How to find a great international leader The case of Swedish managers working in Singapore

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Faculty of Education and Economic Studies

Department of Business and Economic Studies

How to find a great international leader

The case of Swedish managers working

in Singapore

Charlotte Tham

Second Cycle

15 Credits

Supervisor: Maria Malama

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ACKNOWLEDGEMENT

I owe my deepest gratitude to my supervisor Maria Malama, whose encourage-ment, guidance and feedback have been of great importance for the development of my thesis.

I would also like to show my gratitude to Helena Tronner and Christina Harrington at Edward Lynx for helping me to understand and evaluate the Hogan Personality Inventory test.

Lastly, I offer my regards to Jay Simpson who supported me in any respect during the completion of the project.

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ABSTRACT

Title: How to find a great international leader – The case of Swedish Managers

working in Singapore

Level: Second Cycle: 15 Credit: Master Thesis in Business Administration Author: Charlotte Tham

Supervisor: Maria Malama Examiner: Akmal Hyder Date: June 2011

Aim: I’m interested in finding a way to make successful international recruitments.

To do so I have worked with three research questions:

 What distinguish an international leader from a domestic leader?  How do you recruit a successful international leader?

 Which personal qualities make an international leader successful?

Method:

 I have used a personal test (Hogan Personality Inventory) to find which personal qualities the manager has.

 Approx. 10 subordinates to each of the managers have answered a survey, in order to find how successful they find the managers to be.

 The five managers have also been interviewed twice. The first time to hear their opinion of the international leadership. The second time to follow up the result from the personal test and the survey.

Result & Conclusions: The four main results of the study are:

 Handling cultural differences makes the international leader special.  Following a structured procedure is essential when recruiting a successful

international leader.

 Qualities to look for are high interpersonal skills, strong sense of self, high flexibility, and strong interest in learning new things.

 Leaders with strong task-orientation and love for details de-motivate their subordinates.

Suggestions for future research: The study could be done on a larger sample, to

get a better statistical material. It could also be done on other nationalities, or on women to see how these factors affect the result.

Contribution of the thesis: The study shows that criteria like, high interpersonal

skills and flexibility have to be searched for and a structured procedure has to be followed, when recruiting international leaders. The study can help multi-national companies make better recruitments and therefore save money and time.

Key words: International Leaders, Cross-Cultural Differences, Personal Skills,

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Table of Figures and Diagrams

FIGURE 1 THE THREE ASPECTS OF MENTAL PROGRAMMING 14

FIGURE 2 HOW TO RECRUIT – A SYSTEMATIC AND FORMAL PROCEDURE 20 FIGURE 3 SKILLS AND ABILITIES OF AN INTERNATIONAL MANAGER 26

FIGURE 4 H-TEST 33 FIGURE 5 STRUCTURE OF METHOD CHAPTER 37

FIGURE 6 QUESTIONNAIRE CHART 41

FIGURE 7 SCATTER DIAGRAM, PERFECT POSITIVE RELATIONSHIP 45 FIGURE 8 HPI RESULTS 50

FIGURE 9 COMPILATION OF CULTURE DIFFERENCES 53

FIGURE 10 COMPILATION OF CROSS CULTURE THEORIES 55

FIGURE 11 EMPIRICAL RECRUITMENT PROCEDURE 57 FIGURE 12 SURVEY RESULTS 59

FIGURE 13 H-TEST RESULT 60

FIGURE 14 OUTCOME PEARSON’S R 61 FIGURE 15 SCATTER DIAGRAM – INTERPERSONAL SKILLS / TOTAL 62

FIGURE 16 SCATTER DIAGRAM – SOCIABILITY – TOTAL 63

FIGURE 17 SCATTER DIAGRAM – LINGUSTIC ABILITY – TOTAL 63 FIGURE 18 SCATTER DIAGRAM - AMBITION – TOTAL 64

Appendices

APPENDIX 1 TEST OF SURVEY 79 APPENDIX 2 THE SURVEY 80

APPENDIX 3 THE INTERVIEW GUIDE 81 APPENDIX 4 THE MANAGERS SURVEY RESULTS 82

APPENDIX 5 THE MANAGERS HPI RESULTS 87

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1 Introduction

1.1 Background

In the old days an international manager was synonymous with the expatriated manager. Today the international manager lives in several countries, is multilingual and multifaceted during his or her career. Fast adaption to the new country and culture is essential. The manager operates across national borders (Schneider & Barsoux, 2003).

More and more managers and technical specialists move around the world, as their companies get more and more involved in the global economy. International

managers are important to the success of multi-national companies (MNCs), as they contribute to the global competencies within the company. They also often hold critical positions in the host country (Joint Venture, Subsidiary Management, New Market Development, Technology Transfer, etc.) It is therefore of great importance that the international manager succeed, as it might be detrimental to the MNC’s future in the host country (Caligiuri, 2000).

Researchers have found that recruiting international managers is hard and that the failure-rate among international managers is high. For example, (Zander, 2006) found that one out of ten recruitments of an international manager are considered successful and Hogan & Goodson, (1990, cited in Pan & Qiao, 2010) find that 40 % of expatriate managers fail with their assignment. The high rates of failure not only cost a lot of money but also slow down the company’s process of increasing their global presence, cooperating with partners and increase their market shares.

For Holopainen & Björkman (2005) a successful manager perform well and complete his or her assignment. In this study a successful manager is the one that score high in the survey answered by their employees and the one having most matching

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At least 40 % of the international managers fail, as they don’t understand the cultural differences of the foreign country (Tung, 1981 cited in Ralston et al.,1993). The biggest challenge when working overseas is being able to handle the cultural

dimension (Hölcke & Lövnord, 2011). Misunderstandings between cultures exist and if business people are not alert to this, the most promising international business deal can disintegrate (Gesteland, 2008). Tung (1982, cited in Holopainen & Björkman, 2005) finds that poor adjustment to the host country will have a large impact on the performance and the likeliness of completion of the assignment.

