative research interview

“is to gather descriptions of the life-world of the interviewee with respect to interpretation

of the meaning of the described phenomena” (Kvale, 1983). The in-depth semi-

structured interview is a style of qualitative interviews which enables the researcher to

explore themes that she wishes to explore by asking major questions the same way each

time. However its flexibility allows the researcher freedom to alter the sequence, to probe

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for more information, to investigate interesting unexpected issues and to adapt the

questions in line with levels of comprehension and articulacy of the respondents. Whilst

allowing for flexibility, the nature of this style of interviewing also affords the researcher a

degree of control.

The in-depth semi-structured interview is appropriate for this study as it enables the

researcher to focus on the meaning of particular phenomena to the interviewees; explore

individual perceptions of processes, use broad research questions and, through

exploration, begin to develop a theoretical framework as well as, help to shape and refine

iterations of the content of a structured questionnaire. It also provides the researcher with

flexibility to choose to conduct one-to-one interviews or focus groups if need be.

Throughout the interview process, the researcher has two jobs: Firstly, to follow your own

line of inquiry, as reflected by your case study protocol and secondly, to ask you actual

questions in an unbiased manner that also serves the needs of your line of inquiry.

A second type of case study interview is a focused interview (Merton, Fiske, & Kendall,

1990), in which a person is interviewed for a short period of time – an hour. In such

cases, the interviews may still remain open-ended and assume a conversational manner,

but you are more likely to be following a certain set of questions derived from the case

study protocol.

The weakness of this research method is that bias can be introduced either by the

interviewer or by the interviewee and reliability, replicability and internal and external

validity are frequently criticised.

Pilot Study - AkzoNobel

On a practical level the objectives & purpose of the pilot study was:

To test gaining access to companies and their information sources and to gain a better

understanding of logistics in terms of scheduling, arranging video-conferencing,

meetings, time differences etc.

To test the researchers in-depth interview technique as well as the structure of the

interview.

To test interviewees’ understanding of questions given the language differences.

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To test appropriateness of grounded theory methodology and to reaffirm the

researchers understanding of this methodology.

To understand how the researcher could better synthesise the diversity and leadership

themes.

Gaining a full understanding of the setting, culture and topic.

To gain an appreciation for recontextualising (the process of generalisation so that the

emerging theory can be applied to other settings and populations).

Background information to the organisation:

Headquartered in Amsterdam, the Netherlands AkzoNobel is the largest global paints and

coatings company and a major producer of specialty chemicals. They employ 60,000

employees who are based in more than 80 countries.

Their values are summed up in the line ‘Tomorrow’s answers today’ and they believe in:

– Focusing on our customers’ future first

– Embracing entrepreneurial thinking

– Developing the talents of our people

– The courage and curiosity to question

– Integrity and responsibility in our actions

AkzoNobel has implemented an ambitious strategy designed to transform their business

and enhance shareholder value. This long-term plan, initiated some years ago,

culminated in 2007 with two major transactions. First they reached an agreement to

divest their pharmaceutical business (Organon BioSciences). Soon after, they acquired

Imperial Chemical Industries plc (ICI). As a result the company is still in the process of

integrating structures, systems and processes and the AkzoNobel brand is not retained in

the UK until the divestiture of Crown. Given this situation, employees in the UK still refer

to themselves as ICI rather than AkzoNobel

The new organisation operates in three business areas: Decorative Paints, Performance

Coatings, and Specialty Chemicals and are now focusing on maintaining momentum and

leadership through faster growth (particularly in emerging markets). Brands and products

include: Dulux, Hammerite, Polycell, Cuprinol; and the Paint Pod.

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Research access:

Through business contacts the researcher gained access to the Global Senior Vice

President of Human Resources for AkzoNobel who gave his regional HR Directors a

choice of participating in the pilot study. The HR Directors from the regions then

identified the individuals from the leadership team to be interviewed and their PAs

scheduled the meetings and organised the locations.

The interviews took place in Slough, UK, and via video-conferencing in Brazil, Argentina

and Uruguay. In total 13 Senior Leaders from across the UK and Latin America were

interviewed. The leaders consisted of Directors and Regional Directors of Marketing,

Information Management, Research & Development, Finance, Human Resources, Legal,

Sales, Operations and Supply Chain. The geographies that they cover include the UK,

Ireland, South Africa and, Latin America. Many of the Directors have also worked across

Western & Eastern Europe as well as Asia

These interviews were recorded onto dictaphone and hand written notes were also taken.

The interviews were then transcribed and analysed for emerging themes.

Main Findings

The findings constitute an analysis of the main themes and concepts that emerged from

the interviews. Below are the findings summarised in relation to the organisation,


Findings on Leadership:

• An observation that the Senior Leadership Team is not representative of AkzoNobel’s

diverse global workforce. The team is comprised of an all Dutch, White, Male make-

up.

• Due to the lack of diversity amongst the leadership team this can impact on leadership

style with regard to process and innovation.

• The profile and visibility of the global team is low. Perceived as removed men in suits.

• Key leadership skills identified as necessary to work across diverse cultures include:

humility; listening; decisiveness; flexibility to understand the differences with regard to

ways of working across cultures.

• Lack of decision making. Decision making is a slow process with decisions evolving

rather than being made. You think you have made a decision at a meeting but then it

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goes round and round. A decision in principle is taken which is then to be expanded

upon, worked on and ultimately a decision emerges. So the issue of consensus in

decision making. It takes a long time, involving many discussions and reflection which

is viewed as a protracted process.

• There is an organisational set of values, then a cultural set of values that feed into that

and a personal set of values. The dynamic between organisational, cultural and

personal values should be explored as there is potential for a clash between the

company values and the cultural values where they cross over.

• Certain countries have more prevalence to lead one way or another and if you are a

product of that culture your style will be influenced by that.

Findings on Diversity:

• An agreed definition that diversity means a variety of backgrounds , cultures and

ethnicities that make up a multicultural society.

• The advantages of a diverse workforce is that it celebrates differences and affords a

broad input of experience. As a result you tend to get better decisions because you

are casting your net wider thus decisions are based on a more representative sample

of your customers. Mixing with others who are different to us helps us to think and

understand our own behaviours. It challenges our minds and behaviours.

• Only 10% of those interviewed said that they were aware of diversity initiatives

• Others were concerned about the possible adoption of a quota based approach based

on race and sex. It raises the argument as to whether you are going to recruit or

promote the best person for the job or only recruit to fit the quotas.

• Diversity initiatives are welcomed with a lot of humour and discussion particularly with

regard to positive discrimination. It was suggested that people do a lot of agreeing and

nodding on the outside but are really sniggering behind their hands.

• Only 10% said issues relating to diversity “kept them awake at night”.

• With regard to practices that encourage diversity there is seen to be a need for more

mentoring and educational programmes.

• At present, diversity training is simply a tick in the box exercise. It felt like a legal

exercise that is led by an employment lawyer rather than an educative programme

Findings on the organisation:

• An overall consensus that values can unite people regardless of who they are or

where they come from as they provide direction and an understanding of what the

company represents and stands for. Values give employees something to frame

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something around so when you are talking to a diverse group you can hang certain

messages of values which are consistent.

• Agreement that there is an excellent alignment between the values of AkzoNobel and

the old ICI values.

• Cultural barriers can exist in relation to the differences between cultures - The Dutch

are more serious and the Asians tend to be more submissive. The British tend to drive

the agendas, participate more actively and take a disproportionate amount of the

airtime at global meetings. As such, there is the suggestion that leaders must be more

aware of their styles.

• As above, it is important to adjust and realise that they are differences in business

practices. For example, in Spain employees can take up to 1 ½ hours for lunch but

work later into the evening. They don’t work less just differently. Also on the continent

people can take the month of August off on holiday whereas in the UK people will

generally only take 2 weeks off at any one time. This can impact upon project

schedules.

• Differences between the genders - It is challenging being a woman in a mainly male

industry. You have to earn your place at the table whilst still retaining your sense of

self. There are few women who are role models and there are no spontaneous

networking forums.

• With regard to power it was acknowledged that in some cultures an all powerful leader

is regarded as an inspirational leader. In other cultures, power is shared whereby

everyone is equally treated and valued and therefore the way of working is more

consultative. As such, the perception of power varies significantly across the cultures.

• Global/local tensions – although AkzoNobel is perceived as a collective culture there is

concern that there is a push from the centre. Some things are being dictated from

the centre which does not take into account a level of refinement at the local level.

There needs to be more appreciation that marketplaces and thus consumer demands

and preferences can be markedly different. There is something about having a

corporate international agenda but having the flexibility to reflect things locally.

• Regarding communications - it was established that was a key area of focus during

integration and AkzoNobel has done a very good job. However a need was identified

for local communications to be plugged into corporate communications.

Explicit cultural differences:

The Dutch are more direct whereas the British tend to be diplomatic

The Dutch are less concerned with hierarchy and are more consultative whereas the

British are concerned with status and getting to decisions quickly.

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The British and the Dutch share an underlying humour.

In Asia people do not like to lose face so people either are unable to say no – they

always say yes or are unable to admit that they do not understand what is requested of

them. As such, you have to find differing ways of teasing out opinions from them and

seek different ways to understand the reality of the situation.

In Holland, USA and the UK there is no hesitation with regard to challenging

leadership and decisions but in Asia it has to be done privately and in Latin America,

the boss is often not challenged although employees have strong characters.

Leadership style in Asia is often directive and can sometimes be perceived as

fatalistic.

Other comments:

• Geographically, ICI is stronger in the emerging markets whereas AkzoNobel is

stronger in Europe. Therefore, geographically, the union is well matched.

• Employees still refer to themselves as ICI rather than AkzoNobel. Most people still

see themselves as being part of ICI

• Due to the divestiture of Crown the company cannot actively publicise the brand at the

moment. This leaves employees in a state of limbo as there is little identity or shared

symbolism with AkzoNobel.

• AkzoNobel is going to great lengths to show surveys that show that there is no

difference between the cultures. However the cultural differences are huge. “Whoever

did these surveys must be smoking something!”

• The Dutch culture is a relatively small view of the world and very centralised. The

world does not extend beyond Amsterdam.

• They are not a results orientated group but more of an input orientated group meaning

that they are more worried about front end of the process. E.g. I am not challenged

about my costs or my customer service but more on trivial things.

What worked well and what didn’t- limitations / logistics, risks and issues

• Some of the questions were too long and/or complicated given the language barriers.

• Scheduling was difficult due to the different time-zones.

• The reality of the business world meant that interviewees would pull out at short notice

and the interviews would have to be rescheduled. This in turn shifted the date of

completion for the project.

• An underestimation of how time consuming the transcribing of the tape recordings and

the analysis would be. In total it took 50 Hrs to transcribe the interviews and due to the

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large amounts of data generated it was often difficult to reduce, structure and

detextualise the information.

• It was necessary to test the equipment up-front. E.g. With the first interview I had

problems with both the dictaphone and the video-conferencing equipment; Also I

experienced connection difficulties to phone numbers & lines.

• There were differences amongst the leadership team in relation to the amount of

experiences relating to managing across cultures.

• Employees views were often impacted by the acquisition. As such there was an

element of bias and protectionism.

• In line with grounded theory analysis there was a vagueness pertaining to the

difference between concepts and categories.

• A final critique of this methodology concerns the notions of reliability, and internal and

external validity. As well as, interviewer and interviewee bias, access limitations,

replicability and generalization

Contribution to research going forward

The pilot study surfaced the following thoughts that the researcher has incorporated into

the research going forward. This includes:

• The researcher’s interpretation of the concept of diversity was limited to cultural

diversity. Diversity is broader and therefore should be differentiated into further

dimensions. As such, further clarity on what parameters of diversity that I am

exploring.

• Given the above the research title has to change to accommodate this.

• A need to develop research questions that can be understood by all nationalities.

• A need to assess the scope of my research in terms of access to companies/number

of companies. Particularly given the current global economic climate. I need to find

ways to interest companies to partake in this research.

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The Research Process

Research setting

The first step in the research process involved approaching organisations to take part in

the research. This was done through contacting individuals in the researcher’s network

or writing directly to the CEO of a company. In total, 61 companies were approached.

Out of the 39 organisations who responded the researcher went on to have conversations

and/or meetings with 14 of these companies and the process was akin to an interview

process. The researcher had conversations and/or meetings with HSBC, Standard

Chartered Bank, Vodafone, Orange, Nike, E&Y, and American Express plus the six

organisations who participated in this research.

As case research requires time and commitment from the organisation, it was important

that the value and relevance of the research, and the time and resources required, were

outlined at this stage. Pointing out the mutual benefits to organisations assisted with

securing participation.

Once the organisation agreed to participate a point of contact was nominated to work with

the researcher. The interviewees were selected based on their seniority in the

organisation. The criterion that the researcher sought was that the interviewees be all

senior leaders within corporate or operational functions that had in the last two years

operated or are currently operating globally. It was requested that their role involved at

least one of the following:

Reporting directly to the Board

Influencing the strategic direction of the company.

Accountability for significant budgets

Responsibility for leading large teams across geographies or across a number of

segments.

Sample group

The sample group consisted of individuals whose responsibilities encompassed multiple

divisions of the company. These individuals served as senior operational managers,

corporate functional managers responsible for finance, human resources, marketing,

strategic planning, manufacturing, quality, and management information or heads of

subsidiaries/country leaders. Each faced a different combination of environmental

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demands. With regard to diversity characteristics of the sample group, information

gleaned from question one of the questionnaire (question one sought personal

information in an attempt to establish rapport – see appendices 2 and 3) show that most

of the leaders interviewed remained true to the demographic of the country where the

interviews took place and that most interviewees were middle aged and above.

Some interviews were done face-to-face with interviewees in India, South Africa,

Argentina and Peru. However, at least 60% of the interviews were conducted via the

telephone. As such, the only possible characteristics for diversity that could be

ascertained statistically were for gender – that is, 18% of the interviewees were women.

The data were collected between 2009 and 2010 by individual in-depth structured

interviews and were triangulated with observations at the work site and/or through desk

top research. A total of 79 senior executives were interviewed over a period of 13

months.

Ethics

It is important to note that access is far more difficult within commercial organisations,

and as such researchers are rarely given the freedom to select their samples on

theoretical grounds. Organisational researchers have to accept the interviewees

assigned to them by powerful organisational members who act as gatekeepers. This

being so, the researcher was unable to apply the full breadth of theoretical sampling as

interviewees were identified for her. However, the researcher did not feel that that power

relations were at play as those interviewed either consisted of the direct reports to the

CEO and senior operational managers who were on D&I steering committees and

therefore commanded a high degree of credibility and respect within their organisations.

Further, there can also be limits imposed in terms of timing, topics and the use of the

data. This often requires a number of compromises to be made in terms of research

design. However, in this research no companies asked for non disclosure agreements to

be signed with regard to how the data was interpreted and conveyed. Given the sensitive

nature of the topic under investigation the researcher was pleasantly surprised by the

courage and openness of the participating organisations. Although anonymity was not

sought by the participating companies all interviewees were granted anonymity. The

researcher felt that this promise of individual anonymity enabled interviewees to be very

open and shared information that would be considered to be of a sensitive nature with

her.

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Clustering of Nations

In terms of practical benefits, clusters provide a useful framework for managing the

complexities of multicultural operations. Multinationals corporations have the difficult job

of operating in nations that have different sets of cultural expectations, beliefs, and

values. Likewise, clusters may provide useful information for working with diverse

nationalities or cultures within a specific country. Practices, policies, and procedures that

work quite effectively in one culture may dramatically fail or produce counterproductive

behaviour in another culture

Scholars have used three major forces to group countries into similar clusters:

a) Geographic proximity (Furnham, Kirkcaldy, & Lynn, 1994)

b) Mass migrations and ethnic social capital (Portes & Zhou, 1994)

c) Religious and linguistic commonality (Cattell, 1950)

Of these three forces, geography has long been identified as having a major influence on

culture. For example, Hofstede (1980) reported geographical latitude to be the single

largest factor explaining intersocietal variation in cultural dimensions such as power

distance. Geography can influence culture because the physical topography of a region

can limit the interactions among people, the nature of the physical climate in a region can

influence the goals of people living in that region, and the economic prosperity of a region

can be affected by its physical geography. The GLOBE project also provided a

framework for Society Cluster Samples which present 10 meaningful clusters of cultures

based on the GLOBE cultural dimensions.

Nevertheless, contrasting evidence suggests cultures tend to be quite different even

among societies at similar levels of economic development. Trompenaars (1993) and

Hofstede (1980) provide many additional examples that support the differentiation of

cultures even among countries of similar economic development.

One of the most well-known and most referenced clustering of societies was proposed by

Ronen and Shenkar (1985). They grouped countries together in terms of their similarity

on work-related variables. For instance, Latin American and Latin European countries

were closely related to each other as were the Germanic and Nordic countries. They also

proposed Arabic, Near Eastern, Anglo, and Far Easter clusters. Brazil, Japan, India, and

Israel were considered independents and remained separate from other identifiable

clusters. However, their studies did not have a sufficient representation of societies from

Eastern Europe, Africa and Asia. This research opted to follow a simple geographical

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sampling of cluster based on the geographical location of the organisations headquarters

being in countries located either in ‘Developing Nations or in ‘Developed Nations’. The

researcher remained cognisant of comments from The GLOBE study that specifies that

points to intraculture variability particularly with respect to countries such as South Africa

and India.

Company selection

The research deliberately sought a range of companies operating in differing sectors.

This was to alleviate that the study not be hostage or biased towards one specific

industry. This served to address the issue of replicability. The research also required that

companies have significant operations across a minimum of three continents. As such,

the geographies taking part in this study included countries in Africa, Asia, Australasia,

Europe, Latin/South America and North America. The following seven companies

operating across 22 countries participated:

Table 2 – Sample Information

Sector Company Location

Industrial

AkzoNobel (pilot study) UK, Argentina,

Uruguay, Brazil

Agriculture/IT/Manufacturing

Conglomerate

Mahindra & Mahindra

India/China/ North

America

Mining

Anglo American Africa/South.

Financial Al Baraka Banking

Group

Bahrain, Jordan,

Turkey

Engineering Skanska

Denmark, UK,

Sweden, Norway,

Finland, USA

Beauty & Cosmetics L’Oreal France, UK, Spain,

China, Italy,

Germany, USA,

Mexico

Novartis Pharmaceutical Portugal,

Switzerland, UK

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Data Collection Process

The goal of the data collection exercise was to understand the perspectives of

participating leaders and how they saw events through their own eyes. Thus, the study

focused on the understanding and accounts of the leaders involved.

Three principles of data collection were maintained: Firstly, where possible, the use of

multiple sources of evidence – the most important advantage presented by using multiple

sources of evidence is the development of converging lines of inquiry, a process of

triangulation and corroboration. Secondly, the creation of a case study database

consisting of- notes, documents, tabular materials, and narratives. Thirdly, maintaining a

case study protocol that constitutes a chain of evidence of the process and data collected

per case.

Case Study Protocol

As proposed by Yin (1994) the case study protocol included an overview of the case

study project (project objectives and auspices, case study issues, and relevant readings

about the topic being investigated). Field procedures (presentation of credentials, access

to the case study “sites,” language pertaining to the protection of human subjects,

sources of data, and procedural reminders). Case study questions (the specific questions

that the case study investigator must keep in mind in collecting data, “table shells” for

specific arrays of data, and the potential sources of information for answering each

question. A guide for the case study report (outline, format for the data, use and

presentation of other documentation, and bibliographical information).

Interview Etiquette

All interviewees agreed to have their interviews tape-recorded. It was clearly

communicated to the interviewees before data collection that the researcher would be the

sole person listening to, transcribing and analysing the data from the interview tapes.

The researchers also describe in detail how the research results would be presented and

assured anonymity in the reporting of their views given the sensitivity of the subject

matter and the need to encourage, as far as possible, candid opinions. The interviews

were either conducted face to face, or by video-conferencing, or over the telephone and

the duration was for up to one and a half hours. In total, the interviews generated

approximately 120 hours of recorded information as well as extensive notes taken for

analysis, all the interviews were then fully transcribed verbatim to allow for subsequent

analysis.

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The questions under each of the three constructs guided the one and a half hour

interviews. These constructs were: leadership, diversity and organisational culture.

Although these constructs shaped the interviews, the interviewer employed a level of

flexibility depending on context and language differences. For instance, a question might

have needed to be reworded so that the interviewee completely understood. Therefore

the researcher did not always ask exactly the same questions in the same way each time.

Also, each successive interview was used to expand and build upon an understanding of

diversity and leadership so questions were either added or dropped in line with grounded

theory methodology.

After each interview, the interviewer summarised the emerging themes and these

summaries served as a basis for the reformulation and development of questions and

testing of the emerging theory.

Structured Interview design

A structured interview schedule was prepared. The objective from each interview was to

gain an understanding of how diversity may impact on the leader’s performance on a

global platform that would then be tested against the researchers LEAD³ tool.

Key features of the interview design were open questions, critical incident technique and

anonymity of individual responses. Asking all interviewees for critical incidents that would

further elaborate and expand upon their views and/or experiences served not only to

enliven and exemplify the research but also acted as a self-checking mechanism to

authenticate, as far as reasonably practicable, their contributions and understanding of

the question/context. All quotes included in the findings will be attributable to the

research interviewees and will be illustrative of the rich data responses afforded by

qualitative research.

All interviewee responses were transcribed verbatim by the researcher. The answers

were then coded, categorised and placed into themes employing content analysis and

grounded analysis techniques.

The interview comprised of three sections focused to capture particular concepts (see

appendices 2 & 3). Section 1 – the global leadership construct – focused on attributes

and sought to understand the leaders’ characteristics, how a leaders performance is

measured, the leaders values and beliefs and their sphere of influence, and how might

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nationality and culture impact a leaders performance with regard to how diversity is

embraced in the organisation

Questions in section 2 focused on diversity per se and explored the leader’s position on

diversity in terms of their understanding of the concept, their contribution to encouraging

dialogue on the topic, how they role model and actively engage their employees in the

pursuance of a diversity agenda, the strategic positioning of diversity and its overall

alignment to the company’s strategic objectives, key performance indicators tied to

diversity as well as how a leader might adapt in cross-culture scenarios.

Section 3 sought to explore organisational and external business factors that may impact

upon how a leader drives and implements diversity across their organisation. This

included issues on, individualism vs. collectivism; globalisation vs. localisation, integration

of diversity policies and activities, managing conflict and challenging the status quo, the

structure of company and how this impacts on the roll out of diversity change initiatives,

how the organisation learns and what they learn, and finally, issues that worry them or,

practices that require attention or should be introduced in relation to diversity.

Finally, random participant observation, including impromptu discussions, took place

during the entire fieldwork period. This activity provided an invaluable supplement to the

formal interviews.

Case study report

A case study report was then prepared for each organisation and included an executive

summary, company information, key findings stemming from the analysis of the three

constructs, and a summary of findings in relation to business impact.

Conclusion

The ontological stance of social constructionism was selected as its design and

methodology was deemed to be most suitable for the study of complex organisational

phenomena and processes in relation to diversity and leadership. To a lesser degree,

some of the principles and practices of relativism was also employed.

Case studies were chosen as the most appropriate research strategy because it is suited

to understanding human behaviour from the participant’s own frame of reference. It lends

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itself towards flexibility and has the capacity to explore social processes as they unfold.

Given the often emergent and changing properties of life in organisations case studies

are useful in capturing the transient nature of organisations.

The methodology selected was a hybrid approach consisting of open coding, thematic

analysis and content analysis. These approaches were deemed to lend themselves

towards discovering the processes of socialisation. They provide new insights into the

understanding of social processes emerging from the context in which they occur and

give room for the interpretation of ‘real’ experiences of the interviewees and also provide

a systematic means to efficiently analyse large quantities of unstructured qualitative data.

The method employed was in-depth interviews which enable the researcher to explore

themes by asking major questions the same way each time. Additionally, its flexibility

allows the researcher a degree of control and freedom to alter the sequence, to probe for

more information, to investigate interesting unexpected issues and to adapt the questions

in line with levels of comprehension and articulacy of the respondents.

A pilot study was undertaken to understand the reality and viability of logistics such as

gaining access to companies and their information sources, scheduling, arranging and

testing equipment, and working with time differences etc. Also, it provided an opportunity

to test the researchers interview technique as well as test the viability of the structure and

content of the proposed interviews and the interviewees’ understanding of questions

given the language differences. Additionally, the pilot study allowed the researcher to test

the appropriateness of using grounded theory as a methodology and to reaffirm my

understanding of this methodology

Finally, the research process was presented which included the criteria for participating

organisations, sample characteristics, ethics and the processes employed.

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Introduction to Chapters Six & Seven

Case study reports

The cases reviewed individually in chapters five and six are based on interviews with 79

leaders in seven organisations on four continents.

The criterion was that the participants be all senior leaders within corporate or operational

functions that had in last two years operated or are currently operating globally with their

role involving at least one of the following:

Reporting directly to the Board

Influencing the strategic direction of the company.

Accountability for significant budgets

Responsibility for leading large teams across geographies or across a number of

segments

A structured interview schedule was then determined with the participating organisations

and the interview questions were iterative based on the preceding case study. All

participants agreed to have their interviews tape-recorded. In total, the interviews

generated approximately 320 hours of recorded information for analysis, all the interviews

were then fully transcribed.

All case reports follow an exacting format and subsequent headings. As a consequence and

inevitably there is some repetition. The rationale for this design is twofold: it is reflective of

the business report sent to the individual companies so that they could corroborate the

findings. And, it enabled the researcher to effectively interpret and compare the data across

the cases in a consistent way. Each case included the following elements:

An executive summary of the case study.

An overview of the Company.

A detailed qualitative analysis of the interviews distilled into emerging themes under

the three constructs.

A summary of the findings

The interviewee names have been removed in order to protect the confidentiality of the

interviewees.

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Sample Selection

Clusters

This research opted to follow a simple geographical cluster of headquarters that were

either based in countries located in the developing nations of Africa, Asia, and Latin

America or the developed nations of Europe and North America. The researcher

remained cognisant of examples and comments from Trompenaars (1993), Hofstede

(1980) and The GLOBE study that advise the researcher to be cognizant of intraculture

variability even among societies at similar levels of economic development. E.g. countries

such as South Africa and India.

Company selection

The research deliberately sought a range of companies operating in differing sectors.

This was to understand whether sectors that may have distinctly different strategic

objectives as they compete cross culturally faced specific barriers.

The research required companies who have significant operations across a minimum of

three continents. As such, the geographies taking part in this study included Africa, Asia,

Australasia, European, Latin/South America and North America.

The following six companies operating across 22 countries participated in the main study:

Company Head Quarter Location

Geography Sector

Mahindra & Mahindra

Mumbai, India Asia Conglomerate – Agriculture / Finance IT / Manufacturing

Anglo Platinum Johannesburg, South Africa

Africa Mining

Al Baraka Banking Group

Manama, Bahrain

Middle East Financial

Skanska AB

Stockholm, Sweden

Europe Construction/Engineering

L’Oréal

Paris, France Europe Beauty/Cosmetics

Novartis

Basel, Switzerland

Europe Pharmaceutical

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Introduction to Chapter Six

Chapter six presents three case studies of organisations that are headquartered on

continents in the developing world/emerging markets – i.e. Asia, Sub-Sahara Africa,

South America and the Middle East. The companies in this cluster were: Mahindra &

Mahindra (M&M), Anglo Platinum and Al Baraka Banking Group (ABG).

Headquartered in Mumbai, Mahindra & Mahindra is an Indian conglomerate operating in

nine key sectors of the Indian economy. 20 face-to-face interviews were conducted with

senior executives in Mumbai.

Anglo Platinum is a subsidiary of Anglo American who is the world’s largest platinum

producer. Headquartered in Johannesburg they operate primarily in South Africa. Eight

senior executives were interviewed face-to-face in Johannesburg.

Al Baraka Banking Group (ABG) headquartered in Bahrain is the largest Islamic bank

operating in 12 countries across the Middle East, North and South Africa and Asia and

have 278 branches. Interviews were conducted over the telephone with eight senior

executives.

The case studies are presented in four sections: The first section is an executive

summary of the case study. The second section provides an overview of the company.

The third section presents the key findings against the headings: leadership; diversity;

and organisational factors; (mirroring the interview structure). The fourth section is

labelled business impact. Here the researcher presents on the impact that the findings

may have on the business in terms of enablers and blockers.

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Case Study 1 – Mahindra & Mahindra

Executive Summary

In March to April 2009 the researcher interviewed 20 senior managers at Mahindra &

Mahindra (M&M) to determine the impact of diversity on the business. M&M is a highly

successful Indian based business that has operated internationally since the 1950s.

Since 2001 an aspiration to be recognised as a “global” business has grown. This

research shows clearly that M&M are in the process of both understanding and realising

the implications of such an aspiration.

Mahindra is equipped with multiple strengths which are underscored by their employees

passion, commitment and energy for the business and as such, the basic ingredients are

in place to fuel the growth ambitions of the business.

The main findings that M&M will need to further attend to centre on the following themes:

How effectively the company embraces the diversity reflected in international

acquisitions and joint ventures.

How they capitalise on the value diversity in terms of innovation and ways of

working.

How well they manage a increasingly diverse and talented workforce.

The company

Mahindra’s core purpose is “Indians are second to none in the world”. The founders of the

nation and of the Company passionately believed this. This core ideology was shaped at

a time when India achieved independence from the British in 1947 and confidence and

belief in their own capabilities needed to be cultivated. The founders of the company set

out to prove that Indian technology and Indian entrepreneurs had the ability and acumen

to take on the world. Mahindra & Mahindra emerged out of this belief. At the heart of its

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core purpose lays the concept of quality – an ambition to make M&M known worldwide for

the quality of its products and services. The group has five core values:

Good Corporate Citizenship

Professionalism

Customer First

Quality Focus

Dignity of the Individual

Since these early days the Mahindra Group has grown to become a US $6.7 billion

business and is among the top 10 industrial houses in India. Mahindra and Mahindra

(M&M) is the only Indian company among the top three tractor manufacturers in the world

and is the market leader in multi-utility vehicles in India. With over 60 years of

manufacturing experience, the Mahindra Group has built a strong base in technology,

engineering, marketing and distribution. The Group employs approximately 67,000

people across five continents/80 countries. Mahindra manufactures and/or distributes

across Europe, Sub-continent Asia, Asia Pacific, North America, South & Latin American

and Africa. There are 10 employee levels within the group ranging from L1 through to

L10.

Mahindra and Mahindra (M&M) is a federation of companies and each business has its

own company structure. The Group has a leading presence in nine key sectors of the

Indian economy which are Automotive, Farm equipment, Information technology,

Financial services, Automotive components – Systech, Speciality businesses, Trade,

Retail and Logistics, Infrastructure development and, After Market.

Of the company’s nine key business areas, farm equipment is the most multinational

based. Mahindra tractors is among the top three tractor brands in the world with plants in

India, the United States, China and Australia and a worldwide network of eight hundred

dealers. M&M Tractors were awarded the prestigious Deming Prize for excellence in

quality, making it the first tractor company in the world to receive the award. Within

India, their most successful products and brands to date are in the automotive sector and

include the Zilo and the ‘Scorpio’ SUV which has received several national awards.

Within the Group each sector has its own President who reports to the Group Managing

Director and the President has bottom-line responsibility for their business. As a result,

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there is a high degree of trust, empowerment and operational freedom with strongly

entrenched review mechanisms by which people commit to budget and there are various

mechanisms for checking how they are meeting budgets and attaining business results.

The following are principles which every company has to adhere to and are driven by the

MD:

Leadership – every company must be either1st or 2nd place in the segment in which it

operates and if it doesn’t do that within a certain period of time then it has to exit.

Innovation. Every company must be driven by innovation and must have a certain

percentage of its revenues coming from products and services that did not exist 5

years earlier.

Globalisation – you should have a potential to be able to go global. A domestic

dominance is not sustainable.

Customer centricity – 3c’s customer centric corporation

Ruthless focus on financial returns and this is monitored by Corporate through a series

of mechanisms like ‘war rooms’, strategy sessions, MIS etc.

Each sector has its own vision and strategy. E.g. Tech Mahindra’s global strategy is

termed

6-3-2-1. This translates to, 6 pillars (offerings) of technology, over 3 years, to turnover 2

billion, with one goal to be number 1 telecoms service company.

Mahindra’s foray into the global stage began as early as 1950 when its first business with

Mitsubishi Corporation commenced. Since then the Mahindra Group has pursued an

ambitious global strategy that is primarily based on mergers, acquisition and joint

ventures. M&M acquire firms or go into Joint ventures (JV’s) to obtain competencies,

technology and knowledge as well as, increase M&M’s brand recognition. It has made

strategic acquisitions across the globe including Stokes Group (UK), and Jeco Holding

AG (Germany). Its global subsidiaries include Mahindra Europe based in Italy, Mahindra

USA Inc and Mahindra South Africa. M&M’s current JV’s include British Telecom (UK),

Navistar (USA); Renault (France) and Jiangling Motors (China).

Mahindra firmly beliefs in contributing and giving back to society and have established

several social programmes that underlie this belief:

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An Employee Social Option Programme (ESOP) – a volunteering program that

enables employees to work for various social projects in the three focus areas of

health, education and environment.

Project Nanhi Kali provide education for 6000 under privileged girl children every year

A welfare programme for farmers – SMRIDDHI (prosperity)

In-house, the company is committed to developing talent, capability and competencies

and there are several initiatives that demonstrate this commitment including:

Gallup survey (employees)

“Reach Out” (Bindas Bol –speak your mind – communications programme)

Global Talent Programme

Management Development – two programmes:

Global Managers Programme / Bodhi Vriksha – M&M Management Development

Centre

Key Findings

Leadership

The Vice-Chairman & Managing Director of Mahindra & Mahindra, Mr. Anand G.

Mahindra, demonstrates integrity and is described as a leader who practices humility

and inspires individuals to be both accountable and committed to the role that they

play in the company. Employees value and respect his leadership style particularly

with regard to his encouragement of behavioural practices such as inclusivity,

transparency, empowerment and good ethics. This is reflected in the following quote:

“The M&M system as a whole is very open and this has to do with the person at the

helm - Arnand Mahindra demonstrates this – he is very open and the system is very

flexible and empowering.”

Employees firmly believe that it is imperative a global leader clearly articulates a

shared vision and, that he/she has a global mindset and, is able to adapt to, and

interact with, other cultures. The employees interviewed fully acknowledge that as a

global leader Mr Mahindra is a role model for the organisation in relation to these

attributes.

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Having the right team in place was seen as one of the key tasks of a leader in his/her

quest towards achieving sustainable success. The company demonstrates this by

placing employees into positions that they are passionate about rather than solely

given an employee a position based on their level of skill and expertise. As an

organisation Mahindra is reluctant to enforce redundancy options and prefers to give

support to non-performing individuals by placing them in a better suited role.

• It has been stated that there is an apparent hesitancy and reluctance to deal effectively

with conflict. “A homogeneous army which responds to command/control is good in

some situations as they are fairly easily led. A diverse based army led by an artful

leader has more chance of navigating turbulent situations but the process of execution

will be more difficult”. This may be the key factor that undermines the good

foundations that has been put in place during the integration process. If a company

shies away from dealing with conflict then the repercussions can lead to fractious

behaviours, misinterpreted communications and territorial and siloed ways of working.

l

The overwhelming measurement of global leadership was fiscal followed by a leader’s

ability to handle complexity and scale. It is normal for the performance of a business

to be measured upon its fiscal achievements but attributes of global leadership should

also ensconce measures that are based upon engagement, that creates a context that

nurtures an alternative future, that initiate and convene conversations that shift

people’s experience and who listens and pays attention. A quote backing-up this point

says “I believe that people orientation is lacking in a lot of global leaders. Global

leaders tend to focus on results and work orientation ...this will only work up to a

point....our competitive advantage is better minds”.

Diversity

An interviewee stated that “we are clearly an Indian-centric organisation and as far as

or business goes there needs to be more learning for us” and the findings reflect this.

Currently the core purpose of Mahindra is Indian-centric. As a company operating

globally a core purpose should serve to inform the choices that you make with regard

to who you choose to embrace into the Mahindra family. A core purpose should also

provide a mechanism for uniting the global workforce behind your identity, values,

beliefs and objectives.

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When global partnerships are established, a new partnership and culture will often

emerge which is a mix of the organisational and social cultures of the constituent

partners. However, M&M has taken a bold step by embracing and maintaining the

status quo of the companies that they acquire who generally remain as semi-

autonomous companies. As inclusive as this approach maybe, it may also eradicate

both alignment and realisation of synergies. For example, technologies and processes

(hard factors) and values and beliefs (soft factors). This is borne out in the quote

“M&M has been fairly capitalistic focused in terms of how can I grow my business?

How can I earn more profit? How can I go into other geographies and be relevant?

What is my global footprint? ...so it has not been in the minds of the leaders but going

forward it is changing because it is not just from a perspective of how can I bring

diversity of structure so that I have people from different experiences that can add

value to my business but it is also about how can I stay close to the ground in terms of

what I hear from my customers and in terms of what I hear from my employees?”

This approach may conflict with the integration process in relation to how cultural

identity, communications, systems and processes are integrated. Further, although

M&M is very good at leveraging and absorbing competencies and knowledge it is not

clear as to how cost advantages are realised through merger and acquisition activities

if dual systems and processes are in operation.

If Mahindra is not leading from the front then they may continuously find that they are

in a transitional stage and managing the present rather than driving towards

transformational change and creating a future that will deliver real value and benefits

of a truly integrated business.

Communications in a global company need to tell a story, articulated clearly and

consistently and within the context in which you operate. There is some evidence that

although dialogue is very much encouraged, communications are not necessarily at

the fore front of strategic activities. For a global company this area should be an

imperative.

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Culture (organisational and country)

Employees share great pride in being a part of the Mahindra family. They feel valued

and acknowledged by the way in which M&M supports and develops its employees.

There is a fondness for the company that one might liken to a mother and child. “We

have a great bonding with our workmen and their families that is not evident in

countries in the West.”

In contrast to the above and, a paradoxical finding, is it appears that the empowerment

of the individual is often at the executive management level of the organisation but not

easily visible at the lower levels. At the lower levels there is limited scope for decision

making. This is further portrayed by the value placed on the individual who at times

can be perceived as lower than other persons due to a ‘rank and file’ approach and

this can by symbolised and reflected in power struggles where everyone is trying

inadvertently to exert their level of authority. This may of course be attributed to the

cultural context.

• It was acknowledged that Mahindra was good at implementing the ‘hard’ stuff in

relation to technologies, systems and processes but repeated references were made

to the issue that Mahindra will need to invest energy on exploring ways of approaching

and dealing with the ‘softer’ issues. Particularly with regard to different ‘ways of

working’, cultural integration, integration and utilisation of differing skill sets and

knowledge and differing communication styles in relation to managing expectations.

An interviewee voiced this as “we conduct our meetings in different ways. We tend to

go off tangent, have arguments and raise our voices”.

There is strong evidence to support that employees live Mahindra’s core values. So

much so that corporate values are seen as ‘part and parcel’ of their personal values.

This would lead to the question of how does an individual’s authenticity emerge and

how is individuality embraced? What effort is given to cultivating and developing an

individual’s authentic identity and emerging capabilities?

A number of forums have been established that allow for robust debate and challenge

within the Group. This includes the ‘Shadow Board’ which are young high potential

managers who anticipate change and, challenge outmoded ways of thinking and

working particularly on major issues relating to strategy, operations and identifying

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critical success factors. Other forums include the ‘War Room’ where the senior

managers are challenged and, within each sector, a number of steering committees

that encourage healthy debate on a variety of issues across divisions and functions.

Interviewees were passionate about this and one said “If you have a homogeneous

team then there is limited value”. “we have a group called IDEOS who are product

developers that foster creativity” “It will not lead to mutation. You will have fusion.”

Summary of findings – Business impact

Key enablers for successful global operations

Strengths – Mahindra is an organisation that is continuously evolving. Behaviours

and attitudes that provide the building blocks for innovation are evident. These

behaviours and attitudes are passion, commitment, hard working, risk taking,

adaptable to change, and entrepreneurship.

Customer-centric – Mahindra is a customer centric corporation where absolute focus

is given to serving the customers need. They place strong emphasis on building a

relationship with the customers for life. With regard to globalisation vs. localisation

M&M standardise wherever possible whilst maintaining an overall emphasis on the

need to adapt for the customer in their local geographies.

Behaviours – transparency, inclusivity, fairness and honesty are deemed to be

important behaviours in terms of the way business is executed across the Mahindra

Group. These behaviours are practised consistently across the Group.

Foreign management practices – there is substantial evidence that the company

embraces management practices and philosophies from other countries. For example,

quality programmes from the Japanese, and, the balanced scorecard methodology

and performance management systems from the West are all firmly established

processes within the Group. With regard to philosophies, approaches to different ways

of managing with regard to communication and, achieving work/life balance have been

observed.

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Key obstacles to operating successfully in a global environment

• Core purpose – as previously iterated, your core purpose needs to move beyond an

Indian-centric outlook to a global outlook that serves to unite your global workforce and

further guides you in the choices that you make when determining future global

partners. Interviewees appreciate this fact and a two quotes reflecting these thoughts

are “a family with more children are able to address a problem as opposed to a one

child family.” And, “if you have a diverse kitchen brigade then you will have a more

diverse culinary offering”.

Cultural awareness – cultural differences were most cited as a significant challenge

to creating and sustaining successful partnerships. There is a perceived need to

invest more in developing the cultural knowledge of your workforce. How to

acknowledge, be non-judgemental, accept, tolerate and respect and work with cultural

differences and differing value systems is an area that employees continuously wrestle

with. According to an interviewee “when I see something that is unexpected from my

cultural perspective the first reaction is a negative one and I have to consciously

remind myself that there is more than one way to live, act, and react and I need to see

the situation in the context of the others world”.

Ways of working – Mahindra see themselves as more relational than their Western

partners in that they often regard the ability to work together as more important than

commercial gain. In a similar vein the contract driven approach of Western companies

is a key obstacle to partnership success. Further examples are:

Unlike their Western counterparts, M&M employees pride themselves on being able to

multi-task. That is, they can move easily across functions – their responsibilities and

aspirations are not associated or limited purely by their title and expertise. Likewise,

M&M employees are used to a direct-contact approach and find it difficult to

understand and warm to, a controlling approach as for example exhibited in China.

Lastly, although underscored by high quality standards, M&M have a flexible approach

towards operational processes, planning and reporting which enables them to respond

more quickly to change and find it frustrating that partners will often place too much

emphasis on structure, reporting and planning.

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Communication – working in different languages with differing forms of expression

presents its own challenges that can often be testing. Communication can also have

an impact on the way the leader is perceived to lead. For example employees

acknowledge that their somewhat diplomatic style of leading can conflict with a

Westerner’s style who might be more direct. As such, tools to enable dialogue that is

engaging and reduces misinterpretation will need to be identified.

With regard to internal communications in the company there appears to be limited

opportunity for knowledge sharing between sectors, divisions and functions. This

should be addressed so that all employees regardless of location, have access to, and

receive the same information in a timely and consistent manner from a centralised

knowledge sharing platform.

Diversity – employees believe that because by its very nature India is a nation that

consists of many cultures then diversity is a given and is a concept built into many of

M&M’s processes. However when probed further they admitted that diversity was a

low priority when compared to other objectives on the Groups strategic agenda. An

interviewee stated that “we could intensify recruiting people from diverse backgrounds

with regard to gender, qualification and work experience”....“we need to have expats

come here so that our people are exposed to other cultures in order to better sensitise

them”. An environment that creates conditions to foster diversity will value different

perspectives and enable diverse employees to contribute authentically to the

company. Diversity can no longer be a phenomenon to keep at arm’s length, an

abstraction to study or philosophise about. Instead, it has become “an experience,”

something that only those who live in very remote and isolate areas can ignore.

• Women in the workforce – there are many assumptions with regard to the types of

work women will be prepared to do and as such women are perceived more likely to

want to work in a service orientated environment rather than a manufacturing or sales

environment. Mahindra will need to ensure that their workforce is a diverse and

textured sample of the larger world that they want to make an impact upon. An

observation by an interviewee reflects this point: “Mahindra is not as diverse as it

should be. There is huge scope for improvement. We need more women and different

nationalities.”

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Case Study 2 – Anglo Platinum

Introduction

In June to August 2009 eight senior managers at Anglo Platinum were interviewed to

determine the impact of diversity on global leadership performance. Anglo Platinum is

the world’s largest platinum producer operating primarily in South Africa with interests in

Zimbabwe.

The findings of the research indicate that Anglo Platinum is very much in the process of

both understanding and realising the implications of diversity and global leadership. As

relayed by interviewees, Anglo was previously dominated by an Oxbridge/Rhodes scholar

culture and an Oppenheimer legacy. According to the Times newspaper it had “a

patriarchal structure and private fiefdoms where people had to work their way steadily up

through the ranks, kow-towing to the corporate aristocracy.” In order to address this

unsustainable environment Anglo American and its subsidiaries have identified strategic

goals that have accelerated transformation programmes to modernise the organisational

culture, from ‘Old Anglo’ to ‘One Anglo’ as well as streamline operations. This has

caused some dissent in the company.

Twinned to the shift in organisational culture is the shift in the social environment.

Operating primarily in South Africa, Anglo Platinum was formed during the Apartheid

years. In order to address the imbalances that such a legacy has caused a programme

of Affirmative Action has been in place for a number of years. This programme has had

some impact in terms of ‘ways of working’ and makeup of the workforce but the concept

of diversity as an integrated programme is still very much in its infancy and the emotional

reaction to diversity initiatives is still acute although it may well be expressed in the most

reasonable language.

