Essay: Developing Global Leadership: A review of barriers and adjustments for international expansion David Burkus Oral Roberts University, City and Country, USA Global expansion brings with it many new challenges and opportunities for any organization. This article outlines four barriers to global expansion (language, regulation, culture, and competition) and provides leaders with organizational adjustments: organizations must develop executives with a global mindset and cultural sensitivity; leaders must decide on the level of involvement and decentralize their structure to empower local managers. These adjustments will better prepare an organization for going global. It’s inevitable. Just as a growing hermit crab will eventually look for a new shell to grow into, as organizations grow, many leaders will eventually look to other countries or continents to expand into. However, often the method that brought success at home is not the same route that will ensure success abroad. Fortunately, there’s help for leaders looking to help their organizations go global. This article will outline common barriers to global expansion and suggest organizational adjustments leaders will need to make. Leaders will need to develop an understanding of these barriers and adjustments in order to know what to expect when they’re expanding. Organizations expanding into new countries will likely find that “business as usual” will not operate well in the new culture (McCall & Hollenbeck, 2002). The cultural differences among locals will create several barriers that must be overcome for a successful expansion: Language. McCall & Hollenbeck’s (2002) research on global executives found that learning the language was often the largest barrier to working across cultures. Though English is the unofficial language of international business, critical information can be lost in translation. Similarly, negotiators who do not speak the local language can find themselves at a disadvantage. Regulation. Differences in labor and consumer regulations can make doing business more difficult in foreign countries (Black, Morrison, & Gregersen, 1999). For instance, emission regulations for computer models are stricter in Europe than the United States; as a result, product lines may have to be customized. Awareness of regulatory standards is vital in order to remain competitive with local firms. Culture. The cultural norms of interaction affect the way business transactions are made, even if all parties interact in the same language. In the United States, many executives focus on doing business first and letting personal relationships build as the business relationship does (Black, Morrison, & Gregersen, 1999). In many cultures, this order is reversed. Knowledge of this and other cultural differences can make interactions with local executives significantly less complicated. Competitors. As companies enter new markets, they inevitably meet local competitors. These competitors have knowledge of local markets that foreign companies may not. For example, McDonald’s spent 13 months trying to sell beef hamburgers in India before an understanding of local beliefs convinced them to use lamb (Rosen, Digh, Singer & Philips, 2000). Partnering with local competitors or conducting extensive competitive analysis is vital for gaining this market knowledge. These four barriers are not exhaustive, just common. When crossing cultures, organizational leaders can expect to encounter barriers similar to the ones listed above and, in some cases, drastically different ones. Whatever barriers these leaders face, their first step is to prepare. Organizations increase their chances of successful expansion by adjusting the way they operate. Several adjustments may need to be made to prepare an executive or organization for going global: Develop a global mindset. Executives preparing for expansion must develop a mindset that is open and aware of cultural diversity yet can synthesize across this diversity (Gupta & Givindarajan, 2002). Organizational leaders must be able to synthesize their companies global strategy with the needs of the local organization and local market. International Management Review Vol. 8 No. 2 2012 84 Develop sensitivity to cultural differences. Understanding how business is done within the local culture is vital to getting business done. The ability to perceive and leverage the differences between familiar and foreign cultures is called cultural literacy and is an important tool for competitive advantage (Rosen, Digh, Singer, & Philips, 2000). Decentralize. The executives with the best understanding of local cultures are the ones who are native to that culture. Organizations may have to change their philosophy of management in order to empower these executives to make decisions on the local level for the good of the global organization (Rosen, Digh, Singer, & Philips, 2000). Decide on the level of involvement. Before making any entry into a foreign market, organizational leaders must first decide how involved they anticipate being. Galbraith (2000) outlines five levels of entry companies can make into new markets: exportation, joint venture, foreign operation, multidimensional network, and transnational operation. Exactly what level of involvement is desired must be accounted for in a strategic plan. These adjustments must be made during the process of preparing the organization and the selected executives for expansion into the new culture. Global expansion brings with it many new challenges and opportunities for any organization. Organizational leaders will likely encounter many barriers to entering the new culture, including language, regulation, cultural differences, and new competitors. In order to prepare for these new hurdles, leaders can prepare by making several adjustments to themselves and their organization. Organizations should develop executives with a global mindset and cultural sensitivity. Leaders need to decide on the level of involvement and decentralize their structure to empower local managers. Regardless of how these adjustments are made, organizations will find they must be in order to break from business as usual and successfully go global.

References Black, J. S., Morrison, A., & Gregersen, H. (1999). Global explorers: The next generation of leaders. New York: Routledge. Galbraith, J. R. (2000). Designing the global corporation. San Francisco: Jossey –Bass. Gupta, A.K., & Govindarajan, V. (2002). Cultivating a global mindset. Academy of Management Executive, 16(1), 116-126. McCall, M., & Hollenbeck, G. (2002). Developing global executives: The lessons of international experience. Boston: Harvard Business School Press. Rosen, R., Digh, P., Singer, M., & Philips, C. (2000). Global literacies: Lessons on business leadership and national cultures. New York: Simon and Schuster.