Theory finds that companies not take the cultural difference dimension into

consideration when recruiting international managers. And companies therefore end up recruiting domestic and international managers in the same way, which is wrong. The international manager will, due to cultural differences, face different challenges than the domestic Swedish manager. Theory finds that the international manager therefore shall hold another set of personal competencies than the domestic Swedish manager. Due to this, I will try to explain the different work environment that international managers work within, in order to increase the recruiting company’s knowledge of cultural differences and how to handle them.

Many researchers have studied which personal qualities that affect the performance of the international manager, but still few companies take this into consideration when recruiting international managers. Tung (1998) finds that many companies still mainly focus on technical skills that, while important, are less vital in an overseas context. Harris and Brewster (1999, cited in Holopainen & Björkman, 2005) find that companies still recruit international managers based on technical competencies and previous track record.

The research, trying to find which qualities that have an impact on the performance, is quite immense. For example, Caligiuri (2000) found that extroversion and

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(2005) find that stress-tolerance and the communicational ability are the most important competencies.

Not only the personal competencies and characters will have an impact on

international managers performance. For example other individual related factors (like marital status, gender), organizational factors (like role conflict and training) and environmental factors (cultural distance between the two cultures) will also have an impact on the manager. (Holopainen & Björkman, 2005) In this study focus will only be on the personal competencies.

The personal competencies of all five managers taking part in the study have been categorized and measured by a personal test. The Hogan Personality Indicator has been chosen. Caligiuri (2005) have used the same personal test in her study. Carroll et al. (1999) find that companies do not use a structured procedure when recruiting both domestic and international managers. It is likely that much recruitment is carried out too quickly and by using the recruiting manager’s network. By doing so companies will miss suitable candidates and increase the likeliness of poor

recruitments.

I have during the last two years lived in Singapore and have therefore faced many cultural differences first hand. I have been thrilled and confused by them. I have seen people handling these differences in different ways and with various results. In order to understand who is best suited to handling cultural differences and how to be able to find this person when recruiting, I have constructed this thesis.

1.2 Problem

The term international manager is widely used. But what does it actually mean? And what separates an international from a domestic manager?

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greater or lesser, even though every culture is different from another (Hofstede, 2008).

It is hard to make good international recruitments. A failure rate of 30 % within US multinationals comes from difficulties in adapting to the new culture. Failed

recruitments are estimated to cost US companies 2 billion USD a year (Schneider & Barsoux, 2003).

In International Human Resource Management many success factors are being discussed and success is essential given the high cost of recruitment. The damage caused by an unsuccessful manager can be severe and highly affect the company (Öhman, 2006).

Personal qualities and skills are important when recruiting an international manager. A common mistake is that recruitment is based on recommendations and not on qualities and skills. For example, a successful international manager needs to have a high level of cultural sensitivity and empathy (Schneider & Barsoux, 2003). To make good recruitments, is it also important to follow a well-structured procedure. In practice only a few companies follow such a procedure (Carroll et al., 1999).

1.3 Aim and Research Questions

The aim of the study is to design a way for companies to make better recruitments, compared to today, when recruiting international managers. The success-ratio can be increased through enhanced knowledge at recruiting companies. They need to better understand the working life and the local culture in the new country. Many companies are not aware of the difference between a domestic and an international manager. This means that recruitment is conducted in the same way. The cost of making poor

recruitments is high for companies and, further, they don’t get what they want out of the manager. Through improvements in recruiting international managers companies can save money and speed up the process of getting global.

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differs between the work environment for the international manager and the domestic manager? How do the cultural differences affect the international manager? I then need to examine the appropriate recruitment procedure in order to increase the number of good recruitments of international managers. Subsequently, I aim to find out which personal qualities make an international manager successful or not. I want to find out what kind of person is most successful when it comes to handling cultural differences? International Human Resource Management Theory states some personal skills. Are the same skills being appreciated in real life? What skills are the

recruitment based on in the five cases this study is based on?

The findings bear significant implications for companies that are recruiting expatriated/international managers. People who want to become an international manager can also use this study to understand what kind of challenges he or she will face.

The study examines the following research questions:

1. What distinguish an international manager from a domestic manager? 2. How do you recruit a successful international manager?

3. Which personal qualities and skills make an international manager successful? I have found no previous study including all three perspectives of the recruiting

procedure. But as mentioned earlier quite a few have tried to find which competencies that are of importance when recruiting a successful manager.

1.4 Delimitations

This work is limited to study:

 Swedish Managers in Singapore. This is done to facilitate the study and to make sure that the result only targets the differences in personal skills and not cultural differences (see chapter 2.1.1 the individual and cultural level).  Five managers and fifty questionnaires, answered by ten subordinates per

manager. The number is set in order to acquire a manageable sample.  There are many theories on the subject. I have chosen those I find most

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1.5 Outline of study

The Study has the following outline:

Chapter 1 Introduction – contains the purpose of the study, the aim and the research

questions. Lastly, the limitations are presented.

Chapter 2 Theoretical Framework – contains a review of the cultural differences

theory, the international manager theory and the recruitment theory.

Chapter 3 Methodology – describes the method used to collect and analyse the data. It

also describes measures taken to increase the quality, reliability and validity of the study.

Chapter 4 Empirical Findings – firstly, the outcome of the personal tests and

questionnaire is presented. Secondly, a presentation of how the managers were recruited and the differences and similarities they find in working in Singapore are presented.

Chapter 5 Analysis – contains the quantitative and qualitative analysis as well as a

concluding analysis.

Chapter 6 Concluding Remarks – includes a conclusion of the study,

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2 Theoretical Framework

In this chapter the theories are presented. I also argue why the theories have been chosen.

The theories that have been chosen provide the best framework to answer the research questions and analyze the outcome of the empirical findings.

 To understand why the cultural differences affect the international manager to

a large extent, I have studied Hofstede & Hofstede (2008), Gesteland (2008) and Trompenaars & Hampden-Turner (1997), whose works present different ways of categorizing cultural differences.

 To be able to recruit a successful international manager the recruiting

company needs to follow a structured procedure. I have studied the example of structured recruiting introduced by Carroll et al. (1999). Zackrisson (2006) has been used to describe the different ways/strategies of recruiting.