The main findings that Anglo Platinum will need to further attend to centre on the

following themes:

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To continue to support a diversity of perspectives.

To move beyond compliance and be as serious about encouraging and

sponsoring critique and diversity as they appear to have been about their

corporate value systems. In cybernetics, the ‘Law of Requisite Variety’, stresses

the importance of internal variety if an organism is to successfully adapt to its

external environment, as change ensues. Anglo Platinum will need to welcome

and learn from independent and challenging perspectives within the organisation

so that they can function more effectively and responsively in diverse

environments.

To work with rather than against the policies of HQ

The company

Anglo Platinum came into being in 1995 when the company Johannesburg Consolidated

Investments unbundled. The platinum interests of the company became Amplats, later to

be renamed the Anglo Platinum Corporation Limited. Anglo Platinum is a subsidiary of

Anglo American who is a major shareholder (80%). Although Anglo American is

geographically diverse with operations in Africa, Europe, South and North America,

Australia and Asia, Anglo Platinum’s operations are primarily confined to South Africa and

Zimbabwe.

Anglo Platinum is the world’s largest platinum producer, accounting for about 37% of

global newly mined platinum output. It mines, processes and refines the entire platinum

group metals (PGMs) range palladium, platinum, rhodium, ruthenium, iridium and

osmium. Its operations exploit the world’s richest reserve of PGMs, known as the

Bushveld Complex and currently own five mining operations in the Limpopo and North

West provinces of South Africa. Anglo Platinum is also involved in developing mining

activity for PGMs on the Great Dyke of Zimbabwe.

Under the leadership of Neville Nicolau (CEO) and aligned with Cynthia Caroll’s (CEO,

Anglo American) ambition ‘to be the leading global mining company becoming the

industry’s employer, partner and investment of choice’, Anglo Platinum has since 2007

seen a revolution in safety, systems, processes and big progress on black empowerment

as well as an accelerated change programme.

http://en.wikipedia.org/w/index.php?title=Johannesburg_Consolidated_Investments&action=edit&redlink=1

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This year the company is wrestling with a downturn in demand from big buyers such as

carmakers as well as a potential hostile takeover bid. Both of these situations have

resulted in a cost cutting programme that has seen more than 10,000 jobs taken out of

the mining group in the past six months. Operations have been restructured and capacity

has been cut dramatically, two shafts have closed in South Africa and production costs

lowered. Anglo Platinum employs approximately 80,000 people and has six core values:

1. We put safety first

2. We deliver on promises

3. We value and care about each other

4. We act with honesty and integrity

5. We are one team

6. We are passionate and take pride in everything we do

Key findings

Leadership

The leadership team is genuinely moving from an autocratic and directive style

towards an inclusive and collaborative way of working.

There is a firm belief that it is imperative that a global leader clearly has the knowledge

and experience of operating in a global setting and thus the ability to adapt their style

to suit different cultures, and interact with diverse stakeholders.

Having the right team in place and having credibility from your peers was seen as one

of the key tasks of a leader in his/her quest towards achieving sustainable success.

Running parallel to the above is the way in which the company recruit, promote and

retain employees. It is no longer appropriate to recruit in one’s own likeness however

there is still reason to believe that whilst there are some leaders who are keen to give

employees opportunities based on their potential and ability to succeed there are

others who continue to look for ways to negate a person’s character and ability based

on preconceptions and stereotypes. Leaders need to understand the complexities of

different nationalities and different cultures. There is a necessity to engage employees

at all levels and encourage them to contribute so that an individual is able to bring their

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best to the job. The leader also has a responsibility to be willing to listen and ensure

that the employee is heard. There should be leadership at every level so that

accountability is achieved and the company can move forward in unison.

It has been stated that although publically diversity is acknowledged, privately there

remains a question mark over the commitment to this area. As voiced in these three

quotes:

“The reality of corporate culture is that people learn to read the signals more that

what is publically portrayed”.

“People are not supportive of diversity because they behave in such a way that

they nullify the strategic advantage. A person of a different culture comes into

the environment and from day one people work to undermine them. From day

one people start saying things that are meant to nullify their performance and

their performance is magnified. It is a self fulfilling prophecy”.

“Here what people have known over the years is that there are boundaries. You

can not say or do certain things which they did with impunity that is why the

conflict happens within acceptable bounds but there is still little respect”.

It would appear that some leader’s private behaviours do not always align with their

overt behavioural displays and verbal utterances (public behaviour) otherwise known

as ‘calculative compliance’. This may be the key factor that undermines the good

foundations that have been put in place during the values development process. If a

company is not demonstrating actions that reflect their spoken words then the

repercussions can be potentially very damaging for an organisation’s diversity agenda.

If staff interprets the mismatch between what is said and what is done to mean that

diversity is more to do with public relations rather than actual practice then this can

lead to fractious behaviours, misinterpreted communications and territorial and siloed

ways of working. This level of disparity will not allow diversity to become mainstream.

The overwhelming measurement of global leadership was deemed to be fiscal

followed by a leader’s ability to implement a sustainable agenda based on the triple

bottom line (economic/social/environmental). It is normal for the performance of a

business to be measured upon its fiscal achievements but attributes of global

leadership should also include measures that are based upon engagement with the

community, that understands the impact of their activities on the environment, that

creates a context that nurtures an alternative future, that initiate and convene

conversations that shift people’s experience and who listens and pays attention.

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This view has been articulated by an interviewee who says “most of the people who

get rewarded as they climb up the leadership ladders get rewarded based on their

outputs in terms of the financials. However we do not pay enough attention to looking

at the behaviours that bring about output. Financial results versus the human element.

Where individuals may be admired for being shrewd business people almost to the

point where it is ok for them to destroy human beings in the process as long as they

get financial results. Now with global leadership it is key and critical to pay attention to

how we deliver and achieve the business results. Bringing the human element into

that. This will bring sustainability.”

Diversity

Although listed on both the Johannesburg and London stock exchanges the main

focus of Anglo Platinum is South African-centric. The company should be wary of

providing a mechanism for uniting their global shareholders behind its strategic,

operational and employee based agendas.

The main thrust of Anglo Platinum’s diversity agenda is based on the pillars of

Affirmative Action. Basically, it is a numbers game as this quote inadvertently

suggests – “It always fascinates me that when people talk about diversity it is

automatically linked to merit and capability. But if there is not diversity issues people

do not talk about merit and capability”. Given the historical context of South Africa

where diversity generally tends to focus on race (Black/White/Coloured/Indian) this is

understandable. However, the company now needs to progress its level of thinking

beyond compliance measures to understanding the value add to the organisation of an

integrated diversity programme. The focus needs to shift from purely a demographic

one to a focus that addresses both cognitive and behavioural measures with

associated KPIs for leaders as part of their deliverables. Issues to consider include,

the White males perceiving themselves as the ‘threatened species’ and thus

discriminated against and the issue pertaining to the retention of staff who do not typify

the ‘Anglo Person’ will need to be addressed.

Also, although it is acknowledged at the senior level that there is a need for diversity

across all spectrums there is still much work to be done at the lower levels of the

organisation. At the lower levels it appears that the Johannesburg Consolidated

Investments (JCI) culture of old is still very much present. That is people who

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supported the apartheid movement and whose ideology is aligned to the Nationalists.

Subsequently the old nationalist way of behaving persists.

If Anglo Platinum does not move their diversity agenda forward then they may

continuously find that they are in a transitional stage and managing the present rather

than driving towards transformational change and creating a future that will deliver real

value and benefits of a truly integrated business.



although dialogue is very much encouraged, there may be some conflict between the

ways in which people communicate. That is, an inclusive vs. directive management

style. In this vein reference was made to the ‘Westerner’ way of doing things versus

the ‘African’ way of doing this. My question is – are you not all African? A spirit of

‘them’ and ‘us’ is still evident in the language used.


One of the biggest issues that presently persists in the company is the way in which

the ‘One Anglo’ programme has been implemented. There is a persistent feeling that

although Anglo American presents itself as a facilitator it is perceived to be playing the

role of ‘orchestrator’. Change is driven by a top-down approach rather than through

collaboration and, more so, when a steer towards change in a particular direction is

given it is often not clearly articulated in terms of how you will work together. As a

result, decisions taken by the subsidiary have a tendency to be overruled at the end or,

two systems/processes run in parallel (e.g. the values of Anglo Platinum and the

values of Anglo American). This is dangerous as expectations are created that one’s

opinion will be taken into account and further it sends out confusing messages to your

employees that creates dissent. Dissent is created at an employee level due to mixed

messages, at a senior level due to a perceived level of interference and, at an

American Anglo level as they become frustrated by the attitudes of their subsidiaries.

As such, you have three levels of resistance to change making it three times as bad as

it could be! If change and transformation is to succeed the dissatisfaction of the

current status, a vision of what is possible and, the willingness for change must be

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greater than the resistance. These views have been articulated in the following

quotes:

“The mode of operation for the most part is management by consensus. But then

they leave it for too long trying to achieve consensus and go to the opposite mode

by returning to command and control. This is dangerous as you create

expectations that employee opinions will be taken into account.”

“‘One Anglo’ programme is a good example whereby it is a good idea but got lost

in the implementation ......as we made the mistake of not articulating how we will

work together. So there is a push and pull between corporate centre and business

centers. They should work out the Anglo American management framework.

What is the system of internal control? What are the things we will do together with

accompanying guidelines with no compromise?”

“Anglo American’s announced position is that of facilitator role but the people

perceive the parent company to be playing an orchestrator role....Anglo American

is beginning to impose their way unto us and people are becoming disempowered

as it is not symbiotic of the facilitator role.”

“With ‘One Anglo’ a lot of effort is taken to dress it up as consultation and

participation but in the end it is pure directives and that his how it is perceived by

the people on the ground.”

“.... It is the way in which it is done. It is token involvement. Yes we will involve

you but actually we have already decided what to do.

“This is inevitable in a global company. But you have to find ways of engaging

effectively in order to influence the outcome of the process. It is a two-way

process. Both the parent company and its subsidiary need to engage and make

their voices heard rather than choose not to partake.”

The concept of the “Anglo Person” is still very much alive and well. This person is

typified as being an Oxbridge or Rhodes scholar familiar with the Oppenheimer legacy,

patriarchal structure and private fiefdoms of Anglo. They are long serving employees

who have worked their way steadily up through the ranks. In fact, until a few years

ago it is said that the only way to work for Anglo was if you were recommended by

someone already working for the company. This is changing but the culture pervades.

An interviewee says that “the ‘Anglo person’ tends to be long serving employees from

the same background, school and having the same qualifications.... Outsiders fit in

with difficulty and they do not last long due to the culture”. As such, new people joining

Anglo face a hostile environment.

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As previously mentioned, it appears that the empowerment of the individual is often

at the executive management level of the organisation but not easily visible at the

lower levels. At the lower levels there is limited scope for decision making. This is

further portrayed by the value placed on the individual who at times can be perceived

as lower than other persons due to a ‘rank and file’ system and this can by

symbolised and reflected in power struggles where everyone is trying inadvertently to

exert their level of authority. This may of course be attributed to the cultural context

of past. The following two quotes bear these findings out:

“In my career I have sat with people with huge potential but they are always kept

down. They say he/she is not assertive or he/she is not got with people

management etc. ......so individuals and the organisation at large needs to make

sure that individuals succeeds so that we manage people for success and not for

failure. Diversity is generally a route for failure because people are quite quick to

say ‘I told you’. Because for some knowledge and competence is assumed and

for others it is not.”

“The lower levels are more entrenched in their ways and are very limited in their

views. They are the most threatened because they tend to be the previously

disadvantaged people which make them act in certain ways.”

It was acknowledged that Anglo Platinum had begun its journey towards achieving

diversity but repeated references were made to the issue that Anglo Platinum will need

to invest energy on exploring ways of approaching and dealing with the ‘softer’ issues.

Particularly with regard to different ‘ways of working’, cultural integration, integration

and utilisation of differing skill sets and knowledge and differing communication styles

in relation to managing expectations. References such as:

“It is a big tragedy of human kind in that we want fairness but we were not born

equally. So even if you make the playground level you will always have disparity in

terms of talent. So the question is how to deal with this empathetically and not to

have unfairness creep into the system”?

“We must not show lip service but put people into substantive roles. The person

has to contribute in a meaningful way. We are far from achieving diversity. e.g.

women only make up a small percentage of the workforce. If we were truly diverse

they would make up 50% of the workforce but we unfortunately require women to

make choices between pursuing a career and being a mother. This is not fair”.

“Historical issues which we are beginning to address. So how we manage

succession planning and career progression. It is correcting a long history of

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imbalances. How we also manage reward and recognition is an issue. Yes we are

focusing now on diversity and inclusion or even employment equity but we are

doing it by ignoring the inequality that our history has created. So maybe putting in

a programme that looks at the people who are here, how do we retain them”.



Strengths – Anglo Platinum is an organisation that is continuously evolving.

Behaviours and attitudes that provide the building blocks for both integration and

innovation are evident. The behaviours and attitudes that are reflective of the values

are care and respect, fairness and honesty, openness and transparency, passion

towards safety, adaptable to change, and inclusivity. These behaviours are

proactively encouraged in terms of the way business is executed across Anglo

Platinum.

Diverse workforce – due to compliance/legislation affirmative action is now firmly

ensconced in Anglo Platinum resulting in a more diverse workforce at the managerial

and senior levels. Also, Anglo Platinum has led by example in the global mining sector

by employing women in mines underground.

Management practices – there is evidence that the company embraces management

practices and philosophies from other cultures. Particularly with regard to both the

‘ubuntu’ and ‘lekgotla’ concepts as well as philosophies from the indigenous cultures in

terms of adopting a consultative approach in relation to decision making and ways of

working.

Leadership style – It was acknowledged that the leadership style at Anglo Platinum is

gradually shifting from autocratic to participative as expressed in this quote – “it is

important for a leader to be built up incrementally in terms of their understanding of

different cultures, and different ways of thinking and different ways of doing business”.

Generally, an autocratic leadership style is associated with the Western world whereas

a participative leadership style is consistent with the traditional African culture. The

disparity between the two styles need not be a breeding ground for conflict but rather,

the good traits and attributes from both styles can be woven into a new style. One that

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is inclusive but still makes decisions in a timely fashion and accepts accountability.

This style of leadership will need to take place so that African leaders can cope with

the cultural ambiguities, complexities and inconsistencies of leading in Africa.


Cultural awareness – cultural differences were most cited as a significant challenge

to creating and sustaining successful working relationships. There is a perceived need

to invest more in developing the cultural knowledge of your workforce. How to

acknowledge, be non-judgemental, accept, tolerate and respect and work with cultural

differences and differing value systems is an area that employees continuously wrestle

with. e.g. the resettlement project. Two following three quotes reflect this finding:

“it is important for a leader to be built up incrementally in terms of their

understanding of different cultures, and different ways of thinking and different

ways of doing business”.

“be a peacock and not a penguin – don’t adapt so much and don’t become so

assimilated that you lose what you bring to the fold. Be aware of cultural

differences and nuances but don’t compromise your belief”.

“You might have the best intention but need to have a good understanding of all

aspects. Changing behaviour and culture is difficult and it is a long process. Take

the time and persevere. Celebrate the small steps but be aware of the long haul”!

Ways of working – Despite progress on the affirmative action front there are still

entrenched behaviours linked to apartheid. As such, employees at the lower levels of

the organisation still embrace a hierarchical and autocratic way of working. Akin to this

there is not much evidence in Anglo Platinum of innovation and creativity particularly in

operational processes where processes tend to be largely rule bound. The following

quote aptly summarises this view: “as far as I can see it now it is easier for the senior

leadership because they are generally more intelligent and qualified. The lower level

are more entrenched in their ways and have very limited in their views. They are the

most threatened because they tend to be the previously disadvantaged people which

make them act in certain ways. It would be great if people are more accommodating.

People are people. Make allowances.”

Centralisation – the ‘One Anglo’ programme is a transformation programme that

requires the capacity to respond to change. However, efforts in this arena are often

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tinged with frustration and infighting between HQ and Anglo Platinum. The need for

both Anglo Platinum and Anglo American to build and protect their brand reputation

together will go a long way towards signalling to shareholders, employees and other

stakeholders that management is in control of its future.

Communication – working in different languages with differing forms of expression

presents its own challenges that can often be testing. Communication can also have

an impact on the way the leader is perceived to lead. For example employees from

the African culture acknowledge that their somewhat diplomatic style of leading can

conflict with a Westerner’s style who might be more direct. As such, tools to enable

dialogue that is engaging and reduces misinterpretation will need to be further

identified.

Diversity – when probed leaders admitted that diversity was a low priority when

compared to other on the objectives on the Groups strategic agenda. Also, leaders

acknowledged that integration efforts were often not seamless. There is a tendency

towards sequential discussions rather than joined-up discussions. An environment

that creates conditions to foster diversity will value different perspectives and enable

diverse employees to contribute authentically to the company. Diversity can no longer

be a phenomenon to keep at arm’s length, an abstraction to study or philosophise

about. Instead, it has become “an experience,” something that only those who live in

very remote and isolate areas can ignore. Diversity needs to become mainstream.

To this end, the emphasis on diversity programmes will need to be stepped up.

Programmes will need not only to create awareness of different cultures but also an

integrated programme of where different behaviours and attitudes and, different ways

of thinking are valued. Anglo Platinum will need to ensure that their workforce is a

diverse and textured sample of the larger world that they want to make an impact

upon.

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Case Study 3 – Al Baraka Banking Group

Introduction

In September to October 2009 eight senior managers at the Al Baraka Banking Group

(ABG) were interviewed to determine the impact of diversity on leading the business.

ABG evolved from the need to have a truly global Islamic banking service for the Arab

world and Muslims worldwide and has successfully integrated 10 Islamic banks in 13

locations stretching from the Middle East to North and South Africa and, to Asia into a

recognisable group that has established a name for itself in the Arab and Islamic banking

world. To this extent the Al Baraka Group is currently undergoing a re-branding exercise,

involving the launch of a new brand that will unify all subsidiaries under a single banner,

propel the Al Baraka brand to the forefront of Islamic banking and emphasise its

commitment to becoming the natural global leader.

A article in The Economist (June 2009) says of the CEO, Adnan Yousif, that “He has

recently struck a tone more reminiscent of greed-is-good Wall Street, with a grand plan to

build the biggest Islamic bank yet seen, spanning the world and providing Muslim

countries with new financial services their people have barely heard of.” Since 2002 an

aspiration to be recognised as a “global” business has grown. The ABG group is in the

throes of geographic expansion and ABG is evolving as a “Pan Islamic Institution”.

Expansion to Far East is under consideration and medium term expansion plans will

include India, China and Europe.

In tune with these plans the Economist article goes on to say that “in private, some Gulf

bankers speak of the need for an “Islamic Goldman Sachs”. That is what Mr Yousif is now

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attempting to create—a Sharia-compliant investment bank with global reach and ready

access to capital. It will be called Istikhlaf – Arabic for “doing God’s work”. From this

research it is clear that ABG are in the process of both understanding and realising the

implications of such an aspiration as the Bank progresses in its journey from international

to global.

Issues relating to diversity and global leadership that the Bank will need to further probe

include:

Differing ‘ways of working’ between the subsidiaries

Leveraging communication and collaboration between the subsidiaries

Diversity programmes with an emphasis on cultural sensitivity,

Internal communications

Workforce composition (women and local vs. international leaders)

On the 14 December 2009 an article by a British newspaper wrote that although the

growth of Islamic banking sector has been phenomenal (an annual rate of 10%-15%) it

has not gone unscathed by the credit crunch. Sukuk, central to the development and

spread of the Islamic banking industry has been thrown under the spotlight by the threat

of default by Dubai’s Nakheel. This has highlighted that because Islamic finance has

grown so fast corporate governance, regulatory enforcement and standard can still be

vague. As such, to survive in an increasingly globalised world as well as sustain a

profitable business the industry will need to rigorously look at its practices, standards and

cross-border regulations and at the heart of this pressingly sits the issue of diversity and

global leadership.

The company

ABG was incorporated on June 27, 2002 as a Bahraini closed shareholding company,

owned 55% by Shaikh Saleh Abdulla Kamel and 45% by Dallah Al Baraka Holding

Company (EC), Bahrain, also owned by Shaikh Saleh Abdulla Kamel. In July 2006, the

ABG Group completed a successful Private Placement and an Initial Public Offering of its

shares, converting the bank into a public joint stock company. Adnan Yousif oversaw its

initial public offering (IPO), the largest thus far by an Islamic bank. Today $700 billion of

global assets are said to comply with Sharia law.

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The Banking Groups basic concept of Islamic banking is revolved on the following:

Prohibition of Interest (any increase in same kind over time). interest-free banking is

based on the Islamic legal concepts of shirkah (partnership) and mudaraba (profit-

sharing).

Permissibility of Trade (within the realm of lslam)

ABG evolved from the need to have a truly global Islamic banking service for the Arab

world and Muslims worldwide. To this extent ABG has successfully synergized ten

Islamic banks in the Middle East, North and South Africa and Asia - all with excellent

track records – into a recognizable group that has established a name for itself in the

Arab and Islamic banking world. Units are niche players in their respective markets with

excellent brand equity.

ABG’s corporate ethos is ‘we believe society needs a fair and equitable financial system:

one which rewards effort and contributes to the development of the community.’ Linked to

their ethos is the mission which is ‘to meet the financial needs of communities across the

world by conducting business ethically in accordance with our beliefs, practicing the

highest professional standards and sharing the mutual benefits with the customers, staff

and shareholders who participate in our business success’.

Their philosophy is ‘that banking has a crucial role to play in society, one in which as

bankers we have an incredible responsibility of stewardship for the resources placed in

our hands. To meet this responsibility and use the resources wisely, we rely on Sharia

principles to guide us as we participate in our customers’ successes, sharing in the social

development of families, businesses and society at large.’

As such, the strategic objectives of ABG were identified as:

Achievement of the highest standards of corporate governance and regulatory

compliance

Distribution of products and services and promotion of cross border services

Research & development into new Islamic financial products

ABG’s prime business driver is ‘enhancement of shareholder value and stakeholder

benefits’ and has 4 major value drivers:

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Increase profitability

Product innovation

Enhancement of technology

Improvement in customer service

The bank has a concept called ‘Beyond Banking’ which says that “money is a conduit by

which we enter into new opportunities together and take part in common effort for mutual

reward; as steward of the resources entrusted to us, our efforts contribute to building the

community, at home and in the wider world.” ABG’s strengths can be summarised as

follows:

Adherence to Shari’a principles

Close customer relationships – a partnership of equals

Financial probity

A local bank first and foremost – but with international reach

Key findings

Leadership

The CEO of Al Baraka Banking Group, Mr. Adnan Yousif, is described as “being very

adept at bringing different cultures together” and communicates with the Heads of the

subsidiaries on a continuous basis. Their view of leadership is that “you need

leadership qualities whether you lead a small or a global company. The global

aspect is that you need to have a sense for multicultural management and Mr. Yousif

embodies this”. Employees value and respect his leadership style particularly with

regard to his encouragement of behavioural practices such as openness, good ethics

and best practice.

Employees firmly believe that it is imperative a global leader values their employees

and fosters a collaborative working environment between the subsidiaries as borne

out in the following quote - “a good leader is one who can build a good institution so

that even if he leaves the institution it will continue to perform and be successful. I

don’t believe in good leadership for the continuance of an organisation. I believe in

good practices”. In line with this there is evidence to suggest that the Bank places

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emphasis on educating, motivating and retaining its employees as well as,

encouraging the senior management team of the subsidiaries to have open dialogue

through regular meetings.

They also see the need for a leader to clearly articulate a shared vision and, that

he/she is able to gather and analyse information from across the subsidiaries to aid

decision making so that the vision is realised.

It is also deemed important that the leader retains a visible profile to develop market

leadership and thus, is able to develop significant relationships with all stakeholders.

The overwhelming measurement of global leadership was fiscal followed by a leader’s

ability to motivate and retain employees. Whilst this is the generic measure of the

performance of a business other measures of global leadership should be considered.

Global issues relating to diversity, sustainability, the environment, human rights etc

creates a context that nurtures an alternative future, that initiate and convene

conversations that shift people’s experience. This view is shared by an interviewee

who says “a global leader cannot just look at financial targets. You have to be aware

of sub issues. That is you have to have a vision of how these issues are moulding the

world in terms of the environment, human rights issues, human development etc.

Therefore you have to take account of global issues.”

Interviewees overwhelmingly stated that it was important for a leader to be local as a

local national is deemed better able to retain respect from their employees on the

ground as well as, understand local customer needs – “A leader should be

local...because they have local cultural values and they are more sophisticated in their

knowledge of the local markets.”

There is much emphasis placed on the importance of a solid and good educational

background with the majority of employees attending established educational

institutions and having excellent qualifications. Almost all qualifications are financial

based.

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Diversity

Currently the core principle of Al Baraka Banking Group is based upon Sharia

principles. As a company operating globally a core principle and purpose should serve

to inform the choices that you make with regard to who you choose to embrace into

the Al Baraka Banking Group family. A core purpose should also provide a

mechanism for uniting the global workforce behind your identity, values, beliefs and

objectives.

When global partnerships are established, a new culture will often emerge which is a

mix of the organisational and social cultures of the constituent partners. ABG seeks

alignment and realisation of synergies of both technologies and processes (hard

factors) and values and beliefs (soft factors) with its subsidiaries and embraces local

preferences. ABG is firm in terms of uniformity and centralisation of practices and

policies across the board but is prepared to listen and adapt practices and polices

(where there are no governance restrictions) to suit local needs. It is acknowledged

that there is much value to be gained by having different competencies, experiences

and ideas in the organisation.



although dialogue is very much encouraged, communications are not necessarily at

the fore front of strategic activities as there is limited opportunity for the subsidiaries to

collaborate with each other as communications are owned and shared by the parent

company. For a global company effective internal communications should be an

imperative.

At the outset, the workforce of ABG appears to be diverse due to the mix of

nationalities that make up the subsidiaries. However, it would seem that the

subsidiaries are primarily staffed by local nationals.

Due to the underlying belief that the Group structure is diverse it is assumed that a

focus on diversity specific issues is not a necessity. This is evidenced in that no KPI’s

are attached to diversity. To this extent, diversity is viewed as a fact of life rather than

a business purpose. Also, the fact that Islam forms the core purpose is seen as a

unifying factor that brings each other together as the following quote suggests – “it is

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not so much about behaviour but it is a state of mind. For example in the Bank we

have different religions that we deal with as equals and value their response and

feedback and their contribution and ideas that they bring to the business. At the end of

the day it is how you value people.”

Given the geographical and cultural diversity of the Group, complexity and challenges

can arise in relation to language differences as well as different ways of working.


Employees share great pride in being a part of the Al Baraka Banking Group family.

They feel valued, engaged, and acknowledged by the way in which ABG supports and

develops its employees.

In contrast to the above and, a paradoxical finding, is it appears that the empowerment

of the individual is often at the executive management level of the organisation but not

easily visible at the lower levels. At the lower levels there is limited scope for decision

making and this is symbolised by a ‘rank and file’ approach with a hierarchical

structure firmly in place. This may of course be attributed to the cultural context.

There is further evidence that a new generation may be challenging this decision

making structure.

It is acknowledged that it is important to understand the differences in relation to

culture, behaviours and ways of thinking between the different nationalities in the

group. And it is stated that individuals must be practice sympathy, tolerance and be

open-minded towards all so that all are treated on an equal footing. “God is one for all.

Deal with all on an equal footing and not on a religious basis.” Similarly, “nationality is

like a genetic trait – you cannot get away from it. What is important is you have to

process and leave yourself open to understand and accommodate other cultures and

backgrounds. My nationality has to accommodate others”.

There is strong evidence to support that employees live Al Baraka Banking Group’s

core values and are compliant with Sharia law. So much so that corporate values

are seen as ‘part and parcel’ of their personal values. “We adhere to the principles of

Sharia and whoever we deal with they all subscribe to the same principles. So

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although there might be diversity in cultures and opinions the principles of business

are retained.”



Strengths – Al Baraka Banking Group is an organisation that is continuously evolving.

Behaviours and attitudes that provide the building blocks for innovation are evident.

These behaviours and attitudes are passion, commitment, open-mindess, adaptable to

change, and equality for all.

Community – ABGs philosophy is that banking has a crucial role to play in society

and as bankers they have an incredible responsibility of stewardship for the resources

placed in their hands. As such, the Bank believes in a fair and equitable financial

system that rewards effort as well as, contributes to the development of the community

and the social development of families.

Customer-centric – Al Baraka Banking Group is a customer centric corporation where

focus is given to serving the customers need. They place strong emphasis on building

a relationship with the customers for life. With regard to globalisation vs. localisation

ABG standardise wherever possible whilst maintaining an overall emphasis on the

need to adapt for the customer in their local geographies.

Behaviours – team building, integrity, and loyalty are deemed to be important

behaviours in terms of the way business is executed across the Al Baraka Banking

Group. These behaviours are seen to be practised consistently across the Group. “In

meetings we have very divergent views that are given and taken but the cultural ethos

is what fuses us together. So we have diversity in thinking but unity in terms of

business and sympathy for other cultures”.

Foreign management practices – there is evidence that the company shares

management practices and philosophies from other countries. For example, credit

review systems, risk management, depositary standards and corporate governance

principles are all firmly established processes within the Group. Due to educational

backgrounds there is also influence from both Europe and America with regard to

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philosophies and approaches to different ways of managing, developing and

implementing business practices.


Cultural differences – It was stated that learning how to acknowledge, be non-

judgemental, accept, tolerate, respect and work with cultural differences and differing

value systems is an area that employees continuously wrestle with. There is at

present a lack of initiatives to address these developmental areas and employees that

have the opportunity to take part in educational programmes that focus on cultural

sensitivity and integration would find this valuable. The Group would also benefit from

organisational programmes such as talent management, leadership development and

mentoring programmes.

Ways of working – Al Baraka Banking Group see themselves as relational in that they

often regard the ability to help the community as more important than commercial gain.

This is a honourable value but it can also provide challenges with regard to different

ways of working between the subsidiaries. For example, in South Africa, an emphasis

is placed on adherence to deadlines whereas in the Middle East, employees are used

to a more relaxed approach to decisions and business processes. It is important that

these different ways of working are acknowledged and understood across the Group.

There also appears to be a marked difference in attitudes towards ways of operating

and relating between long serving members of staff and new joiners. It is necessary

that the Group harness the good attributes of both sets of employees so that learning

across the Group can be increased and opportunity for creativity and innovation

maximised.

Communication – Language differences was cited the most as a significant challenge

to creating and sustaining successful partnerships. Working in different languages

with differing forms of expression presents its own challenges that can often be testing

as voiced in the following quote – “We are moulding 10 different nationalities together

therefore it existed before. Diversity was there from day one. In fact one of the issues

that we have to cope with in managing diversity is the language differences between

the staff. i.e. Arabic, English, Turkish and French. These are enormous challenges for

us”. Ineffective communication can have an impact on the way the strategy and

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objectives are implemented and realised as well as undermine the opportunity for

shared learning and best practices across the Group. There is a perceived need to

invest more in developing a Group language for the workforce. Similarly, with regard

to internal communications in the company there appears to be limited opportunity for

knowledge sharing between the subsidiaries. A view echoed by an interviewee – “we

need to know how to make internal communication more effective”.

So that all employees regardless of location, have access to, and receive the same

information in a timely and consistent manner from a centralised knowledge sharing

platform two activities could be developed and implemented. Firstly, tools to enable

dialogue that is engaging and reduces misinterpretation will need to be identified –

specifically, a communications strategy. Secondly, that all employees at any level are

empowered to speak to another subsidiary without having to go through headquarters.

Diversity – employees believe that given the diverse make-up of the Group diversity is

a given and a concept built into many of ABG’s processes. However when probed

further they admitted that diversity was a low priority when compared to other priorities

on the Groups strategic agenda. This is further evidenced in that no KPI’s are

attached to diversity.

Although on the outset the workforce of ABG appear to be diverse because of the mix

of nationalities that make up the subsidiaries there are many areas where the issue of

diversity is not given sufficient credibility and thus not fully appreciated. “We don’t

document it (diversity) but the practice is there. Business is the first priority in any

profitable organisation. But we believe that diversity and motivation is important and

therefore diversity is linked to the business objectives.” Similarly, in relation to

business priorities it was stated that “diversity does not sit anywhere. Unless a matter

arises that has a relationship to diversity it is not discussed as a separate topic.”

This can impact on Group performance. For example, it would seem that the

subsidiaries are primarily staffed by local nationals and much emphasis is placed on

the importance for a leader to be local. Whilst this may have associated benefits, it

should be recognised that whilst the Bank continues to operate in a global environment

leadership should not be limited to local nationals.

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Similarly there is much emphasis placed on the importance of a solid and good

educational background with employees having significant qualifications. As important

as this is, this focus may serve to alienate equally talented individuals who have not

attended esteemed educational institutions. It may also limit opportunities for

individuals from different socio-economic and professional backgrounds and who may

have equally valid experiences. This limits how much the status quo is challenged

which ultimately can impact on creativity and innovation.

Likewise, although there is a mix of religions amongst the workforce the majority of

employees are Moslem. This would lead one to ask the question is an individual who

is not from an Islamic background truly ingrained and embedded in the culture? What

effort is given to cultivating and developing an individual’s authentic identity and

emerging capabilities?

As demonstrated in the examples above, diversity is viewed as a fact of life rather than

a business purpose. The researcher suggests that diversity like any other business

concept needs to be on the strategic agenda. An environment that creates conditions

to foster diversity will value different perspective and enable diverse employees to

contribute authentically to the company. Diversity can no longer be a phenomenon to

keep at arm’s length, an abstraction to study or philosophise about. In fact, the sheer

speed and value of globalisation has made diversity become “an experience,” –

something that only those who live in very remote and isolate areas can ignore.

Women in the workforce – there are assumptions tied to the types of work women

will be prepared to do and that the customer will accept. For example, in line with

Islamic tradition it is frowned on women to travel alone on business. This will

undoubtedly impact upon the career development of the women as it will limit her

capability to progress to a global role. Also, the fact that women are deemed not

suitable for sales and marketing roles because of perceptions of the customer will

place restrictions on her career choice. Al Baraka Banking Group will need to ensure

that their workforce is a diverse and textured sample of the larger world that they

would like to make an impact upon.

Influence of HQ – Opportunities to leverage best practices across the subsidiaries are

not harnessed sufficiently. There appears to be limited opportunity for the subsidiaries

to collaborate with each other as strategic decisions and practices are owned and

shared by the parent company at their discretion. As such, a need to encourage

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further integration across the units of the Group that does not utilise Head Quarters

intervention and orchestration should be encouraged and an imperative. However,

there is a difference in opinion with regard to collaboration and integration as shown in

the quotes below:

“We are not yet at this stage. There will need to be far more interaction amongst the

various units in the Group in order to get to creativity and challenging the status quo.”

“Before the Group was established they were independent banks so we have to

push for centralisation and uniformity.”

“Yes and no. In most cases HQ will impose restrictions and methodologies re

systems and decisions on its subsidiaries. We have a pleasant mix of both. We are

like a salad bar. Together we represent a salad but we respect the individual

differences of the subsidiaries. We believe that each of our subsidiaries in the

countries that they operate are niche and experienced in their own field so we

respect that. It’s like playing Judo – we use the strength of the subsidiaries to

enhance our business but internationally and locally.......There are some things which

are non-negotiable like common risk management systems and common accounting

systems as they are best practice so that integration is easier into the whole business

and Group. If the subsidiaries would like to introduce a product we listen and respect

their decision. We respond to the individuality of our subsidiaries.”

“It happens. The parent company needs to have certain vision and principles on the

working environments and we are an international company. Most of the

Management are seasoned people who are exposed to international work

environment and the principles they bring are not isolated our closed policies. They

are international standards and Corporate governance that are adopted by reputed

international organisations. And when we implement these policies we use

International consultants to guide us. We filter these guidelines down to our business

units. Of course, some subsidiaries might have a different attitude and can be a bit

closed and might resist but at the end of the day we try to implement and reinforce

our policies as long as they are applicable to international countries and not specific

to Bahrain. SS: can the BU’s adapt these policies to meet local needs? As long as

they are not restrictive policies then we are able to localise.

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Introduction to Chapter Seven

Chapter seven presents three case studies of organisations that are headquartered on

continents in the developed markets of the West – i.e. Europe and America. The

companies in this cluster were Skanska AB, L’Oréal and Novartis.

Skanska AB, headquartered in Stockholm, Sweden, is one of the leading construction

contractors in the world engaged in construction and property development activities.

They operate in home markets of Sweden, the US, the UK, Norway, Finland and Estonia,

Poland, the Czech Republic and Slovakia and in Latin America. Interviews were

conducted over the telephone with eight senior executives.

Headquartered in Paris, L’Oréal operates across three geographical regions – Europe,

America, and Rest of the World that consists of 130 countries. 10 senior executives were

interviewed over the telephone.

Novartis is a world leading pharmaceutical company based in Basel, Switzerland and

operates across 140 countries worldwide. Eight interviews were conducted with senior

executives over the telephone.

The case studies are presented in four sections: The first section is an executive

summary of the case study. The second section provides an overview of the company.

The third section presents the key findings against the three constructs: leadership;

diversity; and organisational factors; (mirroring the interview structure). The fourth

section is a summary of the key findings and the resulting business impact. Here the

researcher presents on the impact that the findings may have on the business in terms of

enablers and blockers.

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Case Study 4 - Skanska AB

Introduction

In March 2010 twelve senior managers at Skanska were interviewed to determine the

impact of diversity on global leadership performance.

The main findings indicate that Skanska has begun its journey towards both

understanding and realising the value and implications of diversity and its relationship to

leadership. Admirably, Skanska has positioned diversity at the heart of strategic

conversations but the concept of diversity as an integrated programme is still very much

in its infancy and there can be an adverse emotional reaction to diversity initiatives.

At its core, Skanska is equipped with multiple strengths including its strong brand value,

its wide geographical operations, its code of conduct, its employee’s dedication and, its

ability to have a finger on the pulse pertaining to key business issues. The opportunity for

Skanska to continue to press ahead with a strategic diversity agenda lies in the fact that it

presents a blank canvass waiting to be painted-in through increased employee

engagement and a revitalisation and renewal of the organisational.

In an article on the 6th June 2010 in the Sunday Times, Will Butler-Adams remarked that

the image that “the word ‘engineer’ constitutes is a person in a boiler suit, £12,000 a year

and grease”. It is vital that this perception of the Construction Industry changes and

Skanska has a pivotal role to play in the orchestrating this change of perception. To

survive in an increasingly globalised world as well as sustain a profitable business the

industry will need to rigorously look at its practices in relation to diversity and leadership.

The main findings show that Skanska will need to focus on the following:

Skanska’s current focus on structural diversity – a one dimensional diversity

programme

How can the organisational culture more effectively complement the ‘Skanska Way’

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Skanska’s ability to leverage communication and collaboration between the business

units

Skanska’s ability to embrace inclusivity and to deal with challenge

Leadership behaviour in relation to hierarchy, heterogeneity, and homogeneity

The company

Skanska AB (Skanska) is one of the leading construction contractors in the world

engaged in construction and property development activities. The group is organised in

four business streams: Construction, Commercial Development, Residential

Development and Infrastructure Development.

The Construction segment operates in building and civil construction sectors, and is

engaged in residential and non-residential buildings development. The Company also

undertakes contract services for the other three business segments. The Company offers

civil construction services to rail and road, oil and gas, manufacturing, public

infrastructure, power, and sports and entertainment sectors.

The residential Development segment is engaged in developing residential projects that

include single-family as well as multi-family housing.

The Commercial Development division is engaged in developing commercial properties

including office buildings, shopping malls and logistic properties.

The Infrastructure Development segment is involved in privately financed infrastructure

projects and its portfolio includes roads, hospitals, schools and power generating plants.

It also operates public-private partnership projects through its subsidiary, Skanska

Infrastructure Development.

The Company operates under five geographic segments, namely:

The USA

Other Europe – The UK, the Czech Republic and Slovakia, Poland

Sweden

Other Nordic Countries – Finland and Estonia, Norway, Denmark

Other markets – Latin America.

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Skanska has built a strong brand image as a leading contractor and property developer

and to maintain the Skanska brand, they strive to succeed in their values known as The

Five Zeros:

Zero loss-making projects

Zero accidents

Zero environmental incidents

Zero ethical breaches and

Zero defects.

Key findings

Leadership

Interviewees firmly believe that it is imperative that employees are given an opportunity

to develop and grow. In line with this there is evidence to suggest that the Company

places great emphasis on retaining, developing and motivating its employees through

offering a wide array of educational, training and leadership programmes.

It was viewed as important that a leader clearly articulate a shared vision and also that

the leader be open-minded and curious to different cultures so that the Company can

adapt and be flexible to changing scenarios that globalisation presents. The following

quote reflects this view: “The leader has to be open to new ideas and he has to be a

good listener with regard to hearing suggestions and feedback from the body of the

organisation. He also has to demonstrate his willingness to embrace diverse

principles. So he has to have evidence of believing in the message he is trying to

promote ...The leader needs to be exposed to different scenarios that lends to a

greater understanding of diversity.. They also need to get out into the organisation and

interact with diverse employees and listen to this dialogue so that they get an

understanding of what represents diversity.”

The overwhelming measurement of a global leader’s performance was fiscal followed

by the Great Boss Index survey. Whilst this is the generic measure of the

performance of a business other measures of global leadership should be considered.

For example, measures should ensconce elements that take into account global

issues. Global issues relating to diversity, sustainability, the environment, human

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rights, customer and employee satisfaction, trust in your brand, long term business

results etc creates a context that nurtures an alternative future and initiates and

convenes conversations that shift people’s experiences.

A key performance criterion was voiced as the leader’s ability to bring together

heterogeneous teams that are both complimentary and high performing. Particularly in

the Nordic Region where teams are primarily homogeneous in their make-up, a move

towards increased diversity in teams is seen as essential in driving the diversity

agenda forward.

Leaders place emphasis on the values of honesty, respect and equitable treatment for

all employees.

Because Skanska operates in different geographic markets leadership styles can be

significantly influenced by both the leader’s culture and nationality. With this in mind

an understanding of others culture and a willingness to adapt to others styles was

seen as vital. In this vein, it is the responsibility of leaders to role model behaviours

that they wish their followers to adopt and be seen to ‘walk the talk’ rather than to just

say the right things. An interviewee suggests that a “determined and confident attitude

in terms of decision making and being able to take on challenging scenarios in terms

of hard policies and direction with emphasis on certain principals that are important for

leadership. Diversity is a key business strategy for the organisation. The Company is

putting a priority on being an inclusive organisation and the leader being able to step

up to make a declaration. Because diversity is a topic that not everyone agrees to or

buys into it takes courage to say that we are going in this direction.”

Diversity

The Construction Industry as a whole does not have a diverse workforce and this is

reflected throughout Skanska – particularly at Senior Management Levels. It is also

evident that Skanska main focus is on gender diversity with limited focus on other

dimensions of diversity. Additionally, because Skanska operates primarily in home

markets the workforce composition of the business units tend in the main to be staffed

by local nationals. An interviewee articulates his view on where diversity stands as “it

is on the agenda but not high enough. It is below safety and environment/green issues

which are much higher. Diversity should be higher. E.g. in safety when we talked

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about colleagues who had lost their lives because of lack of safety then we moved

from ‘mind’ to ‘heart’. You could see top management and employees really engage.

This process must be copied to diversity. You must start with changing the behaviour

and talk about the three dimensions and you must have the right top managers and

leaders who show that this important and are committed. It needs to be an important

question for the Company.” As such, Skanska is at the beginning of a journey in terms

of achieving a diverse workforce.

Skanska exercises a concentrated effort on the recruitment, retention and promotion of

women. To facilitate this focus the Skanska Female Mentorship Programme has been

established.

The Company’s area of focus in relation to diversity is not consistent across the

Company. For example, in Europe the focus is primarily on gender diversity and to a

lesser degree educational diversity. Whilst in the USA the focus is primarily on ethnic

and supplier diversity.

When a Company operates across several geographies the organisational culture will

often reflect a mix of the organisational and social cultures of the constituent countries.

However, Skanska’s organisational structure is decentralised and this means that each

country operates autonomously within their home markets. Although Skanska

maximises alignment and realisation of synergies of both technologies and processes

(‘hard factors’) and stands firm in terms of its principles on ethics and safety, with

regard to the ‘soft factors’ relating to organisational culture it is more unclear.

Some interviewees believe that a focus on diversity is not a necessity. They feel that

diversity should be viewed as the norm rather than as a business purpose and

therefore there is resistance to targets and quotas. This is further evidenced in that

though there are targets for gender there are no KPI’s attached to diversity at an

individual level. That is, there is no personal accountability for diversity. Further, no

Board member or Executive Vice President is known to own the diversity agenda in

Europe. Although diversity is acknowledged as being a top five priority for Skanska

and is openly discussed, across Skanska there does not appear to be a clear and

consistent diversity strategy.

The above can be tempered in that it is acknowledged that it is important to

understand the differences in relation to culture, behaviours and ways of thinking

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between the different nationalities in the group. And repeatedly it was stated that

individuals must practice sympathy, tolerance and be open-minded towards all so that

all are treated on an equal footing.