 The cross-culture theory helps us understand both International Human

Resource Management and the importance of the stated skills. It will also be used to understand the challenges that confront managers and why they are challenges.

 Schneider & Barsoux’s (2003) theory of International Human Resource

Management (IHRM) has mainly been used when evaluating the managers, as it describes the skills of the international manager.

2.1 Cross culture theory

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To begin, there are two

Iron Rules

of international business

:

1) The seller adapts to the buyer

2) The visitor is expected to observe local customs

The second of these rules highly influences the international manager as he operates in a new culture.

The importance of the adaption to the local culture has been known for long. The Chinese express it with the saying; ”Enter village, follow customs”, mirroring the old saying, “When in Rome, do as the Romans” (Gesteland, 2008). Many researchers find that handling cultural differences is one of the hardest issues when being an

international manager (Hölcke & Lövnord, 2011, and Tung (1981, cited in Ralston et al., 1993).

Gesteland (2008) doesn’t want expatriates to change and become local. You should continue being yourself. But you have to be aware of the local customs, habits and traditions and you have to respect them in order to become a successful international manager. Different nationalities all have unique business behaviours (Ralston et al., 1993).

To be able to make successful international business and to collaborate with people from other cultures I have found that you need to initially be aware that there are differences, subsequently recognize what differences exist and, finally, discover how to communicate with each other.

2.1.1 Why Cultural differences?

The culture that we grow up with affects us highly leading people to react differently to the same situation. To be able to describe why different individuals react in

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shown in the figure, the culture, the individual and the universal aspect (Hofstede, 2008).

Figure 1 – The three aspects of mental programming (Hofstede, 2008)

The term Culture in this context stands for the pattern of thoughts, feelings and behaviour that a human being has. A culture is a collective phenomenon as people living in the same area, often a country, share the same culture. Culture is thought in social contexts. Culture is something you learn after birth and is not inherited

(Hofstede, 2008).

The Universal level of the programming refers to the issues and expressions that are shared by all humankind. The Individual level is unique for every individual and cannot be shared with anybody else. It is formed both by inherited behaviours and through culture (Hofstede, 2008).

2.1.2 Ways of categorizing cultural differences

Cultural differences frustrate people, as they are confusing and seemingly

unpredictable. By classifying and putting these differences into logical patterns the behaviour becomes more logical to us (Gesteland, 2008).

I have studied three different theories, Trompenaars and Hampden-Turner’s (1997) orientations covering how people relate to each other, Hofstede & Hofstede’s (2008) dimensions to explain the cultural differences, and Gesteland’s (2008) findings of

Individual

Culture / Collective

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logical patterns in business behaviours as they, in different ways, categorise and simplify cultural differences.

Orientations showing how people deal with each other

Universalism vs. Particularism

For the Universalist correct and good things can be defined by, for example, laws and regulations and it is always correct to apply these. For the particularist relationships and specific circumstances are far more important. The particularist prioritises friendship and informal networks ahead of the correct way. In Sweden, and most of the protestant countries, universalists are more common than in Singapore and Asia in general, where more particularists are found (Trompenaars and Hampden-Turner, 1997).

Individualism vs. Communitarianism

For the individualist it is important to focus on personal development and needs ahead of the community. For the Communitarianist it is important to be a part of a group and that this group develops well. In Singapore communitarians are more common than in Sweden, where individualists are more common (Trompenaars and Hampden-Turner, 1997).

Specific vs. Diffuse cultures

A specific person separates situations from each other, like business and private life, and like detailed instructions. A diffuse person integrates personal and business life with each other. To be able to do business in a diffuse culture you need to know your partner personally before making business. Sweden is a specific culture and

Singapore is more diffuse (Trompenaars and Hampden-Turner, 1997).

Achievement vs. Ascription cultures

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Hofstede’s dimensions of national cultures

Hofstede has found five dimensions that differentiate cultures from each other. The reasons for these differences are our different cultural heritage, described above.

Power Distance Index

This index describes how people with different status handle each other: whether they can accept that there is a hierarchy and that people are unequal or not. For cultures with a high index it is easier to accept that, for example, the boss has power over their subordinates. Singapore has a much higher index than Sweden.

Uncertainty Avoidance

Uncertainty avoidance describes how a culture handles uncertain situations. It measures to what extent a person becomes stressed by uncertain situations and how they react, like creating rules, to avoid getting into these situations. In cultures with a high level of uncertainty avoidance the need for rules and regulations is high. Both formal and informal rules exist. Cultures with a low uncertainty avoidance, emotions have to be controlled and people have a weak loyalty to employer. Sweden has a higher uncertainty index than Singapore.

Individualism Index

In an individualistic culture focus is on the individual and its development. In the collectivistic culture focus is on the group. It is important to belong to and act as a group. Cultures with a high index are more individualistic than those with a low index. Sweden has a higher index than Singapore.

Masculinity Index

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Long-term vs. Short-term Orientation

Cultures with long-term orientation value future returns higher and have patience when the return takes a long time to materialize. They also have cost focus and informal networks are highly used. Cultures with short-term orientation value immediate returns and economic goals. Singapore is more long-term oriented than Sweden (Hofstede & Hofstede, 2008).

Gesteland

Gesteland has divided many of the world countries into eight different groups. These groups have different behaviours when making business. In order to classify types of business behaviour four types of category have been used. They are: Deal or

Relationship focused; Formal or Informal networks; Monochronic or Polychronic; and Reserved or Expressive.

Deal- or Relationship-focused

Most of the world’s countries are relationship-focused. Sweden is one of the exceptions, as it is deal focused. In relationship-focused countries people prefer conducting business with people they know. Things get done via networks and personal contacts. People like to deal with people they can trust. People from deal-focused countries have no problems contacting strangers and can therefore make “cold calls”. This is not appreciated in relationship-focused countries. It is well advised to arrange an introduction to the person you want to make business with (Gesteland, 2008).

Formal or Informal Cultures

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Monochronic vs. Polychronic

In monochronic cultures punctuality is important, schedules are specified, agendas fixed and meetings are seldom being interrupted. In polychronic countries, is in direct contrast. Less focus is on deadlines and meetings can be interrupted constantly.

Reserved vs. Expressive cultures

Non-verbal communication also affects us. In reserved cultures people are more soft spoken, they feel at ease with periods of silence and are frustrated by people who interrupt. In expressive cultures people like using facial expressions, speaking loud and using gestures when speaking, and they get nervous if there are more than two seconds of silence and have no problem when being interrupted (Gesteland, 2008). It is important to bear in mind the different categories when working in a local culture, as it affects behaviour. Gesteland describes Singapore and Sweden in the following way:

 Singapore

Singapore has been put into the relationship-focused, formal, monochronic and reserved group. The best way to meet new customers and people is through introduction by a third party. Singaporeans don’t like conflicts, which makes them unwilling to answer “no” to a question, instead they answer “yes, but…”, when they mean no. To conclude a deal takes time and you will have to visit the customer several times. But when you have established a

relationship it will probably be long-lasting (Gesteland, 2008).  Sweden

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2.2 Recruitment procedures and strategies

Companies that are, or are trying to become, global normally apply a strategy for their international development. Human Resource Management’s (HRM) mission is to find a procedure that matches that strategy. This strategy shall contain HRM policies and practises (Schneider & Barsoux, 2003). Another way of seeing it is like the HR Director of Honeywell Europe sees it,

“HRM is the local implementation of the strategy”

(Schneider & Barsoux, 2003, p 148).

In other words it is important to realise that policies and practises have to be locally adapted. The cultural effect will result in the same policy having different outcomes in different cultural contexts. For companies that are international or aim to be international, a big challenge is to make HRM international in order to give all cultures the same interpretation of the strategy (Schneider & Barsoux, 2003). Harris & Brewster (1999) found that most recruitment is made on the basis of

recommendations, and some even by chance. By recruiting on these bases the chances for poor recruitment increases. In the cases where the company has a model for international recruitments, they seldom use it. The gap between theory and practise is large.

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Figure 2 – How to recruit, A systematic and formal procedure

When making international recruitments it is important to make a thorough

Preparation

. According to Carroll et al. (1999), the preparation consists of four

different stages, an assessment of whether the vacancy needs to be filled, a job analysis, the production of a job description and an applicant specification. This information forms the profile of demand and the job description.

When recruiting people to international positions it is also important to have in mind the character of the local culture and which qualities are important. For example, senior people, meaning having more grey hairs, are respected in countries with a high Power Distance Index, like Singapore (Hofstede, 2008). Therefore in Singapore it is normally easier for an elder person to make business. This does not match many companies aim to send young, up and coming professionals on international missions (Gesteland, 2008).

Recruitment Strategies Preparations

HRM / IHRM @ the recruiting Company

Profile of Demand & Job

Description

Advertising Recruiting Firms Networking Head-Hunting

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Companies can pick from a wide range of Human Resource Management (HRM)

strategies

when recruiting staff. They have their advantages and their disadvantages.

 Advertising

A job advertisement can be posted in external magazines, journals and on the Internet. To get candidates with good qualities and skills, the profile of demand has to be precise. It is otherwise likely that a large number of people will apply. The process will then be long and time consuming (Zackrisson, 2006).

 Recruiting Firms / Employment agencies

To be successful when using recruiting firms it is good to decide to use one or two to work with. The company and the recruiting firm then establish a relationship with each other. This will make it easier for the recruiting firm to get to know what kind of people the company is looking for. (Cooper et al., 2001). The usage of recruiting firms is often expensive, when compared with in-house work (Richardson, 2000), yet convenient. Recruiting firms are often better in finding the right person as they have good knowledge in recruiting, due to more experience. They also have large databases to use when searching for candidates (Cushaw, 2005).

 Networking and Social Networking

When advertising the company can only hope that the person with the right skills will apply for the job. When using the networking or headhunting strategy the company can employ different means to search for the right person. After finding a potential candidate the company has to persuade them to apply. One disadvantage can then be that the candidate doesn’t want to change employer (Zackrisson, 2006).

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network has to be big enough to contain the candidates. It can also be hard for the recruiter to remain objective. If, for example, a person has recommended the candidate the recruiter likes and highly respects, he will find it harder to evaluate the candidate objectively. A great advantage is though that the recruiter directly or indirectly has a relationship to the candidate (Zackrisson, 2006).

Using social networks become more and more common. Some HR Managers are so thrilled by their result from Social Networking that they consider ending all other forms of recruiting. It is though not sure that social

networking works for all companies. It is of importance to have a clear goal and well-thought recruiting plan (Clus, 2009).

Companies have to be aware of the fact that networking might cause indirect discrimination, as only one or a few kind of people exist within the network (Carroll et al., 1999).

 Headhunting

When using headhunting the company has to begin by deciding on the profile of demand and job description in order to know exactly who it is looking for. The big advantage with head hunting is that the company does not have to hope that the “right” person applies for the job, as they can go hunting themselves for the “right” person. When the company has found the person they are looking for they have to start persuading the person to accept the offer. Head hunting is a very good tool to use when recruiting qualified co-workers (Zackrisson, 2006).

When the company has got its candidates it has to follow a predetermined

selection

procedure

. All selected candidates shall go through the same procedure to be able to

compare the candidates (Carroll et al., 1999).

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is highly compatible with the profile of demand, as the supply is not large enough. Companies have a tendency towards being overly flexible and ultimately recruit a person that does not fully fulfil the profile (Richardson, 2000).

Large international companies such as Shell, HSBC and BP have got assessment centers to select international business managers. Other companies resort to external agencies. The advantage of assessment centers is that they offer specifically-designed tests to assess the qualities and competencies of the candidates (Hurn, 2006).

2.2.1 Poor recruitments

Many companies seem to be unaware of the cost of poor recruitment. This tends to become apparent if employees leave within a few days of starting, if they fail to perform at a satisfactory level or employers have to appear before an employment tribunal to defend their actions (Carroll et al., 1999).