Communications in a multi-national Company need to tell a story, articulated clearly

and consistently and within the context in which you operate. There is some evidence

that although dialogue between business units is encouraged, it is random and

primarily conducted on an ‘only when need to speak’ basis. This is borne out in the

following quote: “I need to adapt and the Company needs to adapt. Communication

needs to change and can become softer. E.g. It takes courage and energy when you

feel differently from the others because you have to adjust your own behaviour.” As

such communications are not necessarily at the fore front of strategic activities as

there is limited opportunity for the business units to collaborate with each other due to

their autonomous structure. In addition, an added complexity and challenge is derived

from the language differences between the geographies. For an international

Company effective internal communications should be an imperative.

Within the Nordic Region much reference was made to distinguishing between White

collar vs. Blue collar employees. This suggests that there is a ‘them and us’ mentality

that is not conducive to pursuing a diversity agenda. The researcher acknowledges

that this division mirrors the Regions cultural stance.

Innovation was acknowledged as the overriding benefit for embracing diversity and

having a diverse workforce is seen as a prerequisite to innovation in terms of cross-

cultural thinking, well rounded and creative solutions and better performance on

complex tasks. Many interviewees shared the view that “in Skanska we tend to have

engineering backgrounds but there could be a focus on softer topics like social

anthropology and sociology and we need to have an understanding of more geo-

political (Government & Management) issues. The more global a Company is the

more multi-cultural perspectives they need.”

At the heart of diversity lies the concept of inclusivity. An inclusive organisation not

only brings diverse individuals on board but makes them feel included and a part of the

Company. It is not evident that inclusivity is a key element of diversity at Skanska.

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Organisational Factors

Employees are dedicated to being a part of the Skanska family. Their expertise is both

valued and acknowledged and this in turn is demonstrated by the way in which

Skanska supports and develops its employees. The internal ‘STEP’ programme, the

Skanska Female Mentorship programme, external executive educational programmes,

the Global Trainee Programme and the Skanska Unlimited exchange programme are

just a sample of developmental programmes offered by the Company.

Alluded to in the previous section, a paradoxical finding is that although employees

appear dedicated to their roles it seems that many sub-cultures exist within the

organisation. The ‘five zeros’ and a ‘code of conduct’ were often referred to as

standard practice but beyond this most interviewees referred to their home markets

rather than to Skanska as a unified whole.

This correlates with the finding on whether Skanska has a collective or an

individualistic culture. It was suggested that Skanska is on a journey from being an

individual culture towards being a collective culture through the ‘One Skanska’

programme. Two quotes echo this:

“We are on a journey from individual to collective. We compete and measure alot

but I have seen a change where we are moving towards cooperation with each

other. So today we have both but moving more towards collective.”

“Both. We are moving towards being a more collective culture. But each project

is unique so we cannot take a McDonalds approach where everything has a

checklist but on the other hand it helps if the project consists of basically the same

process. The perception is that each project is unique so there are not centralised

processes but we are moving towards a policy approach in terms of the ‘Skanska

Way’.”

In relation to both organisational culture and individualism/collectiveness is a strong

correlation to hierarchy. Finding shows that there is sliding scale in terms of great

respect to no respect for hierarchy that this attitude is determined by your geography.

Backing this finding up was a notable absent in the lack of reference to the CEO and

the Executive Team. It is almost as if the senior leadership team of Skanska is

invisible. This has significant implications with regard to how the leader frames and

achieves the Company’s objectives.

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Leading a diverse team can present challenges because by their very make-up they

are not homogeneous. Similarly, diverse teams are more likely to challenge the status

quo. Both these types of challenges can lead to conflict. Conflict can be good and so

the key is how you deal with it. Overall at Skanska it was suggested that challenge

and conflict is not completely accepted or handled well but that the Company is on a

journey. In order to address conflict the leadership team must set the tone for

inclusive discussions and interaction that allows for conflict to be addressed as soon

as possible. The following two quotes mirror these views:

“Yes, to an extent. But there is work to be done – we are not there yet – we have a

journey. A good example in leadership we need to listen more and see things

afterwards. We need to spend more time to explain and understand.”

“When confronting the way things have been for years one of the things you have to

demonstrate from a survival standpoint of the organisation as the workforce

changes as a large segment of the community move towards retirement and you

have an influx of talent that is somewhat different than what has traditionally taken

place. So the organisation has to be more flexible in terms of adapting to the new

dynamics that are coming into the workforce otherwise it can affect not only your

survival but also innovation that is taking place in the industry. You can not fall

behind the curb with regard to your effectiveness as a builder in relation to green

issues and diversity. Can’t be seen as an antiquated organisation as this may loose

you work because you haven’t made an effort to change in terms of your policies or

procedures.”

A number of diversity initiatives are in place with the main focus in Europe being on

recruitment, development and promotion of women. This is supported by the Skanska

Female Mentorship Programme. Diversity in the USA is more advanced due to

regulations / compliance and affirmative action mandates. Their initiatives include

gender and ethnicity but also build on changing the perception of the Industry via

visiting educational institutions, providing educational programmes for minority and

women business owners and through supplier diversity. There is also a National

Diversity Council.

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Behaviours – Skanska is an organisation that is continuously evolving. Behaviours

and attitudes that provide the building blocks for innovation are evident. These

behaviours and attitudes are dedication, commitment, open-mindedness, and equality

for all. Respect, integrity, and loyalty are deemed to be important behaviours in terms

of the way business is executed across Skanska. These behaviours are seen to be

practised consistently across the Company.

Organisational Structure – Skanska is a decentralised Company and the expertise

and knowledge in their home markets is seen as a key feature. It allows them to fully

understand the needs of their country market whilst building both a strong brand and

forging deep relationships with their customers. Given this structure as a rule the

Company is not normally confronted with issues around globalisation vs. localisation

issues and subsequent standardisation.

Development & Training – It was stated that learning how to acknowledge, be non-

judgemental, accept, tolerate, respect, and work with cultural differences and differing

value systems is an area that employees continue to wrestle with. Employees have

the opportunity to take part in cultural sensitivity and awareness programmes,

educational programmes, talent management, leadership development and mentoring

programmes.

Ethics – Skanska has adopted a strong ethical stance with regard to underhand

dealing, corruption and safety and will not operate in countries where there is a high

potential for their code of conduct to be breached. All employees are 100% aligned

with this code of conduct.


Organisational Structure & Culture – Ten home markets with different

characteristics can be a leadership challenge when forging and articulating the

organisational culture as well as implementing new initiatives in order to change

processes. As suggested before the employees do not refer to Skanska as a unified

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whole and therefore the culture is somewhat evasive and almost vacuous. In other

words, there was a notable absence of passion with regard to who we are (our

symbols, stories, rituals), our history, where we are going (our future), our ways of

behaving, thinking, and what makes us unique. Simply put, the very things that serves

to identify the essence of the Company’s soul is absent. It has proved difficult to pin

down what it is that engages the employee, and what keeps the employees both

motivated and committed in their pursuance of achieving Skanska’s strategic

objectives?

Strongly related to this is that the structure of the Company leans towards

individualism but the demands of a high performance Company lean towards

collectiveness. High performing companies practice joined-up thinking and extensively

collaborate by sharing both knowledge and expertise.

Collaboration – Opportunities to leverage best practices across the business units are

not harnessed sufficiently. There appears to be limited opportunity for the business

units to collaborate with each other as strategic decisions and practices are owned by

and tailored for the home markets as referred to in this quote – “.....there is a lot of

discussion around global vs. local. It is a power thing in both ways in that you try to

keep your own thinking as well as have to realise that your way is not always possible.

You have to keep a few things regarding what is important to you but you have to

explain that we also need to work in a global environment and we need to change our

old ways of working.”. As such, a need to encourage further interaction across the

units of Skanska utilising Head Quarters facilitation and orchestration should be

encouraged as this permits learning, flexibility and agility throughout the Company.

Communication – Working in different languages with differing forms of expression

presents its own challenges that can often be testing. Ineffective communication can

have an impact on the way the strategy and objectives are implemented and realised

as well as undermine the opportunity for shared learning and best practices across the

Group. As such, there is a perceived need to invest more in forging consistent internal

communications in the Company. This should be addressed in two ways so that all

employees regardless of location, have access to, and receive the same information in

a timely and consistent manner from a centralised knowledge sharing platform. Firstly,

tools to enable dialogue that is engaging and reduces misinterpretation will need to be

identified – specifically, a coherent communications strategy. Secondly, that all

employees at any level are empowered to speak to another subsidiary.

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Diversity – The Company’s area of focus in relation to diversity is not consistent

across the Company. For example, in Europe the focus is primarily on gender

diversity and to a lesser degree educational diversity. Whilst in the USA the focus is

primarily on ethnic and supplier diversity. Naturally, diversity may be more progressive

in certain countries depending on their history however an integrated diversity strategy

needs to be developed and implemented across the Company. An interviewee

offered the view that diversity “sits very high but another answer is that it is only a

theory. At Executive team meetings the right things are said but then in reality quite

often they will be trapped in their individuals experience especially when things get

tough you can see they are not sticking to gender diversity. That is, those who survive

are not the women. SS: you said sometimes it feels theoretical and sometimes the

right things are said? E.g. in a management meeting they say that we need to be

more diverse. So then we have three candidates for a new position. Then we discuss

the female candidate ......... management put up an obstacle for women without them

being aware of doing it.”

Secondly, Skanska in Europe operates a one dimensional diversity programme. That

is, a tendency to focus on one element of diversity – e.g. gender (“Our biggest

challenge is to keep women and develop them into line managers so that we can have

diversity at all levels”). It is recommended that the Company looks at broader diversity

strategy that encompasses cognitive and behavioural diversity as well. The outcomes

of adopting such a strategy would be on return on investment in terms of contributing

to the bottom line; a learning organisation where new ways of working and sharing

knowledge and thinking is embraced; and sustainable change grounded in the

business realities of the Company so that diversity becomes part of the DNA of

Skanska.

This also lends support to both the business case and the buy-in from employees to a

diversity strategy.

Employee’s reaction to diversity usually presents itself as a double-edge sword. On

the one hand there is recognition that embracing difference can lead to a greater

creativity. However, for women and people of colour diversity can be viewed as an act

of tokenism or as an attempt to achieve quotas rather than based on an individual’s

level of competence and capability. For White males, the fear of losing status or a

feeling of redundancy is often an adverse reaction to diversity. An integrated diversity

strategy lessens this negative reaction to diversity. An interviewee suggests that

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Skanska needs to “introduce more proactive diversity sensitivity training across the

board in the organisation. This would lead to more understanding around issues

relating to discrimination / harassment / inclusion and give everybody an opportunity to

have an open dialogue around diversity and break down barriers in terms of people

feeling comfortable enough to talk about diverse topics and not be concerned about

appearing racist or ignorant because of not having this exposure. One of the things

that I am working on is identifying firms to provide this kind of training.”

Further, beyond targets for gender there are no specific KPI’s for diversity. So as to

embed diversity as a change process KPI’s should be devised for individuals or teams

accountable for implementing diversity initiatives.

On the outset, the workforce of Skanska appears to be diverse because of the mix of

nationalities that make up the business units. However, the differing nationalities

generally preside in their home countries. For instance, it would seem that the

business units are primarily staffed by local nationals and much emphasis is placed on

the importance for a leader to be local. Whilst this may have associated benefits, it

should be recognised that whilst the Company continues to operate in a global

environment leadership should not be limited to local nationals and continued effort in

international secondments should be accelerated.

Linked to this would be an effective talent management programme in which diversity

is at the core. To this end, what effort is given to cultivating and developing an

individual’s authentic identity and emerging capabilities? And, what different

educational backgrounds are considered that would lead Skanska towards innovative

and leading edge thinking?

Inclusivity - Through marketing efforts your messages can proclaim that as a

Company you embrace diversity but when a diverse individual joins the organisation

they may experience the opposite. That is, the culture is not accepting or supportive of

them so there is an ultimate clash between diverse individuals and cultural fit once

they enter the organisation. As such, the message does not correlate with the

behaviours or culture of the organisation. In other words, if you ‘learn the rules of the

game’ you will be accepted, if you do not, you will not be recognised or rewarded. To

embrace the company’s values and follow business principles goes without saying but

having to change who you are in order to feel that you ‘fit in’ and are accepted does

not embrace the concept of inclusivity. Inclusivity is demonstrating a genuine

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openness to all people, at all levels regardless of visible differences, different ways of

thinking and different ways of behaving. This does not advocate a maverick or

reckless organisation but simply that all employees are valued, respected and

engaged. An interviewee expresses this view forcefully by reinforcing that “as

individuals we are victims of stereotypes and preconceived notions so we have to work

on respecting people regardless of differences. Give people an opportunity to

demonstrate their capability in terms of competencies and skills rather than what they

look like.” Another interviewee says that

“I believe that diversity should be driven by business values and not done simply to

look good or for political reasons. Diversity makes us be competitive and be an

inclusive environment. SS: do you think that the environment is inclusive at the

moment? Not enough inclusivity at Skanska”.

Leadership Commitment – Although diversity is acknowledged as being a top five

priority for Skanska and is openly discussed there does not appear to be a clear

diversity strategy that proactively places diversity at the heart of the Company’s

strategic agenda. In other words the reality has to back up the message otherwise it

will be perceived as “window dressing”. Leaders need to demonstrate that they are on

a common platform. With the exception of the USA, no Board member or Executive

Vice President is known to own the diversity agenda. This strongly correlates with an

apparent lack of leadership visibility. One interviewee suggests that “firstly you have to

be clear about what you are trying to achieve. So in terms of safety we had to ‘Declare

a future’ and get senior team on a common platform. You need to realise how you

want to change your culture. See it as a priority and take it away from a minimum

compliance to essentially changing people’s behaviour. Tell me what you want to

measure and I’ll behave accordingly is very short-term so you need to work on things

to change people’s behaviour”. In this vein it is recommended that a Skanska wide

Diversity Council is formed so that a unified approach to implementing diversity can be

achieved as well as having broader ownership and accountability.

Heterogeneous vs. homogeneous – In the Nordic Region, teams are primarily

homogeneous in their make-up with regard to nationality. In other countries, they are

homogeneous in their make-up with regard to gender and educational background.

For example, an interviewee is quoted as saying “at a recent conference we had 60

top managers ..... there were only two females and the rest were all white males

present. So in terms of demonstrating, leaders need to encourage a more diverse

workforce and bring in a framework where it is acceptable to be different. They need

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to demonstrate that they can step outside the norm.” A move towards increased

diversity in teams is seen as essential in driving the diversity agenda forward.

Skanska will need to ensure that their workforce is a diverse and textured sample of

the larger world that you would like to make an impact upon. Diversity can no longer

be a phenomenon to keep at arm’s length, an abstraction to study or philosophise

about. In fact, the sheer speed and value of globalisation has made diversity become

“an experience,” – something that only those who live in very remote and isolate areas

can ignore.

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Case Study 5 – L’Oréal

Introduction

In February to March 2010 ten senior managers at L’Oréal were interviewed to determine

the impact of diversity on global leadership performance.

The findings indicate that L’Oréal has taken significant steps in its journey towards both

understanding and realising the value and implications of diversity and its relationship to

leadership. Diversity is also seen as key enabler in terms of mirroring L’Oreal’s consumer

make-up and their subsequent needs and thus is a key element of its brand. L’Oréal

continues to position diversity at the heart of strategic conversations and it is evident that

diversity is a key initiative for the CEO and his Executive Team.

At its core, L’Oréal is equipped with multiple strengths including its strong brand equity, its

diversified geographical operations, its strong growth prospects and most importantly, its

entrepreneurial and innovative culture. As globalisation continues to accelerate at an

increased pace L’Oréal can play a pivotal role in orchestrating a change in the perception

of both its employees and consumers to diversity. In relation to sustaining a profitable

business and creating shared value L’Oréal will need to rigorously look at its practices in

terms of its structural, cognitive and behavioural elements and at the heart of this, sits the

issue of diversity and global leadership. Also, L’Oréal will further need to interrogate how

to continue to maximise the synergies across its geographies and brands so that

performance is enhanced.

L’Oréal have done well in putting the basic pattern of the mosaic together, now the

pattern needs to be tessellated across the organisation and therein lies an opportunity –

increased employee engagement coupled with an appraisal and renewal of the

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organisational culture through the mechanism of diversity. However, although diversity

initiatives are plentiful throughout the company, the concept of diversity as a holistic,

integrated and consistent programme is still very much in its infancy.

The main findings that L’Oréal will need to further attend to centre on the following

themes:

L’Oréal ’s current focus on structural diversity – a one dimensional diversity

programme

L’Oréal’s strong culture and its impact on driving forward a diversity agenda

L’Oréal ’s ability to leverage a consistent diversity programme across the brands

globally

L’Oréal ’s ability to embrace inclusivity at the heart of its diversity agenda

L’Oréal’s ability to recruit, integrate and promote senior and experienced leaders into

the organisation.

Accountability and key performance indicators for diversity.

A diversity strategy that has too many arms for focus to be retained

The company

L’Oréal celebrated 100 years in 2009 and as it enters its second century it continues to be

the world leader and the world’s largest cosmetics and beauty company. L’Oréal believes

that everyone aspires to beauty and thus its mission ‘is to help men and women around

the world realise that aspiration, and express their individual personalities to the full’.

The company is principally engaged in the production and marketing of make-up,

perfume and fragrances, haircare, styling and skin care products. L’Oréal is proud of its

rigorous scientific research which enables its brands to deliver products which are

innovative. Their Brand and associated slogan ‘Because You’re Worth It’ is universally

recognised.

The company has approximately 64 600 employees and operates across three

geographical regions – Europe, America, Rest of the World that consists of 130 countries.

It markets 23 brands that are segmented into 3 divisions namely, Cosmetics, The Body

Shop and Dermatology (Galderma). The Cosmetics divisions are classified into four

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segments which include, Consumer Products, Luxury Products, Professional Products,

and Active Cosmetics.

Consumer Products division develops haircare, skincare, make-up and perfume products.

The company distributes its products through mass-market channels such as

hypermarkets, supermarkets and drugstores. The Division’s five international brands

are: L’Oréal Paris, Garnier, Maybelline New York, Shoftsheen.Carson and Le Club des

Createurs de Beaute.

Luxury Products division has a portfolio of luxury cosmetic brands whose products, such

as perfumes and skin care cosmetics, are sold in department stores, speciality stores,

travel retail outlets and brand and distributor on-line sales sites. Brands offered in this

division include Lancôme, Helena Rubinstein, Yves Saint Laurent Beaute, Biotherm, Shu

Uemura and Kiehl’s, Giorgio Armani, Ralph Lauren, Viktor & Rolf, Diesel and Cacharel.

Professional Products division is dedicated to the hairdressing community the world over.

Its products are not only used but also sold in salons. There are six brands in this

division consisting of L’Oréal professional, Kerastase, Redken, Matrix, Mizani and Shu

Uemura Art of Hair.

Active Cosmetics designs and markets dermo-cosmetic skin care products that are sold

in pharmacies, spas and medispas, and specialist retailers. The five brands, including

Vichy, La Roche-Posay, Inneov, Skinceuticals and Sanoflore, offer skin care, sun care,

hair care and make-up products.

The Body Shop provides products on the basis of natural ingredients sold in the wholly

owned and franchise stores under the same name and markets a range of cosmetics

including bath and body products, skin care products make-up, fragrances, hair care and

others.

The Dermatology division operates through Galderma, a joint venture between L’Oréal

and Nestle. It provides therapeutic, corrective and aesthetic solutions for dermatology

patients and physicians.

L’Oréal’s strength lies in its strong brand equity, its diversified geographical operations

and its efficient use of resources and opportunities present themselves in the forms of

strategic acquisitions, new potential markets and strong growth in the cosmetics market.

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The company has the weakness of being open to litigations as well as declining market

share in sector and high indebtedness remains an area of concern. It faces potential

threats from a rising counterfeit goods market and risks from international operations and

going forward ever increasing competition.

Diversity is a core value for L’Oréal and was one of the first companies in France to sign

the Diversity Charter. The Group has diversity and social cohesion observatories and a

diversity policy is in place:

6 Priority dimensions

Action Levers Nationality Ethnic origin

Socio-economic background

Gender Disability Age

Recruitment & Integration

Training

Career Management

Management & Inclusion

Communication

Creation of an ecosystem

Lead of the policy

Key findings

Leadership

“I tried to be humble in order to survive therefore I need to understand other rules

without losing my personality”. This quote reflects the finding of what is viewed as

important – that a leader clearly articulate a shared vision and also that the leader be

open-minded and curious to different cultures so that the company can adapt and be

flexible to the changing scenarios that globalisation presents. The following two

quotes also echo this finding: “It is important that a Leader is open-minded and has

cultural experience or there is a risk of judging with your filter of culture.” And,

“Monoculture leadership is thinking through one filter whereby you replicate the same

model in different countries, not respecting the local needs and the local context. And

Universalism – is to adapt the global strategy to the local context. This is a big

difference. A leader driven by one citizenship will be in the first category and a global

leader will be leaning towards universalism”.

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The overwhelming measurement of a global leader’s performance was fiscal followed

by a sizeable market share.

A key performance criterion was seen as maintaining sustainable business

performance not solely from a financial perspective but also by gaining buy-in and

engaging employees in the company’s long-term objectives. The following quote

embodies this quote: “Personal development of people so they can grow and work

better. This is my main driver for sustainability. When the team works well then I have

achieved”.

Leaders place significant emphasis on the values of honesty and transparency as well

as providing opportunities for employees to develop and grow. Emphasis is placed on

cultivating individual talent with the individual given great autonomy in the articulation

and shaping of their own careers.

A person’s cultural background was seen as playing an inevitable role in shaping the

leaders style. However, this was tempered by acknowledging that there are many

elements that also constitute how a leader’s style is shaped including gender, age,

occupational background, experience and exposure. “When I look at different items I

think nationality is not the one that influences most...there is the cultural background

but once you understand it, it is easier to decode...there are more differences

between a man and a woman or between a Scientist and a Marketer.” And “There

are many slices dealing with people. There is a local culture/birthplace; background;

different exposure and different learnings. In one life there are few lives. Enriched

experiences. You are the result of this exposure. Exposure to International cities and

networks and through studies etc. Success is being open-minded. Different friends.

Different types of educational backgrounds and different ages. Different slices of

backgrounds”.

Diversity

L’Oreal’s has a diversity policy in place that focuses on six priority dimensions and five

action levers. At this point in time it is evident that L’Oréal’s main focus is on the

dimensions of gender, nationality and socio-economical background with limited focus

on disability, age, and ethnic origin. In relation to this only two out of the five action

levers appear to be operationalised. That is recruitment and training.

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L’Oréal’s diversity initiatives place a concentrated effort on the recruitment of young

graduates from socially deprived backgrounds however the recruitment of graduates

from different subject backgrounds (i.e. not scientific) is not evident. Linked to this is

the tendency to primarily recruit graduates at the expense of experienced and senior

people. This reflects the need to widen recruitment focus so as to increase differing

diversity offerings as this quote acknowledges: “...cognitive is more difficult to integrate

because the culture of our company is very strong as we prefer people who are

dynamic and passionate and convincing. Therefore it is difficult for people who are not

like this.” Tied to this finding is the observation that the integration and retention of

experienced individuals is poor. This is attributed to L’Oreal’s strong culture which

advocates and values entrepreneurship qualities and is highly oral and within this

scenario senior/experienced individuals can often find it difficult to adapt. This was

advocated in the following quote: “Not enough experience/aged people to help the

young people. We are not enough senior people in L’Oréal. Also, I argue that in

L’Oréal there are a lot of people from an economic background and not enough people

from a humanities background. There are too many people from similar backgrounds

and too scientific”.

L’Oréal has a diverse workforce at junior and middle levels however at Senior

Management Levels diversity is not represented to the same degree.

The diversity strategy developed at corporate headquarters is not actively imposed

across the Group. As such the brands have the choice as to whether they adopt and

implement diversity initiatives advocated by Group. Subsequently the view,

understanding and implementation of diversity are not consistent globally.

L’Oréal’s organisational structure is decentralised in that each brand operates

autonomously. Although L’Oréal maximises alignment and realisation of synergies of

both technologies and processes (‘hard factors’) and stands firm in terms of its

principles on ethics and safety, with regard to the ‘soft factors’ relating to

organisational culture it is more unclear.

There are some 100 quantitative and qualitative indicators of diversity in place and

these measures serve to provide an understanding of how the organisation is

progressing against their targets for both the action levers and the objectives of the

diversity policy. However, there are no specific KPIs for diversity at an individual level.

That is, there is no personal accountability for diversity. Further, with the exception of

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the Vice President in the USA, no Board member is known to own the diversity

agenda. Many interviews expressed frustration that HQ did not provide sufficient

resources that would enable diversity to be both focused and measurable. Those who

were representing their divisions as diversity champions felt constrained in their ability

to do justice to diversity due to the demands of their day-to-day job as reflected in the

following comment: “Give the means and the resources for building a real diversity

policy and having people who are paid to do this and it is world-wide and not just

corporate so a local person is dedicated to it”.

It is acknowledged that it is important to understand the differences in relation to

culture, behaviours and ways of thinking between the different nationalities in the

group as well as the consumer and the market. To this end, it was stated that

individuals must practice empathy, tolerance and be open-minded towards all so that

all employees are treated on an equal footing.

Innovation is also a driving force within L’Oréal and diversity is seen as key to

accentuating innovation. Innovation was acknowledged as the overriding benefit for

embracing diversity and having a diverse workforce is seen as a prerequisite to

innovation in terms of cross-cultural thinking, well rounded and creative solutions and

better performance on complex tasks. “...innovation is important to L’Oreal. So if you

have clones they will not be creative but if you have people from different backgrounds

then there is more innovation.”

Communications in a multi-national company need to tell a story, articulated clearly


to suggest that dialogue between the brands is at best random and primarily

conducted on an ‘only when need to speak’ basis. As such communications are not

necessarily at the fore front of strategic activities as there is limited opportunity for the

brands to collaborate with each other due to their autonomous structure. For an

international Company effective internal communications around diversity should be an

imperative.

At the heart of diversity lies the concept of inclusivity. An inclusive organisation not

only brings diverse individuals on board but makes them feel included and a part of the

company. It is not conclusive that inclusivity is a key element of diversity at L’Oréal.

At L’Oréal equity is positioned above inclusivity.

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L’Oréal’s brand is firmly embedded not only within L’Oréal but within society at large

and is synonymous with diversity as beauty is seen as a universal right. To this end

the need to adapt products and communications for different geographical markets

and differing consumer needs is seen as an imperative. The following quotes mirror

this finding: “...we believe that beauty is for anyone re price and location and we

believe that products are supported by science and that we go for safe products. And

we believe in bringing added value and innovation. We believe in a worldwide vision

of beauty.” And, “...our consumers are diverse across the world so we are sensitive

and proactive. From a business point of view you will never understand your

customers if you do not have diverse people”.

Employees are dedicated to being a part of their brands within the L’Oréal family.

Their expertise is both valued and acknowledged and this in turn is demonstrated by

the way in which L’Oréal supports and develops its employees. The ‘Pepiniere’

programme, coaching and mentoring programmes, external executive educational

programmes, diversity training programme, and an international programme for high

potentials are just a sample of developmental programmes offered by the company.

Alluded to in the previous section, a paradoxical finding is that employees appear more

aligned to their brand rather than to L’Oréal as a unified whole. This correlates with

the finding that L’Oréal oscillates between being an individual culture and a collective

culture. Individual talent and achievement is highly prized within the organisation

almost to the expense of collective performance.

The above finding correlates strongly with L’Oréal’s organisational culture which is

highly entrepreneurial and oral. A culture in which networking, connecting and building

relationships, risk-taking and creativity is valued above process and structure. Aligned

to this is a significant element of power that the brands have with regard to how

strategy and objectives are devolved and implemented. This has significant

implications with regard to how the leader frames and achieves the company’s

objectives.


are not homogeneous. As such, diverse teams are more likely to challenge the

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status quo which can lead to conflict. Conflict can be good and so the key is how you

deal with it. At L’Oréal it was suggested that challenge is a way of life although

challenges from newly recruited experienced staff is not necessarily welcomed. In

order to address conflict the leadership team must address conflict as soon as

possible as well as communicate educate and train. “Entrepreneurship is the DNA of

L’Oréal ....this means diversity and the ability to confront not to be a yes women or a

yes man.” Another voiced their opinion by saying “most important challenge is not

the business because I was trained to do my job the challenge is of other cultures –

their words, gestures, attitude; reaction and values.” A third interviewee agreed that

challenge was encouraged in L’oreal: “culturally, L’Oréal is keen on having people

who say what they think and ‘think outside the box’. It is not a process culture. It is a

culture of ‘confrontation’ in the sense that you say what you think is in the DNA of the

company.”

There are many singular diversity actions in place both internally and externally with

social partners, associations and other organisations and this is evident from my

interviews and examples given on L’Oréal’s web site. As mentioned before there is

also a diversity policy in place and L’Oréal has demonstrated their commitment to

diversity through the signing of a diversity charter. However a cohesive diversity

programme is still not apparent.

There is no question of L’Oréal’s investment to diversity activities, both with regard to

training and with external bodies but with regard to investment of resources in relation

to people accountable for diversity at senior levels this was noted as a substantial gap.

It is acknowledged that diversity in the USA is more advanced due to regulations /

compliance and affirmative action mandates.



Behaviours – L’Oréal is an organisation that is continuously evolving. Behaviours and

attitudes that provide the building blocks for innovation are evident. These behaviours

and attitudes are creativity, risk-taking, commitment, open-mindedness, and equality

for all. In terms of how business is executed across L’Oréal respect, integrity, and

loyalty are behaviours that are practised consistently across the company.

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Diversity – L’Oréal has a robust diversity policy in place and has made significant in-

roads towards the pursuit of diversity. Their internal activities with regard to

recruitment, mentoring and coaching as well as the external support and involvement

with social partners, associations and organisational bodies.

Organisational Structure – L’Oréal is a decentralised company and the expertise and

knowledge of their brands and regions is seen as a key feature. Products and

communications are adapted to market needs as well as enabling and forging deep

relationships with their customers.

Development & Training – It was stated that learning how to be non-judgemental, be

aware of one’s own filters, and work with cultural differences and differing value

systems is an area that employees continue to wrestle with. Employees have the

opportunity to take part in cultural sensitivity and awareness programmes, educational

programmes, talent management, leadership development and mentoring

programmes.

Ethics – L’Oréal has adopted a strong ethical stance with regard to underhand

dealing, corruption and safety and will not tolerate actions that will breach these ethics.

Employees are 100% aligned with this stance.


Diversity – L’Oréal’s diversity policy represents the beginning of their journey towards

diversity. However it is apparent that L’Oréal operates a one dimensional diversity

programme. That is, a tendency to focus on one element of diversity – e.g. structural

diversity. I recommend that the company adopts a broader diversity strategy that also

encompasses cognitive and behavioural diversity. The outcomes of adopting such a

strategy would be on return on investment in terms of contributing to the bottom line; a

learning organisation where new ways of working and sharing knowledge and thinking

is embraced; and sustainable change grounded in the business realities of the

Company so that diversity becomes part of the DNA of L’Oréal .

This three-pronged approach to diversity has two primary advantages. Firstly, it lends

support to both the business case in that it can be aligned to organisational activities

that are measurable. Organisational activities such as talent management,

recruitment, retention and promotion, leadership development, innovation, decision

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making, problem solving, knowledge sharing, intercultural communications, ways of

working and managing conflict.

Secondly, it also gains the buy-in from employees as it focuses on the value added to

the company rather than diverting attention to the more sensitive and negative

perceptions of identity, tokenism, and quotas. Employees’ reaction to diversity usually

presents itself as a double-edge sword. On the one hand there is recognition that

embracing difference can lead to a greater creativity. However, for women and people

of colour diversity can be viewed as an act of tokenism or as an attempt to achieve

quotas rather than based on an individual’s level of competence and capability. For

white males, the fear of losing status or a feeling of redundancy is often an adverse

reaction to diversity. An integrated diversity strategy lessens this negative reaction to

diversity.

An additional identified weakness is that the company’s area of focus in relation to

diversity is not consistent across the Group as echoed in this quote: “corporate issues

guidelines but the general managers are strong enough to filter, modify and adapt

those guidelines. GM’s are very strong personalities and they like to be independent.

SS: how does the organisation manage this level of independence? A behaviour that

is promoted in the company is to be independent. You are not rewarded for being shy

or well-behaved. You have to write your story, make your path in a good way of course

within the rule of the game.” This largely stems from the structure of the organisation

whereby there are companies (i.e. brands) within the company at large. The brands

are empowered to develop, adapt, and implement (or not) elements of L’Oréal’s

diversity policy. As a result, diversity strategy is not cohesively integrated across the

groups and there is no clear global view. Naturally, diversity may be more progressive

in certain countries but this is no excuse for an integrated diversity strategy not to be

developed and implemented to address the global needs of the Group.

Further, beyond targets for gender there are no specific KPIs for diversity. So as to

embed diversity as a change process KPIs should be devised for individuals or teams

accountable for implementing diversity initiatives.

Recruitment Processes – Additionally, the recruitment drivers linked to the diversity

policy are implemented in an unbalanced way. That is, there is much attention given

to recruiting graduates from socially deprived backgrounds and recruiting different

nationalities but there is less attention placed to recruiting individuals with experience

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and individuals from non-scientific backgrounds. This taps into the cognitive and

behavioural elements of diversity that enable increased innovation and collaboration.

Linked to this would be an effective talent management programme in which diversity

is at the core. To this end, what effort is given to cultivating and developing an

individual’s authentic identity and emerging capabilities? And, what different

educational backgrounds are considered that would maximise L’Oréal innovative and

leading edge capabilities?

Inclusivity – Through marketing efforts your messages can proclaim that as a

company you embrace diversity but when a diverse individual joins the organisation

they may experience the opposite. That is, the culture is not accepting or supportive of

them so there is an ultimate clash between diverse individuals and cultural fit once

they enter the organisation. As such, the message does not correlate with the

behaviours or culture of the organisation. In other words, if you ‘learn the rules of the

game’ you will be accepted, if you do not, you will not be recognised or rewarded. As

an interviewee aptly says “the challenge of diversity is to realise the challenge from

within without becoming clones of each other. So not moulded into the culture.”

To embrace the company’s values and follow business principles goes without saying

but having to change who you are in order to feel that you ‘fit in’ and are accepted

does not embrace the concept of inclusivity. An individual needs to be given time to

acclimatise to the culture and find their own way within the culture. As such, inclusivity

is demonstrating a genuine openness to all people, at all levels regardless of visible

differences, different ways of thinking and different ways of behaving. This does not

advocate a maverick or reckless organisation but simply that all employees are valued,

respected and engaged. The concept of inclusivity is strongly twinned with the concept

of integration. Once a new employee comes on board how effectively are they

integrated into the organisation? Are they equipped with the right tools and resources

that will enable a smooth integration or must they simply learn by making mistakes?

Interviewees were passionate on this issue of integration: “Recruiting diverse

individuals is great but it is worse if you bring them in and so that they fit into your

culture you have to brainwash them so that they stay within the company then you

miss a part of their diversity. So the question is how compatible is diversity with a

strong company culture”?

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An environment that creates conditions to foster diversity will value different

perspective and enable diverse employees to contribute authentically to the company.

Diversity can no longer be a phenomenon to keep at arm’s length, an abstraction to

study or philosophise about. In fact, the sheer speed and value of globalisation has

made diversity become “an experience,” – something that only those who live in very

remote and isolated areas can ignore.

Organisational Structure & Culture – L’Oréal’s structure has no doubt fostered the

competitiveness throughout the company that has enabled L’Oréal to become the

number one beauty and cosmetics company in the world. However there can be no

denying that 23 brands operating in three different geographical regions is a leadership

challenge when forging and articulating the organisational culture as well as

implementing new initiatives in order to change processes. As suggested before the

employees do not refer to L’Oréal as a unified whole but largely identify with their

brand and therefore the global L’Oréal values are somewhat elusive. A view that was

precisely articulated by an interviewee: “L’Oreal is most developed when compared to

the literature I read. But we need a global view of L’Oreal”.

Paradoxically, a strong culture of entrepreneurship and a highly oral environment

permeates across the Group. In other words, there are symbols, stories, and rituals

that define who you are, your history, where we are going (your future), and what

makes us unique. This serves to identify the essence of the company’s soul.

Therefore the culture can be divided into two distinct entities. That is, ‘the way of being’

(operational strategy), and ‘a way of behaving’ (people strategy). Beyond an

individual’s singular contribution it has proved difficult to pin down what it is that

engages the employee, and what keeps the employees both motivated and committed

in their pursuance of achieving L’Oréal’s overall strategic objectives? This finding was

eloquently stated by interviewees in the following quotes:

“L’Oreal culture – Innovation; appreciation for beauty; entrepreneur/risk taker;

oral culture; not based on processes but on the association of individual

talents. But we also have a strong country culture which is completely the

opposite of the L’Oréal culture. How do not lose our DNA but at the same time

be able to adapt to the other countries”?

“Initially I would say collective because of strong company culture with the

values but on the other hand it is an individualistic company as they are not a

lot of processes to do things the same way. You can have a different

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management style, a different way of doing things and your own priorities. So

everyone can manage themselves individually and define your own way and

what you make out of it yourself. ”

“An individualistic culture. A culture that is based on the individual’s

performance. E.g. the way we manage careers of people. .......Even the way

the business itself is structured. We say that L’Oreal is in not like one big

company. It is more like boats that go in the same direction.”

This strongly correlates with the finding that the culture of the company leans towards

individualism. In other words, in the eyes of the employees the individual or the brand

is a star but not necessarily the collective company. Herein lies the dilemma, as it

stands, it works – L’Oréal is number one in their sector in the world therefore there is

no observable business need to change their way of operating. However, it is

acknowledged that the demands of a high performance company lean towards

collectiveness. High performing companies practice joined-up thinking and extensively

collaborate across functions and divisions by sharing both knowledge and expertise.

Leading edge thinking on diversity suggests that if L’Oréal were to further work

towards collectiveness then this would positively impact on the company’s bottom line

and threats from the competition, and risks from international operations would be

reduced and market share increased with the potential to better understand the

collective orientated markets of the BRICS and CIVETS.

Collaboration - Opportunities to leverage best practices across the brands are not

harnessed sufficiently. There appears to be limited opportunity for the brands to

collaborate with each other as strategic decisions and practices are owned by and

tailored for the brands. As such, a need to encourage further interaction across the

brands of L’Oréal utilising Head Quarters facilitation and orchestration should be

encouraged as this permits learning, flexibility and agility throughout the company.


presents its own challenges that can often be testing. Ineffective communication can

have an impact on the way the strategy and objectives are implemented and realised

as well as undermine the opportunity for shared learning and best practices across the

Group. As such, there is a perceived need by interviewees to invest more in forging

consistent internal communications in the company. For example, many interviewees

suggested that decisions are often off-the-record conversations that take place in the

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corridor which leads to inconsistency in communications (e.g. “L’Oreal is an informal

company. It is about networks and people and about oral communications and you get

the most out of it if you visit the cafeteria”). This should be addressed by identifying

and putting in place tools to enable dialogue that is engaging and reduces

misinterpretation – specifically, a coherent communications strategy so that all

employees regardless of location, have access to, and receive the same information in

a timely and consistent manner from a centralised knowledge sharing platform.

Leadership Commitment – Although diversity is acknowledged as being a top five

priority for L’Oréal and it is energetically communicated, the lack of ownership at senior

levels has the impact of creating a different message. A message that this may be a

trend rather than a sustainable strategic objective. In other words the reality has to

back up the message otherwise it will be perceived as “window dressing”. Leaders

need to demonstrate that they are both committed and accountable. With the

exception of the USA, no Board member or Executive Vice President is known to own

the diversity agenda. It is recommended that a global Diversity Council is formed with

representation from the most senior executives so that a unified approach to

implementing diversity can be achieved as well as having broader ownership and

accountability. Linked to this is the need to invest in local diversity representatives in

the regions. The following quotes reflect the perceived lack of leadership commitment

to diversity by the interviewees:

“Of course rules are important but my strong belief is around the inner in terms

of behavioural diversity. Even if structural is visible (because we have many

agreements in place with partners) but behaviour is intangible and so more

important. If we look at behaviour then structure will come naturally. The CEO

launched 3 yrs ago the programme ‘a great place to work’ focusing on

communication, conflict, respect and then structural diversity. “The great place

to work” went well until we had the economic crisis in 2009 – now go back to

work. This is not the way to handle it. In crisis you really see what is important.

Structural diversity is easy to do but the real stressful situations you see the

real nature”.

“If you want to promote diversity it needs to be represented at the highest level

in the company (Executive Committee) and create a position representing

diversity. ...... At the moment each country does it by itself so the action is not

consistent. There is no global steering committee for diversity and if someone

has the initiative to pull together some meetings this person is not part of the

Board. E.g. at Board level there is 2 women and 9 men all Caucasian and all

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European. Because of the culture of L’Oréal it is not easy to promote someone

in a diverse person ...”

In conclusion the following quotes sum up the essence of L’Oréal’s philosophy on

diversity:

“Diversity is life. Diversity can be if you are a non-smoker to accept people

smoking? Or whether an Arab women wears a veil vs. women who do not wear

veils. Whether you come from a private school vs. someone who attended a

public school. So diversity is the definition of our life. For many years humans

have decided to go with our level of comfortability and avoid diversity. So diversity

is about how we complement each other and know that together we will be

stronger.”

“We need a global move to change customer’s perception. It is about how to take

a risk to show clients that we are diverse when some clients can be racist.”

“L’Oréal tries to be a global company without losing your values or roots. Do not

compare one company to another. Our identity is important. We must not copy

the other one because we will fail miserable so we need to be ourselves and have

a different approach.”

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Case Study 6 – Novartis

Introduction

April through to May 2010 eight senior managers at Novartis were interviewed to

determine the impact of diversity on global leadership performance.

The findings indicate that Novartis has positioned diversity and inclusivity at the heart of

strategic conversations and has made significant inroads towards both understanding and

realising the value and implications of diversity and its relationship to leadership. In this

regard, diversity is seen as key enabler in terms of mirroring Novartis’s consumer make-

up and their subsequent needs. However, although diversity and inclusivity is embraced

as evidenced by the differing diversity initiatives implemented across the company, the

concept of diversity as a holistic, integrated and consistent programme is still to be fully

embraced and the concept of inclusivity in relation to truly valuing and integrating

difference is yet to be fully realised.

Novartis is equipped with multiple strengths including its diverse product offerings, its

sturdy R&D activities and its diversified geographical presence and therefore the basic

ingredients are in place to fuel and propel forward the ambitions of the Group. The

company has definitely moved beyond compliance and workforce diversity (structural)

and is one of the few companies that have begun the process of tapping into ‘cognitive

diversity’. This effort needs to be further expanded so that ‘behavioural diversity’ is added

to its suite of offerings. Diversity must be seen as an investment to the same degree as

research and innovation is seen as an investment and is a prevalent force in its corporate

strategy. Novartis will need to continue to consistently and sustainably demonstrate a

proactive diversity and inclusion strategy that will deliver real value and benefits of a truly

integrated business. The evidence suggests that the leadership at Novartis has at its

heart, the intention and will to do so.

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The main findings that Novartis will need to further attend to centre on the following

themes:

Novartis ’s current focus on structural diversity – a one dimensional diversity

programme

Novartis’s performance driven culture and its impact on driving forward a diversity

agenda that primarily is best driven through a relationship culture.

Novartis ’s ability to leverage a consistent diversity programme across somewhat

autonomous divisions globally

Novartis’s ability to recruit, integrate and promote from a diverse pool of sources

Novartis’s Board constitution and accountability and diversity teams per country.

The company

Novartis, headquartered in Basel, Switzerland was created in 1996 through the merger of

Ciba-Geigy and Sandoz, and is a world leader engaging in the research and

development, manufacture and marketing of healthcare products and its healthcare

solutions portfolio includes medicines, preventive vaccines and diagnostic tools, generic

pharmaceuticals and consumer health products. The company is focused on areas of

Cardiovascular and Metabolism; Oncology Neuroscience and Opthalmics; Respiratory,

Immunology and Infectious diseases and classifies its geographic segments into three

areas, namely Europe, The Americas, and Asia/Africa/Australasia.

Its businesses are divided on a worldwide basis into four operating divisions:

Pharmaceuticals, which comprises brand-name patented pharmaceuticals;

Vaccines and Diagnostics, which focuses on human vaccines and blood-testing

diagnostics;

Sandoz, which consists of generic pharmaceuticals, and,

Consumer Health, which includes over-the-counter medicines, animal health

medicines, and contact lenses and lens-care products.

With approximately 100 000 associates in 140 countries worldwide, Novartis associates

share a vision of ‘a better today and tomorrow for patients’. Their primary purpose as a

pharmaceutical company is to discover and develop effective medicines and successfully

bring them to market always with the aim of alleviating suffering, improving patient’s

quality of life and even saving lives.

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The company has a performance-oriented culture with a strong focus on innovation and a

responsibility towards patients and society. Its strength lies in its diverse product

offerings, its sturdy R&D activities and its diverse geographic presence. Opportunities

are presented through the product pipeline, strategic acquisitions and a focus on

biologics. Its weaknesses lies in the withdrawal of products which impacts both its

financial position and its reputation, its legal proceedings and limited liquidity position

whilst its threats are patent expiration and generic competition as well as tightening of the

FDA;s regulatory oversight and increased pricing control.

Novartis places innovation at the heart of its strategy and as the healthcare environment

continues to undergo unprecedented change its strategy is primed to take this into

account. Primary changes in the world that impact on healthcare is an increasingly aging

population; increasing growth in emerging markets such as China, India, Brazil, Mexico,

Russia, Turkey and South Korea; and changing lifestyles are leading to higher prevalence

of chronic and degenerative diseases.

In 2006, Novartis developed a group-wide Diversity and Inclusion (D&I) vision and strategy

based on Novartis Values and Behaviours and Leadership Standards. The company also

established an external Diversity and Inclusion Advisory Council (DIAC) with internationally

renowned experts from academia, business and non-governmental organizations. The

council advises Novartis in all aspects of D&I. The four Novartis divisions are now

developing and implementing their own specific D&I structures and action plans.

Novartis believes that Diversity and Inclusion (D&I) includes, but is not limited to, race,

ethnicity, gender, thinking styles, religion and beliefs, sexual orientation, age, differential

ability, education, nationality and life experiences and take a view that the diversity of

their workforce enhances insight into customers and their ability to meet the needs of

patients and other stakeholders. They believe that retaining talent from all backgrounds

according to ability and achievement adds value to their shareholders, company,

customers, associates, suppliers, and the communities where they live and work.

Diversity initiatives currently in place (but not limited to) include:

A 'Pharma CEO Diversity and Inclusion Award.'

Employee Resource Groups (ERGs)

The Novartis Female Leadership Forum

'Winning Styles' program

The 'Inclusive Leadership' program

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Key findings

Leadership

A key characteristic of a global leader was the ability to be attuned into the ‘people’

aspect of the role. Competencies stipulated included empathy, connecting, and active

listening. These competencies relate heavily to the concepts of emotional and social

intelligence. Twinned to these competencies were the actions that the leader should

focus on that attest to his/her level of ‘people’ focus. These actions included investing

time to develop, coach and mentor your associates.

It was viewed as important that a leader clearly articulates a shared vision and a global

strategy that can then be adapted to the changing scenarios that globalisation

presents in terms of catering to a local market context and needs. Relating to this was

the necessity for the leader to have clarity in their communication styles. A

communication style that remains authentic to the leader but can be adapted across

cultures and professional backgrounds. It was seen as essential that communication

is not lost in translation.

The overwhelming measurement of a global leader’s performance was fiscal (lagging

indicators) followed by employee engagement and customer satisfaction (leading

indicators).

A further measure of performance was the leader’s ability to maintain a focus on

science and thus enabling innovation via ethical and sustainable channels.

“Leadership is moving science forward and enabling innovation.”

Leaders placed significant emphasis on the values of improving lives. The lives of

both consumers and associates. This was further underlined by ‘doing the right thing’,

practising respect, and having in place a good code of conduct. Additionally,

emphasis was placed on cultivating a culture of inclusivity, integrity and collaboration.

A person’s cultural background was seen as playing a significant role in shaping the

leaders style. However, this was tempered by acknowledging that there are many

elements that also constitute how a leader’s style is shaped particularly in relation to

career mobility and international experience/exposure. “Every Leaders starts of

working predominantly in their own culture and that socialisation in terms of work

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socialisation drives the way we begin to see the world. Both in a business and cultural

sense. This varies by nationality and by culture and can be regional or sub-national.

Durkheim – “give me the child till seven I will give you the man” – essentially Durkheim

argued that socialisation of a child up to 7 sets them for life”.

Diversity

Novartis has in place a Diversity and Inclusion (D&I) strategy that is based on the

company’s Values and Behaviours. At this point in time it is evident that the main

focus of the companies D&I strategy is talent management, recruitment, and training.

That is, the primary focus of the D&I strategy consist of elements within the ‘structural’

diversity dimension.

Novartis’s understanding of diversity is coherent in that it acknowledges all types of

differences, both visible differences (socio-factors) and invisible differences (thinking

styles, perspectives, behaviour and personality). Two quotes by interviewees indicate

this:

“in stereotype there are aspects that are visible that every person has unless it

is consciously overwritten. And then there are many aspects that drive

diversity that are not visible but based on culture, experience, education etc.

The key is to recognise differences and celebrate diversity. Overall I believe

that there are many more in common than differences between people.

Diversity is simply recognising differences”.

“It starts from making sure that you have enough differences amongst the

table. I.e. leadership styles / thinking styles/ physical styles / communication

styles. So you can have a lot of differences around the table but have a

sameness in terms of output so the real key is how good can you be as an

inclusive leader to make different people comfortable within themselves,

comfortable with each other and build an environment that people feel

respected and trust in order to expose their differences in a promoting and

building sense.”

Also, it is evident that inclusivity is a key element of the diversity strategy at Novartis.

However, it is more difficult to ascertain and therefore not conclusive how deeply

inclusivity penetrates or is further embedded into the organisations overall culture and

various sub-cultures and ways of working across the company. Nor indeed, how the

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varying organisational structures accommodate inclusivity. At this point in time

inclusivity is primarily advocated through an inclusive leadership programme and their

hiring strategy.

On the whole, Novartis does not have a diverse workforce with regard to gender,

ethnicity and occupational background. This is most stark at Senior Management

levels with a lack of diverse representation at Board level. In tandem with this, it

appears that the integration and retention of women and non-scientists is poor. This is

attributed to Novartis strong performance/results driven culture which often cultivates

behaviours that embrace alpha-male characteristics and less relationship building

characteristics. This inevitably impacts on both ‘cognitive’ and ‘behavioural’ diversity.

According to an interviewee: “we understand structural diversity and we understand if

we do not have the physical images of structural diversity then is not a positive

environment. I think we are aware that if we have the structural diversity that will help

us with the cognitive diversity. We still have a way to go before we appreciate

behavioural diversity because sometimes we do not accept all styles (e.g. women/men

communication styles). We have men sitting around the table from a different cultural

background and we can accommodate those men because it will still have that male

tinge to it so it is still accepted but a woman in the room with a different cultural

background plus a communication style and as women relate to hierarchy and power

differently is all a bit too much. We think that a meeting is a good opportunity to sit

around and have a debate and when people say speak up we treat our superiors are

equals but this is not how it is. You are always conscious of this pecking order and

you make the men feel too uncomfortable and then you come across as too

challenging. The very thing that makes you a competent, strong and successful as a

middle manager is a pain in the ass at senior/executive level. And for this reason it is

difficult to coach women because if a women is not assertive enough they do not get

on the radar screen but this window between being assertive and aggressive is 1cm.

So either a woman is seen as a wilting flower or you are a rot viler and this line is so

delicate for women. Also women are not hierarchical by treating people on the same

level and this comes across as disrespectful in terms of being too pushy or arrogant or

outspoken which is really tough”. “...we have a problem with retention and promotion

of women because of its macho and alpha-male culture”.

The diversity strategy developed at corporate headquarters is not actively imposed

across the Group. That is, the different divisions have the choice as to whether they

adopt and implement diversity initiatives promoted by Group. As such, a cohesive

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diversity programme is not evident. At this point in time it would appear that universal

diversity initiatives centre on inclusive leadership training, female leadership

development, inclusive hiring and promotion, research relating to generational, gender

and age differences and limited cultural awareness training

There are glimmers of leading edge initiatives in place relating to learning disabilities

and behavioural modelling. Also, is the activity of benchmarking against other

companies different ways of working. A quote that illustrate this view is:

“So we are doing a lot of work at decision boards and teams and interventions in terms

of how they interact with each other. The idea is that you really need to leverage

diversity on the cognitive side. You need to behave in such a way you give people a

chance to voice their divergent ideas and problem solving skills”. And, “It is

somewhere in the middle. Novartis has a strong performance culture which means it

leans heavily towards individual’s performance and this is to an individualistic

component but we are changing and therefore depending on each other therefore we

need the other component. SS: how does this position of being somewhere in the

middle foster diversity? You will learn very fast that if you just focus on yourself it will

not work and you will not get your performance. Also you will not learn very fast if you

surround yourself with clones”.

However, these programmes and activities appear to be isolated one-off programmes

run by departments in divisions and are not consistently rolled out throughout and

across all divisions. Subsequently the overall view, understanding, and

implementation of D&I initiatives are not consistent globally and therefore impact upon,

and detract away from, the good intentions of the company’s D&I strategy and shared

learnings across the group.

Novartis’s organisational structure is decentralised in that each division, in the main,

operates autonomously. Although Novartis maximises alignment and realisation of

synergies of costs, technologies and processes (‘hard factors’) and stands firm in

terms of its principles on ethics and sustainable business practices, there appears to

be limited accommodation for the softer style of management. Despite an overriding

performance driven culture, it would appear that each of the five divisions have their

own cultures ranging from revenue driven-top/down, to a family type, to a lean, fast

paced and aggressive, to one that focuses on expertise and therefore displays a

positive and inclusive culture. This is explained by an interviewee in the following

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quote: “Five divisions so we have a set of cultures which are very different: Pharma

(60,000 people) is 80% of the company in terms of associates and revenue

driven./.numbers driven / Top/down. Crack the whip. Smart people. Complex;

Consumer health (25,000 people)..Three very autonomous business units. Family type

culture so close knit; Generics (30,000 people). Extremely low margin business. Very

lean and fast paced and aggressive. No nonsense – just get it done; Research (6,000

people). Scientists. More about expertise and therefore a positive culture and

inclusive. A culture of experts but this can be tough to manage; Vaccines. Part of a

M&A. Undergoing turmoil with leadership changes. So a company in transition”.

There was a mixed response to what performance objectives are tied to diversity. It

seems that there are no specific KPIs for diversity at an individual level. That is,

associates have no personal accountability for diversity. However, there are goals that

members of the D&I council are requested to attain and organisational KPIs with

respect to gender.

Innovation is a driving force within Novartis and diversity is seen as key to enabling

innovation. Innovation was acknowledged as the overriding benefit for embracing

diversity and having a diverse workforce is seen as a prerequisite to innovation in

terms of cross-cultural thinking, robust debate, creative solutions and better

performance on complex tasks. Parallel to this is the acknowledgement that it is

important to understand the differences in relation to culture, behaviours and ways of

thinking between the different nationalities in the group as well as the differences of

the consumers and the markets. To this end, it was stated that individuals must

practice empathy, tolerance and be open-minded towards all so that all associates are

treated on an equal footing and feel listened to and respected as demonstrated in the

following quotes.

“The best ideas do not always come from the markets with the largest number

of treatments or prices. So in innovation and differential thinking coming out of

markets which necessarily isn’t a market where we would focus the biggest

resources but what it does demonstrate is that the minds at work in those

markets provide very different ideas so the thinking is diverse..... Fresh thinking

from newer markets is at the heart of diversity...... We look for the quality of the

idea rather than look at the seniority of a person or how big the market size is.”

“We are a peculiar sort of place which is part of the Swiss culture which is

lovely in that the Swiss do not like to boast which helps with innovation and

creativity. We are not bold but we constantly look at reengineering and

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rewiring, and learning and challenging and fine-tuning things. Like the Swiss

watch – exact timing of evolution through step change but not crazily different

in terms of design.”

Communications in a multi-national company need to tell a story, articulated clearly


to suggest that dialogue between the divisions is at best random and primarily

conducted on an ‘only when need to speak’ basis. As such communications are not

necessarily at the fore front of strategic activities as there is limited opportunity for the

divisions to collaborate with each other due to their autonomous structure.

Novartis is unique in that at the time of this study it had established an external D&I

Advisory Council (DIAC) whose make-up consists of internationally renowned experts

from academia, business and non-governmental organisations. They advised Novartis

on all aspects of D&I. This was significant as it demonstrated Novartis’s commitment

to pursuing and implementing a coherent D&I strategy and practices across the

company.


Associates are dedicated to being a part of their divisions within the Novartis family.

Their expertise and commitment is both valued and rewarded and is reflected in the

way in which Novartis supports and develops its associates. The various leadership,

coaching and mentoring programmes, external executive educational programmes,

diversity training programmes, and international secondments for high potentials, are

just a sample of developmental programmes offered by the company and testament to

the commitment of the company to their associates.

Alluded to in the previous section, a paradoxical finding is that associates appear more

aligned to their divisions sub-culture rather than to Novartis as a unified whole. This

correlates with the finding that it is felt that Novartis oscillates between being a highly

individualistic culture with leanings towards a collective culture. Individual

performance and achievement is highly prized within the organisation almost at the

expense of collective performance.

The above finding correlates strongly with Novartis’s overall organisational culture

which is highly performance and number orientated. A culture in which achieving

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shareholder performance and company profits appears to be valued above

collaboration, connecting, and building relationships. This relates to the finding that

associates can find it difficult to balance challenging the status quo and practicing

creativity against speaking up for fear of being penalised. Parallel to this finding is the

degree of empowerment that the divisions have with regard to how strategy and

objectives are devolved and implemented can have significant implications with regard

to how the leadership team frames and intertwines the company’s goals and objectives

with D&I objectives going forward. “Diversity will always play second to hard number

performance but there is a serious push behind it.” Also, “Novartis is a performance

and number driven organisation but now we want to move towards a holistic approach

and then on the other hand it is impossible to measure it”.

There is a strong emphasis on inclusivity within the recruitment process with this being

seen to be a key lever for achieving an inclusive workforce. However the recruitment

sources that talent is sought from tend to be on a preferred suppliers list and these

preferred suppliers tend to specialise within the parameters of the Pharmaceutical

sector. Further, the promotion of women to senior executive levels is perceived as

limited within the company. “In the Pharmaceutical industry we are trying to bring

chemist and biologists from different disciplines together and they come from different

cultures. But for this reason it is hard to iron out conflicts because it is hard to work

across these areas because of what you know and what you are familiar with”.


are not homogeneous. As such, diverse teams are more like to challenge the status

quo which can lead to conflict. In Novartis, conflict is viewed as positive and the

company is open to associates challenging the status quo as long as the numbers are

met. The following quotes describe this finding:

“We are a global company .... so you need operate globally and be in a position

to recruit globally and to understand different social styles. e.g. a American will

stand on stage and beat their chest; a Brit will stand on stage and take the

mickey out of themselves because of their sense of humour and a Japanese

will stand on stage and be humble and yet call for performance and be seen to

be senior without saying so. So you need to be open that these 3 people are

not equal but judge on their achievements in terms of their strong concepts”.

“We are very open to challenge. E.g. around Life/ work integration because this

is the workforce saying things aren’t right and the leadership team saying lets

do something about it. Changed significantly in the last 10 years over time.

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SS: is that the leadership has changed or the company? the company has

become more open and a listening organisation? SS: why has this happened?

People realise that in order to have a working environment that people enjoy

and therefore are more productive in then you need to change the way you

operate. It is not conducive to getting the best out of people if you have an

environment where people are too afraid to say what they think”.

“Yes we are open to challenge. We are a global company with different

leaders from different parts and therefore we are able to challenge the status

quo but of course you need also to understand our Novartis culture (fact-

orientated, number, scientific, performance driven). So even if you come with a

crazy idea then at least you will have to come up with some facts. SS: from a

diversity perspective you wouldn’t employ people who are the same as you but

the culture says you have to be the same as us. So you look different, you

think different but once you are here you need to be more like us. How does

this tie into the concept of diversity. How does the culture marry up to

diversity? It’s limited. Its not fully diverse. You can not survive in this company

if you are not successful and also accept 2/3 company values to survive. Also,

this is how our company became successful. SS: so would Novartis recruit

someone from a Humanities or Arts background in order to bring in a different

perspective of the markets. Yes, as long as he/she understands that we are

here to sell products and create products. SS: so there is diversity with a

recognition/element that commercial/customer/R&D is realised. Yes”.

There is no doubt of Novartis’s commitment to D&I initiatives as demonstrated by the

range of diversity initiatives, but, there is a perceived gap in terms of the company’s

readiness to invest resources so that each country can have a dedicated diversity

team/officers whose role and efforts would exclusively focus on driving through the D&I

strategy. In tandem, there is a perception that the Board room is not diverse enough

and that there are no Board members who have specific ownership/accountability for

the D&I agenda. This sends out conflicting messages to the organisation in terms of

leaders not modelling behaviours or actions that are congruent with the D&I strategy.

It is acknowledged that diversity in differing countries is more or less advanced due to

regulations / compliance and affirmative action mandates and an interviewee stated

that “In Novartis we have a perception of an American view of diversity rather than a

European focus. It does not work and creates resistance to the diversity effort. The

issue is to convert people who don’t believe and not the converted”.

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Behaviours – Novartis is an organisation that is continuously evolving. Behaviours

and attitudes that provide the building blocks to allow diversity to be embedded into

every process are evident. These behaviours and attitudes include inclusivity,

creativity, commitment, and open-mindedness. In terms of how business is executed

across Novartis – respect, integrity, and doing the right thing are behaviours that are

deemed to be of paramount importance and are practised consistently across the

company.

Diversity – Novartis has a robust diversity and inclusion strategy in place and has

made significant in-roads in the pursuit of diversity and inclusion. Their internal

activities with regard to recruitment, promotion, coaching and developmental and

training programmes as well as, the establishment of the DIAC are testament to this.

Organisational Structure – Novartis is a decentralised company and the expertise

and knowledge of each division within the regions is seen as a key feature. Products

and communications (i.e. marketing mix) can be adapted to meet local market needs

as well as enabling and forging deep relationships with their local customers and

patients.

Development & Training – It was stated that being aware of one’s own filters, and

working with different cultures and subsequent differing value systems is an area that

associates continue to wrestle with. Associates are given the opportunity to take part

in cultural sensitivity and awareness programmes, educational programmes, talent

management, leadership development and mentoring programmes so as to address

these identified learning needs.

Measures of global leadership – the normal measurement of a leader’s performance

is largely fiscal. However measures should ensconce elements that take into account

global issues. Global issues relating to diversity, sustainability, the environment,

human rights, customer and employee satisfaction, trust in your division, long terms

business results etc creates a context that nurtures an alternative future, that initiate

and convene conversations that shift people’s experience. Leaders at Novartis

engage and actively engage in these measures.

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Diversity – Novartis has made progressive in-roads in their journey towards achieving

a diverse workforce and an inclusive working environment. However currently

Novartis has put in place a one dimensional diversity programme. That is, a tendency

to focus on one element of diversity – e.g. structural diversity. (NB: structural diversity

can also be referred to as identity diversity or workforce diversity). According to an

interviewee: “I would like to take on a much more conscious approach to thinking

about the “we” and productivity aligned to employee engagement also, how we could

achieve cognitive and behavioural diversity”.

To this end the company will need to consider adopting a broader diversity strategy

that also encompasses cognitive and behavioural diversity. Adopting this integrated

framework would result in a learning organisation where new ways of working are

embraced in the form of increased collaboration and forged networks and connections.

This in turn would manifest in increased innovation and shared knowledge and thinking

and encourage behaviours such as adaptability and flexibility. Thus D&I becomes part

of a sustainable change management programme grounded in the business realities of

the company and subsequently becomes part of the DNA of Novartis.

This three-pronged approach to diversity has two primary advantages. Firstly, it lends

support to both the business case in that it can be aligned to organisational activities

that are measurable (a balanced scorecard approach). Organisational activities

include talent management, recruitment, retention and promotion, leadership

development, innovation, decision making, problem solving, knowledge sharing,

intercultural communications, ways of working, behaviour modelling and conflict

management.

Secondly, it also gains the buy-in from associates as it focuses on the value added to

the company rather than diverting attention to the more sensitive and negative

perceptions of identity, tokenism, and quotas. Associates’ reaction to diversity usually

presents itself as a double-edge sword. On the one hand there is recognition that

embracing difference can lead to a greater creativity and exposure to differing cultures.

However, for women and people of colour diversity can be viewed as an act of

tokenism or as an attempt to achieve quotas rather than based on an individual’s level

of competence and capability. For white males, the fear of losing status or a feeling of

redundancy is often an adverse reaction to diversity. An integrated diversity strategy

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lessens this negative reaction to diversity by focusing on the value added and thus

contributes to increased employee engagement. An interviewee voiced this concern

by saying, “in a research organisation the biggest hurdle and most sensitive is the

demographic diversity because people are always worried that you are lowering your

standards and fulfilling quotas which are akin to affirmative action. Research

organisations need diversity but it’s harder for them to understand the demographic

component. It is easier for them to embrace different experiences and thinking styles

which also contribute to innovation”.

As referred to earlier, an additional identified weakness is that the company’s area of

focus in relation to diversity is not consistent across the Group. This largely stems

from the structure of the organisation whereby the divisions are largely autonomous.

The divisions are empowered to develop, adapt, and implement (or not) elements of

Novartis’s diversity strategy. As a result diversity strategy is not cohesively integrated

across the groups and there is no clear global view. Naturally, diversity and inclusion

may be more progressive in certain countries than others but this should not prevent

an integrated diversity strategy from being developed and implemented globally so that

it is a significant element of the global strategy.

Further, beyond targets for gender there are no specific KPIs for diversity. So as to

embed diversity as a change process KPIs should be devised for individuals or teams

accountable for implementing diversity initiatives as well as senior managers PDPs.

Recruitment Processes – the current system in place for recruitment does not allow

the company to recruit from a variety of sources. That is, there are still preferred

suppliers who primarily source candidates from pharma backgrounds. As such, the

likelihood of recruiting individuals from different ethnic, cultural and occupational

backgrounds is marginalised. This impacts upon and negates the cognitive and

behavioural elements of diversity.

Linked to this would be effective talent management and leadership development

programmes in which diversity and inclusion is at the core. To this end, what effort is

given to cultivating and developing an individual’s authentic identity and emerging

capabilities? And, what differing educational backgrounds are considered that would

maximise Novartis innovative and leading edge capabilities?

“So international experience is important but I am struggling with this as it

preselects those who are mobile over many years. And this is the reason why

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most leaders are still men as men are the leading spouse and the women and

family follow. So from this standpoint we have to find different ways of

providing this culturally flexibility. In some countries and cultures they have

strong family bonds. So we have to find training opportunities to create cultural

adaptability without moving families. So we need to have regional and global

projects where teams work together and it doesn’t matter where they live”.

“I can’t say that a person who has lived in 22 countries is more adaptable it

depends how open they are and there mindset. E.g. there are two types of

expatriates. One who lives/socialises only in the expat community and

surrounds themselves by expat leaders and have no connection with the local.

Second type tends to get connective with local markets and the local

leadership team.” Another person said “tension comes from global who have

not worked in a local environment or local guys with global egos who want to

change everything.”

Inclusivity – An inclusive organisation not only brings diverse individuals on board but

also makes them feel included and a valued contributor to the company. Novartis’s

strategy and associated communications and programmes imply that as a company

you embrace diversity and (tolerate) difference. However, when a diverse individual

joins the organisation they may experience the opposite. That is, if an individual is not

numbers/results driven then the culture is less likely to support or accommodate them

so there is an ultimate clash between diverse individuals and cultural fit once they

enter the organisation. As such, the message does not correlate with the behaviours or

culture of the organisation. In other words, if you ‘learn the rules of the game’ you will

be accepted, if you do not, you will not be recognised or rewarded. To embrace the

companies values and follow business principles goes without saying but having to

change who you are in order to feel that you ‘fit in’ and are accepted does not embrace

the concept of inclusivity. An individual needs to be given time to acclimatise to the

culture and find their own way within the culture. As such, inclusivity is demonstrating

a genuine openness to all people, at all levels regardless of visible differences,

different ways of thinking and different ways of behaving. This does not advocate a

maverick or reckless organisation but simply that all associates are valued, respected

and engaged.

Integration – The concept of inclusivity is strongly twinned with the concept of

integration. Once a new employee comes on board how effectively are they integrated

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into the organisation? Are they equipped with the right tools and resources that will

enable a smooth integration or must they simply learn by making mistakes? The

following quotes articulate this very dilemma:

“...because you can have diversity but then individuals with diverse

backgrounds come together as a team then very often they are not included so

diversity is not leveraged that is why we emphasise inclusion to ensure

diversity works.”

“SS: I want to push you on the concept of inclusivity. So you get a broad

spectrum of difference into the organisation but you bring people who are

different on board but they do not fit. This happens when the culture is

constraining – i.e. when you bring people in who are innovative and free

thinking but the system is process driven then they will go, so you need to

create the environment within which those people flourish and that comes from

adapting the recruitment process and this comes from having the right strategy

which comes from the buy-in of the senior leadership team. So changing

processes and getting people on the ground engaged in it. SS: so you are

talking about changing the organisations culture so I will play devil’s advocate –

I am aware that the culture is one that is tough, is rewards and performance

driven so even though we want diversity you as an individual still have to make

the numbers. Therefore the concept of inclusivity is not embraced and has not

penetrated throughout the division – what is your take on this? This is right but

varies on where you are and we are working to enable that change. SS: is

diversity seen as a change process? Some see it as a tick box exercise and

some see it as a change thing but it is variable and we could do more to

change this perception.”

An environment that creates conditions to foster diversity will value different

perspectives and enable diverse associates to contribute authentically to the company.

Diversity can no longer be a phenomenon to keep at arm’s length, an abstraction to

study or philosophise about. In fact, the sheer speed and value of globalisation has

made diversity become “an experience,” – something that only those who live in very

remote and isolated areas can ignore.

Organisational Structure & Culture – Novartis’s structure has no doubt fostered

competitiveness throughout the company that has enabled Novartis to become a

highly respected and regarded company across the world. However there can be no

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denying that five divisions operating in three different geographical regions is a

leadership challenge when forging and articulating the organisational culture as well as

implementing new initiatives in order to change processes. Added to this is the fact

that although Novartis values and behaviours and global strategy are articulated the

divisions are empowered to create their own culture. This may serve to undermine the

overriding values, behaviours and strategy resulting in a negative impact on D&I

initiatives.

At the same time, a strong culture of innovation, performance and customer focus

permeates across the Group. In other words, there are symbols, stories, and rituals

that define who you are, your history, where we are going (your future), and what

makes you unique. This serves to identify the essence of the company’s soul.

Therefore the culture can be divided into two distinct entities. That is – ‘the way of

operating’ (operational strategy), and ‘a way of behaving’ (behavioural strategy).

Beyond an individual’s singular contribution and with the patients in mind, it has proved

difficult to pin down what it is that engages the employee, and what keeps the

associates both motivated and committed in their pursuance of achieving Novartis’s

overall strategic objectives?

This strongly correlates with the finding that the culture of the company leans towards

individualism. In other words, in the eyes of the associates the individual or the

division is a star but not necessarily the collective company. Herein lays the dilemma

– as it stands, it works – Novartis is recognised in the top four within their sector in the

world. As such, changing the formula for business operations is not a given.

However, it is possible to refine the formula so that it pays tribute to and acknowledges

the demands of a high performance company. High performing companies practice

joined-up thinking and extensively collaborate across functions and divisions by

sharing both knowledge and expertise.

Leading edge thinking on diversity suggests that if Novartis were to further emphasise

these behaviours and work towards a culture of collectiveness then this would

positively impact on the company’s bottom line, by giving credence to the company’s

brand and reputation, reducing threats from the competition and risks from

international operations, increasing the potential to better understand the collective

nature of emerging markets and thus potentially increasing market share in these

countries. Interviewees recognised the weaknesses of not working collectively:

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“Individualistic culture. It is very much a culture of performance rather than a

performance culture and the reward and recognition systems and the nature of

the company which is highly competitive makes it highly individualistic. SS:

what are the advantages and disadvantages to that individualistic culture? The

advantages are that it is very performance driven and individuals can make and

seen to make a difference so every individual needs to shine and blow their

own trumpet. There is no hiding behind teams or groups of people. The

negatives is that it makes collaboration more difficult.”

“Individualistic culture. SS: how does this “I” culture help to foster diversity? It

doesn’t help to foster diversity. We are very performance driven organisation

and so this makes it difficult for us to embrace both cognitive and behavioural

diversity. We need to have an appreciation of how to focus on the “we” and the

team. SS: I get the sense that Novartis as a company is like a Federal state so

you have each division but each division is like its own country? It’s hard to

generalise for each division and you get a different feeling when you go to

different countries because you have pockets of “we” around the organisation

but what disseminates from the centre it is a “I” culture. SS: but even the

differences between the divisions are quite marked so the question that follows

is how do you bring those differences together or do you need to? It would be

nice to have a congruence and integrity running through the organisation from

the top to the bottom.....There is a certain amount of cynicism around this

group hug so softer relationship stuff is not much talked about. Even the way

D&I is talked about makes it sound like a number game not a relationship game

in Novartis. .......The ‘Generation Y’ is not into the “I” and they want the social

stuff to come back. The pendulum will come back and companies will have to

pay attention to the “we” and will have to pay attention to the team”

Collaboration – as stated in the above findings on organisational structure and

culture, opportunities to leverage best practices and innovation across the divisions

are not harnessed sufficiently. There appears to be limited opportunity for the

divisions to collaborate with each other as strategic decisions and practices are owned

by and tailored for the divisions. As such, a need to encourage further interaction

across the divisions of Novartis utilising leadership facilitation and orchestration should

be encouraged as this permits learning, flexibility and agility throughout the company.

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presents its own challenges that can often be testing. Ineffective communication can have

an impact on the way the strategy and objectives are implemented and realised as well as

undermine the opportunity for shared learning and best practices across the Group. As

such, there is a perceived need by interviewees to invest more in forging consistent and

clear internal communications in the company. This should be addressed by identifying

and putting in place tools to enable dialogue that is engaging and reduces misinterpretation

– specifically, a coherent communications strategy so that all associates regardless of

location, have access to, and receive the same information in a timely and consistent

manner from a centralised knowledge sharing platform.

An interviewee speaks of this lack of integrated communications by referring to personal

experience: “What can occur is not understanding or appreciating differences which has a

big impact. People can be under appreciated or discounted because of the way they

approach things are different. It also impacts how you seek and present info and resolve

conflicts. E.g. in a former company I was involved in a multi billion global project which

covered 25 countries around the world and the TCs were a complete disaster because we

have a rapid agenda approach to the calls and the Latin America’s couldn’t keep up and

couldn’t answer questions in 30 seconds and I’m sure did not know what they were doing.

Communication lost in translation”.

Leadership Commitment – Although diversity is acknowledged as being a top five priority

for Novartis and it is energetically communicated, the lack of ownership at senior levels has

the impact of creating a different message. A message that this may be a trend rather than

a sustainable strategic objective. In other words the reality has to back up the message

otherwise it will be perceived as “window dressing”. Leaders need to demonstrate that they

are both committed and accountable. There are no Board members known to own the

diversity agenda and this may serve to undermine your position. As such, it is important

that leaders are seen to be proactively engaged and visible when it comes to propagating

diversity.

Also, although global diversity council members are well intentioned, their efforts in

pursuing D&I initiatives is often thwarted when faced with their day to day business

responsibilities. Therefore it is recommended that where possible, each country has its

own D&I team/officers who can concentrate on driving through a unified approach to

implementing diversity as well as, having broader ownership and accountability. These

country teams would then be accountable to regional teams who in turn would be

accountable to a identified Board member.

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Conclusion to Chapters Six & Seven

Chapters six and seven presented the individual case studies for the following

companies: Mahindra & Mahindra (M&M), Anglo Platinum, Al Baraka Banking Group

(ABG), Skanska AB, L’Oréal and Novartis.

Chapter six included three cases whose organisations are headquartered on continents in

the developing world/emerging markets – i.e. Asia, Sub-Sahara Africa, South America

and the Middle East. The companies in this cluster were: Mahindra & Mahindra (M&M),

Anglo Platinum and Al Baraka Banking Group (ABG).

M&M are frequently engaged in M&A activities. As such, they are in the process of

understanding and realising the implications of leading a diverse workforce. They are

cognizant of how their core purpose is Indian-centric which may not necessarily unite a

global workforce.

Anglo Platinum continues to contend with the legacy of apartheid which influences their

diversity strategies in the form of affirmative action policies. However, cultural fiefdoms

still permeate the company culture and an adverse emotional reaction to diversity is

acute. As such, the concept of diversity as an integrated strategy is still in its infancy as

they remain bound by compliance.

Although Al Baraka Banking Group (ABG) is very much a family united by Shari’a law

their remains a distinctness amongst the varying differing cultures that make up the

Group which ultimately impact on ways of working, being and thinking. These need to

come together to work in unison so that it adds value to the company and assists the

company in its goal to progress from an international workforce towards a global

workforce.

Although these three companies leadership approach to diversity in this geographical

structure varied greatly due to the very different cultures of these societies as well as,

intracultural variability within these societies, many shared the opinion that their nations

are so diverse that diversity is a ‘way of being’ and therefore not an issue. As such, for

both M&M and ABG there are no diversity policies, diversity charters, diversity steering

groups or diversity champions in place. One could interpret this as wanting to maintain

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the status quo and more crudely, ‘ignorance is bliss’. If, the researcher were to use team

formation as an analogy, then the diversity journey of these companies would be at the

forming stage.

A feature that they all shared relates to their approach to ‘ways of working’ which was

highly collective and relationship based. They focus on serving their community and

collective needs as opposed to servicing individual needs and ambitions.

An interesting conundrum that these three companies have to deal with is how to be a

globally respected business and yet simultaneously protect and develop the identity of the

business in a manner that maintains their cultural essence. This is a transformative

journey and as such, a transformation from an international business to a genuinely

global organisation rooted in their cultural values and business practices looks both

exciting and achievable.

Chapter seven included three cases whose organisations are headquartered on

continents in the developed and Industrialised/Western Nations – i.e. Europe and

America. The companies in this cluster were Skanska AB, L’Oréal and Novartis.

Skanska AB has begun to position diversity at the heart of strategic conversations and a

number of diversity initiatives focused on gender are up and running. Their key belief for

diversity centres on the necessity for heterogeneous teams as well as, the need for

leaders to role model behaviours that are central to diversity.

At L’Oréal, diversity is seen as the driving force for accentuating innovation. Further, they

view diversity as mirroring the demographics of their consumers and therefore diversity

as a concept is positioned at the heart of their strategy. It was also noted that the

concept of inclusivity is not referred to in their language on diversity. Rather, L’Oréal

refers to equity as a key element of diversity.

Novartis is committed to diversity and was the only company in this study to commission

an external Diversity and Inclusion Advisory Council (DIAC). (The researcher has since

learnt that this council was disbanded at the beginning of 2012). As a company they

remain dependent on recruiting from preferred suppliers whose focus is on a scientific

pool rather than extending their recruitment sources to include individuals sourced from a

more diverse background. This is linked to a problematic issue that when diverse

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individuals do join the onus is on them to ‘fit in’ rather than for the company to value their

contribution. This issue continues to impact on both retention and promotion.

Companies in this geographical cluster demonstrate that they have made significant

progression in their diversity efforts and generally extend the concept of diversity to

embrace inclusivity. Diversity policies, charters, steering groups and champions are in

place alongside several programmes and initiatives. Innovation is seen as key to

company growth and tends to be the driving force behind these companies’ diversity

efforts.

These companies have done well in putting the basic pattern of the diversity mosaic

together and now the pattern needs to be tessellated across their respective

organisations so that there is a consistent and integrated approach to diversity. A shared

feature for these companies is that there is not an integrated, consistent and joined-up

approach to diversity due to the decentralised and often autonomous structures of them.

In the main, the home markets/divisions/brands retain autonomy for their operations and

subsequently how diversity programmes are developed and implemented. Subsequently,

although diversity policies are in place at Group level, diversity initiatives and

programmes tend to be randomly deployed and key performance measures for diversity

are a rarity.

Also, emotional reactions to diversity are evident and the benefits of diversity can be

perceived as a double-edge sword. On the one hand these companies value the high

degree of creativity and innovation that diversity affords. However, many interviewed

remain conscious that diversity can also be perceived as acts of tokenism or attempts to

achieve quotas for compliance reasons. Therefore, can be resistance to diversity

initiatives at senior level.

A shared phenomena is that interviewees report that Executives all say the ‘right things’

when discussing diversity – that is, they are all politically correct and it appears on the

outset that they do have a diverse workforce. However, they were candid in expressing

that diverse individuals were often not integrated well and this resulted in poor retention

and under representation of diverse individuals at senior levels. Linked to this is that

diverse individuals were expected to ‘fit into’ the existing organisational culture rather than

the culture being open to the value that they brought. Therefore the messages imparted

for diversity and inclusivity did not necessarily correlate with the behaviours or culture of

the organisation.

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If, the researcher were to use team formation as an analogy, then the diversity journey of

these companies would be at the storming stage.

For all six companies, the basic ingredients are in place to fuel the growth ambitions of

the business. However, much of their future success will, in the researchers view,

depend on how effectively the leadership team and organisational culture embrace the

diversity reflected in international acquisitions, joint ventures and increasingly diverse

workforces as well as, how they manage the talent of the future.

As globalisation continues to accelerate at an increased pace these companies can play

a pivotal role across their respective industries in orchestrating a change in the perception

of diversity and inclusion for both its employees and consumers alike so that an

integrative view on global leadership and diversity can emerge. In terms of sustaining a

profitable business and focusing on customer shared value they will need to rigorously

look at their shared practices in terms of the structural, cognitive and behavioural

elements of the organisation and, at the heart of this pressingly sits the issue of diversity,

inclusion and leadership.

In this context, these companies may find additional benefit in involving all stakeholders in

shaping a company’s core ideology towards diversity so that it is reflective of their global

customer base and workforce and subsequently the diversity of cultures that they represent.

The challenge is to develop a mechanism that supports diversity through an integrated

platform that addresses three key areas: workforce and systems, ways of thinking and

ways of behaving. These companies will need to move beyond compliance and minimal

action and invest in diversity to the same degree as they have invested in the values and

activities that are important to them. They will need to demonstrate a proactive diversity

strategy that will deliver real value and benefits of a truly integrated business. The

evidence suggests that the leadership at these companies have at their heart, the

intention and will to do so.

The analysis of all six cases will be further interrogated and elaborated on in chapter eight

in order to extract key themes as well as to understand the differences between the

developed and developing countries approaches to diversity.

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Chapter Eight: Analysis of the six case studies

Introduction

This chapter is a qualitative examination of the findings across the six case studies and

are based on interviews with 79 Senior Managers across 22 countries on five continents

across the following organisations: L’Oréal (Paris), Novartis (Switzerland) and Skanska

(Sweden), Al Baraka Bank (Bahrain), Anglo Platinum (South Africa), and Mahindra &

Mahindra (India).

The analysis started out by employing grounded theory but this changed over time. The

researcher utilised a hybrid approach consisting of open coding, thematic analysis and

content analysis. What follows is a step-by-step process of the analysis that serves to

demonstrate transparency as to how the researcher formulated the overarching themes

and categories from the raw data generated by the interviewees.

The first analysis does a deep dive into the three constructs. These three constructs –

leadership, diversity, and organisational factors – formed the framework for the in-depth

semi-structured interviews. That is, the questions in the structured interviews fell into one

of these three constructs. The first two constructs – leadership and diversity –directly

related to the topic being researched and questions focused on understanding the

attributes of a global leader and the current stance of diversity in their organisations.

These two constructs directly map onto the leadership dimensions and diversity

dimensions of LEAD³.

The third construct – organisational factors – was drawn from reference to extant

literature as the researcher was conscious of, and wanted to understand how internal or

external elements pertaining to organisational life might impact on the relationship

between diversity and a global leader’s performance. Also, by including this construct the

researcher has taken into account a whole systems approach. This third construct maps

onto the performance dimensions (inclusion & engagement; collaboration; strategic

alignment;), stakeholder groupings (individual; teams; organisation) and performance

outcomes (return-on-investment; organisational learning; sustainable growth & change) of

the LEAD³ model.

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Process –Thematic analysis and content analysis

The objectives of this analysis were threefold. Firstly, to confirm, or not, the components

of the LEAD³ model. Secondly, to understand the possibility of how diversity in

organisations can be encompassed within a change programme. Thirdly, to understand

how leaders could better leverage diversity in their organisations.

The researcher employed a hybrid approach (similar to that of Miles and Huberman, 1984

and Fereday and Muir-Cochrane, 2006). This began by using elements of grounded

theory but moved to thematic analysis and content analysis. Data analysis was

considered as comprising of three concurrent flows of activity – data reduction, data

display and conclusion drawing.

The researcher conducted and transcribed all interviews of individuals from each

organisation and so became intimately familiar with the data transcripts. Interview

transcripts were constantly re-read in order to allow for the development of the main

research ‘categories’. The data was broken down into discrete ideas, events, and

incidents and given a name that represents these. The names were taken from the

words of respondents themselves – as in “in vivo codes” (Glaser & Strauss, 1967). This

is data reduction. In data reduction the researcher went through a process of selecting,

focusing, simplifying, abstracting and transforming the ‘raw’ data that appear in the

interviews. (e.g. data chunks to code). The codes are suggested by the data rather than

imposed from outside, a procedure known as ‘open coding’ (Strauss and Corbin, 1990).

Coding, open coding in particular refers to a process of ‘breaking down, examining,

comparing, conceptualising and categorizing data. The process of analysis up to this

point was influenced by grounded theory methodology.

The methodology then progressed to thematic analysis for data display. That is, the data

was then thematically coded and grouped using categories generated from the

interviews. Thematic analysis is a search for themes that emerge as being important to

the description of the phenomenon. It is a form of pattern recognition within the data

where emerging themes become the categories for analysis (Fereday and Muir-

Cochrane, 2006). The thematic development of these categories was a key stage in the

research analysis. Categories represent not one individual’s or group’s story but rather

the stories of many persons or groups reduced into, and represented by, several highly

conceptual terms. Although no longer the specific data of an individual, group, or

organisation, categories are derived by comparing data from each case; therefore, they

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should, in a general sense, have relevance for, and be applicable to, all cases in the

study. It is the details included under each category and subcategory, through the

specification of properties and dimensions that bring out the case differences and

variations within a category.

Once a particular theme had enough properties, namely no new properties related to a

theme emerged in the transcriptions, a particular theme became an integrative category

with a set of defined dimensions. Iteration between data, concepts and themes ended

when enough categories and associated dimensions were defined to describe the

relationship between leadership and diversity, a situation Glaser and Strauss (1967) refer

to as ‘theoretical saturation’.

So as to ensure interpretive rigour the findings are illustrated by integrating quotations

from the raw data (also illustrated in chapters 6 and 7). The interviewees’ reflections,

conveyed in their own words, strengthen the face validity and credibility of the research.

As such, overarching themes are supported by excerpts from the raw data to ensure that

data interpretation remains directly linked to the words of the interviewees. This process

of data reduction and data display was done after each case study and allowed for

individual case reports per case study as presented in chapters six and seven.

In the third flow of activity – conclusion drawing – the researcher then conducted a basic

form of counting by combining the data from across the six cases (content analysis).

Word counts led to the generation of spreadsheets that detailed the three constructs and

their corresponding questions (see appendices 6 and 7). The results from the combined

data are presented in the next section titled data analysis.

The use of content analysis was not an attempt to use any form of statistical technique,

rather, it was envisaged that the use of numbers could be transferred to graphs which

would illustrate what the most frequent responses were as well as provide the researcher

with a clear pictorial understanding of the themes and categories generated. Also, it was

hoped that content analysis would add rigour to the rich tapestry of data. Indeed, it was

hoped that clear indicators and patterns might emerge to further substantiate key

findings.

In addition, the researcher went through a period of reflection whereby the researcher

sought to understand whether the data showed differences or similarities between the

geographies and, if so, what was the significance or implications of this for organisations?

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The position taken is constructionist in nature in that the research clearly gained access

to the experiences of those in the research setting. There was transparency about how

sense was made from the raw data. And, the categories and themes derived from this

research have relevance to other settings.

Sampling framework

‘Theoretical sampling’ is associated with grounded theory and is the process of data

collecting for generating theory whereby the analyst jointly collects, codes and analyses

his data and then decides what data to collect next and where to find them, in order to

develop his theory as it emerges (Glaser and Strauss, 1967).

However, it is important to note that access is far more difficult within commercial

organisations, and as such researchers are rarely given the freedom to select their

samples on theoretical grounds. Therefore, some of the assumptions of grounded theory

have to be amended further to deal with this kind of situation (Locke, 2001).

Organisational researchers have to accept the interviewees assigned to them and this

often requires a number of compromises to be made in terms of research design. This

was the case for this research. As such, the researcher was unable to apply the full

breadth of theoretical sampling. The researcher was constrained by controlled access to

organisations in that the interviewees were identified for her and schedules tightly

managed and she had no power to determine where or who to collect data from next. As

such, the sample in this research is akin to convenience sampling.

Data display: Combined analysis of the six cases across the three

constructs

Three constructs, namely, leadership, diversity and organisational factors, formed the

framework for the in-depth semi-structured interviews. Following the process of open

coding, 202 concepts were identified from the combined six case studies. As described

in the previous section, in line with thematic analysis, these concepts were then grouped

into themes and corresponding categories. What follows are data displays for each of

the three constructs and their associated themes and categories.

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Leadership – Categories and Themes

In the first construct – Leadership – questions in the interview centered on: characteristics

of global leaders, performance criteria, values and nationality and culture. From the 50

concepts identified for the leadership construct six categories emerged. The categories

and its associated themes are:

Table 3: Leadership – Categories and Themes

Category Themes

Competencies Business; cross-cultural competencies

Connecting People leadership; bringing people together; directing;

relationships building

Rigour Monetary; business performance; strategy

Stakeholder satisfaction Customer satisfaction; employee satisfaction

Value-based

professional

Intrinsic competencies [dynamic, motivated etc],

integrity/honesty; developing employees

Influences Nationality; cultural; social identity; global vs. local

Figure 2

Leadership

Quote Code in open coding Theme Category

• Adaptability of what you are in the new location that you are is very important...adaptability is about everything

• To be able to be sensitive and adapt to different cultures

• A global mindset

• An openness to everything that is different to what you are familiar with

• Ability to embrace change and complexity

• We need to be quicker but not to slow down decisions. This means diversity and ability to confront not to be a yes women/man.