The cost of poor recruitment is high. In a survey made by Öhrling at Pricewaterhouse Coopers in 2006 the average cost for poor recruitment was 700 000 SEK per

recruitment. This cost consists of the lost tempo in the organisation and the cost of recruiting and training. In some cases the recruitment has been so poor that customers have been lost (Öhman, 2006).

The level of poor recruitment can decrease if company follows a formal and well-structured recruitment procedure. A clear goal and a well-thought plan shall be included into this (Clus, 2009). Even though literature exists on how to make good recruitments, little evidence is given that companies actually follow these guidelines (Carroll et al., 1999).

2.3 International Human Resource Management

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It is important to find the right person when recruiting international managers. A failure becomes magnified overseas compared with the home market, as the

international manager represents much more. He or she doesn’t just represent himself or herself, as he or she often “is” the company’s only representative. The manager represents the whole company and in some cases even the home country. A failure can therefore have larger and more profound effects than if it occurred in the home country (Schneider & Barsoux, 2003).

The expatriated manager must be able to handle different dilemmas. A dilemma that many managers find is that they become mediator between two cultures (the home and the local culture) and two parts of the same organisation. Head office directives and demands often conflict with local values. The manager has to pick the battles he/she can win and avoid those he/she cannot win. To be able to handle this situation the manager needs to be able to see the situation from both the head office and the local perspective (Schneider & Barsoux, 2003).

To be successful, the manager has to be able to see strengths and weaknesses with both perspectives and cultures. In other words the manager need to have a

bicultural

perspective.

This means that the manager doesn’t think his own culture is the best.

He is able to see pros and cons with both the home and the local culture (Schneider & Barsoux, 2003).

Hickson and Pugh (2002, cited in Hurn 2006) mentioned two immediate

preconditions for international managers to adapt successfully to other cultures. First, they must want to operate in another culture and second they need to be excited by the challenges involved in the mission. They also have to be prepared to learn at least one foreign language (Hickson and Pugh (2002, cited in Hurn 2006)). The manager has to find the correct balance between the two cultures, as Moran and Reisenberger (1994, cited in Tung 1998) stated, the slogan is no longer, "Think global, act locally,” but

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Making poor recruitments is common. A poor recruitment is when the manager’s achievement is below standard, the manager doesn’t understand the local market and its needs, and cannot handle the different ways of making business abroad. The manager is therefore not acting appropriately (Zander, 2006). Managers not completing their assignment are also seen as a poor recruitment (Caligiuri, 2000). To make successful recruitments you need to find the person with the correct attitude. Attitude is more important than experience. Experience and knowledge can be given during a period of time but a person’s attitude is hard to change (Torrington et al., 1994). The manager also needs to be able to adapt to the local market. Being flexible and sensitive are important competencies, to be able to adapt (Zander, 2006). Zander (2006) states that many companies have an ambition to recruit people with the right attitude, but fail when it comes to the final decisions. In the end finding a person with the right technical skill is safer, easier, and measurable (Tung, 1998). According to Tung (1998) no good model exists to use when recruiting international managers. A US survey made with companies that post people overseas, shows that the main selection criteria is technical expertise (95 %), employee interest in assignment (88 %) and personal flexibility (84 %) (Schneider & Barsoux, 2003).

Schneider & Barsoux (2003) think that a common mistake when recruiting

international managers is that people that work efficiently domestically is often sent abroad and that high-fliers also often are being recruited. Harris and Brewster (1999, cited in Holopainen & Björkman, 2005) find that recruitment is based on previous track record and technical skills. These categories are chosen on conceptual and technical abilities, which Schneider & Barsoux (2003) do not think is the correct ability.

2.3.1. Skills of an International Managers

If technical skill and experience is not the most important when recruiting, what are the abilities needed for an international manager?

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rooted in your personality and are for most people hard to acquire. In the below picture they are summarized. I have decided to use Schneider & Barsoux’s (2003) abilities as they have the widest perspectives of skills that I have found.

Interpersonal Skills Flexibility Linguistic Ability

Motivation Tolerance Patience & Respect

Cultural Empathy Humour Strong Sense of Self

Skills of an International Manager

Figure 3 – Skills & Abilities of an international manager

 Interpersonal skills

The interpersonal skills measure a person’s ability to establish relationships and build trust. A person with good interpersonal skills is people-oriented and good at getting along with colleagues. The person shall also prefer working in a team and try to solve problems through consensus and cooperation.

 Linguistic ability

By learning the local language the manager can more easily get a feeling for what matters to the locals. It is not only a way of communicating with the local people; it has a symbolic value as is shows that the manager has an interest in communicating with the locals.

 Motivation to live abroad

To be able to adapt and enjoy life abroad not only the manager needs to exude cultural curiosity. The whole family needs to have the curiosity. If the whole family doesn’t like staying abroad the manager will not do a good job.  Tolerance for uncertainty and ambiguity

An international manager needs to be able to handle uncertainty and

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solve all problems by him/herself. The fact that head office does not really know how it works in the local culture also force the managers to make most of the decisions on their own.

Faced with a high level of uncertainty many managers tend to feel a strong need to reassert control. The control is reasserted by imposing greater controls, restricting information to subordinates and reverting to well-known

behaviours (Schneider & Barsoux, 2003). This will interfere with the desirable level of flexibility.

It is, however, important to remember that in cultures with a high Power Distance Index, like Singapore, a controlling manager is a good manager. This comes from the fact that these subordinates are used to depending on a person with a higher rank (Hofstede & Hofstede, 2008).

 Flexibility

Flexibility is taken to mean a form of readiness to adapt rather than trying to control an always-moving target (Schneider & Barsoux, 2003).

 Patience and respect

Having patience for a different culture with different rhythms is important. Gesteland (2008) has divided cultures into monochronic and polychronic, in order to categorize the different rhythms. It takes some time to learn the ropes and to respect the new culture. It is important not to compare local values and culture with the home culture. Having patience and demonstrating respect is

the

golden law

when making international business, but is commonly

broken. Commonly, international managers tend to think that they come from a superior culture and that locals do or make things in the wrong way.