• Knowledge and experience of operating within a global setting

• Understand the implications of your strategy in different cultural environments

BusinessCompetencies

27%

Cross-culturalCompetencies

19%

Competencies

Ability to:innovate; to adapt:

to be agile; to influence;To take risks;

To gather and analyse information;

Strategic thinker

Manage complexity

Knowledge of context

Experience of operating in a global setting

Multi-cultural management skills

Adaptable to different cultures

Global mindset

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Figure 3

Leadership

• Ensuring that we have the right people for the right jobs and empower them

• Trust in local management – don’t allow a western management style to be imposed.

• Emotional intelligence and empathy

• Sharing with every level the vision for the organisation so that we can get everyone on board

• Drawing the vision

• Engages the organisation to work towards that vision and implements the strategy to enable that to happen

• Empathy – interacting and understanding

• Person orientated and not thinking only about technical

• Curiosity to discover the different cultures, needs and markets

• A very strong sense for people, their performance and hiring and developing the right people


Connecting:

•Bringing together

•Directing•Building relationships

PeopleLeadership

17%

Connecting/empathy

Ensuring right team in place

Visible & inclusive

Trusting local teams

People & management skills

Vision16%Having a clear vision

Relationships12%

To bring others together

Ability to link and engage with diverse groups

Ability to build relationships

Ability to deal with different cultures

Figure 4

Leadership

• Robust policies that stand up to global differences

• Ruthless focus on financial returns

• The measurement of performance needs to be multi-faceted with a long-term component built in.

• A measure that is not short term like profitability but a long term perspective like share price

• Market leadership

• Geographical presence

• R&D and product development

• A leader who leaves a legacy and solid foundations in place – I don’t believe in good leadership ...but good practices

• Sustainable business performance

• Leadership is moving science forward and enabling innovation

• Lagging indicators – business performance


Market and revenue growth

Stable share price / profit

Clear communications

Effective management of stakeholder groups

Focus on sustainability issues

Focus on innovation / R&D

Robust policies that are adaptable to context

Strong problem solving and decision making

Long term perspective

Ability to see the big picture

Financial results

Fiscal26%

StrategicContext

12%

Rigour:

• Monetary• Performance • Strategy

BusinessCompetencies

12%

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Figure 5

Leadership

• Leading indicators – employee and customer satisfaction

• It’s all about meeting the customer needs

• Working in a way so you have happy customers by delivering good quality

• Subordinates who believe that they are a part of the family of their organisation

• Team building and motivation

• ‘God in one for all’...deal with all on an equal footing

• Development of people and succession planning

• Develop younger people and give them the chance to grow

• Employee satisfaction

• Engagement data / employee feedback

• Coach and mentor your employees

• Develop local talent to an international standard

Employee Satisfaction

12%


CustomerSatisfaction

7%

StakeholderSatisfaction

Customer is satisfied

Customer-centric

Coach / mentor

Employee engaged

Attract talent

Motivate and retain

Develop employees

Employee buy-in

Figure 6

Leadership

• Professional integrity – do not be untrue to your domain whilst still being part of a team working towards a common cause.

• This is about equity in the way you deal with people ... It is all about respecting the individuality and dignity of people

• The need to have ‘cultural fluency’ –where you can get the message across to people without loosing your identity in the process

• Changing attitudes from being served to serving – the leader is just an agent in the whole scheme of things

• To create a culture of innovation and discovery

• Honesty and openness – no hidden agendas - transparency

• Having equality between what you say and what you do is important

• Connecting people with each other -networks

• You get committed people by good leadership...that is, leadership that makes people grow

• Developing people – it’s a lot about delegation...so you need the strong empowerment of team

• Orchestrate different countries and challenge rationale and strategy but at the end they are the people who know better the countries where we will implement the strategies so the make the decisions.

• Embed values in performance management systems with equal weight into salaries increases and bonus payments


IntrinsicCompetencies

28%

Value-BasedProfessional

Integrity / Honesty

15%

DevelopingEmployees

14%

Professional

Self-driven

Innovative

Motivated to achieve

Reliable

Acts with integrity and is honest

Growing & valuing

Providing opportunities

Team building

Challenge & motivate

Empower

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Figure 7

Leadership

• Our values are different to the West – family values are stronger

• The only sentiment that binds us together is our nationality ...each nation has its own way of getting things done

• You should have a global view – you should be able to see a oneness and not be led by nationality

• Nationality shapes how we view the world of work and shape our view of what is acceptable or not from a leadership perspective

• Significant..it amounts to the effectiveness of communication between cultures

• A big part of diversity of seeing how different nationalities can communicate within a global company

• Your horizons of thinking changes in terms of global needs vs. local needs as you move into a global role

• In a globalised environment I don’t think nationality has much influence – socialisation has more of an impact

• There are big differences in ways of working• There are more differences between men

and women• There are many slices dealing with

people...enriched experiences, exposure, educational background, age etc.

• Monoculture leadership is thinking through one filter whereby you replicate the same model in different countries, not respecting the local needs and the local context

• People can be under appreciated or discounted because of the way they approach things are different


National & Cultural factors

46%

Social identity

influences21%

Influences:

•Nationality:•Culture•Social

Nationality plays a role in relation to family, ethics &

values

Nationality shapes what is acceptable and important

A person of the same nationality provides

confidence

Culture influences leadership style

Material vs. relational

Westerners are confident and direct

Socialisation has an impact

Dimensions such as gender, generation and

socio-economic play a part

International exposure

Presented below is an in-depth analysis of the emerging categories and corresponding

themes for the construct Leadership as depicted in the diagrams above:

Competencies

The findings show that senior executives view competencies as a key capability and one

of paramount importance when leading a global organisation. The two themes that were

identified for this category were divided into business competencies which included

technical skills and sustainable business performance and strategic intent and cross-

cultural competencies which included global mindset.

Business Competencies

Technical competency

A leader’s ability to demonstrate an exemplary level of technical skills of leaders was

seen as instrumental in instilling a high degree of confidence amongst employees. In the

main, technical skills of leaders tend to be in the ‘hard’ domain of finance, economics, and

strategy. Consequently, there is marginal empathy towards the ‘softer’ aspect that

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diversity presents. This resulted in a harder sell to leaders with regard to the benefits of

driving a diversity agenda and its subsequent impact on the financial bottom-line.

Sustainable business performance and strategic intent

A number of executives raised concern regarding the sustainability of embedding

diversity. Executives often referred to diversity as a ‘management fad’ that will disappear

once the next ‘fad’ is discovered and therefore refer to its lack for sustainable impact.

Another perspective is that if diversity is implemented as a strategic intent it was often

done due to the personal interest of the existing CEO. It was felt that if the CEO were to

leave the company then diversity would inevitably disappear from the corporate agenda -

diversity may not even be a lasting legacy of the departing CEO! In other words, there is

limited long term orientation towards diversity.

Cross-Cultural Competencies

Global mindset and cross-cultural sensitivity

Having a global mindset and practicing cross-cultural sensitivity was viewed as

paramount in incorporating and leveraging diversity in the organisation. The findings

show that a leader must be able to influence across national and cultural boundaries and

they must also be willing to learn and be able to adapt more readily to environmental

changes. They must also have an acute ability to handle complexity and ambiguity and

appreciate the impact of cultural and social identity forces on business.

A key aspect of a global leader’s role was viewed as the ability to deal with cultural

differences as cultural knowledge in international management requires understanding

differences within a culture as well as across culture. The added complexity for leaders is

their lack of comprehension of the diversity within a given culture, because they do not

understand the historical, political, and social context of “within-culture” differences. As

such, they need to become au fait with a multiple level knowledge of cultures as well as

be conscious of their own. Black, Morrison, and Gregersen (2000) have termed this as

‘embracing duality’. As an executive said, “you need to know how the mind works in

other cultures – what are the motivators for different groups of people”. Another

executive states more bluntly that “you need to put your ego away and go out of your way

to understand”.

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Connecting

The findings concur with previous research that the global leaders role in effectively

leading across differences is heavily dependent on a category named ‘connecting’. The

themes emerging from this category are: people leadership, bringing people together,

visioning and relationship building.

People leadership

This theme was seen as vital and compose of demonstrating empathy with people,

having the right team in place as well as having trust in local teams and most importantly

being visible and inclusive.

Bringing people together

Bringing people together through the facilitation of networks between different

backgrounds of people was deemed to be an essential role of the leader. Encouraging

people to learn, understand and appreciate the value of each other’s differences and the

unique contribution that each one can make to achieve the organisation’s mission is seen

to be a prerequisite act of embedding diversity. It also had the added advantage of the

leader demonstrating that they are open to including different types of people into all

facets of organisational life.

Visioning

Executives placed visioning as one of the top characteristics for leading an organisation.

It was seen as important for a leader to have a overarching vision that paints a picture for

the future of the organisation and is used to get buy-in and engage so that every level of

the organisation is on board. Further, the development of a direction-setting vision was

also seen as an imperative when a leader wanted to initiate a need for change and

encourage subordinate managers to take leadership actions to implement the vision. An

analogy of an orchestra’s conductor was given to emphasise how the vision serves the

purpose of everyone playing from the same hymn sheet.

In particular, it was felt that through broad-based communication of the vision, leaders

can use vision statements that articulate and reiterate the values of an organisation to

speak to the relational concerns of group members without having to interact with them

directly thus, providing employees with a shared basis for identification and cooperation.

Another view stated is that where a leader has articulated and communicated a global

vision then a degree of risk taking is accommodated. As risk taking is a vital component

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of accommodating different approaches and opinions and ways of doing things it

therefore embraces the principles of diversity and consequently, vision serves the utmost

importance.

Relationship building

As with bringing people together, relationship building was seen as an unequivocal part of a

leader’s role in the pursuit of advocating diversity. Building relations both internally with

employees, as well as externally with customers, suppliers, Governments etc. from across

the globe served to demonstrate the leader’s capability for curiosity, openness, trust and to

engage with others who are from different walks of life to themselves. It also presents the

leader as people orientated and not simply a person who is focused on the financials or

operational issues.

Rigour

Primarily rigour means that the way in which the organisation is led must ultimately serve

to impact on the bottom line in a profitable way. In other words, fiscal performance in

terms of monetary rigour is seen to be an imperative and must demonstrate a return on

investment to the organisation and its shareholders. Because diversity can be an

intangible concept to digest and, a lengthy change process to implement, the outputs and

measurements can take longer to be observed, felt and measured. As such, it was felt

that leaders will often shy away from diversity because shareholders and stakeholders

alike are unlikely to see an immediate return on investment either in the current financial

year or for some years to come.

The findings suggest that there is a high level of concern in relation to measuring the

outputs of a diversity programme. At the simplest level, diversity is measured through

recruitment and retention, through talent management programmes and the promotion of

diverse individuals, and in some cases, by the development of innovative products.

However the measurement of diversity continues to remain an elusive process.

Interviewees suggest that measurement for diversity be framed through a different lens

so that employees will understand how a more joined-up and collaborative organisation

correlates with increased employee satisfaction which in turn, equates with a more

productive workforce that ultimately impacts on the bottom-line.

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Stakeholder satisfaction

Customer satisfaction

Interviewees said that activities such as customer relations, marketing and sales and

brand management should be specifically targeted towards diverse consumers. The

rationale is that if and organisation tailors its products and services to a local market then

it will enhance the brand, fuel growth and increase profitability. Additionally, some

organisations employed local nationals as it was perceived that they are better able to

connect and form relationships with consumers who are of the same culture to them. As

an interview stated “It is all about meeting the customer needs”.

Employee satisfaction

It was important for interviewees that leaders sought feedback from their employees. For

example, employee engagement surveys was seen as both a way of keeping ‘in touch’

with employees which allowed leaders to gauge the temperature of the climate as well as,

understand the impact that their leadership style has on the organisation. Also, employee

engagement activities were seen as important for building relationships and bringing

people together by harnessing collective energy.

Value based professional

How leaders employ their behavioural, cognitive, interpersonal and strategic capability

was considered to be vital when gaining support for diversity programmes. Two themes

in this category emerged that highlight the necessity for the leader to demonstrate

intrinsic competencies and to apply oneself to developing their employees.

Intrinsic competencies

The central view expressed was that every leader should be professional in their way of

working and in dealing with others. Elements of professionalism intrinsic to the leader are

to be dynamic (self-driven, innovative and motivated to achieve), to practice integrity, and

demonstrate equity in the way they deal with people and respect the individuality and

dignity of people. There should be a culture of openness and transparency with no

hidden agendas and honesty should prevail. Leaders should also remain focused on the

business and not deviate their attention from key objectives. They must be reliable.

It was also viewed as important that leaders should not be untrue to who they are whilst

still being part of a team working towards a common cause. The term “cultural influence”

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was coined by an interviewee to explain the need to get your message across to people

without losing your identity in the process.

Developing employees

Chiefly, a leader’s role was seen to be one of developing employees. Developing

younger people as the future of the organisation, and developing local talent to an

international standard in the increasing face of globalisation were seen as imperatives.

Activities such as mentoring and coaching employees were viewed as being part and

parcel of a leader’s job. In essence the leader’s job is to serve their people and an

element of serving is empowering and growing your employees.

Lastly, comments suggest that organisational values and practices should embed

diversity principles through talent management and succession planning activities so that

all employees have an equal chance of being successful as they progress up the

organisational ladder.

Influences

The research has shown that there are key influences that impact how diversity is borne

out and driven in the organisation. Primarily, the willingness and flexibility to tailor and/or

adapt global strategies to meet local requirements, and the influence of national, cultural,

and social heritage.

Global vs. local strategy - adaptability

The challenges presented by globalisation are particularly complex and relate to many

aspects of organisational effectiveness and performance. One executive said “we aim for

divergence and then convergence – a diversity based army led by an artful leader has

more chance of navigating turbulent situations”. The findings suggest that although the

presence of globalisation is keenly felt, the level of integration of diverse cultures and

subsidiaries are at best tentative and the journey is just beginning.

Some business leaders clearly appreciate that their companies need more diverse staff

and so are increasing their efforts to employ local talent. Additionally, to compete, they

are changing the way they do business to address diverse business operational needs.

For example by moving manufacturing and production to low-cost locations around the

sale, and by adapting and tailoring their products to meet exacting customer needs

across different geographies and markets.

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There is also a significant need to understand the implication of their strategy in different

cultural environments. The challenge for leaders is to take the organisational context into

account as fundamental organisational concepts as participation, control, decision making

and cooperation do not necessarily mean the same in every cultural context. This was

artfully articulated by an executive who said “monoculture leadership is thinking through

one filter whereby you replicate the same model in different countries, not respecting the

local needs and the local context.”

National, cultural and social identity

Executives suggested that national culture influences show up as differences in a leader

beliefs, values and styles and further, the content of leader attributes and behaviours

perceived as desirable and effective by individuals in that culture. So much so that the

majority of executives interviewed believe that national, cultural and social identity plays a

significant part with regard to how diversity is both interpreted and implemented.

Executives from the East and Latin American countries believe that they are already

diverse because of their cultural make-up and do not see the need or importance for

diversity as a concept to be further delved into. Therefore they are less likely to include

diversity within their strategic objectives and as part of organisational culture change.

Further, others view diversity as a risk that only the largest and most profitable companies

can afford to take.

Additionally, people from emerging countries are less likely to challenge the status quo

because of the benevolent status attributed to the position of leader – the leader is often

held in great esteem – akin to a good father and the structure tends to be hierarchical in

nature and therefore there exist a degree of inequality between the higher levels and the

lower levels. Even if at the lower level the employee has the opportunity to voice their

opinions, they are not necessarily empowered to make, act on, or implement decisions

without the authority and sanction of someone higher up in the organisation. This cultural

aspect can send out mixed messages with regard to how diversity manifests itself in

organisation and has the disadvantage of not taking into account differing viewpoints.

This in turn is seen to stifle and eradicate innovation and creativity that ultimately impacts

upon cognitive and behavioural diversity.

Also, the way in which ‘ways of working’ manifests itself in organisations can be heavily

dependent on nationality and culture. For example, interviewees observed that

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Westerners often feel free to voice their opinions where as Easterners tend to be more

reserved in expressing their opinions so as not to lose face.

Lastly, social identity can manifest itself according to ‘in’ and ‘out’ groups. That is, a

sense of who we are, how we should behave, and how others will treat us is fundamental

to adaptive social conduct. People seek, promote, and protect valuable self-describing

social identities and the social groups that define such identities. Typically people in one

group agree on attributes specific to their own group (in-group) and of relevant other

groups (out-group). This can be demonstrated visibly for example, when a person

recruits in their own likeness. Paradoxically, because followers invest their trust in

leaders who are perceived to be part of an in-group it allows such leaders to diverge from

group norms and be less conformist and more innovative and transformational.

Therefore the leader’s role is fundamental in breaking down these group identities in

order to allow differences to penetrate and make a difference to the system

Diversity – Categories and Themes

In the interview, questions on diversity ranged from leaders perception of diversity, to how

diversity is measured and prioritised, to how leaders engage with diversity and how

leaders convey the benefits of diversity.

Following the process of open coding, 58 concepts were identified for diversity and

applying thematic analysis five categories and their corresponding themes emerged. The

categories and its themes are:

Table 4: Diversity – Categories and Themes

Category Themes

Inclusivity Difference; tolerance; communications

Performance measures No measures, targets in place; prioritisation

Role modelling Behaviour, practices and make-up of SM team

Positioning of diversity Conveying; allocation of resources;

Innovation Broader perspectives, creativity/learning-cognitive &

behavioural, sensitivity and awareness

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Figure 8

Diversity

• Diversity is encompassing people with different thoughts, cultures and religions

• Diversity is with a lot of parameters• The different backgrounds with regard to

geographies – cultural diversity – different value systems

• We are the ‘rainbow’ nation • To be different is to be rich because...help to move

the organisation and make more rich the work• So when I walk in L’Oreal am I representative of the

new world or not..we need to have diverse internal communities

• Manage through values ... values transcend differences

• It is a big tragedy of human kind in that we want fairness but we were not born equally so even if you make the playground level you will always have disparity in terms of talent

• Participative decision making process• Diversification in terms of products, customer

requirements and people• How you adapt your basic values to fit a new

structure• It doesn’t matter where you are coming from or

your culture, it matters what you know – this is diversity

• You need to understand your culture first and adapt your culture to diversity rather than bring in diverse individuals and hope that they adapt to the company

• Sometimes we take people in because we want their experience but we need to...also listen to their experience

• It is about an inclusive leadership style – diversity and inclusivity is dependent on each other.

• The leaders job is to serve and enable their teams –so to move to a situational leadership style

• Have different focal points. i.e. Role modelling, composition of SMT, diverse project teams and fair and equitable treatment of people


Tolerance28%

Difference67%

Inclusivity

Mix of different people

Mix of experiences

Inclusive not directive

Not force-fitting people to suit culture

Tolerant of difference

Adapt style to fit culture

Clear communications

Different focal points

Different thinking styles

Figure 9

Diversity

• No formal targets..there is no diversity officer or a laid down diversity policy so we have not reached the stage where performance metrics are linked to diversity

• Affirmative Action targets in South Africa• Affirmative Action mandated by the USA

Government• Very basic – tied to quotas• Recruitment targets for gender and for the

promotion of women to senior positions.• Targets for engaging diverse supplier• Employee surveys• I don’t believe in targets...is the person right for

the job and motivated to do the job?• No. More KPIs around business and technical

elements• We leave it to the countries and regions to define

within their scope what their D&I targets are. Gender is the common denominator on the world-wide business.

• Their was a big fight one year ago with regard to the human way to manage people. The idea is to link 25% of bonus to human behaviours.

• I don’t look at statistics at all. Male/female, it doesn’t matter. I feel very uncomfortable about this. This women thing is not right

• I put emphasis on our recruitment efforts so we go to diverse institutions to make them aware of opportunities in the construction industry.

• It is not a question of just bringing different people in. we have a business culture towards our clients and people we bring in need to slip into the culture or be trained to develop within that culture.

• Not enough experienced people to help the young people...also, there are too many people from similar backgrounds and too scientific

• We don’t understand how to recruit diverse individuals


Prioritisation and

Targets in place18%

No measure-ments in

place47%

Performance Measures

No performance metrics

Just a number game

Compliance driven

Targets for recruitment

Targets for gender

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Figure 10

Diversity

• In acquisitions we try to keep the same team as before so that their is continuity which in turn enables integration

• You have to be prepared to ‘walk the talk’..the reality has to back-up the message or you will be quickly discovered as ‘window dressing’.

• Leaders launching and managing initiatives• Two things that a leader can do are if I am asking you to

do something then I must be able to do it myself. The second thing is to put organisational muscle behind it.

• When you can see employment of women, different nationalities and different religions and we give room for different thinking

• It takes courage and energy when you feel differently from the others because you have to adjust your own behaviour

• Hiring people who have not studied in civil engineering• The CEO is the champion for the National Diversity

Council• ‘declare a future’ and get senior team on a common

platform. You need to realise how you want to change your culture. See it as a priority and take it away from a minimum compliance to essentially changing peoples behaviour

• The emphasis must be on communication• Openness and listening are important behaviours...also

defending diverse people in your team• Give the means and the resources to build real

diversity..and not just corporate so a local person is dedicated to it

• Privately people believe that it is a waste of time and only participate in a diversity programme because HQ wants them to do it

• Inclusive behaviour and inclusive leadership model• We are not only focusing on gender but we are also

looking at thinking styles and leadership styles and we are actively challenging people

• Taking the time to listen to all people. We need to go into the countries more to understand what they need

• I respect, engage and listen to people who are different to me


Diverse management

team11%

Behavioural / Demonstrated

actions39%

Role modelling through:•Behaviour•Practices•SM make-up

SM ‘Walking the talk’ / leading by example

Diverse practices

38%

SM role modelling engagement

SM team is of mixed composition

SM team is represented on diversity councils

Put in place a rotation policy

Representative mix of people

Employ locals

Align public with private behaviours

Respect, engage, listen to employee voice and

divergent ideas

Active involvement

SM: Senior Management

Figure 11

Diversity

• Not very high up but it is catching up like sustainability

• Our focus is more on financials and the customer• We do not need to think of diversity like this –

diversity is a given• Diversity is a concept that is in-built into several

processes.• Very important - there is a clear link between

beauty and diversity – our consumers are divers across the world so we are sensitive and proactive

• It is seen as a compliance issue and nice thing to do but does not give you a clear edge when it comes to competitiveness

• Diversity is a fact of life and not a business purpose

• Business is the first priority .... Diversity is linked to the business objectives

• You can not diversify your customers...it is about meeting the customer needs

• In the top 5 but below safety, productivity, environment and business results. Diversity should be higher...move from ‘mind’ to ‘heart’...you must start with changing the behaviour

• At executive meetings the right things are said but then in reality quite often they will be trapped in their individual experience especially when things get tough!

• We feel that it is front and centre in everything we do. It is not competing

• Diversity will always play second to hard number performance but there is a serious push behind it

• It is difficult to coach women because if you are not assertive enough you do not get on the radar screen but this window between being assertive and aggressive is 1cm. So either you are a wilting flower or you are a rot viler and this line is so delicate for women.


Diversity as a priority is

high33%

Diversity as a priority is

low34%

Positioning of Diversity

Diversity comes after the top 5 business priorities

Not a Exco agenda item

Low in the scheme of things

Below business, technical and innovation issues

Maximises relationships

Front and centre in everything we do

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Figure 12

Diversity

• How the mind works in other cultures – what are the motivators for different groups of people

• How to lead a heterogeneous team• You get innovation in the true sense when you

give equal opportunity• Cross-cultural thinking is very good because

then you can get innovation..people from different countries offer different ways of thinking.

• On the results side it enables you to have better performance on the market because consumers are different too.

• Outcomes tend to be better when generated by a heterogeneous team

• Broader concept of value in terms of different perspectives and issues brought to the table.

• Outcomes are more robust and people are more engaged

• Fresh thinking from newer markets is at the heart of diversity

• It is a learning issue – if you want to operate in a global environment is the ability to learn and to adjust your style

• You need to study the culture• Put your ego away and go out of your way to

understand• We establish trust..and become good listeners• You have to move around the world to

experience it – listen to the people on the ground in those countries

• The leader has to be open to new ideas and he has to be a good listener with regard to hearing suggestions and receiving feedback

Quote Code in open coding Dimensions Theme

IncreasedSensitivity

and awareness

20%

Broader perspectives

34%

IncreasedInnovation

And openness

Understanding others points of views and issues

Increased creativity

21%

Encourage ‘out of the box’ thinking

Well rounded solutions

Appreciation of cultures

Open-minded to immersing into cultures

Listening and adapting communication style to

understand

Increased learning


themes for the construct Diversity as depicted in the diagrams above.

Inclusivity

The concept of inclusivity goes hand in hand with diversity. You can push for and get a

diverse workforce but if you do not include and value that workforce into the very fabric of

the organisation then diversity amounts to nothing. Themes for the category inclusivity

include: being culturally aware so as to be able to involve employees from different

contexts, to be tolerant of all differences and to consistently communicate the importance

of including all employees into the differing elements of organisational life.

Cultural awareness and sensitivity

The findings show that organisations implement diversity initiatives based on a

combination of compliance, goodwill, strengthening the brand, and to achieve competitive

advantage. However, in the main diversity strategy is not always extended to incorporate

the concept of inclusivity whereby employees are included and valued at all levels of the

organisation. The result of this is that senior leadership positions still tend to be filled by

those most likely to fit in with the norm of the organisation.

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More importantly, it is likely that the culture of the organisation has not adapted at the

same pace as the diversity agenda and so there is an ultimate clash between diverse

individuals and cultural fit once they enter the organisation. This finding is apparent in

most organisations in this study who typically will state that we encourage the recruitment

of people from diverse backgrounds but they still need to fit into our culture. In other

words, if you ‘learn the rules of the game’ you will be embraced; if you do not fit you will

not be recognised or rewarded. As one executive put it “people can be under appreciated

or discounted because the way they approach things are different”.

Tolerance

Due to increased globalisation and increased competitiveness there is heightened

attention to workforce competition. The findings suggest that companies and their

leaders must manage the diversity that employees bring into the workplace – and be

astute and open to individual differences. The leaders must contend with greater

heterogeneity because as one executive said “to be different is to be rich...because it

helps to move the organisation and make more rich the work”. Another view is that “when

I walk in (my company) am I representative of the new world or not?...we need to have

diverse internal communities.” Executives are aware that “it is about an inclusive

leadership style – diversity and inclusivity is dependent on each other” and therefore

leaders have to be able to exercise being tolerant of difference.

Communication

Effective communication with regard to inclusivity is seen as an imperative in pursuing a

diversity agenda and several quotes by executives back this up. For example, “The

emphasis must be on communication;” “respect, engage and listen to people who are

different to me;” “set the tone for inclusive conversations..it is about having an inclusive

leadership style –and model and practicing inclusive behaviours.” The need for

communication to be two way has also been acknowledged – “the leader has to be open

to new ideas and he has to be a good listener with regard to hearing suggestions and

receiving feedback.”

Performance measures

How diversity is measured and prioritised in organisations will send out a signal as to how

committed the leadership team is to progressing diversity. With regard to measures for

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such as Key Performance Indicators (KPIs) for measuring diversity activities there are

minimal measures in place across all organisations interviewed. The measures that are

in place tend to be centred on targets for gender, recruitment and/or promotion as well as,

affirmative action policies. These types of measurements remain a contentious issue as

most executives agree with the opinion voiced by an interviewee who say “I don’t believe

in targets...it is the person right for the job and motivated to do the job?” Others say “I

don’t look at statistics at all. Male/female, it doesn’t matter. I feel very uncomfortable

about this. This women thing is not right.”

Role modelling

The three themes to emerge for the category role modelling were practicing behaviours

that were congruent with diversity principles, ensuring that organisational practices were

aligned with diversity principles and diversity was observed in the make-up of the senior

management team.

Congruent behaviours

It was essential that leaders behaviours were congruent with diversity principles. Having

equality between what you say and what you do was viewed as being very important.

Some executives said that we are attuned with how to have politically correct

conversations as well as display ‘calculative compliance’ (a term coined by an

interviewee) which means that they ‘put up’ with activities associated with diversity.

Employees are frightfully aware of this lack of congruency between what is being said

and what is being done. One executive says “you have to be prepared to ‘walk the talk’ –

the reality has to back-up the message or you will be quickly discovered as ‘window

dressing.” There is a cry from the business “to see more leadership modelling of

behaviour...D&I needs to be sold and told by the business leaders.”

Practices aligned with diversity

In some cases, activities such as diversity recruitment, diversity training, diversity

branding campaigns, diversity sponsorships, supplier diversity, flexible working

programmes and employee groups were viewed as bolted-on activities around the edges

of the company’s core strategy and objectives, rather than integrally bound up with the

heart and soul of the organisations strategy and objectives. These bolted-on activities

are seen by executives as costs to be managed and minimised rather than as

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investments that can lead to bottom line rewards. Privately some executives believe

these activities to be a waste of time and only participate because it is a directive from

HQ.

In a similar vein, diversity strategies notoriously focus on singular threads within one

dimension of diversity. The research has backed this up. For example, many

organisations choose to focus on the need to increase the number of women promoted to

senior management positions. This is one thread within one dimension of diversity and,

to a large extent, is driven by a combination of compliance and a need to enhance the

company brand in order to attract talent. That is, the underlying rationale for this choice is

that it is more about economic self-interest and not explicitly aligned to a strategic

business objective. It’s merely driven by societal pressure and/or a feeling that it is “the

right thing to do”.

Composition of senior management teams

Hiring, retaining and the advancement of women, minorities, and/or local executives into

the upper echelons of management and senior leadership positions continue to be a

challenge for all organisations interviewed.

The emerging pattern with regard to women is that they seem to make it to a certain level

(i.e. middle management) and then the glass ceiling comes into play. In part this is

because the organisational system does not allow for flexibility in working patterns and

secondly, in some cases, the ‘old boy’ network is still very much at play. With regard to

minorities, their recruitment into certain sectors continues to be an issue and therefore

there are few who come through the ranks to make it to senior levels. Also voiced, was

that executives feel that often local nationals are not trusted in management positions and

therefore often a western management style of management is imposed.

The findings show that until senior management teams are made up of women, people

from multi-cultural backgrounds and local nationals then employees will find it difficult to

believe that the organisation embraces diversity.

Positioning of diversity

The findings reflect that how diversity is positioned by the leader to the organisation will

inevitably impact on how seriously employees adopt and embed diversity into their

everyday practices so that it becomes a way of life. The category positioning was broken

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down into three key themes: how diversity is conveyed, the allocation of resources and

the prioritisation given to diversity by executives.

Conveying

It was stated that how a leader positions diversity can make a significant impact on what

the organisation takes seriously. For example, where diversity is housed in the

organisation can signal to employees how important it is to the senior management team.

That is, if diversity is housed in Corporate Social Relations, Human Resources or

Corporate Affairs can impact on whether leaders view diversity strategically,

operationally, by compliance, or as a ‘nice to have branding exercise’. As a few

interviewees stated, “diversity should be driven by business values and not done simply

to look good or for political reasons”.

Allocation of resources

Linked to this, and from a resource viewpoint, the willingness of leaders to provide

additional investment in relation to human, financial and technical resources for diversity

largely correlate with an employee’s perception of the leader’s commitment to diversity.

The diversity mission is often not accompanied by expansion of diversity resources or

staff, and this can make progressing core diversity practices even more challenging.

Companies tend to invest minimal resources to meet the requirements of the law and

advance a range of initiatives to produce a diverse workforce and create a cohesive

atmosphere. It is very rare that there is a diversity representative on the ground in a local

country and often, people have to do their day jobs as well as champion and implement

diversity initiatives at the same time. This has the effect of siphoning energy. This is

reinforced by an executive who states that “two things that a leader can do are if I am

asking you to do something then I must be able to do it myself. The second thing is to put

organisational muscle behind it.”

Relating to this, if there is accountability/ownership at Board Level for diversity, or senior

management are represented on diversity councils then employees view this as a

significant commitment by the organisation to diversity. In tandem with this is if leaders

are seen to be launching and managing initiatives themselves then employees feel that

there is real commitment by the organisation. Only two of the organisations studied had a

Board member whose remit was to champion diversity in the organisation.

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Prioritisation

How diversity was prioritised at executive meetings was seen to signify the importance

given to it. Many executives stated that discussions on diversity as an agenda item very

rarely made it into the top 5. It often fell behind financial/business results, strategy,

customer, green issues etc.

Innovation

Innovation is one of the categories for diversity that is positively viewed. It is perceived

that diversity not only harnesses creativity but allows for broader perspectives in terms of

cognitive and behavioural skills. It was also seen to enhance and increase learning in the

companies.

Broader perspectives, creativity and learning

Executives’ passion for innovation as a key product of diversity is exemplified by the

many quotes. For example, “if you have a diverse kitchen brigade then you will have a

more diverse culinary offering”; “you get innovation in the true sense when you give equal

opportunity”; “cross-cultural thinking is very good because then you can get

innovation...people from different countries offer different ways of thinking”; “fresh thinking

from newer markets is at the heart of diversity”; and, diversity produces “outcomes that

are more robust and people are more engaged”

Innovation accessed through diversity is also seen to stipulate R&D and product

development and has been summarised as “moving science forward to enable

innovation”. There is increasing recognition that “on the results side it enables you to

have a better performance on the market because consumers are different too.” In one of

the organisations interviewed the leaders challenge is that “every company must be

driven by innovation and must have a certain percentage of its revenues coming from

products and services that did not exist five years earlier.”

From a learning standpoint many executives see diversity as “a learning issue – if you

want to operate in a global environment is the ability to learn and to adjust your style.” .

Other executives feel that a way of learning is through immersion. That is, “you have to

move around the world to experience it – listen to the people on the ground in those

countries – immerse yourself rather than simply adopt an expatriate lifestyle”

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How organisations learn from each other as well is deemed to be important. Some have

learnt different ways of behaving with regard to consultative approaches of South Africa

(i.e. Lekgotla & Ubuntu). Some have adopted operational best practices developed by

their subsidiaries (i.e. risk management best practices in ABGs offices). Others have

adopted quality standards and practices from the Japanese whilst some in the developing

countries have learnt processes from Westerners that lean towards efficiency and project

management.

Organisational Factors – Categories and Themes

The interview questions on organisational factors incorporated a broad spectrum from

organisational culture, to local vs. global factors, to diversity and behavioural practices, to

learnings and opinions on how the diversity agenda could be moved forward.

Following the process of open coding 104 concepts were identified for organisational

factors and in applying thematic analysis six categories and their corresponding themes

emerged. They are:

Table 5: Organisational Factors – Categories and Themes

Category Themes

Organisational way of being varied across cultures [individualistic vs.

collective], structures; operational

practices

Facilitating diversity recruitment practices, values; initiatives,

integration, organisational culture

Behavioural practices conflict; equality & inclusivity; fairness and

transparency

Ways of working challenge; HQ influence; adaptability;

learning

Issues of concern none; integration

Driving diversity practices; collaboration; embedding

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Figure 13


• Both, the performance system is individual based with regard to KRAs but we are encouraged to work cross-functionally and have cross-sector teams

• Both. We hold people accountable to contribute as an individual but we move towards team-based collective approach

• We are on a journey from individual to collective

• Through our strategy of ‘One Anglo’ we are moving towards a collective culture

• We work as project teams which leads to a collective culture.

• Individualistic. It is very much a culture of performance rather than a performance culture and the reward and recognition systems..is highly competitive

• Individual differences should come second...first, company standards should be put on the table

• The parent company has a role..the orchestral leader and it is their role to manage the subsidiaries.

• Can not compromise on safety or business standards

• We operate very high ethical standards and operate a code of conduct...one of the key things about leadership is you have to define your values and challenge yourself whether there are certain cultures that are compatible with those values and whether you feel you can operate in those environments

• We begin by standardising and then tailor as required

• We operate in home markets so every country is run as a company

• We are moulding 10 different nationalities together –diversity was there from day 1.

• ‘real world usage profiling’ we cannot carry the same product in different cultures so we use this concept to adapt to local needs and markets

• We have a fairly autonomous culture. Each divisions culture is different

• Beauty is a global need – so brands are adapted for different consumers in different geographies


Adaptation27%

Mixed working

styles37% No definitive

organisationalway of being.

Varying:•Cultures•Structures•Operational practices

Both individual & collective cultures

Standardise where possible

Dencentralised structure means there is a degree of operating autonomy

in the business

Standardise30%

Some aspects are localised. e.g. Marketing

&products

Figure 14


• Going to campuses abroad and recruiting from there

• It is starting in the moment of recruitment – they key question for me is where to find talent – we do not have a culture where we are good at importing..or integrating talent

• People who are not from the sector specific background can bring a change in mindset

• ‘bindos bol’’ – speak your mind• We should not look at diversity as a

compliance exercise in terms of AA but a hearts and minds exercise in ways of doing business

• We have an ‘open door’ policy• A hell of a lot of campaigning and

communication• Adapting global campaigns and strategy

to fit the local needs• You need a critical mass and focus

diversity on several dimensions.• Transformation initiatives• It comes down to leadership

commitment and deciding it is a priority and creating a culture that accommodates diversity

• National diversity council and diversity policies

• The programme...’a great place to work’ went well until we had the economic crisis in 2009 not its go back to work.


Equality and inclusivity

21%

Recruitment policies

22%

Facilitating diversity:•Practices •Initiatives •Integration •Organisational culture

Not recruiting in own likeness

Creating a value-based

culture13%

Using diverse sources of recruitment

Diversity is valued

Appraising values

Open dialogue & inclusive conversations

Encouraging flow of ideas & listening to opinions

Creating awareness

Organisational Initiatives e.g. Leadership

programmes; change programmes, diversity

training; gender initiativesAA: affirmative action

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Figure 15


• We do nothing until the conflict implodes and then disciplinary action is taken

• Some groups are unsettled – you will hear white males talking about themselves as the ‘threatened species’

• Pockets of discrimination relating to gender and identity

• We don’t dictate things we give time for people to see things from a business perspective and not through competing nationalities

• Change management has to be gradual ...not implemented in an autocratic way

• Be clear about your values – be proactive, take a position immediately and stick to it

• Identify issues very early in the process and fix them quickly

• The key is communication make both sides understand that there are differences – constant dialogue – constant compromise

• Awareness training

• Set the tone for inclusive discussion and inclusive interaction


Equality & fairness through demonstrated

actions23%

Communications16%

Behavioural practices:

• Conflict•Equality•Fairness

Language differences can lead to misinterpretation or

breakdown in communications

Work with facts

Be open, transparent and fair

Address conflict by ironing out issues as soon as possible

Build business in a sharing way

Appreciate different ways of working

Set the tone for inclusive conversations

Practice employment equity

Figure 16


• We aim for divergence and then convergence – a diversity based army led by an artful leader has more chance of navigating turbulent situations

• If you have a diverse kitchen brigade then you will have a more diverse culinary offering

• Challenge is still in its infancy• ‘One Anglo’ a lot of effort is taken to dress it up as

consultation..but in the end it is pure directives• There will need to be far more interaction amongst the

various units in the Group...to get to challenging the status quo

• The people that work at HR see themselves as higher and aloof and portray ‘a do what we say’ approach because we are the parent company as opposed to what is in the best interest of the company at large

• The company is open to challenges we have a confrontation room

• HQ imposes restriction and methodologies re systems and decisions on its subsidiaries. i.e. International standards and corporate governance

• Many initiatives come from HQ e.g. Safety & environment but also given flexibility to local countries so that they can adapt KPIs country by country.

• Values and the hard stuff...should be standardised• ..we have rules and regulations that we can not

compromise• Novartis is driven by the BUs.who set their agenda• Corporate issues guidelines but the GMs are strong

enough to filter, modify and adapt those guidelines• Consultative approach i.e. ‘lekgotla’ (engage/court) &

‘ubuntu’ (respect).• Ways of behaving• Different ways of working from subsidiaries and other

countries• Diversity councils• Quality from the Japanese • We observe other companies ways of working in their

own habitat. E.g. We visited a company called ‘Mother’


HQ imposing

policies on its

subsidiaries43%

High level of challenge

48%

Ways of Working:

•Challenge •Adaptability •Learning

We are able to challenge the status quo

HQ imposes policy because of risk, brand congruency, corporate governance, costs etc.

Learnings from other

organisations

15%

Business processes

Management processes

Best practice

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Figure 17


• I sleep very well – I only have sleepless nights when it comes to business issues

• I worry about sensitivity training across countries

• Where do I draw the line – how much am I willing to bend?

• Are we going to adapt fast enough to meet the cultural imperatives of globalisation?

• Breakdown of communication• That we engage in something that is not

acceptable to the ‘Sharia’• The softer issues• Women are not given the same chance to

progress as men• The integration issue – we may loose

people from diverse backgrounds because the environment is too hostile

• The sustainability issue – people with huge potential are always kept down

• Law suits!• Our biggest challenge is to keep women

and develop them into line managers so that we can have diversity at all levels.

• It is about how to take a risk to show clients that we are diverse when some clients can be racist..we do it

• That we don’t do enough...everyone doing D&I on top of the day job so there is no dedicate time out to drive the D&I agenda – at the country level you need D&I offices in each country


Integration issues14%

None27%

Issues of concern

Nothing to do with diversity keeps me awake

Facilitating cultural diversity

Limited time to drive the D&I agenda

Integrating different cultures and women in

our organisational culture

How to deal with heterogeneous groups

Ensuring fair treatment across the board

Figure 18


• Combine projects so that we have cultural spread

• Intensify recruiting people from diverse backgrounds

• Use different agencies for recruitment and not preferred suppliers

• To focus on recruiting senior/experienced people and the second is to focus on universities that have a more human focus rather than a scientific focus

• Creating a knowledge sharing platform

• That people talk about merit and capability

• The sustainability of diversity –have an agenda that is sustainable and not only the current CEOsagenda

• That diversity should be driven by business values and not done simply to look good or for political reasons

• At L'Oréal we need a global view –there is no global steering committee for diversity

• To see more leadership modelling of behaviour. D&I needs to be sold and told by the business leaders


Other / general

Diverse recruitment

practices10%

Driving diversity:

•Practices•Collaboration•Embedding

Recruit from different knowledge and socio-

economic backgrounds

Collaboration / knowledge

sharing10%

Diversity is embraced

12%

Recruit different nationalities and all ages

Get the basics right

Create an open culture

increased exposure to different thinking and

working styles

Driven by values and not politics

Embed D&I into all processes

Focus on inclusivity

Increased focus on gender

Increase focus on leadership practice

Put in place diversity policies

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themes for the construct Organisational Factors as depicted in the diagrams above.

Organisational way of being

The way organisations are structured and operate can vary significantly across national

boundaries and therefore impact on how readily diversity as a concept or as a practice is

embraced. Also the country culture can have a significant impact on the organisational

culture in terms of being an individual or collective culture which can impact inclusivity

and engagement.

Varied across cultures, structures and operational practices,

There are four distinct ways in which organisations who took part in this study are

structured:

i. they are decentralised so that every country has sole responsibility for its own

ways of operating and own policies or,

ii. operating divisions/brands whose culture and the way it is run can be different to

head office or,

iii. there are companies who sell/produce different products and are registered as a

separate legal entity as part of a conglomerate or,

iv. they are centralised.

Because of this variation how a company tailors its services or products for varying

markets is essentially different. For example, at L’Oréal they employ the concept of ‘real

world usage profiling’ as they cannot carry the same product in different cultures in order

to adapt to local needs and markets.

This undoubtedly impacts on the way in which a diversity agenda is rolled out. It can be

universally rolled out at an international level, or each division and/or company can opt to

buy into it. In this case it means that there can be inconsistency towards how a diversity

ethos and practices are embraced and embedded. For instance companies who have

offices or entities in the U.S.A. generally have a legal obligation to embed diversity and

therefore tend to have well established diversity policies and practices (as found by

Maltbia & Power, 2009). These same companies who have offices in other jurisdictions

do not necessarily have to work within the same legal frameworks and so are not

compliance bound.

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Cultural differences - Individualistic versus Collective cultures and Power Distance

Companies in the study range from highly individualistic – “...it is very much a culture of

performance rather than a performance culture and the reward and recognition systems

is highly competitive” to both individual and collective – “Both, the performance system is

individual based with regard to KRAs but we are encouraged to work cross-functionally

and have cross-sector teams”. The findings show that whether a company culture is

individualistic or collective is highly dependent on where they are located. In general,

most companies headquartered in developed markets tend to observe individualistic

cultures whereas companies headquartered in emerging markets tend to lean towards

collective cultures. This has implications for how organisations employ, work and treat

each other.

For example, this research has shown that in a Mergers and Acquisitions, companies

from emerging markets who acquire companies in industrialised Nations tend to keep the

original management team intact so that consistency is insured and the acquired

company is not destabilised. They appear to be apt at managing the context, have a non-

confrontational approach when dealing with contentious stakeholders and are able to

install a sense of commitment and engagement with the workforce with the intention of

proceeding to work collectively towards a future vision. Their ambitions are informed by

their strategies. Be it, for example, where foreign acquisitions are sought that bring

complementary competencies, help obtain brands that resonate with Western consumers,

obtain access to foreign distribution networks or consumers, extend their product portfolio

to higher-priced and more sophisticated products or, add significant R&D capabilities.

Whilst companies from developed markets may reflect the same intentions in their

strategies their execution is entirely different. In developed countries the tendency is to

impose the buying company’s way of working onto emerging countries and expatriate

their Nationals to manage these acquisitions. Consequently, this can be perceived by

local markets as disrespecting local nationals and thus contributing to cultural

insensitivity.

Facilitating diversity

In the category ‘facilitating diversity’ a leader simply saying that we will pursue a diversity

agenda was borne out to be not enough. How the organisation facilitates their diversity

agenda through how practices, processes, structures and systems are implemented will

reveal how dedicated and faithful the organisation is to the concept. Similarly, the way in

which the organisation aligns its values, and engages and integrates employees and

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customers alike will often serve to demonstrate how skilled the organisations leaders are

at facilitating the often messy and sensitive issues of diversity and thus how ultimately

they shape the culture.

Practices – recruitment and initiatives

It was evident from the results that diversity recruitment has stepped up across all

organisations interviewed. Some companies are going abroad to recruit from university

campuses whilst others are going to atypical universities where they may not have

recruited from before as there is an understanding that “we should not be recruiting in our

own likeness.” However, there remained instances and frustration was voiced regarding

the fact that individuals continue to be recruited from the same preferred suppliers and

agencies.

Linked to this is the recognition that individuals should be recruited from outside of the

organisations sector expertise. So, for example, where the organisations expertise is

renowned for engineering or science then firms should also recruit individuals from a

humanity background such as art/philosophy/psychology. This was articulated by an

executive who said “the part of diversity in relation to people who come from different

perspectives is not so much there because for many years this was an engineering driven

company so 80% were engineers and the remaining 20% were MBAs which reflects a

very left brain way of thinking and (the CEO) and I have been acutely aware of the fact

that in the coming world we will need both left and right brain skills. So we have been

inculcating more right brain people and appreciating the perspective that they bring. So

this is work in progress.” Another executive stated that “people who are not from the

sector specific background can bring a change in mindset.” Frustration was also echoed

with regard to the lack of employing experienced people. As one executive put it “there

are not enough experienced people to help the young people”.

Diversity initiatives have also drawn a mixed response. The findings show that

employees’ reaction to diversity initiatives usually presents itself as a double-edge sword.

On the one hand there is recognition that embracing difference can lead to greater

creativity. However, for women, people of colour and white males feelings can manifest

itself through guilt, inadequacy, undeserving or fear. As such, interviewees felt that

diversity is often viewed through negative lenses rather than through a positive lens of

opportunity for learning, sharing and innovation.

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Employee engagement and integration

How to integrate employees and engage them with a diversity agenda remains a chief

concern. An executive said that “we do not have a culture where we are good at

importing or integrating talent.” Another said “...we may lose people from diverse

backgrounds because the environment is too hostile”. Alas, “the sustainability issue –

people with huge potential are always kept down”. You need to “not look at diversity as a

compliance exercise in terms of affirmative action but a heart and minds exercise in ways

of doing business.” Also executives felt that more effort should go into campaigning and

communication and adapting global campaigns and strategy to fit the local needs so that

all employees feel engaged.

The concept of inclusivity is strongly twinned with the concept of integration and

engagement. Several interviewees were highly sceptical on how effective their

organisation were at integrating new employees into the organisation? They questioned

whether they were equipped with the right tools and resources that would enable a

smooth integration or as they observed, they simply learnt by making mistakes? Yet

again, the unfocused recruitment and integration of diverse individuals reared its ugly

head. It was suggested numerous times that when a diverse individual joins the

organisation they may experience a clash between their values and focus and cultural fit.

For example, if an individual is not numbers/results driven or from a specific sector

background then the culture is less likely to support or accommodate them. As such, the

messages that companies purport do not correlate with the behaviours or culture of the

organisation. In other words, “if you ‘learn the rules of the game’ you will be accepted, if

you do not, you will not be recognised or rewarded”.

Shaping organisational culture

The results show that one of the important roles of the leader is to shape the culture

through its corporate identity. By defining the culture as one that is inclusive and

adaptable to other cultures heightens the level of tolerance for accommodating difference

within the organisation. To this extent, how the organisation operates within a global

setting in terms of its ability to embrace change and complexity is indicative of how a

leader can shape the culture. An executive says that “you need to declare a future and

get senior team on a common platform. You need to realise how you want to change

your culture. See it as a priority and take it away from minimum compliance to essentially

changing people’s behaviour”.

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As iterated previously in the category or inclusivity and under the them of employee

engagement, another arm of shaping culture is how you integrate people from different

walks of life into the culture. Interviewees repeatedly said that “it is one thing to advocate

for a diverse workforce and another to accept the differences that that diverse workforce

will bring to the table”. It was evident from the results that some organisations went out of

their way to recruit from a diverse portfolio but once these people were brought into the

company the emphasis was for these individuals to adapt to the current culture of the

organisation rather than for the organisation to understand the value of these differences.

In other words, “be different but be like us”!

Ways of working/behavioural practices

The findings show that ‘ways of working’ and associated behavioural practices are highly

influenced by national and cultural influences and social practices. Particularly in the

case of how organisations deal with challenge and conflict; how they are influenced or not

by headquarters; they way they collaborate and share learnings, and the level of

perceived equity, fairness and sensitivity.

Challenge and conflict

Some companies are open to challenge and have established ‘war rooms’ and

‘confrontation rooms’ where robust debates are encouraged whereas in other companies

“challenge is still in its infancy”. For example in developed countries a level of challenge

is expected by leaders from their employees. However, in emerging markets, leaders are

held in high regard and it is very unusual for a subordinate to challenge a leader openly if

at all resulting in stifled innovation.

Also, due to differing cultures and subsequent different ways of working, conflict inevitably

arises. Most organisations will only deal with conflict once it implodes others will address

is as soon as possible.

Influence of Headquarters (HQ)

The influence of HQ on driving through initiatives at subsidiary level is varied.

Organisations that are highly decentralised tend to have powerful and influential country

or business unit leaders. It is often at these leaders discretion to progress diversity. Also

companies who rate high on individualism are still in the throes of grappling with the

impact of diversity in relation to its business performance as there is no joined-up and

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integrated way of managing diversity and subsequently the relevant mechanisms that

need to be in place in order to turn diversity into a competitive advantage are not.

At the opposite spectrum HQ imposes and directs standardised systems and processes

due to international legislation, corporate congruency, and/or corporate governance.

Driving a diversity agenda can be more successful because of the very nature of

unification but has the disadvantage of people feeling that they have been ‘told’ to

implement diversity rather than given the option to buy-into diversity and therefore runs

into the danger of disengaging them with the concept. Once more the notion of a leader

having to deal with complexity and paradox within the global context resonates.

Collaboration and shared learnings

Collaboration was seen as key way of working in the new globalised world. Executives

suggested that it was necessary to “combine projects so that we have a cultural spread”

and also it was viewed as imperative to “create a knowledge sharing platform”. The

results show that most companies are on the journey from a siloed way of working

towards a collaborative way of working. Some have considerable experience of working

in teams and particularly working with virtual teams where sharing knowledge is vital to

remain competitive.

Equality and sensitivity

Equality and sensitivity was seen as being an important component of diversity. Several

executives echoed that “this is about equity in the way you deal with people...it is all about

respecting the individuality and dignity of people”.

It was also important for leaders to have equality between what they say and what they

do. As an executive put it, “there are big differences in ways of working” “the key is to

have different focal points”. E.g. role modelling, composition of SMT, diverse project

teams and fair and equitable treatment of people.” this view was echoed by another

executive who said “you need a critical mass and focus diversity on several dimensions.”

Issues of concern

The majority of executives said that there were no issues relating to diversity that kept

them awake at night. Many reinforced that if anything kept them awake at night it

generally had to do with operational or financial issues. When issues of concern were

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voiced it came from the female participants who shared concerns on how they were

heard and how seriously their contribution was taken.

Driving diversity

Results in this category closely correlate with the responses from the categories of

facilitating diversity (practices – recruitment and initiatives, employee engagement &

integration, and shaping organisational culture), and behavioural practices/ways of

working (collaboration & shared learnings, equality & sensitivity).

In general, some suggested that demonstrating good leadership practice, creating an

environment that values inclusivity and focusing on achieving gender balance was a good

way to drive diversity forward in an organisation.

Comparative analysis of cases across developed and developing

countries

The second analysis is a brief cross-cultural analysis of the marked differences or

similarities in approaches and attitude to how leaders engage with diversity across the

geographies as shown in the results. This was conducted by comparing the responses

from the developed and emerging countries. And developed or emerging was defined by

where the headquarters of the organisations studied were located. Therefore, falling

within the geography of developed countries were L’Oréal (Paris), Novartis (Switzerland)

and Skanska (Sweden). Falling within the geography of emerging countries were Al

Baraka Bank (Bahrain), Anglo Platinum (South Africa), and Mahindra & Mahindra (India).

This analysis is deemed to be brief because this was not the aim of the research but

rather emerged from the data. Also, it is important to bear in mind that the analysis

between the geographies is not black and white but shades of grey. This is so because

some of the interviewees from developing countries have either been educated or worked

at length in developed economies such as the UK, USA and Australia and similarly,

interviewees from developed economies have worked in emerging markets such as

China, India and Brazil for example. The benefit of interviewees experiencing differing

economies is that it afforded them with an opportunity to compare and contrast their

home experiences with their expatriate experiences which came through in the data.

From the responses the eight organisational characteristic differences emerging from the

data were observed in the following areas:

1. Individual vs. collective cultures

2. Low vs. high power distance

3. Long term vs. short term orientation

4. Relationship building

5. Influence of nationality

6. Legal compliance

7. Learning from others

8. Diversity is actively endorsed by the executive team

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Individual vs. collective cultures & low vs. high power distance

My findings suggest that the culture of an organisations exemplified through its leadership

style is strongly influenced by the culture of the country. For example, Western cultures

(North America, Europe) tend to operate from an individualistic platform. On the other

hand, countries developing markets (Middle East, China, India, Africa, Latin America)

tend to operate from a collective platform – they are more team orientated and have a

strong value set that focuses on family and the community at large.

Low vs. High Power Distance

This research evidenced a lack of empowerment amongst low status employees. Status

is highly desirable in developing countries and this directly correlates with an authoritarian

approach. This was seen in India and the Middle East where employees were reluctant

to challenge those in positions of authority.

Long term vs. short term orientation

Leaders from developing countries are in business for the long term. They invest and are

prepared to wait patiently for a return on their investments. Whereas those in developed

countries find themselves unduly betrothing to the shareholder and in their quest for

shareholder return their strategy is to normally pursue short-term wins. That is, they are

short-term driven and results focused.

Relationship building

An extension or outcome of collectivism is fostering relationships. Thus, developing

countries place a higher value on building relationships as a key part of their strategy.

They see themselves as more relational than their Western partners in that they regard

the ability to help the community and regard the ability to work together as more important

than commercial gain and shareholder performance. Further, they practice joined-up

thinking and extensively collaborate across functions and divisions by sharing both

knowledge and expertise.

Most of the companies in the developed countries have decentralised and autonomous

business units and to this end inevitably fall into a siloed way of working or a competitive

way of working. They fail to collaborate effectively across the divisions/brands/units.

Also, although developed countries can be credited as having initially led the way in what

constitutes good customer service they are now trailing emerging markets due to range of

factors from learning, to attitude, to low cost industries. Having said this, leaders from

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developed countries demonstrate that they are very apt at building networks and

managing stakeholders including social partners, associations and organisational bodies.

They see this as a key component of stimulating innovation and creativity.

Influence of nationality

Most executives saw nationality as highly influential in relation to their leadership style.

The Africans, Arabs and Asians demonstrate a higher propensity towards cultural pride

and maintaining cultural value and are wary of companies imposing western style

management on them. These views also transcend to what they see as key leadership

capabilities. For example emphasis is placed on family, ethics and values and leadership

styles tends to be more diplomatic and indirect as opposed to a Westerners style who

they perceive as confident and direct.

Legal compliance

Due to apartheid in South Africa, a high emphasis is given to affirmative action (AA).

Similarly due to the civil rights movement and equal opportunities legislation in the USA

an emphasis on meeting quotas is still evident.

Learning from others

Executives from the developing countries see learning as an essential element of

diversity. Some overtly copy the practices and operations of their developed partners as

evidenced in their M&A activities.

Diversity is actively endorsed by the executive team

It is evident that companies within developed countries are further along the road when it

comes to driving a diversity agenda and putting in place structures and resources to

support diversity initiatives and programmes than their counterparts from emerging

countries. For example, most of the companies in developed countries have in place

diversity officers and diversity champions as well as diversity steering committees,

external diversity and inclusion advisory councils, diversity charters and diversity policies.

Some even have a Board member who is a champion for diversity.

Likewise they tend to exclusively embrace the concept of inclusion. That is, an inclusive

organisation not only brings diverse individuals on board but makes them feel included

and a valued contributor to the company.

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Whereas, for companies in the developed markets their diversity journey is just beginning

or hasn’t even begun. More so, some developing countries take the view that within their

own countries/markets diversity is a way of life and that this is normal so there is no need

to focus on diversity as an entity in its own right.

Organisational characteristics that organisations have in common

The seven organisational characteristic similarities emerging from the data were

observed in the following areas:

1. A realisation that pursuing and putting in place a diversity is being driven by

globalisation.

2. Diversity is under-represented in the composition of their senior management

teams and at Board level.

3. Innovation is seen as the overriding benefit for embracing diversity and having a

diverse workforce is seen as a prerequisite to innovation in terms of cross-cultural

thinking, robust debate, creative solutions and better performance on complex

tasks.

4. Internal and external communications is still perceived to be in its infancy with

regard to diversity.

5. There was little or no evidence of performance indicators for individual or

collective accountability in relation to diversity – in the main, only a few

organisations had targets for gender and nationality at recruitment level and

middle management level.

6. There was a pattern for most organisations to focus on one strand of diversity –

e.g. gender

7. For those companies that maintain a decentralised structure, employees are more

aligned to the cultures of the individual/autonomous companies/units/divisions

than to the company at large.

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Conclusion

This chapter provided a qualitative examination of findings based on interviews with 79

Senior Managers from six organisations across four continents. These organisations are

L’Oréal (Paris), Novartis (Switzerland) and Skanska (Sweden), Al Baraka Bank (Bahrain),

Anglo Platinum (South Africa), and Mahindra & Mahindra (India).

The results were analysed in two parts – the first analysis was a deep dive into the three

constructs measured in the structured interviews; that is: leadership, diversity, and

organisational factors (these constructs, were drawn from reference to extant literature)

and draws out the major categories and themes that have emerged to paint an overall

picture of the impact of diversity on leadership performance.

The second analysis sought to briefly compare the responses between the developed

and developing countries with regard to how leaders approach, role model and engage

with diversity across the geographies.

Data reduction and display was conducted through employing a blend of thematic

analysis and content analysis which consisted of interrogating the data and reducing the

data into categories and themes.

The first objective was to confirm or not the components of the LEAD³ model by analysing

the three constructs and understanding the possibility of how diversity in organisations

can be encompassed within a change programme.

The second objective was to generate a descriptive theory of the data emerging from the

cross-cultural analysis that make a significant contribution to the dominant approach

taken by global leaders in leading diversity in the workplace.

The findings presented in this chapter identified main categories and their associated

themes that strongly map onto the elements of the LEAD³ model and these findings and

their linkages to the model will be further discussed in chapter nine. The categories and

themes were:

Global leadership – competencies, connecting, rigour, stakeholder satisfaction, value

based professional, influences;

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Diversity – inclusivity, performance measures, role modelling, positioning diversity

and innovation;

Organisational factors – organisational way of being, facilitating diversity, behavioural

practices, ways of working, issues of concern and driving diversity;

Further, this chapter identified key differences and similarities between developing and

developed countries.

The key differences found for diversity activities relate to cultural dimensions, the

influence of nationality, compliance, learning and endorsement by the senior executive

team.

Key similarities uncovered for diversity activities relate to the correlation between diversity

and globalisation, under-representation of diversity at senior management/Board level,

innovation as a key driver, lack of accountability and performance indicators, inconsistent

communications, focus on one aspect of diversity, and a pattern for those companies who

operate within a decentralised structure to not exhibit a unified culture.

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Chapter Nine: Discussion

Introduction

The Bass review (1990) revealed that there is a marked dearth of comparative research

with regard to global leadership and according to House, (1995) “...there is a growing

awareness of need for a better understanding of the way in which leadership is enacted in

various cultures and a need for an empirically grounded theory to explain differential

leader behaviour and effectiveness across cultures...” (see also Bass, 1990a; Boyacigiller

& Adler, 1991; Dorfman, 1996; Dorfman & Ronen, 1991). This research sought to

address these shortcomings. That is:

1. The dearth of studies based on more than three or four countries and

2. Many studies make use of existing standardised U.S. instruments that may not

fully capture non-Western or non-U.S. conceptualisations of leadership.

3. A need for an empirically grounded theory to explain differential leader behaviour

and effectiveness across cultures.

4. A tool that embraces a holistic approach to leadership and diversity

To address these shortcomings the researcher:

Reviewed a number of studies undertaken in the developing world so as to

incorporate questions in the interviews that would draw out non-Western/non-

U.S. conceptualisations of leadership.

The researcher conducted a pilot study that involved the views of

interviewees from emerging markets.

The researcher conducted the research across 22 countries on five

continents.

The researcher employed qualitative methodology which included a case

study research strategy, in-depth structured interviews, thematic analysis and

content analysis.

Additionally, with regard to the literature on global leadership and diversity, comments

made by April and Shockley (2007) also encouraged the researcher to develop a tool that

embraces a holistic approach to leadership. They asserted that a one model approach to

leadership is not viable. They said that cultural diversity, especially at the international

268

level, forcefully nudges us to consider other tools to enrich our thinking about leadership.

Gómez-Mejia, & Palich, (1999) concur with this view by restating that the literature on

cultural diversity has generally focused on domestic models, ignoring the effects of a

firm’s exposure to multiple national cultures on a leader’s performance. And finally,

Nancie Zane (2002:335) attests that “while theories on organisational change have

focused on the benefits of having a diverse workforce (Cox, 1993; Cross, 2000; Katz &

Miller, 1986; Meyerson & Fletcher, 2000; Thomas, 2001; Thomas & Ely, 1996), there are

few longitudinal studies focused on the role that both leadership and organizational

groups play in co-constructing the meaning of diversity for the system as a whole” (Barrett

et al., 1995; Bartunek & Moch, 1992).”

Taking on board all of the above views, the aim of this study was to:

1. To examine how a global leaders performance can effectively leverage diversity in

a global context.

2. To develop a model or tool (derived from reviewing the literature) that broadens

the scope of diversity and takes into account key organisational factors. Thereby

embodying a whole system approach to diversity and leadership within a change

management framework.


Explicitly, therefore the findings reported in chapter eight will be discussed to:

Show how the LEAD³ tool is operationalised.

Test the tools viability by assessing if the findings map onto components of the

tool.

Confirm whether the rationale for developing a multi-level/multi-dimensional

approach for diversity and global leadership is the best way of enabling leaders to

leverage diversity in their organisation.

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The Purpose and Operationalisation of LEAD³

The LEAD³ tool was developed by synergising various theories reviewed in chapters two

and three. It presents a whole systems approach framed within an organisational change

process and incorporates a suite of key organisational elements that are grouped into

dimensions. This positions both diversity and leadership within a commercial frame and

provides focus and flexibility to meet the ever changing needs of an organisation.

The literature reviewed drew from theories and studies on leadership, diversity and

organisational change and development. In turn, some of these theories consider and

draw from other sources of knowledge in the fields of philosophy, psychology, cognitive

neuroscience, anthropology and business strategy.

Figure 19

The Leadership Dimensions and the Performance Drivers in LEAD³ are indicated as

inputs. That is, they form the foundation of required skills and attributes on which a

cohesive diversity agenda should be built on. Organisational Activities and Performance

Outcomes are indicated as outputs. That is, the results that will generated as a

consequence of decisions and actions taken in the implementation of a diversity agenda.

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Within this theoretical framework is a workable tool. This is the key feature, differentiator

and value of the LEAD³ tool. The area highlighted in red depicts the operational element

of the tool.

The tool suggests a number of Organisational Activities (change interventions). These

‘organisational activities’ are the change interventions that can be employed when an

organisation wishes to focus on a particular aspect of diversity. That is, the organisation

can choose to focus on any one or all of the diversity dimensions and one or all of the

stakeholder groupings. Depending on the combination they chose they would then match

an intervention that is most suitable and applicable to this combination. Thereby the

organisational need is calibrated with the organisations strategic diversity agenda

As such, the tool is interactive – that is, behind each yellow button in the tool lies a

corresponding and relevant intervention/s. For example, a company way want to understand

how women are promoted into senior management positions. Using the tool they can click

the structural diversity and individual stakeholder buttons to see the associated interventions

such as talent management or succession planning practices.

Figure 20

© S Storey 2012

A second example could be where a strategic objective is to develop a new product that is

germane across many countries. Using the tool they can click the cognitive diversity and

team stakeholder buttons to see associated problem solving and decision making

interventions.

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Figure 21

© S Storey 2012

A third example may be where an organisation may need to understand the effectiveness of

their communications across subsidiaries and with external stakeholders. Here they would

click the behavioural diversity and organisational stakeholder buttons to see the

recommended selection of interventions.

Figure 22

© S Storey 2012

The LEAD³ tool enables diversity to be driven from a multi-level and multi-dimensional

perspective that is tailored to align with the organisations strategic objectives. It

recognises the differing attributes of leadership and diversity which in turn, are

interdependent on organisational attributes. This results in a measurable, holistic,

integrated and sustainable approach to diversity rather than a series of random and

fragmented initiatives implemented in an inconsistent and disconnected manner which

allows diversity to be embedded into the fabric of organisational life.

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Below is a list of recommended interventions for each of the possible combinations:

Organisational Activities – Change Interventions © S Storey 2012

Individual Team Organisational

Structural • Development

• Coaching / Mentoring

• Secondments

• Promotion

• Stretching Project

Assignments

• International Assignments

• Job structure flexibility

• Talent Management

• Career Pathway

• Returnships

• Workforce composition

• Development

• Connectivity

• Communications

• Virtual working

• Collaboration

• Recruitment & Retention

• Talent Management

• Succession Planning

• Development

• Skills Strategy

• Positive Action

• Networking

• Market Agility

• Stakeholder Engagement

• Employee Engagement

Cognitive • Absorptive Capacity

• Cognitive Complexity

• Cognitive Integration

• Cognitive Neuroscience

• Decision Making

• Problem Solving

• Knowledge transfer

• Global Literacy

• Unconscious Bias Testing

• Strategic Planning

• Innovation

• Organisational Learning

• Decision Making

• Solution Generation

Behavioural • Global Mindset

• Self Awareness

• Interpersonal Skills

• Emotional Intelligence

• Social Intelligence

• Unconscious Bias Testing

• Networking

• Cultural Sensitivity

• Cultural Integration

• Intercultural Communications

• Intercultural Team Building

• Team Emotional Intelligence

• Team Social Intelligence

• Inter-group Conflict

• Awareness of Micro-inequities

• Ways of Working

• Dialogue

• Fishbowls

• Appreciative Inquiry

• Cultural Integration (national

& company culture)

• Values Alignment

• Intercultural Communications

• Shaping culture

• Managing Conflict

• Managing Politics

• Ways of Working

• Large group intervention

• Storytelling

• Action Learning

• Appreciative Inquiry

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Mapping the findings onto the LEAD³ tool.

The findings across the six case studies were analysed via the three constructs in the

structured interviews – leadership, diversity, and organisational factors. From the findings

major categories and their associated themes emerged and this section will assess how

these maps onto the LEAD³ tool. It is believed, that this in turn, will validate the rationale

for developing a multi-level/multi-dimensional framework and tool for diversity as a way of

enabling global leaders to better leverage diversity in their global organisations.

Global Leadership

Global leadership, a new term reflecting the importance of the global economy, is defined

as the leader’s ability to “influence across national and cultural boundaries” (Mobley &

Dorfman, 2003) (p.4). Expressed in another way, Rosabeth Moss Kanter (2009)

suggests that there are three big tasks for leaders stemming from the phenomena of

globalisation – “institutional work to deal with uncertainty, integrative work to deal with

complexity and Identity work to deal with diversity.” The findings bear these views out as

the six key themes emerging from the leadership construct were competencies,

connecting, rigour, stakeholder satisfaction, value based professional, and influences.

Competencies

Competencies were seen as key in the pursuit of how a global leaders performance can

effectively leverage diversity in a global context. The research shows that these

competencies relate particularly to business and cross-cultural skills.

Business competencies

Business competencies included technical skills related to: cognitive capability (problem

solving, decision making, and processing and disseminating information); social skills

(empathising, motivating and communicating within a thorough understanding of one’s

social setting); behavioural skills (interacting with different cultures, influencing across

borders and negotiating and persuading in different contexts and across subsidiaries);

These competencies map directly unto the cognitive, social and behavioural components

of the leadership dimensions as well as the inclusion & engagement and collaboration

components of the performance drivers dimension.

Additionally, incorporate within the finding for business competencies were strategic skills

(understanding of the business from a global perspective; assimilating and acting on large

amounts of complex or ambiguous information; driving change based on a tight alignment

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of the culture change strategy with the business or organisational strategy). This finding

directly maps onto the strategic alignment component of the performance drivers.

Cross-cultural competencies

In order to effectively leverage diversity the concepts of global mindset and cross-cultural

sensitivity were consistently present in the findings and interviewees suggested that

curiosity, openness, immersion and exposure to diversity across cultures and markets as

well as a capability to manage ambiguities and complexities in the environment through

establishing priorities and managing external relationships is essential in order to perform

as a global leader.

These findings map directly onto the cognitive, social and behavioural components of

leadership dimensions; the inclusion and engagement component of performance drivers;

as well as, the cognitive and behavioural components of the diversity dimensions and

stakeholder groupings.

Several studies (Laczniak and Lusch, 1997; Gupta and Govindarajan, 2002) agree that a

global or executive mindset is prerequisite when driving through a diversity agenda in

organisations. In particular, the findings reflect that where a senior leader has had a

multitude of experiences of, and exposure too, different cultures and/or has an appetite

for learning and therefore practices a high degree of openness then employees observe a

high level of inclusivity and/or willingness to embrace diversity. This is reflected in the

organisations strategies, policies and employee make-up of the organisation and

correlates strongly with how the way in which a global leader can effectively leverage

diversity. However, as one executive says “it takes courage and energy when you feel

differently from others because you have to adjust your own behaviour”.

Connecting

The second category – connecting identified the three themes of bringing people

together, visioning and relationship building. The findings state that how leaders forge

networks and partnerships, build collaborative relationships, demonstrate caring and

empathy, provide strategic vision and direction, build learning environments, teams, and

community and lead large-scale change efforts that span across diverse cultures is a vital

performance indicator of their role and subsequently has a significant impact on how

diversity is both perceived and leveraged across the organisation.

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Leaders need to demonstrate that they possess both behavioural and social knowledge

repertoires as well as demonstrate inclusive and engaging and collaborating behaviours.

Additionally, strategic capability to lead a demographically diverse employee population is

an important skill in performing and working effectively in a global context. This directly

maps onto the cognitive, social and behavioural components of the leadership

dimensions and all three components of performance drivers. Further, they must be

cognisant and embody elements of the structural, cognitive and behavioural components

of the diversity dimensions and work across all of the stakeholder groupings.

However, organisational characteristic differences across the cases were observed for

relationship building. Companies in developing countries (India, the Middle East, South

America & South Africa) place a higher value on building relationships as a key part of

their way of being and working. They see themselves as more relational than their

Western partners in that they regard the ability to help the community and regard the

ability to work together as more important than commercial gain and shareholder

performance. Further, they practice joined-up thinking and extensively collaborate across

functions and divisions by sharing both knowledge and expertise.

Compare this way of being and working to the companies in the developed countries

(Europe & the U.S.A.) who tend to have decentralised and autonomous business units

and to this end inevitably fall into a siloed way of working or a competitive way of working.

They fail to collaborate effectively across the divisions/brands/units and their preference

is to work independently of each other.

Also, although developed countries can be credited as having initially led the way in what

constitutes good customer service they are now trailing behind emerging markets due to

range of factors from learning, to attitude, to low cost industries. Ultimately, this means

that skills in the areas of collaboration and organisational learning will need to be

considered more by leaders from the developed nations if competitive advantage is to be

secured and sustained.

Having said this, it was noted by some interviewees that leaders from developed

countries are very apt at building external networks and managing external stakeholders

including social partners, associations and organisational bodies. They see this as a key

component of stimulating innovation and creativity. This signifies that competence at the

organisation component of stakeholder grouping can be mapped to the tool but to

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perform effectively leaders from these nations will also have to demonstrate increased

engagement at the individual and team level of the stakeholder groupings.

Rigour

The third category to emerge from the global leadership construct is rigour in terms of

fiscal rigour, business competencies and strategic context.

Fiscal rigour

Fiscal rigour was seen as the key performance indicator of a global leader’s performance.

It is the most contentious theme of diversity as many interviewees said that any diversity

related strategy or intervention must not only result in a return on investment in terms of

growth and profitability but the results must also be sustainable when the leader moves

on. Therefore any diversity related activities driven by leaders actions must ultimately

impact positively on the bottom line and leave behind a positive legacy. This directly

maps onto the return on investment component and the sustainable change component

of the LEAD³ tool and concurs with Cleve Stevens (2010) proclamation that “if they

genuinely develop and grow their people...they will be more enthusiastic and more

committed... and you will produce a better bottom line.”

Business competencies and strategic context

The concepts of business competencies and strategic context emerged through the nvivo

codes which revealed that effective management of stakeholder groups, focus on

sustainability issues, policies that are adaptable to context and having a long term

perspective were all attributed to a global leader providing rigour in their organisations.

These findings map onto the cognitive component of leadership dimensions, all

stakeholder groupings as well as, sustainable change and strategic alignment

components of LEAD³. Further, the results suggest that for global leaders to effectively

leverage diversity rigour should not only be measured by numbers but through

collaborative ways of working and engaged employees which in turn, equates with a more

productive workforce that ultimately impacts on the bottom-line. Once more, findings that

map directly to the collaboration and inclusion and engagement components of the tool.

Stakeholder Satisfaction

The fourth category stemming from the global leadership construct is stakeholder

satisfaction and the themes identified were customer satisfaction and employee

satisfaction. It builds on the belief that there is a fundamental need for leaders to develop

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and build relationships with their employees and other stakeholders as they continue their

journey towards globalisation.

Customer satisfaction

Many interviewed stated that for a leader to be effective they must maintain a focus on

customer satisfaction in terms of improved understanding of client and customers needs,

improved responsiveness and flexibility, increased market share through the successful

penetration into new and niche markets, and increased productivity.

Essentially, diversity was seen to add value because it enabled organisations to respond

to customers changing needs and a number of executives suggested that having local

knowledge on the ground as well as being able to tailor services and products to local

tastes was a vital output of embracing diversity. This is somewhat being played out

through the current global economic situation where organisations are being forced to

look farther afield for growth opportunities and demonstrates the necessity for the

inclusion of organisational stakeholders, cognitive, social and behavioural diversity and

strategic alignment components in the tool.

Employee satisfaction

Included in stakeholder satisfaction is employee satisfaction. Those interviewed suggest

that if employees are satisfied and feel that their voices are heard then they are more

likely to embrace the values and objectives of the organisation, be more productive,

motivated and innovative as well as ‘go the extra mile’ for the organisation. Thus,

improving productivity and relationships with customer. This finding maps onto the

inclusion and engagement component of LEAD³.

Therefore diversity initiatives that focus on employee satisfaction send a message of

commitment too, and value of, an inclusive work environment. According to the case

studies the most successful diversity-management practices are those with measurable

results that increases cultural competence and delivers strong financial results that align

with the company's business goals. According to DiversityInc (2010) these practices are

increasingly focused on employee-resource groups, also known as affinity groups or

employee networks, formal, cross-cultural mentoring programs, diversity training to

ensure cultural competence across the organization, and talent-development programs

that help people realize their potential. The recognised advantages of these diversity

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practices for employers include high retention rates which ultimately save money in lost

productivity, recruiting, hiring cost and legal costs.

These findings correlate with both the return on investment and organisational learning

components in the performance outcomes as well as, across all stakeholder groupings

and validate the importance of their inclusion in the LEAD³ tool.

Value Based Professional

The fifth category of this global leadership construct is the importance for a global leader

to be a value based professional. That is, how they apply and adapt their intrinsic

competencies (e.g. intrapersonal, interpersonal, and social skills) as well as, how they

develop their employees.

Intrinsic competencies

As commented in the connecting category, the findings confirm the need for leaders to

have skilful social and behavioural repertoires – intrinsic competencies – to enable them

to function effectively with a demographically diverse employee population in the

international arena. These views confirm integrity as an integral attribute of the intrinsic

competencies of an outstanding leader. Such a leader is seen to be trustworthy, just,

honest, and transparent across all of their words and deeds. They know who they are

and what they believe in. They display consistency between their values and actions,

and more so, have the ability to practice self-awareness and not lose their voice or values

whilst still being able to adapt their behaviour across cultural boundaries. So much so,

that the term ‘cultural influence’ was coined by an interviewee at Mahindra & Mahindra to

reflect this. This finding verifies the inclusion of cognitive, social and behavioural

components in the leadership dimensions of LEAD³.

Developing employees

Further, there is a shared agreement across all case studies that the globally literate

leader is a leader who develops their own potential and that of others – a view reaffirmed

by Rosen (2000) in the literature review. Those interviewed suggest a primary

responsibility of the leader’s role is to develop the leaders of the future and had a

responsibility to coach and/or mentor them. Further the onus was on leaders to identify

leaders of the future by putting in place focused talent management and succession

planning programmes. This finding falls primarily into the domain of structural, cognitive

and behavioural components of the diversity dimensions, the behavioural and social

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components of the leadership dimensions and finally, the organisational learning and

sustainable components in performance outcomes.

Influences

The final category within the global leadership construct is termed influences and the

themes are global vs. local adaptability, and national, cultural & social identity.

Global vs. local adaptability

House et al., (2004) say that ‘leaders confront situations that are highly complex,

constantly evolving and difficult to interpret’. Interviewees concur and say that the

challenge for effective leaders is to take context into account by balancing the global and

local needs of the organisation. Global competition requires each multinational to

continually balance national responsiveness and global integration through strategic

coordination and the results suggest that they have to be so in order to address three

areas:

In the first instance, a leader should have the capability to withstand complex demands

that require him to assimilate and act on large amounts of ambiguous, insufficient and

unreliable information, deal with paradox, and importantly, hold competing views at the

same time. This level of cognitive capacity maps to the cognitive component of the

leadership dimension in LEAD³.

Secondly, it is important for global leaders to practice flexibility by adapting their policies

and strategy to the local context so as to accommodate local preferences which

correlates strongly with the component in and this level of cognitive capacity maps to the

cognitive component of the leadership dimension in LEAD³ – strategic alignment.

Thirdly, it is important that global leaders trust local leaders to competently implement

these policies and strategies and not fill key posts with expatriates. By this way they are

seen to be supporting local capability and building trust and engagement amongst the

community. By doing so, leaders are building organisational learning capabilities within

the organisation which not only substantiates the organisational learning component in

LEAD³ but also augments the leader’s performance to effectively leverage diversity

globally.

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National, cultural & social identity

Interviewees across the board were highly mindful of the second theme stemming from

this category – the impact that national, cultural and social influences have on a leader’s

style, beliefs, and values and saw their nationality as highly influential on their leadership

style. The study highlighted that national culture (cognitive systems and behavioural

repertoires that are shaped as a result of individuals’ common experiences) affects a

person in numerous interconnected ways. This can impact on how a person is perceived

in a multi-national organisation.

For instance, behaviours perceived as desirable and effective by individuals in one

culture may not be perceived as desirable by individuals in another culture. For example,

challenging the views of those in authority is highly unlikely to happen in Asian cultures as

opposed to the U.S.A. This finding authenticates the inclusion of the structural, cognitive

and behavioural diversity dimensions and acutely confirms the need for leaders to

demonstrate appropriate skills contained with the cognitive, social and behavioural

components in the leadership dimensions of and this level of cognitive capacity maps to

the cognitive component of the leadership dimensions in LEAD³.

Subsequently, organisational characteristic differences across the cases were observed

in this concept as most interviewees in developing markets (i.e. Africa, The Middle East

and Asia) demonstrate a higher propensity towards cultural pride and maintaining cultural

value and are wary of companies imposing western style management on them. These

views also transcend to what they see as key leadership capabilities. For example

emphasis in these cultures is placed on family, ethics and values and leadership styles

tends to be more diplomatic and indirect as opposed to a Westerners style who they

perceive as confident and direct.

These results are significant as it demonstrates that global managers are increasingly

tasked with integrating or balancing corporate culture and national cultures in host

countries. These findings also have important implications for global leaders. As shown

in the literature review, at its core, the role of global leaders is to influence individuals,

groups, and organisations from other parts of the world. Some of these stakeholders may

belong to the global leader’s organisations (e.g. employees), while others may be

independent (e.g. clients; customers; regulatory agencies). As Javidan et al., (2010:370)

say, “it is the diversity of the targets of influence that signifies and distinguishes the task

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of global leaders.” And this finding directly demonstrates the need for leaders to be

acutely aware of the structural, cognitive and behavioural diversity components.

Lastly, within this theme the findings suggest that a globally literate leader manages their

culture and the culture of others. Specifically, the results show that one of the main

challenges is the ability of a global leader to step out of their comfort zone – to put aside

their national, cultural and social identity when interacting with those who are different to

them and to rise above the particularities of many regions and national cultures while at

the same time meeting the expectations of followers in those different cultures. They must

be culturally adaptable and able to operate competently across borders. For example,

they should display a tolerance for ambiguity, practice behavioural flexibility and be non-

judgmental, demonstrate interpersonal skills including cultural empathy, and exhibit low

ethnocentrism as well as, show an interest in different cultural and country experiences

whilst being willing to acquire new patterns of behaviour and attitudes.

These findings provide overwhelming support for several dimensions in the LEAD³ tool.

That is in leaders must have the cognitive capability to cognitively complex environments

as well as adapt their social and behavioural skills to the cultural environment that they

are operating in. They must also seek to include, engage and collaborate across all

stakeholder groups and adapt strategy to the local environment through a variety of

diversity lens so that a return on investment is made, organisational learning is gained

and change is sustainable.

Diversity

Organisations typically structure their diversity efforts in line with the six diversity strands

of age, gender, race, ethnicity, disability and religion (a part of structural diversity) and the

main definitions for diversity centre on the notion of “difference”. In recent years, the term

‘inclusion’ was added as an essential extension of diversity as it both signifies and

creates an environment in which everyone feels valued and accepted. Interestingly, the

categories to emerge from this construct do not focus on these six strands. Rather, they

show up as inclusivity, performance measures, role modelling, positioning diversity and

innovation.

Inclusivity

The three themes emerging for inclusivity are cultural awareness and sensitivity,

tolerance and communication.

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Cultural awareness and sensitivity

Interviewees found that it was important for leaders to manage their culture and be

sensitive to the culture of others. They must understand their own cultural values and

assumptions and accurately profile the organisational and national culture of others so as

to avoid cultural mistakes and behave in an appropriate manner in other countries. They

suggest that an inclusive organisational culture leverages diversity by creating an

environment that accepts a broader bandwidth of ways of thinking, doing and being. This

finding correlates with the concept of ‘micro-inequities’. Coined by Rowe (1990) it

postulates that subtle forms of verbal and non verbal communication can unintentionally

serve to undermine an individual’s performance and impact negatively on feeling

included.

Executives are quite cognisant of these behaviours and one executive stated “sometimes

we take people in because we want their experience but we need to also listen to their

experience.” Another executive says that “you need to understand your culture first and

adapt your culture to diversity rather than bring in diverse individuals and hope that they

adapt to the company.” One executive bluntly states that “it is not a question of just

bringing different people in. We have a business culture towards our clients and the

people we bring in need to slip into the culture or be trained to develop within that

culture.” These findings confirm the need for leaders to have within their suite of skills

and knowledge (as depicted in LEAD³) both the social and behavioural components of the

leadership dimensions as well as behavioural diversity.

Tolerance

This research suggests that leaders need to have the capability not simply to tolerate

those who are different to them but to treat those who are different on an equal platform

so that tolerance for different cultural viewpoints is embraced. It was anticipated this

would lead to greater openness to new ideas which in turn would enhance organisational

flexibility as thinking and systems are broadened and innovative ways of being and

working allow the organisation to become more fluid and adaptable.

However, Kandola (2009:198) referring to Todd Pittinsky’s (2005) theory of ‘allophilia’

says that “tolerance is not enough to neutralise prejudice and proposes allophilia (a

measurable, positive attitude towards other groups and the behaviours that stem from

liking others) as a strengthened form of tolerance”.

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A further finding stemming from the theme of tolerance was voiced by interviewees who

strongly suggest that overwhelmingly, employees often perceived the diversity efforts of

their organisations as a matter of enlightened economic self-interest and as simply a

branding and compliance exercise rather than a true measure of inclusion. That is, once

a diverse individual is employed into the organisation their differences are not necessarily

embraced but rather they have to adopt their style and behaviours so as to ‘fit into’ the

organisational culture – their cultural and national differences are not being employed to

the advantage of the organisation nor even tolerated. This way of working was noted at

both Anglo Platinum and Novartis. This lack of inclusion can lead employees from

diverse backgrounds who may have diverse thinking and ways of behaving to not feeling

integrated and ultimately, not being engaged.

The theme of tolerance can be mapped to the inclusivity and engagement component of

the tool and reconfirm the importance of its place in the tool. The findings also suggest

that it is necessary for leaders to embrace all three components of the diversity

dimensions so as to effectively leverage diversity in a global context.

Communication

Lastly, effective communication on two levels was seen by interviewees to be an

imperative in the pursuit of a diversity agenda. The first level is how a leader listens to

employees so that their voice is heard as well as how a leader interacts in conversation

with them in respect of the inclusive tone set. This is a key feature of employee

engagement and thus maps to the inclusion and engagement component in LEAD³.

Interviewees cite challenges with communication in terms of “learning new languages or

changing one’s own style of communication to suit a listener as well as their willingness to

analyse their own “cultural baggage” and to view problems solving as a social process

involving consensus and interpersonal influence rather than just telling and reacting.

The second level of communications observed by my many of the interviewees is that

strategic and informative communications pertaining to diversity are at best fragmented,

inconsistent, not transparent and that there can be limited congruency between what is

being said and what is being done across a number of organisational factors. For

example, an interviewee at Anglo Platinum said “privately people believe that it is a waste

of time and only participate in a diversity programme because HQ wants them to do it.”.

This behaviour links to a perceived incongruence in role modelling and is a key element

of behavioural complexity and behavioural diversity. Ultimately, this can negatively

impact upon the key messages, drivers and efforts for diversity and is reinforced by the

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views of Kandola (2009) and Benett (1998) who assert that there must be congruency

between what is said and what is done. This finding emphasises the significance of the

factors constituted in both the leadership and the diversity dimensions in LEAD³ as well

as, reconfirm the substance and necessity for the inclusion and engagement component.

Performance Measures

The research confirms that performance measures (the second category) for diversity is

generally associated with ‘hard’ measures such as numbers and targets rather than, ‘soft’

measures such as development and communication. It is in this category that

organisational characteristics differed across the cases in relation to legal compliance.

Differences were strongly observed in specific contexts where there has been a history of

discrimination. As such, the frequently mentioned policy – affirmative action (AA) – is a

result of the legacy of apartheid in South Africa and in the main is peculiar to South

Africa. Similarly, due to the civil rights movement and subsequent Equal Opportunity

Employment legislation in the USA, recruitment and talent initiatives can be heavily quota

driven.

For companies outside of these geographies they maintained that legal compliance was

not the driver of their diversity efforts. However, according to interviewees at AkzoNobel

and Skanska, for all the organisations rhetoric about its importance, the observed trend is

that diversity is often treated as a compliance issue especially in relation to gender

quotas. This observation is acutely so following the Lord Davies (2011) report on the

level of gender inequality in Boardrooms. Companies in this research, who are wary of

the need to uphold company brand reputation as a part of their talent acquisition strategy,

view legal compliance as a way of achieving this. This finding – bounded by compliance

– does not directly map onto the tool but obliquely fits into the structural diversity

dimension in terms of being conscious of diversity issues relating to gender.

The research further illustrates that although all of the interviewees interviewed have Key

Performance Indicators (KPIs) for business objectives, for the most part, there are no

performance measures for diversity which are directly attributed to their performance and

so they are not held directly accountable for diversity. Interviewee’s state in order for top

management’s to demonstrate their support and genuine commitment to diversity there

should be KPIs for diversity so that a level of accountability is assured. So for example,

some suggested that “tying a percentage of a manager’s bonus to success in the

development and promotion of a diverse group of people...moves the diversity agenda

from concept to reality” and reinforce this view by saying “what the leaders regularly pay

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attention to is most often measured here”. This would undoubtedly impact a leaders

performance which would have a knock-on effect on the return on investment component

depicted in the tool.

The Return on Investment component of the LEAD³ tool advocates that in measuring

diversity a company would be able to accurately and directly attribute what the return on

investment would be investing in diversity practices and programmes through tools such

as the diversity scorecard. In fact, Hubbard (2004), the creator of the diversity scorecard

suggests that a diverse workforce, given proper attention to development, mentoring,

growth-enabling assignments, flexibility, and the like, can create a whole new level of

competitive performance and innovation in a diverse, global marketplace.