 Cultural Empathy

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People with cultural empathy are open-minded, have no prejudices towards other people and cultures and are good at listening to people. They need to be able to understand the differences intellectually and also understand how to communicate with people from other cultures; the intercultural

communication skill (Lahdenperä, 2008).

“Intercultural contact does not automatically breed mutual understanding”

(Hofstede, 2001, p 424).

This means that a person needs to take actions to achieve cultural empathy. Normally the person goes through three phases:

1) Curiosity – the foreigners are seen as rare animals at the zoo. Every step

they take is carefully watched;

2) Ethnocentrism – the foreigners are valued by the beholder’s home culture’s

standards and values. Every “mistake” the foreigner makes is a sign of lacking manners. Ethnocentrism is to a population what egocentrism is to the

individual;

3) Polycentrism – After a time of constant exposure to the local culture the

person hopefully move into the polycentrism. This means that the person knows that different kind of people should be measured by different standards. You understand that a foreigner shall be measured by the local culture’s standards and values (Hofstede, 2001).

“Culture and communication go hand in hand”

(Gesteland, 2008, p 199).

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1) Awareness - The person finds out that people from different cultures have

different mindsets;

2) Knowledge – After a time of integration, we will gain knowledge of the

local culture discovering that the culture has different values and standards, heroes and symbols;

3) Skill – When you are aware of that people from others cultures act in a

different way as they come from another culture, know why they act as they do, and have practised intercultural communication you have attained intercultural communication skills (Hofstede & Hofstede, 2008).

It is important to remember that the cultural empathy ability is rooted in your personality and is not easy to acquire (Schneider & Barsoux, 2003). Hofstede & Hofstede, (2008) believe that it can be developed but that it is a lot easier for some people.

 Strong sense of Self

People with a strong sense of self have a high self-esteem. They know who they are and are aware of their strengths and weaknesses. A person with strong self is open to feedback, is self-critical and has healthy level of narcissism. This is important, as a person with these skills tends to be more stable. It also enables the manager to respond appropriately to failure (Schneider & Barsoux, 2003).

 Sense of humour

Having a sense of humour is often included in job advertisements but is not really taken into notice. For example, a person with a great sense of humour is not being recruited if that person does not have the correct technical abilities. Schneider & Barsoux (2003) think that is wrong.

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sense of perspective and it distances you from the situation. As one industry veteran said,

“The first few months in an international posting can seem like one long round of social gaffes and management blunders. If you don’t laugh, you’d cry”.

(Schneider & Barsoux, 2003 p 194)

Secondly, it is a good ability when building relationships. Humour opens the door and makes people more frank. One thing to remember is that humour is not a global issue. Things or situations can be considered as very funny in one culture but absolutely not in another.

2.4 Personal Tests

The most common way of categorizing people when employing people is to use a personal test. The categorization is done in order to figure out a person’s way of acting in different situations and their personal strengths and weaknesses. (Allen, 2010) I have therefore decided to use a personal test in order to find out which qualifications and skills the managers possess. It will help me answer the first part of the third research questions, Which personal qualities and skills make an

international manager successful or not?

The need of categorizing people has more or less always existed. For example, the Greek philosopher Theophrastus (371 – 287 B.C.) wrote sketches called the

Characters, including well-known stereotypes like the flatterer and the coward. Since then many philosophers and now a days psychologists has conducted different kinds of ways of categorizing people. Using different kind of standards or stereotypes makes it easier for us to handle the differences between people (Allen, 2010). Many different personality tests exist. Most common is the test in which the

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Three types of tests are used:

 Dimensional or Normative Approach

The test uses a set of continuous dimensions in which we all differ. The Five-Factor Model is using five dimensions (openness, conscientiousness,

extraversion, agreeableness and emotional ability), in which we all differ to categorize individuals. The test is based on data-driven research and is comprehensive.

 Typological Approach

This kind of test uses opposing categorises of functioning in which we all differ.

 Combination of typological and normative

The normative tests are by many, but not all, psychologists seen as the most accurate test model. (Allen, 2010 and Wikipedia.org).

2.4.1 Hogan Personality Inventory

To be able to evaluate the manager’s international leadership skills the Hogan

Personality Inventory (HPI) has been used. Caligiuri (2000) has used the same test in her study. She studied the correlation between personal characters and the likeliness of terminating the assignment early and supervisor-rated performance. The reasons for choosing this specific test is the fact that the company that offered to help me with conducting the personality tests, Edward Lynx, a well-known and established

recruiting firm, uses this test. The test suits the purpose of this study, as it is good at judging people’s social behaviour.

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The managers have answered 100 questions and the answers to these questions give the HPI-result. HPI-result consists of seven factors, which are presented below. The primary scale, High – Low Scorers, indicate the skills and qualities that the managers have or don’t have (Smart and Frank, 2004 and Hogan Assessment, 2009).

1. Adjustments: Confidence, Self-esteem and Handling pressure High Scorers – Confident, resilient and optimistic

Low Scorers – Tense, irritable and negative

2. Ambition: Initiative, Competitiveness, and Desire for leadership roles

High Scorers – Competitive and Eager to Advance

Low Scorers – Unassertive and less interested in advancement

3. Sociability

:

Extraversion, gregarious, and need for social interaction High Scorers – Outgoing, colourful and dislike working alone Low Scorers – Reserved, quiet and prefer working alone

4. Interpersonal Sensitivity: Tact, perceptiveness, and ability to maintain relationships

High Scorers – Friendly, warm, and popular Low Scorers – Independent, frank, and direct

5. Prudence: Self-discipline, responsibility, and conscientiousness

High Scorers – Organized, dependable, and thorough Low Scorers – Impulsive, flexible, and creative

6. Inquisitive: Imagination, curiosity, and creative potential

High Scorers – Quick-witted, visionary, and pay less attention to details Low Scorers – Practical, Focused and able to concentrate for long periods

7. Learning Approach: Achievement-oriented and up-to-date on business and technical matters

High Scorers – Enjoy reading and studying

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To be able to use the HPI-test to evaluate the manager’s skills I have made a chart showing which of Schneider & Barsoux’s (2003) skills that match the HPI-result. A manager has the skill if he has got a high score in the HPI-test.