Role Modelling

The third category is role modelling and includes three themes: congruent behaviours,

practices aligned with diversity, and composition of senior management teams.

Congruent behaviours

The views echoed across the case studies suggest that leaders must hold themselves

accountable for their own performance in their interactions with others as well as the

organisation’s collective actions. An interviewee at Skanska is quoted as saying “declare

a future and get your senior team on a common platform. You need to realise how you

want to change your culture. See it as a priority and take it away from a minimum

compliance to essentially changing people’s behaviour.”

Also strongly voiced and stipulated by interviewees in this theme was the need for

leaders to ‘walk the talk’ so that there is equality between what is said and what is done

and that engaging in politically correct conversations is simply interpreted as treating the

employees as fools. An interviewee at Anglo Platinum painted a negative picture by

saying “we know what we need to say – what is politically correct – the reality of our

corporate culture is that people learn to read the signals more than what is publically

portrayed”. In this scenario the importance of both behavioural complexity in the

leadership dimension and the behavioural diversity dimension is establishede.

Kandola (2009) aptly echoes these views above when he says that ‘this dominant group

projects the moral boundary of the organisation and senior management need to be role

models for diversity and ‘walk the talk’ otherwise it becomes known as a ‘window

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dressing’ exercise. He advocates that leaders should display behaviours that develop

people, value individuals, champion diversity as well as give diversity a strategic focus.

Practices aligned with diversity

Secondly, as stated by several researchers (Miller & Katz, 2002; Hubbard, 2004; Maltbia

& Power, 2009), the ultimate leadership challenge of diversity is that it is imperative that a

set of potential strategic priorities related to diversity with linked success indicators and

measures are put in place and an accountability system to track and generate results are

identified so that practices are aligned with diversity.

To achieve this, all aspects of the organisation’s policies and practices must be aligned to

these competencies and that baseline policies and practices should include performance

appraisal systems, rewards and scorecards, employee networks/affinity groups and

benefits packages (e.g. flexi time, maternity/paternity leave/floating holidays), formal,

cross-cultural mentoring programs, diversity training to ensure cultural competence

across the organization, and talent-development programs that help people realize their

potential.

This finding authenticates the proposition of a whole systems approach to diversity as

advocated by the LEAD³ tool. In this research few organisations and their leaders viewed

diversity from a multifaceted (whole systems) perspective. In a whole systems approach

to diversity, diversity is rooted in a structural, cognitive and behavioural perspective and is

more likely to be embedded and aligned to organisational activities. Thus, this way of

operating inherently supports processes, structures and systems to impact overall

business performance. In this way the resulting benefits can be observed, realised and

measured.

Composition of Senior Management Teams

Interviewees stated that for the most part diversity (women and individuals from diverse

cultural backgrounds) was underrepresented in the composition of their senior

management teams. In this research senior management is defined as those who have

operational mandates and work at Board level. This corresponds closely with the

structural diversity dimensions which includes gender, ethnicity, and age. It is in this

structural diversity dimension where lack of diversity at senior management level can be

addressed. Interviewees stressed that they were acutely aware of the un-diverse make-

up of their executive team in their organisations. However, this issue remains contentious

as several men said “this women thing is not right” “is the person right for the job and

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motivated to do the job?” Zane (2002) in her study heard very similar comments from

‘White men’.

Hopkins et al.(2008) says that the benefits to the organisation as a result of diversity is a

better ‘diversity mindset’ within the senior management team. Therefore, the degree to

which the composition of the senior management teams reflects the available diversity in

the talent pool demonstrates the diversity at the top of the organisation. It also crucially

demonstrates top management’s support and genuine commitment to diversity and

therefore champions for diversity in the organisation should be evident.

Similarly, the findings reflect that how diversity is actively endorsed by the executive team

differed between developing and developed countries. It is evident that companies within

developed countries are further along the road when it comes to advocating and driving a

diversity agenda, and putting in place structures and resources to support diversity

initiatives and programmes than their counterparts from emerging countries. For

example, most of the companies in developed countries have in place a mix of diversity

officers and diversity champions, diversity charters and diversity policies as well as

diversity steering committees. Others go further – for example, the CEO for Skanska

U.S.A. is the champion for the National Diversity Council and at the time of this research,

Novartis engaged a pool of leading academics and practitioners to form an external

diversity and inclusion advisory council. Disappointingly, this council has now been

disbanded.

Likewise they tend to exclusively refer to the concept of inclusion. That is, an inclusive

organisation not only brings diverse individuals on board but makes them feel included

and a valued contributor to the company. These findings map directly onto the inclusion

and engagement and collaboration components of LEAD³.

Whereas, for companies in the emerging markets, their diversity journey is either just

beginning or hasn’t even begun. For example, whilst a few interviewees at Mahindra &

Mahindra were aware for the need to employ people from a humanities background in

order to diversify thought leadership other interviewees both at Mahindra & Mahindra and

Al Baraka Bank share the view that within their own countries they are so diverse that

diversity is a way of life and so there is no need to focus on diversity as an entity in its

own right.

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This attitude is obliquely accommodated for in the tool and the working feature of the tool

affords companies the opportunity to focus on aspects of organisational life such as

innovation that previously they may not necessarily have considered to be a essential

component of cognitive diversity. It also enables them to examine attitudes within the

behavioural and cognitive components of the leadership dimensions as well as how they

are perceived by different stakeholders.

An interviewee from Al Baraka Bank gave an extreme example of a lack of diversity in the

Middle East whereby women (regardless of their age) are not allowed to travel overseas

on business without male guardians. These guardians have to be their fathers or

husbands. So, if you are not married or, your father has sadly passed on then a women’s

ability to work with colleagues overseas or, to carry out parts of their jobs that is reliant on

international travel or, to even attend international conferences that would enable

networking opportunities is significantly hampered. This rule also inevitably impacts on

promotion and career opportunities.

This attitude towards embracing diversity can be an output of Middle Eastern culture

where an extreme assumption is that nature is powerful and humanity subservient to

nature. This implies a kind of fatalism, as one cannot influence nature, and must

therefore accept one’s destiny and enjoy what one has. The Muslim phrase “Insh’allah”

(God willing) is reflective of a culture characterised by this attitude.

Overall, it appears that there is still a way to go in terms of attitude to diversity and

mindsets still need to be shifted. For instance, from a Western perspective, leaders may

need to be more poised to accept the notion of equal representation at senior leadership

level. From an Eastern perspective, leaders need to acknowledge that encouraging

diversity in all of its guises may facilitate competitive advantage through increased

innovation and maximisation of their employees’ capability. These findings further

validate the inclusion of the organisational learning and sustainable change components

in the LEAD³ tool.

Positioning Diversity

This fourth category aligns closely with the category of role modelling and refers to how a

leader positions diversity. The concepts that surfaced are conveying, allocation of

resources, and prioritisation.

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Conveying

The findings show that how a leader conveys diversity will spread across the organisation

and impact the entire workplace, culture and climate. The net impact is if the leader does

not promote a culture that encourages difference then diverse individuals will inevitably

feel that they must assimilate in order to ‘fit in’.

Allocation of resources and prioritisation

Further, and as iterated previously, interviewees said that top management’s support and

genuine commitment to diversity can be demonstrated in terms of how they allocate

resources. So for instance, in most organisations champions for diversity are needed –

people who will take strong personal stands on the need for change, role model the

behaviours required for change, and assist with the work of moving the organisation

forward. Also, according to interviewees, it was felt that in some instances, the

commitment to diversity could be shown by employing a focused diversity representative

at local level rather than expecting a diversity member of a steering committee who also

has a ‘day job’ to advocate from afar.. They believe that commitment needed to go

beyond sloganism. As Cox & Blake (1991:52-53) put it – “are human, financial, and

technical resources being provided? Is diversity prioritised and prominently featured in the

corporate strategy and consistently made a part of senior level staff meetings? Is there a

willingness to change human resource management systems such as performance

appraisal and executive bonuses? Is there a willingness to sustain mental energy and

financial support focused on this for a period of years?” In their view, this is the

commitment needed by leaders. This would tie in with the purpose of the strategic

alignment component. That is, how does your organisational strategic objectives align

with your diversity objectives?

With regard to how diversity is prioritised comments include: Most executives

acknowledged that diversity sits below the top five business priorities “but is catching up

like sustainability” and go on to state that “at executive meetings the right things are said

but then in reality quite often they will be trapped in their individual experience especially

when things get tough”...In summary, executives acknowledge that “diversity will always

play second to hard number performance but there is a serious push behind it.”

To summarise, how a leader conveys diversity say through the articulation of their

strategy, how diversity is resourced and where it is housed in the organisation, and how

diversity is prioritised can make a significant impact on what those in the organisation

take seriously. Schein (1992) concurs with these findings by stipulating that how a leader

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reacts to organisational activities correlates with what they determine as priorities for the

organisation. These findings highlight the value of the leadership dimensions, the

strategic alignment component as well as the organisational learning component in the

LEAD³ tool and serve to signify the relevance of leveraging diversity in a global context.

Innovation

The fifth and final category within the diversity construct is innovation. Innovation is seen

as a key driver of diversity and diversity is seen as a “learning issue” and ties into both

the organisational learning component of the performance outcome dimension and the

cognitive component in the leadership dimension of the LEAD³ tool. The themes that

surfaced in this category involve having a broad perspective, fostering creativity and

instilling a learning environment.

Broad Perspective, Creativity and Learning

Innovation is seen as essential for companies seeking competitive advantage and having

a diverse workforce is seen as a prerequisite to innovation in providing opportunity for

cross-cultural thinking, robust debate, creative solutions and better performance on

complex tasks. This

For example, Researchers Nieto and Quevedo (2005) cite improved innovation capability.

Lockwood (2005) says that diversity encourages broader perspectives and Cox (1991)

believes that increasing cultural heterogeneity leads to “greater creativity and innovation

and more successful marketing to different types of customers”. Similarly, Leimbach and

Muller (2001) in their global competency model identified commitment to learning as a

key outcome of diversity and Lobel (1991) say that a final challenge for diversity is

sustaining a commitment to continuous improvement in intercultural learning.

Todorova and Durisin (2007) contend that the cognitions of an organisation’s executives

play a key role in judging the potential and thus value of new knowledge

Interviewees said that how their leaders encouraged and fostered learning was of primary

importance. This ranges from – actually having a diverse workforce, to how leaders

release the potential of their employees, to how both the culture and infrastructure is

supportive, to how they accommodate differing perspectives, to how they facilitate and

direct synergistic interactions – all of which constitute key factors of the learning

organisation. These findings support the move towards more inclusive, multicultural work

environments where cultural heterogeneity is acknowledged, understood and respected

through its policies, systems and leadership practices is a necessity. Therefore, in

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instilling a comprehensive learning environment, the change process must focus at an

individual, group and systemic level which correspond with the stakeholder dimension

and the organisational learning component LEAD³. This finding also directly maps onto

two of the performance outcomes – organisational learning and sustainable change the

tool as well as, verifies the philosophy behind structural, cognitive and behavioural

diversity.

Also, as referred to previously, interviewees acknowledged the relationship between

innovation and business growth and profitability. Diversity was seen to provide the

organisation with an opportunity to tailor their services and products to meet customer

needs and interviewees at L’Oréal are keen advocates of this belief which ultimately

maps onto the return on investment component of performance outcomes dimension of

the LEAD³ tool.

In summary, we are witnessing the emergence of the knowledge economy, in which firms

face the challenge of developing a work environment that fosters organisational learning,

while facilitating the sharing of knowledge within the company and among arrays of

networks which link it up with its stakeholders. (Burton-Jones, 2000; Dixon, 2000).

Likewise, Søderberg, and Holden (2002:113) further reiterate that the management of

multiple cultures involves knowledge transfer, organisational learning and networking.

They therefore proposed a new working definition of cross cultural management: “the

core task of cross cultural management in a globalising world is to facilitate and direct

synergistic interaction and learning at interfaces, where knowledge, values and

experience are transferred into multicultural domains of implementation”.

Organisational factors

The research appreciates that internal organisational factors as well as factors external to

the organisation can impact on the interplay between diversity and a global leader’s

performance. The key categories that emerge from the organisational factors construct

are organisational way of being, facilitating diversity, behavioural practices/ways of

working, issues of concern and driving diversity.

Organisational Way of Being

The themes relating to organisational way of being that have emerged from the research

are varied across cultures, structures and operational practices and Cultural dimensions.

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Varied across cultures, structures and operational practices

The key finding to surface from this theme is the way in which a diversity agenda is driven

by a leader in an organisation (as previously written up in the diversity theme under the

concepts of role modelling and positioning and in the upcoming theme ways of

working/behavioural practices under the concept of influence of HQ) is dependent on

organisational structure (decentralised vs. centralised) as well as the geographic location

of an organisations subsidiaries (e.g. USA/UK/ India). So for instance, although a CEO

maybe a strong advocate of diversity s/he may not have sufficient influence across all of

their divisions due to the autonomy that they have given to their subsidiaries or operating

divisions/brands. The leaders of these entities can determine what is implemented or not.

In a similar vein, diversity can be driven by legal compliance as in the USA which is not a

given factor in say India. The net impact is that there can be inconsistencies in diversity

practices within organisations.

This is an important finding and has significant implications as a global leader cannot

state with integrity that he is supportive of diversity if globally there are no uniform

diversity practices across their organisations global operations. This impacts across all of

the components of the LEAD³ tool. These findings on difference amongst subsidiaries

are supported in the literature review by Johanson and Vahlne (1977, 1990), Nohria and

Ghoshal (1994), Evans (1986), Forsgren and Pahlberg (1991) Hofstede, (1981)

Rosenzweig and Singh (1991) Trompenaars (1993) and the GLOBE study (2008). More

importantly this issue of inconsistency in diversity practices can be addressed through the

tool by combining the behavioural diversity and organisational stakeholder grouping to

understand what interventions can be employed that attends to this scenario.

Cultural Differences

As referred to in chapter eight, differences across the cases were observed in relation to

three of Hofstede’s (1991) cultural dimensions: individual vs. collective cultures; low vs.

high power distance; and, long term vs. short term orientation.

According to Hofstede (1991) individualism vs. collectivism is about the relation between

an individual and his or her fellow individuals – that is, ‘cultures where people tend to look

after his or her self-interest as opposed to societies in which the ties between individuals

are very tight and the emphasis is on community’.

My findings corroborate this view and suggest that the culture of an organisation is

exemplified through its leadership style which is strongly influenced by the culture of the

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leaders country or origin. For example, in relation to ‘ways of working’ Western cultures

(North America, Europe) tend to operate from an individualistic platform – that is, a

tendency to look out for their own self interest and although there is a general move

towards increased teamwork and cross-functional collaboration, merit and rewards are

generally based on individual performance. Even where there are KPIs for diversity they

are still attributed on an individual basis.

On the other hand, countries in developing markets (Middle East, China, India, Africa,

Latin America) tend to operate from a collective platform and exhibit more cooperative

behaviour. They practice interdependence with emphasis placed on relationships and

networking as opposed to there their Anglo colleagues who in the main, value self-

reliance and personal achievement. The focus in developed countries is more on the

collective performance – what can be referred to as the ‘Ubuntu’ (“we are people because

of other people”) and ‘lekgotla’ (to engage/court) both of which are South African

philosophies This concept of the collective was also visible in India where the leaders

adopted a paternalistic stance ‘taking care’ of their employees extended families and in

the Middle East where ‘Sharia’ law (personal achievement is less stressed as you work

towards the good of Allah) both underlies and governs this way of being.

The implications are that if organisations of the future are composed of more members

who have a collectivist orientation then it is likely that those from individualistic cultures

will have to adapt their ways of working as in collective societies getting along is more

important than getting ahead.

This theme extends to ‘ways of operating’. Not only was a collective approach evident in

the way in which developing countries chose to conduct business, but also observed was

the cultural dimension – ‘long term orientation’. Long term orientation is characterised by

‘demonstrating perseverance, being thrifty, respectful of circumstance, a willingness to

subordinate oneself for a purpose and has concern with personal adaptiveness’ Hofstede

(2001). This research corroborates the perseverance vs. quick results characteristics of

this dimension in that it highlighted that leaders from developing countries are in business

for the long term. That is, when they invest they are prepared to wait patiently for a return

on their investments.

As referred to previously, in India, through their Merger & Acquisition (M&A) activities

interviewees informed me that as leaders they often choose to adopt the practices and

operations of the organisations that they were acquiring rather than impose their own

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culture and ways of working on them. Kumar (2010) has also observed this phenomena

in his research on M&A activities in Eastern countries. The diametrically opposite way of

operating was evident in the developed countries of Europe and the U.S.A. who are

unduly betrothing to the shareholder and in their quest for shareholder return their

strategy is to normally pursue short-term wins. That is, they are short-term driven and

results focused and are concerned with personal stability.

The third dimension of culture that correlates closely to this research is that of power

distance and countries high on collectivism are frequently also high on power distance.

Hofstede (1980) defined power distance as ‘the extent to which a society accepts and

embraces the fact that power in institutions and organisations is distributed unequally’.

The fundamental issue involved is how society deals with the fact that people are

unequal. All societies are unequal, but some are more unequal than others. This degree

of inequality is measured by the Power Distance scale.

This research observed significant evidence of hierarchical structures (high-power-

distance culture) in Asian and Middle Eastern cultures where status is highly desirable

and where they typically appear to favour more authoritarian, directive leadership. In this

environment employees are obliged to be deferential toward their elders and superiors in

contrast to those in Europe and the U.S.A.

Linked to subservience to authority is level of challenge. In India and the Middle East

employees were reluctant to challenge those in positions of authority. At Mahindra &

Mahindra reference was made to ‘war rooms’ where they go to engage in robust debate

as well as to the philosophy of ‘bindos bol’ meaning ‘speak your mind’. However, despite

these initiatives, there remained strong evidence of a lack of empowerment amongst

subordinates who are typically more reluctant to challenge and more fearful in expressing

disagreement with their leaders than are employees in low power distance countries like

Finland, France, and the United States. This has a negative effect on factors that foster

learning and drive innovation and ultimately has a net impact on stemming competitive

advantage.

It is important to bear in mind that these findings can be tempered by the global

orientation and disposition of the leader. If the senior leaders are from cultures in the

developed markets but have also worked and have lived in developing countries then

there is a tendency to exhibit thought processes and behaviours that are more in tune

with collaboration. And similarly, if senior leaders whose original culture is from a

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developing market but who has worked and lived in a developed country they are more

open to challenge and feedback. Again this magnifies the importance of the role of the

leader in driving a diversity agenda.

The conclusion bears forth that working effectively across cultures is therefore not simply

a matter of applying the skills found to be most effective within the culture of one’s

country or organisation. It requires also that individuals can understand, cope and adapt

their behavioural and cognitive styles to fit with different contexts.

The consequences that may result from the differences in these cultural dimensions are

addressed through the leadership dimensions, the diversity dimensions and the

organisational learning components of the LEAD³ tool. The tool appreciates and

recognises that there are differences in the leaders, thinking, doing and being which

correlate with how structural, cognitive and behavioural diversity interventions are

deployed and inevitably what the impact is on the organisations performance.

Facilitating Diversity

The second category is facilitating diversity. That is how a leader is able to facilitate

diversity in the organisation. The themes that surface in this theme are: practices –

recruitment and initiatives, employee engagement and integration, and shaping

organisational culture.

Practices –recruitment and initiatives

The findings recognise that best practice in diversity recruitment and initiatives can make

positive in-roads within the organisation. However, several voices at Skanska, Novartis

and L’Oréal expressed concern that as a result of their policy of engaging preferred

suppliers then companies do not necessarily source individuals from diverse pools in

relation to academic institutions, technical expertise, sector expertise or age. Once

again, the net impact is an organisational climate where differences are suppressed and

“outsiders” are not effectively integrated. Organisations can address this finding through

the structural diversity and individual stakeholder groupings of the LEAD³ tool.

Also diversity activities have differing ramifications for groups and therefore have drawn a

mixed response in that the findings show that employees’ reaction to diversity initiatives

usually presents itself as a double-edge sword. On the one hand there is recognition that

embracing difference can lead to greater creativity. However, for diverse groups

promotion can often be tainted by being viewed as an act of tokenism or as an attempt to

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achieve quotas rather than based on an individual’s level of competence and capability

(AkzoNobel, Anglo Platinum and Skanska). For White males, the fear of losing status or

a feeling of redundancy is often an adverse reaction to diversity (Anglo Platinum refer to

this as “the threatened species”). This results in an overriding effect of doom and gloom

with diversity being viewed through negative lenses. This finding supports the philosophy

of the LEAD³ tool to consider all the diversity dimensions as well as the importance of

strategic alignment as a performance driver so that diversity becomes a strategic

advantage rather than perceived as a nuisance.

This finding above is supported in the literature by Smith, (1982) and Berg and Smith

(1990) who suggest that “diversity activities have differing ramifications for groups, each

with interest that may or may not overlap, thereby heightening intergroup conflict by

creating increased ; competition for resources, and accentuating differences in goals,

values and power.” (p. 62).

The one positive that is shared across the cases is the realisation that in pursuing and

putting in place a diversity strategy lends towards positively enhancing a organisations

brand equity. If prospective employees recognise that an organisation promotes

individuals from diverse backgrounds then they are more likely to want to work for that

organisation. This in turn, impacts positively on the organisations talent pool.

Employee engagement and integration

Linking in with the findings presented above is the leader’s ability to be engaged and to

engage with a diverse mix of employees so that diversity is leveraged. This is expressed

as a source of concern in the findings primarily relating to how an organisations culture

can often fail to facilitate integration. Some interviewees suggest that often an employee

is not given time to acclimatise to the culture but rather feel pressurised to ‘fit in’ and often

are not equipped with the right tools and resources that would foster their integration into

the organisation. More dangerously, other executives are quoted as saying “it is not a

question of just bringing different people in. We have a business culture towards our

clients and people we bring in need to slip into the culture or be trained to develop within

that culture”.

Additionally, the findings show that the benefits of employee engagement and integration

(i.e. diversity is seen to positively impact on the bottom line in that the correlation between

an engaged workforce and a productive workforce is high) can often be lost if diversity is

undertaken as a compliance exercise rather than a ‘hearts and minds’ exercise.

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Therefore the real frontiers in diversity management are measuring employee

engagement across cultural groups. This finding directly maps onto all of the

components in the leadership dimension, the stakeholder dimension, the inclusion and

engagement component as well as, the organisational learning component in the LEAD³

tool.

Shaping organisational culture

Diversity practices and employee engagement are an integral part of an organisations

culture and link into the crucial and relevant role that a leader plays as chief architects of

organisational culture. The leader’s role was viewed by interviewees as a critical

component of any effort to change culture so that diversity and inclusion moves from a

loose collection of best practices to an organisational strategy to improve performance.

These daily actions and decisions can once again directly influence the diversity climate

of a given organisation and related outcomes. These sentiments were universally

echoed in terms of ‘the leader initially creating beliefs and values’ so that what was once

only the leader’s assumption gradually comes to be a shared assumption which

eventually becomes a way of life in the organisation. Those interviewed suggest that the

softer, more symbolic and less tangible aspects of leadership are every bit as important in

securing speedy transformation as the more tangible hard structures and systems

changes. That is ‘practising inclusive leadership’, ‘showing empathy’ and ‘where the

leaders job is so serve and enable their teams’. This aspect of shaping organisational

culture is represented in the LEAD³ tool across the leadership dimensions as well as in

the sustainable change component.

For those companies that maintain a decentralised structure, a similar and overriding

feature was that employees tended to be more aligned to the cultures of their

subsidiaries, or individual and autonomous companies, or Brands than to the company at

large. In general, where an organisation is a conglomerate or where an organisation is

decentralised and operate a federal structure, then sub-cultures within the organisational

culture are apparent. This can make it inherently difficult for the leader of an organisation

to garner and galvanise his followers in the pursuance of a diversity agenda as his level

of influence can be marginalised by other powerful leaders of divisions or subsidiaries.

Noticeable examples of where the loyalties of employees were aligned to their Brands or

business units rather than to the Group were observed at L’Oréal, Skanska and Novartis

where a lack of uniformity in the organisational culture across the brands/business units



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was observed. At these companies the sub-cultures were more influential as well as

influenced by the brand/BU leaders.

This finding contrasts with the findings observed at Mahindra & Mahindra. Although this

company is a conglomerate made of up nine different business sectors the culture across

all nine businesses was uniform and one that emphasised ‘we’re all in this together and

therefore working towards the collective good for the company’.

Behavioural Practices and Ways of Working

Behavioural practices and Ways of Working are the third and fourth categories and have

been combined due to the cross-over and similarities between the themes.

The themes linked to this category are challenge & conflict, influence of headquarters,

collaboration & learning, and equality & sensitivity.

Challenge and conflict

It makes sense that the greater the cultural differences, and/or the complexity of

operations across geographies then the more likely communication breakdowns and

misunderstandings amongst key decision makers and boundary spanners become.

These views have been verified by my findings which show that communication

breakdowns, misinterpretations due to differing communication styles or language

differences as well as different ways of working are common and can often lead to

conflict. A best case scenario according to an executive is to “be clear about your values

– be proactive and take a position immediately and stick with it” and “...set the tone for

inclusive discussion and inclusive interaction”. Another executive says that “the key is

communication – make both sides understand that there are differences...have constant

dialogue – constant compromise”. The findings suggest that leaders need to

demonstrate more transparent communications, be open to feedback and challenge and

also be sensitive to national differences by practicing agility and adapting their

behavioural style to the context. Specifically, they need to find ways to build upon cultural

integration through developing sustainable and quality relationships that will help to avoid

the pitfalls of cultural ignorance and boost engagement in their organisations. this finding

would substantiate the inclusion of the social and behavioural leadership dimensions as

well as the collaboration and engagement components in the performance drivers.

Fundamentally, Adler (1980) suggest that ‘global firms need to better exploit the benefits

of cultural synergies so that the differences people bring to the intercultural experience

can lead to growth and outcomes that exceed the sum of individual contributions’.

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Benefits to the organisation of culturally synergistic organisations have been listed as

reduced inter-group conflict (Kandola and Fullerton, 1998), and greater flexibility to

respond to environmental changes because members of diverse teams are more likely to

disagree with each other and find fault with the status quo (Glick, Huber, Miller, Doty, and

Sutcliffe 1990).

Influence of HQ

Previously referred to, there are several examples where inconsistencies in diversity

practices between HQ and its subsidiaries/business units/brands are noted. (e.g. L’Oréal,

Novartis, Skanska,). This is primarily due to decentralised or subsidiary structures who

can adapt products and ideas coming from the center. Even, where the parent company

retains considerable influence and control (e.g. Anglo Platinum) sub-cultures within

parent company cultures exist and any direction coming from HQ can be resisted. This

often presents a complex and paradoxical situation as HQ cannot always relinquish all

decision rights to the subsidiaries since the local interests of subsidiaries may not always

be aligned with those of the corporation as a whole (.e.g. safety policy at Skanska,

financial risk management at Al Baraka etc.). There is a growing body of research on

subsidiary inculcation indicating the difficulties that multinationals face in attempting to

impose parent company values on their diverse foreign affiliates (e.g. Evans, 1986;

Forsgren and Pahlberg, 1991; Hofstede, 1981; Rosenzweig and singh, 1991;

Trompenaars, 1993).

Likewise, the greater the extent to which corporate headquarters and subsidiaries differ in

their cultural characteristics (a phenomenon termed “cultural distance” by Johanson and

Vahlne (1977, 1990) the more difficult it becomes to effectively influence

departments/functions/units. These views have been borne out in the findings where an

individualistic culture is at play as there tends to be a minimal joined-up approach to

managing diversity. However, where HQ is able to impose standardised processes then

diversity initiatives can be more successful but at the expense of disengaging employees

in these efforts as they feel that they have been ‘told’ what to do rather than given the

option to buy-into these initiatives (Anglo Platinum). As such, the output may result in

negative behaviours and practices.

These findings can be mapped unto and negatively impact all of the dimensions in the

LEAD³ tool resulting in substantial implications for the organisation due to lack of

unification, harmony and commitment to diversity. How an organisation resolves this

issue may yet be through the practice of collaboration and shared learnings.

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Collaboration and shared learning

Much of the writings on collaboration and shared learnings have been incorporated and

expanded upon in the findings on innovation (see the innovation theme). As shown in the

literature review, collaboration was viewed as an essential way of working if organisations

want to improve their competitiveness by growing their businesses across geographies

and in particular, in emerging markets. Interviewees report the necessity “to combine

projects so that we have a cultural spread”. Too many organisations still operate through

silos and if they are to exploit the benefits of innovation, shared knowledge and best

practices they must progress in the direction of collaboration particularly given the

increasingly virtual ways of working and complex working structures. In the LEAD³ tool

collaboration sits within the performance driver dimension as a key factor that leaders

need to consider as a driver of diversity.

With regard to learning from others, organisational characteristic differences across the

cases were observed. In this research, executives from the developing countries display

a hunger for new knowledge and see learning as an essential element of diversity. Their

curiosity and desire for knowledge far surpasses those in developed countries. This

extends to practices in business operations where they will overtly copy the practices,

methodologies and operations from their developed partners as evidenced through their

M&A philosophy and activities.

This is diametrically opposed to executives from developed countries who often did not

voice an appetite for learning from their counterparts in the developing world and who

tended to socialise with fellow expatriates rather than integrate with nationals from their

host countries. This trait may be a direct legacy of colonial bureaucracies where the

reach and power of multinationals was deeply ingrained resulting in their ways of being

not challenged. Or, because until recently the majority of senior leadership teams were

staffed by expatriates whose make-up often reflected the demographic of the home

countries. An interviewee labours this point by saying “monoculture leadership is thinking

through one filter whereby you replicate the same model in different countries, not

respecting the local needs and the local context”. When this view was presented to them

Multinationals often complain that it is difficult to resource local talent due to their general

lack of knowledge and experience.

A further interesting phenomenon linked to learning that was observed stems from the

differences between the sexes. So, how a woman’s contribution to the business is

sought and acknowledged was dependent on a man’s attitude to women in business. A

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female interviewee is quoted as saying “if you are not assertive enough you do not get on

the radar screen but this window between being assertive and aggressive is 1cm. So

either you are a wilting flower or you are a Rottweiler and this line is so delicate for

women to straddle.” These findings reflect accurately the philosophy on implementing

interventions that focus on the structural, cognitive and behavioural diversity dimesions

across all stakeholder groupings.

On the positive side, there were examples of leaders from developed countries that

understood the reality of the emerging markets and identified new sources of value to

bring back home. For example, a division at Novartis visited a company so as to observe

a different culture that resulted in a different way of working. Once more, this verifies the

value of leaders having within their repertoire a suite of skills comprising of cognitive,

social and behavioural traits.

Equality and Sensitivity

The final theme in this category is ‘equality and sensitivity. Deutsch (1985) defines

equality as a “distributional notion based on the equal value of individuals and their right

to benefit equally in any benefits and burdens whereas equity is concerned with

distribution based on individual inputs as well as opportunity.” (p.35). In this research the

terms equality and equity were used interchangeably.

With the exception of L’Oréal who used the term ‘equality’ as a philosophy underlying

their diversity efforts, the findings suggest that this understanding and perception of

diversity is somewhat weak. Rather, in many cases, diversity efforts are viewed simply as

a political exercise rather than an exercise that establishes equity and adds value.

Particularly so, when it affects an individual’s status or is perceived as an act of tokenism.

(e.g. gender in Skanska). Even more so, the findings suggest that when there is disparity

between what a leader says and what they do then the notion of equality fades into the

distance (e.g. Anglo Platinum, Novartis). A quote exemplifying this is “privately people

believe that it is a waste of time and only participate in a diversity programme because

HQ wants them to do it.”

Within the concept of equality and sensitivity sits the concept of ‘microinequities’ – a term

coined by Mary Rowe (1990) who describes micro-inequities as “a subtle form of

discrimination involving a perpetrator and a victim and are characterised by slight, verbal,

or non-verbal personal assaults that are often ephemeral and covert. These messages

can take the shape of looks, gestures or even tones.” Microinequities are typically

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directed at identity group members such as White and Blacks or between men and

women. This behaviour was observed by several interviewees who said that “senior

leaders can proclaim the value of equality but through their actions and semiconscious

messages that they set out they do not demonstrate equally treatment to those who are

different which is far more swaying and potentially damaging.” These findings closely

relate to the findings reported in the inclusivity, role modelling, positioning and facilitating

diversity themes.

For equality and sensitivity to be embedded, interviewees expressed that it was

fundamental for diversity efforts to have different focal points. This view is central to the

design of the LEAD³ tool that postulates diversity be recognised at the structural,

cognitive and behavioural dimensions which will in turn enable organisational activities to

be more focused in the pursuit of aligning strategy to meet organisational objectives. It is

not good enough that diversity efforts are focused on one strand of the diversity

continuum (i.e. achieving equal gender representation in the Boardroom) which for the

best part is being driven by both by societal and legal pressures rather than a genuine

commitment to diversity. Also, pertaining to diversity measures, gender is an easy goal to

measure and subsequently an easy option for leaders who want to show that they

support diversity.

Issues of Concern

The fifth category – issues of concern – uncovered two themes. First, the majority of

interviewees said that in the main, issues relating to diversity did not keep them awake at

night. Rather, the issues that kept them awake at night tended to be short term

operational/business issues. This acutely demonstrates the continued limited visibility

and priority that leaders give to diversity. Because of the lack of accountability and

performance measures, as well as the perceived minimal impact on financial results

diversity is considered as a ‘nice thing to do’ rather than an essential practice that we

‘have to do’.

Second, where a few leaders at AkzoNobel, Skanska, L’Oréal and Novartis did voice

some concern is with regard to integration. That is, how can we better integrate

differences into the organisational culture and our ways of working rather than individuals

having to ‘fit into’ the culture? How can we leverage difference better? These views have

been echoed across the research – in particular within the themes and concepts of

inclusivity (tolerance), positioning (conveying), and facilitation (practices – recruitment

and initiatives & employee engagement).

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Driving Diversity

The sixth and final category to emerge from organisational factors is driving diversity.

The question associated with this theme was an attempt to get leaders to qualify the best

way to drive diversity forwards in their organisation. The findings show that the

responses were very closely correlated with the categories and associated themes of

facilitating diversity (practices – recruitment and initiatives, employee engagement &

integration, and shaping organisational culture), and the category – behavioural

practices/ways of working (collaboration & shared learnings, equality & sensitivity). In

general, some suggest that demonstrating good leadership practice, creating an

environment that values inclusivity and focusing on achieving gender balance was a good

way to drive diversity forward in an organisation.

Gender inequality was an undercurrent concept across the interviews. Male interviewees

saw working towards gender balance as a key activity of diversity. Female interviewees

referred several times to gender disparity and said it was very apparent at senior

meetings ( e.g. ‘frequently bumping into the male ego which forces us to jostle for position

at the table in order for our voices to be heard. Then we are perceived as being

aggressive’) or, often showed up a large gatherings (“at a recent conference we had 60

top managers...there were only two females and the rest were all white males present”).

This level of gender inequality was evident in the sample where only 18% (14 out of 79).

of those interviewed were women. Once more, by paying attention to the diversity

dimensions organisations will be able to tailor their talent agendas to better reflect the

diverse make-up of the new world.

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Conclusion

Encouraged by the views of April and Shockley (2007), Gómez-Mejia, & Palich, (1999)

and Zanie (2002) that were cited in previous chapters, the researcher developed a tool

that embraces a whole systems approach to both leadership and diversity. Specifically,

the case for how leaders can effectively leverage diversity in a global context.

The first section of this chapter clearly describes the theoretical underpinnings of the tool

as well as served to demonstrate the workings of the tool.

Secondly, this chapter also sought to test and discuss the viability of the tool and this was

proven as the findings mapping onto the dimensions of LEAD³.

The findings from the across case study analysis on the three constructs:

Global leadership – competencies, connecting, rigour, stakeholder satisfaction,

value based professional, influences;

Diversity – inclusivity, performance measures, role modelling, positioning

diversity and innovation;

Organisational factors – organisational way of being, facilitating diversity,

behavioural practices, ways of working, issues of concern and driving diversity;

The testing of the LEAD³ tool confirmed that it is a holistic approach to global leadership

and confirmed that the rational for developing a multi-level/multi-dimensional approach

for diversity is the best way of enabling leaders to leverage diversity in their organisation.

This confirmation came from the findings mapping onto all of the components that make

up the levels of the LEAD³ tool.

Given the support for the tool demonstrated through by the findings the researcher

believes that the LEAD³ tool provides an effective change management framework for

encapsulating the culture, behaviours, systems, processes and outcomes of an

organisation so that global leaders have the tools to embed and leverage diversity in such

a way that has a practical application and makes sense for the organisation. That is

leaders will be able to align their diversity efforts across all organisational elements within

a commercial frame so that it becomes a way of working and being. More so, the model

can be operationalised to accommodate differing stakeholder groups so that

organisational learning can be sustained.

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Chapter Ten: Conclusion

Introduction

Complexity. Ambiguity. Unpredictability. Words that sum up the current business

landscape which is endlessly fluid and continues to change at a fast pace. Given this

context as well as the diversity of stakeholders that have to be engaged, leaders often

have to contend with a host of multifaceted factors. For instance, they may have to set

the organisation off on a change process before the destination is fully understood. Or,

due to cross-border activities they have to be agile enough to navigate and adapt across

cultural and geographic lines as well as, determine new organisational structures and

capabilities through anticipating growing needs and demands of those markets.

Therefore it is of essence that leaders perform effectively across diverse scenarios whilst

managing their abilities and perhaps having to shift their personal values and behaviours

in the pursuit of organisational effectiveness.

With these issues in mind, this research set out to address three key objectives:

1. To examine how a global leaders performance can effectively leverage diversity in

a global context.

2. To develop a model or tool (derived from reviewing the literature) that broadens

the scope of diversity and takes into account key organisational factors. Thereby




This research has demonstrated that the three objectives of the thesis have been

realised. This has resulted in key achievements. First, the achievement of building and

developing the Leadership & Diversity tool (LEAD³) – a multi-level, multi-faceted

framework and tool for diversity that enables global leaders to effectively leverage

diversity so as to enhance their performance within a global context. Second, it assessed

how the tool has been verified against the findings.

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It will discuss these two achievements by examining the contribution that they make to

both academia and practice, the philosophy, benefits and value of LEAD³ as well as, the

possibility to build on the outputs of this research.

Lastly, it will highlight methodological issues and implications of the research and

conclude by offering reflections on both process and learnings.

Key Research Achievements

Contribution to academia

This research set out to attend to specific concerns raised by academic research and

tabled in Chapter One by Adler and Graham(1989), Bass review (1990) House (1995)

Zane (2002) and April and Shockley (2007). These were:

1. The dearth of studies based on more than three or four countries.

2. The many studies that make use of existing standardised U.S. instruments

that may not fully capture non-Western or non-U.S. conceptualisations of

leadership.

3. A need for an empirically grounded theory to explain differential leader

behaviour and effectiveness across cultures.

4. An integrated tool that embraces a holistic and integrated approach to


The research attends to these four issues and offers an original and substantial

contribution to academia in the following areas:

The research covered 22 countries across five continents. The first notable contribution

of the research is that it employed a hybrid methodology utilising open coding, thematic

analysis and content analysis. This combination of methods enabled the data to be

grounded in real experiences and new insights into the understanding of social processes

emerging from the context in which they occur. Also by employing an iterative process it

provided the researcher with an opportunity to continuously tailor the questionnaire

instrument to capture non-Western/non U.S. conceptualisations for leadership and

diversity. This feature was a key differentiator of the research.

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The second contribution is that it covered differing sectors as opposed to focusing on one

sector or one company thereby offering a ‘big picture’ view of diversity and leadership that

is not hostage to one environment, or one sector, or one company’s way of being and

doing things. As such, the findings are applicable across industry.

The third contribution to academia is that the research converted the knowledge that

emerged from both the literature reviews and the findings into a practical tool. LEAD³ is a

tool framed within a change management process that takes into account key

organisational performance drivers and positions both diversity and leadership within a

commercial frame. More so, the model can be operationalised to accommodate differing

stakeholder groups so that organisational learning can be sustained and high

performance achieved.

Contribution to practice

It is intended that organizational research (particularly from a DBA programme) should

convert at least some of its findings into practical management tools. As such the

contribution of this research was to develop a tool that can be applied in the business

environment – the Leadership & Diversity tool (LEAD³). LEAD³ is a pragmatic tool that

has been developed through the global reach of this study and therefore provides an

organisation with the opportunity to understand how they can operate more effectively

and efficiently on a global platform. This is the first valuable output of this research – the

output is founded on global scale and reach.

The second valuable output stemming from the research is it provides leaders of global

organisations with a workable tool. LEAD³ positions diversity and leadership within a

change management framework. This framework encapsulates the culture, behaviours,

systems, processes and performance outcomes of an organisation so that global leaders

have the tools to embed and leverage diversity in such a way that has a practical

application and makes sense for the organisation. Leaders are able to align their

diversity efforts across all organisational elements so that it becomes a way of working

and being. It operationalises a strategic diversity agenda that is aligned to the key

elements of both organisational and leadership performance. By the very nature of its

segmented and multi-level/multi-faceted structure it enables leaders to prioritise, focus

and tailor their diversity activities to meet their changing organisational needs. LEAD³ is

an interactive tool that allows you to click through to the situation specific interventions.

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The third valuable output is that the research argues for and provides a whole systems

approach to diversity. Diversity is structured from a structural, cognitive and behavioural

perspective and thus is more likely to be embedded and aligned to organisational

activities and thus inherently support processes, structures and systems to impact overall

business performance. Thus, the organisation is continually learning and change

becomes sustainable.

LEAD³ - Philosophy, Benefits and Value

The key achievement of the research and where it adds value lies in the philosophy of the

LEAD³ model which is to widen the scope of diversity so that a diversity strategic agenda

can be mapped to organisational objectives, activities and learning. Thus, it emphasises

a move away from a singular focus on structural diversity (often referred to as workforce

or identity diversity) towards a broader focus that includes cognitive and behavioural

diversity as well. The intention is to facilitate buy-in, engagement and commitment from

all employees by making the strategic story for diversity real and enabling leaders to

amplify their performance by establishing a compelling organisational and personal

rationale for leveraging diversity. This means that global leaders have to be conscious of,

and demonstrate commitment to, thinking and being on several levels whilst at the same

time coalesce key organisational elements.

The second value-adding achievement of this research lies in the practical application of

the LEAD³ tool. It is a multi-level/multi-dimensional approach to enable global leaders to

leverage diversity. The main benefit of this tool is that it enables diversity activities to

align with changing organisational needs and therefore benefits can be realised for each

of the dimensions. It is an interactive tool that allows you to click through to situation

specific interventions depending on your diversity and stakeholder group focus.

At the leadership dimension the benefits are threefold – other than intellectual and

technical ability there is an appreciation that cognitive, social and behavioural capability

all need to be considered as part of a leader’s repertoire and portfolio of skills. This is

guided from an awareness that leaders have to process complex, ambiguous and often

competing information through to leaders having to appropriately apply interpersonal

skills within a thorough understanding of one’s social setting and function effectively with

a demographically diverse employee population in a global environment.

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The performance drivers dimension enable leaders to consider key organisational ways

of working, being, influencing and directing that are required so that the organisation has

a joined up and integrated approach when designing and implementing diversity

activities. These organisational ways of working, being, influencing and directing include

inclusion & engagement so that all employees can prosper and progress irrespective of

their diversity as well as feel that they are valued, respected and engaged. Engagement

in turn will lead to higher motivation and commitment to the organisation so that

employees are willing to go ‘the extra mile’. It is about releasing employees’ discretionary

behaviour.

Collaboration permits learning, flexibility and agility throughout the organisation and takes

into account differing perspectives thereby offering well rounded solutions. Collaborating

lends fortuitously towards better ways of working between countries in emerged and

emerging markets so that they can work harmoniously.

Lastly, by seeking and committing to strategic alignment leaders demonstrate their

commitment to the attainment and embedment of organisational and business goals to

diversity activities.

The benefits of addressing differing stakeholders needs is that the focus is on collective

impact (e.g., attracting and retaining talent, multicultural marketing etc.). For example, at

the individual level employees identities are embraced and they are included at all levels

in all areas so that their individual capability is recognised and rewarded. At the team

level it affords interaction across global cross-functional teams which increases

knowledge sharing, team productivity, innovation and creativity and reduces inter-group

conflict. Finally, at the organisation level it allows for collaboration across organisational,

functions, divisions and subsidiaries, as well as encouraging external stakeholders to

contribute to the process so that a unified culture and vision is shared that has consistent

governance processes in place. It also sets both tone and direction for diversity policies,

charters, steering groups and councils and networking groups and strategic alliances.

The diversity dimensions help to segment and structure diversity activities by way of three

different lenses. The first is structural whereby the organisation accepts all differences

(primary and secondary) so that individuals are not precluded from engaging on activities.

It also takes into ‘account systems, processes and strategic styles and interactions across

functions, organisational levels, divisions and between parent companies, subsidiaries

and ventures thereby increasing alignment across the organisation’ (Hubbard, 2004).

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Cognitive diversity allows for different ways of thinking to be embraced which reduces the

likelihood of ‘groupthink’ and leads to increased effectiveness in activities such as

decision making, problem solving, strategic planning, organisational learning, innovation

and creativity so that the company can sustain its competitive advantage as well as push

the boundaries of their current performance.