Low scores (L) are people with a score below 35, Average scores (A) are between 35

and 65, High scores (H) are above 65.

Adjust-ments

Ambition Sociability IP-Sensitivity

Prudence Inquisitive Learning Approach IP-Skills _H _H Linguistic Ability H Motivation _H Tolerance… _H _H Flexibility… _H Patience… _H Cultural Empathy H Strong Sense of Self H H Sense of Humour H Figure 4 – “H-‐test”

Caligiuri (2000) finds that Ambition and Sociability can predict an international managers likeliness to terminate the assignment early. A person with high scores on these two factors is likely to fulfil the assignment. She also finds that Ambition is of importance. When conducting a H-test on these results we find that Interpersonal skills, Strong sense of self, Motivation, Patience and Cultural Empathy are of importance.

2.5 The Survey

A survey has been used to evaluate how successful the subordinates find their

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 Overall judgement of the manager

Aim to tell us the respondents overall impression of their manager. Is the manager efficient in managing the office? Does the manager have high professional qualifications and leadership skills?

 Personal Skills

Aim to tell us how the respondents think their manager behaves. If he or she is trustworthy, can establish relationships and is able to solve tasks.

 Cultural Ability

Aim to tell us how the manager has adapted to the local culture. If the manager has shown interest in learning and respecting the local culture.  Ability to handle uncertainty

Aim to tell us how the manager handles uncertain situations. Many situations are uncertain when working internationally. Is the manager flexible? Can the manager take decisions without knowing all the details? Is the manager too controlling?

 Empathy

Aim to tell us how the manager shows empathy towards his or her subordinates. If the manager is a good listener, has a non-judgemental approach, has humour and can receive feed back in a sensible way?

2.6 Theoretical Summary

In order to be able to answer the three research questions three different kinds of theories have been used.

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locals might be insulted or not motivated by the way the international manager handles certain situations. For example, for a Swedish manager it is hard to

understand that consensus and involvement in decision-making does not necessarily motivate people. It just confuses the Singaporeans, who are used to managers that make all decisions by themselves.

Hofstede (2008), Trompenaars & Hampden-Turner (1997) and Gesteland (2008) all have different ways of explaining those issues. I find it important to use all three as they use different angles in describing the differences. Together, these three gives us a more complete picture of the differences.

By better understanding the cross-cultural environment and the issues that the international manger needs to handle, it is easier to understand who to recruit and how.

The second theory studied is the recruitment theory. I find it pretty shocking, but interesting that Zander (2006) finds that one out of ten recruitments is successful and that Hogan & Goodson, (1990, cited in Pan & Qiao, 2010) find that 40 % fail with their assignment. This shows that companies need to change their way of recruiting international managers and that they probably use the same procedure when recruiting international and domestic managers.

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3 Methodology

In this chapter the method used in the study is described. The methods have been chosen in order to answer the research questions in the best way.

Figure 5 Structure of Method Chapter

As shown in the above figure, the following methods have been selected in order to answer the research questions.

 The Deductive Approach is used as it tests and modifies already existing

theories, which I aim to do.

 Both the Qualitative and the Quantitative data collection method have been

used.

 The qualitative strategy used consists of interviews and the quantitative

strategy used is a survey. The survey has been given to the subordinates and the managers have been interviewed and have answered a personal test.

 To be able to analyse the quantitative data the correlation coefficient

Pearson’s r and a scatter diagram have been used.

 The qualitative data has been analysed by using a matrix, in order to find

relationships between the manager’s answers.

3.1 Research approach

Three approaches exist, the inductive, the deductive, and the abductive. These

approaches are used when creating new theories or when modifying existing theories (Alvesson & Sköldberg, 2007).

When using the

inductive approach

you have a wider approach to the study; starting with observations, but without a prescribed conclusion. From these observations, patterns and regularities will be found and hypotheses can be

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formulated. Finally general conclusions and in some cases theories can be developed.

The

deductive approach

starts with one or several theories being deducted into

pieces. Out of these pieces hypotheses are stipulated. Hypotheses are tested by observations/specific data to confirm (or disapprove) the theory (Alvesson & Sköldberg, 2007). The

abductive approach

combines the theoretical framework with the empirical findings. This combination can modify or create new theories (Dubois & Gadde, 2002).

The deductive research approach is used in this study. This approach is the most commonly used approach, when it comes to developing and modifying theories. This is a way of testing the theories’ reliability. It gives us a wider understanding for the theory. (Holme & Solvang, 2008). I use this approach as I am testing the existing International Human Resource Management theory on Swedish managers in Singapore.

3.2 Data Collection

Two methods can be used when collecting data, the qualitative and the quantitative method. Interviews and observations are examples of qualitative data collection. Surveys are the most common way of collecting quantitative data and employ statistics and numbers. Both methods have their strengths and limitations (Holme & Solvang, 2008).

The

qualitative method

gives us information in a narrow but deep way. The

researcher has to be careful when holding the interviews not to affect the interviewee. Questions have to be asked in the same way and in the same order. Otherwise answers cannot be easily compared. Transcripts are later provided to subjects to ensure no details have been missed (Ejvegård, 2009).

The

quantitative method

gives us a wider range of information. Data is collected

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3.2.1 Personality test

To be able to answer the first part of the third research question, “

Which personal

qualities and skills…”

a personality test has been given to the five managers in

order to evaluate their personality and personal competences. The Hogan Personal Inventory test (HPI) has been used. The test is described in the Theoretical

Framework chapter. Edward Lynx, a recruiting firm in Stockholm, has administrated the test. They have also helped me to understand and evaluate the test results.

3.2.2 The Questionnaire

To be able to answer the second part of the above research question, “

What makes

an international manager successful?”

a questionnaire has been made.

Eight to ten subordinates working under each of the five managers have answered the questionnaire. The managers have selected the respondents. This might affect the survey result, as they might have chosen people they know like them.

I decided to use a questionnaire, as it is a cost and time efficient way of collecting data. All respondents get the same questions. The data is also easy to evaluate and analyse, when compared to the alternative interview method (Ejvegård, 2009). This method has been selected, as, in my opinion, people will answer more truthfully on a survey than through direct questions in an interview. It is also possible to ask more people of their opinion than if interviews would have been made.

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Design of Questionnaire

To construct the questionnaire the following chart has been followed:

Design Methodology Determine Feasibility Develop Instruments Select Sample Conduct Pilot Test

Revise Instruments Conduct Research Analyze Data Prepare Report

Figure 6 – Questionnaire Chart (Walonick, 2010)

The questionnaire is based on the theory of International Human Resource

Management (IHRM) and cross-culture theory. I first studied the theory to find out which findings I wanted to gain from the survey. Thereafter the questions were constructed and the instrument developed, according to the above chart.

The questionnaire is a written questionnaire with closed answers. Meaning that the respondent has been given five answer alternatives, Totally Agree, Agree, Disagree,

Totally Disagree and Undecided. This type of questionnaire is used, as it is easier and

less time consuming to analyze the data. The questionnaire can therefore also be given to more respondents, than if the answers had been open (Holme & Solvang, 2008).

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for the questions, so they answer the same actual question. Finally, the order of questions is important. The respondents don’t want to answer overly hard and sensitive questions in the beginning or at the end. To give the respondent the right feeling, hard questions should be put in the middle of the questionnaire (Holme & Solvang, 2008).

In order to ask good questions, meaning questions that give us the answers we are looking for, you have to have some issues in mind. Examples are:

 The question has to be non-threatening in order to get truthful answers.  Ask only one thing at a time, otherwise the respondents do not know what to

answer.

 Do not imply a certain type of answer.

It is important that a good question leaves no ambiguity in the mind of the respondent (Walonick, 2010).

The questionnaire was pilot tested on five people, from a company, which was not taking part in the study. These people answered the questionnaire and questions regarding the questionnaire, in order to make it clear and more precise. The

questionnaire was revised after the test group’s comments (Holme & Solvang, 2008). In appendix 2 the questionnaire is presented. In appendix 1 the questions that were answered by the test group are presented.

The questionnaire has been given to nine to eleven subordinates of each manager. But only eight to ten answered the survey. The manager has chosen the subordinates and collected the questionnaire. The subordinates are mostly from Singapore, but some are from other countries in the Asia-Pacific Region. As Singaporean highly respect their subordinates and therefore not dare to say the truth to them it is of great importance that the survey is confidential (Hofstede, 2008).

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were excluded so as not to affect the average, as undecided is not equal to “Strongly” disagree (Bryman, 2004).

The results were indexed, to achieve a more comparable and usable result. The maximum is 100. In order to get the base to 100 the results were divided by 4, the maximum result on the survey, to get the given index number.

3.2.3 The interviews

To answer the first and second research question, “

What distinguishes an

international manager from a domestic?”

and

“How do you recruit a

successful manager?”,

and to follow up the personality test and the result of the

questionnaire, two interviews with each manager have been held.

The first interview lasted for about one hour and was recorded and transcribed. This has been done to assure that no details have been missed (Ejvegård, 2009). Ahead of the interview the questions have been sent to the interviewees, so they have been able to prepare themselves for the interview. The interviews have been structured, as I have only used pre-scripted questions and question order.

The second interview was conducted over the phone in order to review the results from the personality test and survey. A discussion, without any strict questions, was held to try to understand the outcomes.

3.3 Analysis model

Three models have been used, two for the quantitative and one for the qualitative data. The quantitative data has been analysed using the correlation coefficient

Pearson’s r

and a

scatter diagram.

The qualitative data has been analysed in a

matrix.

3.3.1 Quantitative Analysis Model

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2004). The test is made to see which qualifications that are the most important to have to become a successful manager according to the subordinates.

As two variables are being analysed, the outcome from the survey and the result from the personal test, a bivariate analysis model has to be used. When having two interval variables, which is the case in this study, Pearson’s r and scatter diagram have been chosen (Bryman, 2004).

To be able to use

Pearson’s r

you have to make sure that the relationship between the variables are linear and not curved. To do this you plot the variables into a scatter diagram. It is important to do this in order to determine the nature of the relationship between a pair of variables, so that they do not violate the assumptions being made when using this correlation method (Bryman, 2004).

Pearson’s r calculates the relationship, the correlation, between two variables. Correlation is the linear dependence. The outcome varies between -1 and 1. A value close to 0 indicates that the relationship is weak and if the value is close to 1 or -1 the relationship is strong. Thus a correlation of +1 means that there is a perfect positive linear relationship between variables and – 1 that there is a perfect negative

relationship (Bryman, 2004).

The calculation of Pearson’s r has been made in Excel, using the following formula:

=PEARSON(X2:X6;Y9:Y13)

Where X is the different variables in the HPI-personal test and Y the different part in the survey.

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Figure 7 – Scatter Diagram, Perfect Positive Relationship

The

H-test

described in the Theoretical Frameworkis made to be able to see how

well the manager’s skills match the skills Schneider & Barsoux (2003) state as theoretically important.

3.3.2 Qualitative Analysis Model

To analyse the answers from the interviews, they were put into a matrix (see chapter 4.3.1 What makes an international leader so special?). Differences and indifferences in the answers were then found (Solvang & Holme, 2008). The analysis is based on the relationships found between the managers’ answers.

3.4 Critique on the research approach

To assure that the quality of the study is high, two aspects are studied, the validity and the reliability of the study. The validity shows the level of accuracy and the reliability the level of trustworthiness in the study (Yin, 2007).

The sample is small approximately 50 surveys, and fulfilment of the statistical significance cannot be assured.

0 20 40 60 80 100 0 20 40 60 80 100 X Y

How to find a great international leader The case of Swedish managers working in Singapore

Faculty of Education and Economic Studies

Department of Business and Economic Studies