Behavioural diversity recognises that people require the capability to adapt their

behaviours across different contexts. This increases acceptance of different ways of

working, reduces communication breakdowns and determines acceptable behavioural

standards.

Further, the value of the LEAD³ tool is it provides a segmented structure. It allows for the

diversity dimensions (change levers) to be mapped to the different stakeholder groups so

that organisational activities (change interventions) can be both tailored and

operationalised and thereby allowing organisations to address key diversity concerns

through focused initiatives and solutions. The change interventions (individualistic and

systemic) are articulated in the appendix.

Finally, performance outcomes enable a return on investment, organisational learning

and sustainable growth and change. In relation to a return on investment if a financial

measuring system is implemented then according to Hubbard (2004) the benefits are

several and include: ‘reduced labour costs, recruitment, turnover and training and

retention of talent; maximisation of ‘global/local’ talent pool; increased organisational

performance in terms of innovation, growth and profitability; response to, and

understanding “all” employees, customers, vendors, suppliers, governments, and other

stakeholder groups; seizing market opportunities, and enhanced brand reputation as

prospective employees would regard the organisation as an employer of choice, because

“all” people are valued and the organisation reflects the demography of the regions in

which they operate’.

The benefits of a learning organisation include multi-functional teams operating

cohesively towards creating innovative solutions for the client whilst at the same time

accepting and encouraging diverse perspectives and integrating diverse knowledge

bases so that best practices are identified and shared. It also enhances global and local

responses to knowledge, relationships and employees.

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The benefits realised for putting in place the LEAD³ tool is that the dimensions are all

grounded in a change management framework which recognises the organisation as a

fluid entity primed to respond to continuous change. Thus, enabling leaders to effectively

drive a strategic diversity agenda targeted to adapt to and address specific organisational

processes and actions at any given time. This leads to organisational flexibility and agility

and harnesses a joined up and integrated approach so that diversity is embedded in the

organisations culture, affording systemic and structural organisational change whilst

contributing to community and developing corporate social responsibility.

Building on the research: GLIDE

The researcher has begun to formulate a competency framework for diversity and

leadership aptly named the Global Leadership Index for Diversity (GLIDE). This

framework is in its early stages and has been developed from a combination of the

findings from the research and the insights gained from the research studies presented in

the literature review. As such, it is a by-product of this research and is very much at

conceptualisation stage. Therefore, it has not yet been tested, verified and validated.

This initial development of the framework reverts to Whiddett & Hollyforde (2003) CIPD

guide for direction and uses the CIPD description of competences as “broader concepts

that encompass demonstrable performance outputs as well as behaviour inputs, and may

relate to a system or set of minimum standards required for effective performance at

work” (CIPD Fact Sheet, July 2012).

GLIDE consists of six characteristics, a suite of dimensions and corresponding

competences that have been identified as what global leaders need within their tool box

to perform across cultures, geographies and differing contexts. How leaders employ and

maximise their portfolio and repertoire of skills was considered to be vital when leaders

have to influence, direct and gain support for organisation wide diversity programmes and

activities on a global scale. As leaders increasingly need to demonstrate strategic

awareness of what ‘managing the future’ entails they have to become more apt at

leveraging specific skills when navigating through a diverse environment.

These skills have been presented and structured into a framework to identify and develop

the competences required by global leaders. GLIDE captures five key characteristics

distinctly believed to set apart a global leader from a domestic leader. These

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characteristics are the categories that emerged from the findings for the construct global

leadership. They are: commercial acumen; rigour, connecting; value-based

professionalism; and cross-cultural. Each characteristic consists of six dimensions:

cognitive; social; behavioural; business; strategic; and global. These six dimensions were

considered key areas of skills for leaders as determined by both Hooijberg, Hunt and

Dodge (1997) and Mumford, Campion and Morgeson (2007) in their ‘Leaderplex’ and

‘Strataplex’ models respectively. For each characteristic and dimension there are specific

competencies (see appendix 8). The competencies emerge from the data from the

themes within the six categories. It is expected that as the framework is further

developed a ratings scale will be applied.

This framework is in its infancy and will need to be further refined into a bona fide

competency framework that is tested with organisations. However, GLIDE offers a

valuable starting point in that it essential ties in with the leadership dimensions and

performance driver dimensions of LEAD³ and as such, it is founded on theoretical

underpinnings as well as, recognises the diverse aspects of a global leader’s role that

have emerged from the findings. To this end, a leader’s performance is not solely judged

on technical or intellectual ability nor on personality – that is, whether they are charismatic

or transformational. Nor is their overall performance associated with isolated decisions or

situations. Rather, a leader’s performance is a blend of how they combine their

behavioural, social, cognitive, business and strategic and global skills to manoeuvre

increasingly complex environments, as well as, appreciate and respect the value of

differences so as to orchestrate effective interactions.

The competencies in GLIDE were not manufactured from a vanilla palette, rather they

present a pattern of the mosaic of global leadership that can be tessellated across global

organisations and on which the future of how global leaders are shaped and perform

rests. It is hoped that this framework can be developed to enhance employee and

organisational effectiveness and provide a better analysis of diversity training needs.

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Other possibilities for further research

Other possibilities for future research include:

How much of leaders time and at which levels, is spent performing institutional,

integrative diversity work in addition to strategic or technical responsibilities and how

does the leader balance these needs with the needs of globalisation?

Can a cohesive diversity agenda (taking all three elements of diversity - structural,

cognitive and behavioural) be forged across diverse countries with conflicting societal

and political needs and requirements?

Methodological issues with cross-cultural research

A criticism often levied at qualitative research is the lack of robust statistics that can be

tested for validation and reliability. However the researcher firmly believes that the

qualitative methodology used in this research enabled the identification of the rich

contextualised detail of the characteristics of diversity and to understand how these

impacted on a global leader’s performance. A quantitative survey would have missed the

powerful way that current experiences were shaped by the organisational history and

culture.

Nevertheless the researcher acknowledges that there are a number of methodological

issues in this research that need to be considered. The first is in the problem of

translation in measurement. That is, the researcher cannot guarantee that all

interviewees interpreted and/or understood questions similarly even when the researcher

tried to re-word questions so as to enable a clearer understanding. This was primarily due

to language differences.

Secondly, in relation to sampling, using national borders as cultural boundaries may not

be appropriate in countries that have large subcultures and the researcher was

particularly aware of this when interviewing in Asia and the Middle East, all of whom have

sub-cultures within them. For example, divides along economic, status and cultural lines.

Thirdly, this study runs the risk of committing the “ecological fallacy” error (Robinson,

1950). Robinson says that ‘this occurs if we ‘assume isomorphic relationships between

variables across differing levels of analysis, such as assuming characteristics and/or

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relationships existing at the cultural level will automatically apply to other levels of

analysis, such as the individual’. The researcher was aware of this issue as she

sometimes interviewed participants who were not located in the same country or

continent as their headquarters. As such, this had the potential to impact the

interviewees views on leadership and diversity as what applies for individuals may or may

not apply for cultures and vice versa. The researcher tried to minimise this problem by

paying careful attention to the level of analysis issue in theory building, and in collecting

and analysing data.

Also, due to the complexity of undertaking qualitative research with multinationals

theoretical sampling was not an option. Some may perceive the sample list/ number of

cases to be limited (7 companies / 79 employees) which may inhibit theory accumulation

in the field and would preferred to have more case organisations so that atheoretical

sampling process would have been utilised. In practice, however, a researcher working

with real organisations rarely has an opportunity to implement text-book theoretical

sampling processes due to problems in gaining access to various companies and time

restrictions of participants in tandem with deadlines set for the thesis.

A fifth methodological issue is that qualitative methods are prone to a researcher bias as

grounded theory puts the main researcher in a central role in the analysis. That is, the

researcher is the primary analyst and creator of the essential categories of the grounded

theory. In parallel to this, as all interviews were conducted on a one-to-one basis they are

open to individual interpretation and subsequent interviewee bias which minimises the

emergence of collective interpretations. It also goes without saying that interviewee bias

should be considered.

Finally, because in the main, only one way of gathering information was used (in-depth

structured interviews) it may not have the robustness that triangulation would have

afforded. Where possible the researcher did try to overcome this bias by triangulating

several types of data (primarily company literature) but it was at best sporadic across

cases.

In conclusion, I applied a blend of qualitative methodologies in my research as a means

to describe characteristics and generate theory about the impact of diversity on

leadership performance. It has been used as a methodology verifying a priori of concepts

housed within an interpretive paradigm – a philosophy that is concerned with the question

of how individuals make sense of the world around them stance. It started with a loosely

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predetermined conceptual frame which was developed through the literature and

confirmed through the gathering and analysis of data. In such a context, grounded theory

is powerful as it gives room for the interpretation of ‘real’ experiences of the participants

and also provides a systematic means to efficiently analyse large quantities of

unstructured qualitative data.

Implications

The primary implication of this research paradoxically is the philosophy and functioning of

the LEAD³ tool. For although the research findings evidenced that framing diversity and

leadership from a multiple perspective was both cohesive and advantageous on

numerous fronts the implication for organisations is that if they are not already on a

trajectory that drives and commits to a strategic diversity agenda then the tool advocated

may seem complext and time consuming. Thus, they may revert to the fall-back position

of having a singular focus – e.g. gender.

The researcher would encourage leaders to take to heart the following quote if they feel

tempted to revert to the fall back position:

“A journey of a 1000 miles begins with a single step.” Tao Te Ching.

Conclusion

The objectives of this research were to:

1. To examine how a global leaders performance can effectively leverage diversity in a

global context.

2. To develop a model or tool (derived from reviewing the literature) that broadens the

scope of diversity and takes into account key organisational factors. Thereby




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This chapter served to show how these three objectives have been realised and

achieved. Firstly, by confirming the value of and furthering the case to develop a multi-

level, multi-faceted approach to diversity and through articulating the philosophy, benefits

and value of LEAD³. These achievements were reflected through the contribution to

academia and practice which emphasised the primary differentiators of this research as:

That the results are founded on both global scale and reach. That is 79 leaders

across 5 continents representing 22 countries were interviewed.

The model presents a whole systems approach to leading diversity in that it

embraces structural, cognitive and behavioural diversity as well as interdependent

organisational elements that need to be considered when formulating and driving

through a diversity agenda.

The development of the Leadership & Diversity model (LEAD³) – a multi-level tool

whose components consider both internal and external factors of the organisation

and has been tested for relevancy and robustness against the findings to provide

leaders of global organisations with a workable model that positions diversity and

leadership within a change management framework.

It also highlighted a possible way to build on the outputs of this research by developing a

draft competency framework named ‘Global Leadership Index for Diversity ‘(GLIDE). In

tandem with this two additional interesting questions for future research that would build

on this body of knowledge were suggested.

It also highlighted methodological issues and implications of the research and will

conclude by offering reflections on both process and learnings.

To conclude, the researcher offers personal reflections on both the research process and

learnings and how her views have been influenced by this.

Reflections on the Process

The process was rewarding because the researcher was offered an insight into both the

personal thoughts of interviewees and also of the workings of the organisations who

participated. The researcher firmly believes that she would not have been privy to such

rich and insightful findings on what are complex organisational phenomena had she

simply sent out questionnaires.

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However, the researcher admits that the process was time consuming for a number of

reasons. First, 61 companies were approached to partake in the research. Out of the 39

organisations who responded the researcher went on to have conversations and/or

meetings with 14 of these companies including the six organisations who participated in

this research. This process was ongoing for 5 months, and was at times, akin to an

interview process that demanded persistence and perseverance from the researcher.

Secondly, the scheduling of interviews with leaders was demanding. On many occasions

interviews had to be rearranged at the last minute due to the pressing operational

demands of the interviewees. Also, the fact that interviews were conducted across

differing time zones often made scheduling very tricky. These two issues drew heavily on

the project management skills of the researcher. In addition to this, at times, the

language differences demanded utmost concentration from the interviewer which was

wearing.

Lastly, the transcription of 79 interviews required the researcher to be both disciplined

and patient as the interviews took approximately 316 hours in total to transcribe which

was both time-consuming and tedious.

Reflections on Learnings

Several key learnings stuck out for the researcher. The first is that to drive a diversity

agenda through an organisation takes absolute commitment, perseverance and role

modelling of congruent behaviours by the leaders.

Secondly, it is apparent that it is important for a uniform organisational culture be aligned

to the strategy so that a consistent process can be adopted by all. Following from this, it

is essential that the organisational strategy is aligned to diversity objectives so that in

turn, interventions are aligned to organisational needs. Thus, ensuring interventions are

both focused and targeted and secure collective impact across the organisation.

Thirdly, it is important that appropriate performance measures for diversity are put in

place that are in overall alignment with systems, strategy and objectives. Thus ensuring

that interventions are tracked and accountability determined.

Fourthly, engagement is key. Keep in touch with how people are feeling. Know what the

emotional temperature of the organisation is. If employees voices are heard, if leaders

318

create communities for action and if relationships are forged then employees will be

engaged which ultimately leads to commitment.

Fifth, diversity should be addressed through multiple levels that take into account the

value that differing structural, cognitive and behavioural diversity perspectives bring to the

organisation. This corresponds with the definition of diversity used in this study which is

“the value added from different ways of being, doing, and thinking”.

Finally, the notion of interdependence and interconnectedness was highlighted. Business

success correlates with how effectively and efficiently we can grow our businesses. In

recent years, growth achieved through doing business between developed countries has

become stagnant and growth opportunities stemming from doing business with emerging

markets has increased. As such, the increasing influence and impact that emerging

markets have are significant. Therefore, leaders in developed countries will have to take

into account new ways of working, thinking and being that relate to behaviours and mind-

sets such as collectivism, collaboration, engagement, inclusion, connecting, integration,

adaptability and flexibility if successful relationships and partnerships on a global scale

are to be forged and realised, resulting in sustained competitive advantage.

Organisations in developing markets will need to ‘buy into’ the multi-dimensional

perspective of diversity and its practices if they are to attract and retain a talented and

diverse workforce as well as understand and communicate effectively with those from

developed countries. As Javidan, Dorfman, Howell and Hanges (2010:370) stress “it is

the diversity of the targets of influence that signifies and distinguishes the task of global

leaders.”

For all organisations across all Nations, this means in essence, that going forward how

we operate in a global environment rests on our capability to be both interconnected and

interdependent. Organisations are complex adaptive systems that embody both technical

and human processes. It is the humanness and quality of our relationships that ultimately

drives an organisation’s success and therefore the focus on engagement, collaboration

and relationships is at the heart of successful change.

These findings can be aptly coined by the English poet John Donne in his famous poem

Meditation XV11 – “No man is an Island, No man stands alone.” And, leaders have

courage and take heart, “nothing happens unless first a dream” by Carl Sandburg.

http://en.wikipedia.org/wiki/John_Donne

319

Ode to Leadership and Diversity

HOPE I hope that the world stops raining

Stops turning it's back on the young

See nobody here is blameless

I hope that we can fix all that we've done

I really hope Martin can see this

I hope that we still have a dream

I'm hoping that change isn't hopeless

I'm hoping to start it with me

I just hope I'm not the only one, I just hope I'm not the only one

I hope we start seeing forever

Instead of what we can gain in a day

I hope we start seeing each other

Cause don't we all bleed the same

I really hope someone can hear me

That a child doesn't bear the weight of a gun

Hope I find the voice within me to scream at the top of my lungs

I just hope I'm not the only one, I just hope I'm not the only one

Louder, I cannot hear you, How can things be better left unsaid

Call me, call me a dreamer, But it seems like dreams are all that we've got left

I hope we still have a heartbeat

I hope we don't turn to snow

A night when you turn the lights off

I hope you don't cry alone

I hope we stop taking for granted

All of the land and all of the sea

I'm taking a chance on loving

I hope that you take it with me

I just hope I'm not the only one,

By Emeli Sandé and Alicia Keys

321

Appendices

Appendix 1 – Questionnaire References

Question Reference

2 What would you say are the 3

characteristics required to lead a

global company?

Osland and Bird (2006); Rosen (2000) Brake (1997);

Rhinesmith (1996); Leimbach, M and Muller, A. (2001)

Moran and Riesenberger (1994); Goldsmith,

Greenburg, Robertson, and Hu-Chan (2003) ; Harrison

and Hopkins (1967); Medenhall and Oddou (1985)

Ronen (1990) - Global Leadership Competencies.

Hanges & Dikson (2004) - GLOBE study

Hooijberg, Hunt, & Dodge (1997) Leaderplex’ Model

Mumford, Campion & Mogeson (2007) ‘Strataplex’

model

3 In your opinion what would you

say is the most effective

measurement of global

leadership performance?

Gupta & Govindarajan (2002 ) and Murtha, Lenway, &

Bagozzi (1998) - global mindsets.

Bartlett & Ghoshal, (1998) - transnational mentality”

Estienne, (1997). willing to learn and are able to

adapt

Kefalas, (1998); Tichy et al., (1992) - possess high

levels of conceptualisation skills,

Harveston, Kedia, & Davis, (2000), - visionary (

Mumford & Connelly, (1991); Mumford et al.,(2000);

Schwandt, 2005) -have high levels of problem-solving

skills and abilities, and can make sense of ambiguous

or ill-defined situations

4 What values and beliefs guide

you in your role as a leader?

Schein (1992) Deal and Kennedy (1982); Posner

(1991); - Values & Beliefs

Meglino et al. (1989); Posner (1992); Posner et al.

(1985, 1987). - ‘fit’ between organisation members’

personal values and those of the organisation

5 In your opinion what is the

influence of nationality/culture on

leadership behaviour?

Hambrick, D (1998) Nationality affects a person in

numerous interconnected ways, ranging from the

deeply underlying to the readily apparent: values,

cognitive schema, demeanour, and language. .

322

6 What is your understanding of

diversity?

No references required

7 How are your values and beliefs

challenged when operating in a

diverse environment?


8 Do you have performance

objectives (KPIs) tied to

diversity? Are you rewarded for

your efforts to embrace

diversity?

Miller & Katz (2002) - tying a percentage of a

manager’s bonus to success in the development and

promotion of a diverse group of people. These moves

the diversity agenda from concept to reality.

Miller & Katz (2002):- all aspects of the organisation’s

policies and practices be aligned with the new set of

competencies. Baseline policies and practices

include: Performance appraisal systems; Rewards

and scorecards; Employee networks/affinity groups;

Benefits packages (flexi time, maternity/paternity

leave/floating holidays).

Hubbard (2004) - [Leadership performance Index?] .

The percentage of diversity objectives that are aligned

with key strategic business objectives, which are tied

to the bonus and compensation system

9 In your opinion which leadership

behaviours demonstrate to

employees that the company

embraces diversity?

Hubbard (2004) Diversity leadership commitment

index: Personal leadership accountability Kandola

(2009) - walking the talk

Maltbia & Power (2009). Action speaks louder than

words, and leaders acting. Be present at the front

lines to identify opportunities

Maltbia & Power (2009) High-performing

organisations align systems to reinforce strategic

focus; diversity must be treated in the same manner.

...clear systems alignment and line-of-sight

accountability, no strategy, no matter how brilliant will

succeed. As such it is imperative that you identify a

set of potential strategic priorities related to diversity

with related success indicators and measures and put

in place an accountability system to track and

generate results.

323

10 How do you as a leader engage

with change and learning

initiatives?

Hubbard (2004) The degree of personal involvement

and participation in diversity actions that drive

organisational performance objectives and/or create a

high-performing, inclusive climate.

11 Where does diversity sit as a

priority relative to other

competing business priorities?

Cox & Blake (1991) - is this item prominently featured

in the corporate strategy and consistently made a part

of senior level staff meetings.

Hubbard (2004) alignment with strategy - alignment of

the diversity measurement system with the

organisation’s strategy implementation process. All

measures on the diversity scorecard serve as

translations of the organisations strategy and link

them to the diversity strategy

12 What can the organisation learn

by embracing a culture of

diversity?

Leimbach and Muller (2001) in their global

competency model identified commitment to learning

as a key outcome of diversity

Lobel (1991) say that a final challenge for diversity is

sustaining a commitment to continuous improvement

in intercultural learning.

Nieto and Quevedo (2005) cite improved innovation

capability.

Lockwood (2005) says that diversity encourages

broader perspectives

Cox (1991) believes that increasing cultural

heterogeneity leads to “greater creativity and

innovation and more successful marketing to different

types of customers”.

Glick (2007) believes that it is necessary to ‘diversify

the brain pool’ by building systems that incentivize

cross-departmental, cross-organizational

collaboration as well as, bringing in your stakeholders

to contribute to the process

324

13 How does a leader become

culturally adaptable? What

challenges does a leader face

operating across cultures

Black & Porter, (1991); Boyacigiller, (1990) - global

firms need to better exploit the benefits of cultural

synergies by adeptly managing the transfer of

activities and knowledge between division to

maximise firm efficiencies.

Adler, (1997) - As mangers acknowledge cultural

diversity and become sensitive to national differences,

they can avoid the pitfalls of cultural ignorance ().

14 In your opinion does the

company have an individualistic

or a collective culture?

Hofstede (1991)

15 How do you balance different

customer needs when competing

at a global level? i.e.

globalisations vs. localisation

tensions.

Allen J. Morrison (2000). The ability to manage

uncertainty, and balance the often-powerful tensions

between globalisation and localisation pressures.

Fons Trompenaars and Charles Hampden-Turner.

2004 - Global Convergence versus Localisation and

Diversity

Prahalad and Doz (1981, 1987) suggested that global

competition required each MNC to continually balance

national responsiveness and global integration

16 Putting aside compliance and

legislation how do you / have

you achieve(d) a diverse

workforce?

Maltbia & Power (2009) – the waves of diversity

17 To the best of your knowledge

what diversity initiatives is the

company currently

implementing?


325

18 How do you integrate diversity

into the workplace? (i.e. best

way of managing diversity). How

do you sensitise the workforce?

Maltbia & Power (2009). ‘opening doors’ (i.e.

representation, workforce and executive parity

focused). The second is ‘opening minds’ (i.e.

organisational culture, diversity training, and other

educational and climate monitoring strategies

including bias-based complaints or legal claims). The

third, ‘opening systems’ (e.g. people processes from

selection, performance management to succession

planning).

DiversityInc.(2012). The most successful diversity-

management practices are those with measurable

results that both increase cultural competence and

deliver a strong result that aligns with the company's

business goals. Those increasingly are focused on

employee-resource groups, also known as affinity

groups or employee networks. These groups are used

for diversity recruiting, diversity retention, employee

engagement and increasing cultural competence as

well as to reach customers/clients/suppliers. Other

diversity best practices include formal, cross-cultural

mentoring programs, diversity training to ensure

cultural competence across the organization, and

talent-development programs that help people realize

their potential.

326

19 Having a diverse workforce can

lead to conflict and frictions

within the firm; e.g. it can

accentuate differences in goals

and values, there can be lack of

cohesion and misunderstandings

amongst key decision makers,

competition for resources and

communication breakdowns. Is

this your experience? If yes,

how do you deal with the

differences? If not, how do you

prevent this from happening?

Miller & Katz (2002) Leaders must also be ready to

recognise and deal with resistance that arises when

making significant and radical change to long-

established procedures and expectations.

Kossek & Zonia (1993) / Smith, (1982); Berg and

Smith, (1990).- These change activities have differing

ramifications for groups, each with interest that may

or may not overlap, thereby heightening intergroup

conflict by creating increased; competition for

resources, and accentuating differences in goals,

values and power

Adler (1991); Boyacigiller (1990); Harris and Moran

(1992), Hendon, Hendon and Herbig (1996) -

attempts to successfully operate multiple business

units in diverse cultural contexts may be frustrated by

conflict and frictions within the firm, lack of cohesion

and misunderstandings among key decision makers,

and communication breakdowns between boundary

spanners (

20 Some say that a diverse

workforce creates an opportunity

for greater creativity and

innovation. Additionally,

members of diverse teams are

more likely to challenge the

status quo. ? Is this the case at

your company?

Shane (1995) - Innovation within the global firm may

be impeded by cultural barriers.

Glick, Huber, Miller, Doty, and Sutcliffe (1990) -

Greater flexibility to respond to environmental

changes because members of diverse teams are

more likely to disagree with each other and find fault

with the status quo (

Welch & Welch (1997) - Toleration of a certain level of

conflict and deviant behaviour might assist in

overcoming undue conformity but, companies may

need to go much further: to welcome and learn from

independent and challenging perspectives within the

organisation so that they can function more effectively

and responsively in diverse environments.

327

21 Some would say that the parent

company can impose their ways

of working unto their

subsidiaries/business units.

Does this happen? If so, how do

you prevent this from

happening?

Bartlett and Ghoshal, (1989) -International companies

base their strategies ‘primarily on transferring and

adapting the parent company’s knowledge or

expertise to foreign markets. The parent retains

considerable influence and control, but less than in a

classic global company; national units can adapt

products and ideas coming from the centre

Johanson and Vahlne (1977, 1990) - The greater the

extent to which corporate headquarters and

subsidiaries differ in their cultural characteristics (a

phenomenon termed “cultural distance”) the more

difficult it becomes to effectively supervise the various

units.

Nohria and Ghoshal (1994) - HQ depends on the

unique knowledge and expertise of subsidiaries yet

“the HQ cannot relinquish all decision rights to the

subsidiaries since the local interests of subsidiaries

may not always be aligned with those of the MNC as

a whole”.

Evans, (1986); Forsgren and Pahlberg, (1991);

Hofstede, (1981); Rosenzweig and Singh, (1991);

Trompenaars, (1993) - The growing body of research

on subsidiary inculcation indicates the difficulties that

multinationals face in attempting to impose parent

company values on their diverse foreign affiliates

22

What management practices or

philosophies have you or the

organisation taken from other

cultures and incorporated into

your operations?


23 In your role as a leader what

issues related to diversity keep

you awake at night?


24 In your role as leader what

issues/practices would you

change or introduce in relation to

diversity?


329

Structured Interview Questionnaire

General

1. Background information: What is your role and geographic responsibilities?

Leadership

2. What would you say are the 3 characteristics required to lead a global company?

3. In your opinion what would you say are the key criteria to measure global leadership

performance?

4. What values and beliefs guide your role as a leader?

Diversity

5. What is your understanding of diversity?

6. What values and beliefs guide your role as a leader in relation to diversity?

7. How are your values and beliefs challenged when operating across cultures?

8. Do you have performance objectives tied to diversity? Are you rewarded for your

efforts to embrace diversity?

9. In your opinion what is the influence of nationality on leadership values and beliefs?

10. In your opinion are there any aspects of leadership that are culture-specific?

11. In your opinion what are leadership behaviours that demonstrate to employees that

the company embraces diversity?

12. How does the leadership team model those behaviours globally?

13. Where does diversity sit as a priority relative to other competing business priorities?

14. What can be learnt by embracing a culture of diversity?

330

15. What kinds of challenges do leaders face operating across cultures? How do you

deal with these cross-cultural issues? And how do you become culturally adaptable?

Is it important to understand the history/politics and social context of the cultures that

you operate in?

Considering Organisational factors

16. In your opinion does the company have a individualistic or a collective culture?

17. Is there an effort to understand which aspects of your company’s strategy can be

standardised and executed globally and which must be sharply tuned to local needs?

18. How do you as a leader balance the tensions between globalisation and localisation

pressures in relation to diversity?

19. To the best of your knowledge what diversity initiatives is the company currently

implementing globally?

20. How do decide upon which elements of diversity to focus on?

21. What strategic interventions are in place to support the differences of a diverse

workforce? (i.e. policies and practices).

22. How do you encourage your teams to buy-into and participate in diversity initiatives?

23. How do you integrate diversity into the workplace? (i.e. best way of managing

diversity).

24. Do you think that diversity can accentuate differences in goals and values? Is this

the case at your company? if so how do you deal with it? If not, how do you prevent

this from happening?

25. Implementing a diversity agenda could lead to conflict and frictions within the firm –

e.g. lack of cohesion and misunderstandings amongst key decision makers,

competition for resources and communication breakdowns. Is this your experience?

If yes, how do you deal with it? If not, how do you prevent this from happening?

331

26. Changing organisations toward the multicultural model means changing the way in

which power and rewards are currently distributed in organisations across gender,

racial and ethnic groups. Would you agree with this statement? If, yes how do you

change? If no, why do you not agree?

27. Some say that a diverse workforce creates an opportunity for greater creativity and

innovation. Do you agree with this? Is this the case at your company?

28. Some have argued that diversity may afford greater flexibility to respond to

environmental changes because member of diverse teams are more likely to

challenge the status quo. Do you agree with this? Is this the case at your company?

29. Some would say that Western hemisphere companies can impose western methods

unto non-western cultures. Does this happen? If so, how do you prevent this from

happening?

30. What management practices or philosophies have you or the organisation taken from

other cultures and incorporated into your operations?

Conclusion

31. In your role as a leader what issues related to cultural diversity keep you awake at

night?

32. In your role as leader what issues/practices would you change in relation to diversity?

332

Appendix 3 – Questionnaire 6 / Case Study 6

©SYLVANA STOREY

The Impact of Diversity on global leadership team

Performance. Questionnaire

2010

Novartis V1

The questionnaire will explore various aspects of diversity in relation to leadership performance

so as to understand whether diversity is a leadership necessity. This will include: structural

diversity in relation to. workforce composition/hygiene dimensions; Cognitive diversity relating to

perspectives, experiences and ‘ways of working’ and, behavioural diversity - values, beliefs and

attitude.

333

Structured Interview Questionnaire

General

1. Background information: What is your role and geographic

responsibilities?

Leadership

2. What would you say are the 3 characteristics required to lead a

global company?

3. In your opinion what would you say is the most effective

measurement of global leadership performance?

4. What values and beliefs guide you in your role as a leader?

5. In your opinion what is the influence of nationality/culture on

leadership behaviour?

334

Diversity

6. What is your understanding of diversity?

7. How are your values and beliefs challenged when operating in a

diverse environment?

8. Do you have performance objectives (KPIs) tied to diversity? Are you

rewarded for your efforts to embrace diversity?

9. In your opinion which leadership behaviours demonstrate to

employees that the company embraces diversity?

10. How do you as a leader engage with change and learning

initiatives?

11. Where does diversity sit as a priority relative to other

competing business priorities?

335

12. What can the organisation learn by embracing a culture of

diversity?

13. How does a leader become culturally adaptable? What

challenges does a leader face operating across cultures?

Considering Organisational factors

14. In your opinion does the company have an individualistic or a

collective culture?

15. How do you balance different customer needs when competing

at a global level? i.e. globalisations vs. localisation tensions.

16. Putting aside compliance and legislation how do you / have you

achieve(d) a diverse workforce?

17. To the best of your knowledge what diversity initiatives is the

company currently implementing?

336

18. How do you integrate diversity into the workplace? (i.e. best

way of managing diversity). How do you sensitise the workforce?

19. Having a diverse workforce can lead to conflict and frictions

within the firm; e.g. it can accentuate differences in goals and values,

there can be lack of cohesion and misunderstandings amongst key

decision makers, competition for resources and communication

breakdowns. Is this your experience? If yes, how do you deal with

the differences? If not, how do you prevent this from happening?

20. Some say that a diverse workforce creates an opportunity for

greater creativity and innovation. Additionally, members of diverse

teams are more likely to challenge the status quo. ? Is this the case at

your company?

21. Some would say that the parent company can impose their

ways of working unto their subsidiaries/business units. Does this

happen? If so, how do you prevent this from happening?

22. What management practices or philosophies have you or the

organisation taken from other cultures and incorporated into your

operations?

337

Conclusion

23. In your role as a leader what issues related to diversity keep

you awake at night?

24. In your role as leader what issues/practices would you change

or introduce in relation to diversity?

338

Appendix 4 – Country differences

The following differences in country cultures were identified by interviewees:

Australia / Australians

Direct / insensitive / harsh (sledgehammer vs. nutcracker)

China / Chinese

Cautious

Long-term perspective

Cannot lose face

Harmonious

Denmark / Danish

The leader makes the decision and then others do what they want to anyhow

Confident but the leader has to take the decision and

Do not like discussions

Strict work/life balance

Respectful

Chaotic

Not hierarchical

Pragmatic

Finland / Finnish

Direct

Open

Seeks opinion

Takes decisions quickly

Too speedy

Action orientated

Leader makes decision and people follow

339

France / French

Intellectual

Creative

Reflective

Direct

Fake consensus

Germany / Germans

Structured

Pragmatic

Japan / Japanese

Employee motivation needs to be encouraged

Netherlands / Dutch

Collective Direct

Norway / Norwegians

Creative

Not structured

Risk takers

Portugal / Portuguese

Emotional

Relationship orientated

Creative

Organised

Sweden / Swedish

Discussive

Compromise

Consensus driven

Hierarchical

Leader is often challenged

Collective

340

Scandinavian

Egalitarian

South Europeans

Hierarchical and follows orders

Warm and open

Flexible

See things in the medium-term

The relationship is more important than the task. Save face / be honourable / create

respect for relationship

things done at the last minute – ‘just in time’ / lots of time in meetings which can be

frustrating

Traditional / hierarchical

Slovakian

They order – no discussion

Swiss

Not bold – humble and modest

Genuinely want to do the right thing

Precise / fact based/ get things done so efficient, effective, functional

Lack social skills sometimes but when you reach out to them they respond. They

don’t smile often – straight faced.

United Kingdom

Creative / bottom-up empowered delivery

Appropriate risk takers

Polite with good social skills

Do not like conflict so manage conflict away from the table

Prepare / Plan / Act

Direct

Leader is not often questioned

Subtle / not direct

Structured and factual

Decision focused

Action orientated

341

United States of America

Likes structure

Factual

Authority is important

Process driven

Open - great communication style / motivating / inspirational / charismatic

Visionary / strategic

You can’t believe what you hear and a lack of integrity between what they say and feel

and do.

USA centric

342

Appendix 5 - Case Study Protocol

The case study protocol included:

An overview of the case study project

Project objectives and auspices

Case study issues

Relevant readings about the topic being investigated

Field procedures

Presentation of credentials

Access to the case study “sites”

Language pertaining to the protection of human subjects

Sources of data

Procedural reminders

Case study questions

Specific questions that the case study investigator must keep in mind in collecting

data

“Table shells” for specific arrays of data

The potential sources of information for answering each question

A guide for the case study report

Outline

Format for the data

Use and presentation of other documentation

Bibliographical information

343

Appendix 6 – Example of content analysis for a single case study

Graphical presentation of data

Sylvana StoreyJune 2010

2

Bars represent the number of times a theme was said.*

5

4

3

2

1

7

6

8

9

10

* This means that one person may have given a response that included and was captured under different themes.

L'OREAL

Characteristics required to lead a global company

• Vision

• Capacity to bring different people together and understand others

• Open-minded / open to feed-back from others

• Intercultural capacities

• Agility / adaptability / flexibility

• Courageous / risk-taking / innovator / entrepreneur

• Respect

• Ability to have others achieve your goals

• Emotional intelligence

• Curious

• Diversified experience

• Strategic thinking

• Ability to cope with complexity

• Charisma

• Understand the core values of the Group

3

4

3

2

1

6

3

3

3

2

2

2

2

1

1

1

L'OREAL

344

Appendix 7 – Example of content analysis for a question across the six case studies

Q2: Characteristics to lead a Global Company Company Company # Open Code # of Responses Concepts

Mahindra 1

Ability to deal with diversity and cultures/global mindset 11 Relationship with global stakeholders

Mahindra 1 Having a clear vision 9 Vision

Mahindra 1 Ensuring right team is in place 5 People Leadership

Mahindra 1 Being customer-centric 4 Customer-Centric

Mahindra 1 Knowledge of context and corresponding competencies 4 Cross-cultural competences

Mahindra 1 Effective communications 3 Communications

Mahindra 1 Ability to handle scale and complexity 2 Business Competencies

Mahindra 1 Put in place and trust local teams to deliver 2 People Leadership

Mahindra 1 Good execution skills 2 Business Competencies

Mahindra 1 Ability to innovate 1 Business Competencies

Mahindra 1 Ability to adapt 1 Business Competencies

Mahindra 1 Ability to influence 1 Business Competencies

Mahindra 1 Ability to take risks 1 Business Competencies

Mahindra 1 Ability to take advantage of opportunities 1 Business Competencies

Mahindra 1 Ability to build relationships 1 Relationship with global stakeholders

Anglo Plat 2

Ability to link up with diverse stakeholders and through communication inspire others 5 Relationship with global stakeholders

Anglo Plat 2

Knowledge and experience of operating in a global setting 4 Cross-cultural competences

Anglo Plat 2

Ability to adapt your style to suit different environments 2 Cross-cultural competences

Anglo Plat 2 Clear vision 2 Vision

345

Anglo Plat 2 People skills 2 People Leadership

Anglo Plat 2 Understanding of the business 2 Business Competencies

Anglo Plat 2 Understand cultural and geographical differences 1 Cross-cultural competences

Anglo Plat 2 Able to manage complexity 1 Business Competencies

Anglo Plat 2 High level of energy 1 Behavioural characteristcs

Anglo Plat 2 Understand history and culture of company 1 Cross-cultural competences

Anglo Plat 2 Formal qualifications 1 Education

Anglo Plat 2 Visible leadership 1 People Leadership

Anglo Plat 2 Inclusive leadership 1 People Leadership

Albaraka 3

Excellent management, teambuilding and valuing of employees 5 People Leadership

Albaraka 3 Vision 4 Vision

Albaraka 3

Ability to gather and analyse information for decision making and communicate 3 Business Competencies

Albaraka 3 Strong educational background 3 Education

Albaraka 3 Open-minded 3 Cross-cultural competences

Albaraka 3 Experienced 2 Business Competencies

Albaraka 3 Interpersonal skills with regard to change management 2 Business Competencies

Albaraka 3 Knowledgeable 2 Business Competencies

Albaraka 3 Multi-cultural management skills 2 Cross-cultural competences

Albaraka 3 Capability to generate resources 1 Business Competencies

Albaraka 3 Patience 1 Behavioural characteristcs

Albaraka 3 Sociable 1 Behavioural characteristcs

Albaraka 3 PR Skills 1 Business Competencies

Skanska 4 Vision 7 Vision

Skanska 4 People leadership 7 People Leadership

Skanska 4 Open-minded / adaptability to different cultures 7 Cross-cultural competences

Skanska 4 Strategic 5 Business Competencies

Skanska 4 Engaging and building relationships with stakeholders 3 Relationship with global stakeholders

346

Skanska 4 Ability to have others achieve your goals 2 People Leadership

Skanska 4 Language skills 1 Business Competencies

Skanska 4 Emotional intelligence 1 Business Competencies

Skanska 4 Good planner 1 Business Competencies

Skanska 4 Determined & courageous 1 Behavioural characteristcs

Skanska 4 Client orientated 1 Customer-Centric

Skanska 4 Strong management skills 1 People Leadership

Skanska 4 Ability to build a good team 1 People Leadership

L'Oreal 5 Vision 6 Vision

L'Oreal 5

Capacity to bring different people together and understand others 4 Relationship with global stakeholders

L'Oreal 5 Open-minded / open to feed-back from others 3 Cross-cultural competences

L'Oreal 5 Intercultural capacities 3 Cross-cultural competences

L'Oreal 5 Agility / adaptability / flexibility 3 Business Competencies

L'Oreal 5 Courageous / risk-taking / innovator / entrepreneur 3 Business Competencies

L'Oreal 5 Respect 2 Cross-cultural competences

L'Oreal 5 Ability to have others achieve your goals 2 People Leadership

L'Oreal 5 Emotional intelligence 2 Business Competencies

L'Oreal 5 Curious 2 Behavioural characteristcs

L'Oreal 5 Diversified experience 2 Cross-cultural competences

L'Oreal 5 Strategic thinking 1 Business Competencies

L'Oreal 5 Ability to cope with complexity 1 Business Competencies

L'Oreal 5 Charisma 1 Behavioural characteristcs

L'Oreal 5 Understand the core values of the Group 1 Business Competencies

Novartis 6

People leadership – empathy, connecting, developing, coaching, mentoring 7 People Leadership

Novartis 6 Vision / strategic intent 4 Vision

Novartis 6 Cross-cultural competences 3 Cross-cultural competences

Novartis 6 Technical competence 2 Business Competencies

347

Novartis 6 Clarity of communication style across boundaries 2 Communications

Novartis 6 Translating global strategy into local context 2 Cross-cultural competences

Novartis 6 Managing complexity (physical & behavioural) 1 Business Competencies

Novartis 6 Authentic 1 Behavioural characteristcs

Novartis 6 Charismatic 1 Behavioural characteristcs

Novartis 6 Innovation / research focused 1 Business Competencies

Q2: Characteristics to lead a Global Company – Graphical presentation of responses

13 5

3 5 4

3 8

2

4

5 2

14 10

2 4 6

9 4 3

7

12

9 4

6 5 2

7

4

9 7 1

11

3 7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Busin

ess C

om

pete

ncie

s

Cro

ss-c

ultura

l com

pete

nces

oth

er

People

Leaders

hip

Rela

tionship

with g

lobal

sta

kehold

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Vis

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(bla

nk)

Albaraka Anglo Plat L'Oreal Mahindra Novartis Skanska

348

Appendix 8 – GLIDE – Global Leadership Index for Diversity Characteristic Dimensions

Cognitive Social Behavioural Business Strategic Global

Commercial Acumen

Ability to assimilate and act on large amounts of complex, ambiguous, insufficient and unreliable information

Ability to dealing with paradox

Ability to hold competing views at the same time

Pattern recognition

Integrative thinking – holding two ideas at once

Ability to diffuse tension

Cultivating collaborative relationships

View problems solving as a social process involving consensus and interpersonal influence

Demonstrate agility

Ability to influence

Ability to span boundaries

Institutional work to deal with uncertainty; Integrative work to deal with complexity

Ability to lead large scale change and transformation efforts

Ability to take risks

Demonstrate entrepreneurship behaviours

Ability to disrupt ways of working, systems & processes

Clear strategy

Shifting organisational culture

Visionary

Pursues innovation

Appreciation of interdependence

Ethical challenges

Tailoring global strategies to meet local needs

Integration into the environment

Building partnerships and alliances

Collaborating across borders

Understanding of country politics and culture

Characteristic Dimensions


Rigour Robust problem solving

Robust decision making

Ability to see the ‘big picture’

Ability to communicate clearly both non-verbally and verbally

Ability to engage with diverse stakeholder groups

Consistently produce strong financial results

Stable share price

Profitability

Focus on innovation

Allocation of resources

Identify market and revenue growth

Long term perspective

Focus on sustainable solutions

Policies in place that are adaptable to context

Geographical presence

349



Connecting

Ability to tap into intuition and other sensory resources

Ability to build relationships

Empathy / caring / compassion

Adaptive leadership

Servant leadership

Demonstrate empathy and caring

Demonstrate sensitivity

Capability of engaging employees

Authentic leadership

Building a learning environment

Ability to mentor/coach so as to develop their own potential and that of others

Ability to provide direction and vision

Democratisation of the workplace, participation, demise of positional power

Capability to build a community

Ability to be inclusive

Ability to work with diversity across cultures

Ability to engage local talent



Value Based Professional

Capability to reflect

Ability to embrace duality

Demonstrate both intellectual and psychological capital

Ability to follow their conscience and to stand firm to their personal principals

Demonstrate care

Ability have a dialogue

Emotional integration – forge a common identity and common feeling of membership, i.e. moving from transactional to relational

Open to forming emotional bonds with others

Openness to change

Demonstrate a high level of self-awareness

Self-driven / highly motivated to achieve

Acts with professional integrity and honesty

Demonstrates congruence between what they say and what they do

Demonstrate commercial savvy

Politically astute

Culturally astute

Committed to developing employees

Has a long-term orientation

Committed to growing the business

Identifying and connecting networks

Ability to immerse into a different cultural environment

Demonstrate a global mind-set

Works as an equal with persons from diverse backgrounds.

Instilling a sense of community

Willingness to analyse their own “cultural baggage

350



Cross-Cultural

Demonstrate relational characteristics. i.e. tolerance for ambiguity, behavioural flexibility, non-judgmentalism, low ethnocentrism

Demonstrating high motivation: i.e. interest in overseas experience, interest in the specific host-country culture, and willingness to acquire new patterns of behaviour and attitudes

Global mindset - transnational mentality to perceive, analyse and decode situations

Communicate cross-culturally in an effective manner

Establishing personal connections readily across cultural boundaries

Acknowledging differences and finding points of commonality

Ability to influence across national and cultural boundaries

Role modelling inclusive behaviours

Understand their own cultural values and assumptions

Demonstrating fairness and transparency

Displaying cultural empathy

Ability of individuals to step out of their comfort zone

Behaves in an appropriate manner in other countries

Putting in place cross-function and cross-cultural process

Putting in place consistent operational practices

Ability to deal with and/or diffuse conflict in a collaborative mode

Accurately profiles the organisational and national culture of others so as avoids cultural mistakes

Sustained commitment to continuous improvement in intercultural learning

Foster cross collaborative ways of working

Ensuring that the organisation is culturally adaptable and able to operate competently across borders

Tapping into divergence and convergence

Ability to build new sources of value that create prosperity, alleviate poverty, and improve well-being

Manage their culture and the culture of others

Manages skilfully the foreign deployment cycle, leads and participates effectively in multicultural teams

Balancing individualistic vs. collective ways of being and working

Balancing HQ policies with local context so that strategy is tailored appropriately

Organisation is flexible so as to adapt accordingly to environmental changes

Being a ‘boundary spanner’ – advocating the best solution for parties who have differing opinions.

351

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