The Global Mindset: Volume 19

In 2006, a cover story in Business Week suggested that global forces are largely controlling the domestic U.S. economy and that there is little that the U.S. government can do. Currently, the United States imports almost $2.2 trillion in foreign goods; in contrast, the U.S. government receives approximately $2.4 trillion in revenues. And, in 2007, the costs of imports are expected to exceed government revenues. In the past, the United States has had a major influence on the world's economy, but this influence is waning (Mandel & Dunham, 2006). The substantial development of several country economies such as in China and India and growing competition in global markets have fueled this change. These changes have heightened the importance of firms’ international strategies and increased the need for more and better research to understand how to develop such strategies and implement them successfully (Nachum & Zaheer, 2005).

Because of the importance of a global mindset from both a theoretical and a practical point of view, there is need to examine this construct further to understand its contents, how it is developed, when and how it should be applied, and what its consequences are. Thus, we invited a select group of scholars to develop chapters on specific aspects of this topic to help build a volume accomplishing these goals. Our aim here was to invite the foremost thinkers and writers on this topic.

In this section, we offer a careful and systematic review of the theoretical and empirical studies relating to global mindset that have been published in books and peer-reviewed journals. This review includes studies that use differing terms to refer to the idea of global mindset but consider the same general concept. At the same time, we exclude studies that do not specifically pertain to global mindset but concentrate on such areas as global leadership, expatriates, and expatriation, even though they may focus on similar underlying themes found in the global mindset literature. We then identify two fundamental themes in the global mindset literature – cosmopolitanism and cognitive complexity – and use these concepts to develop a new integrative approach to global mindset.

The metaphor of a poker game suggests the reality of international business as a competitive field in which players test their wits against each other, often using guile, and play at high levels of uncertainty. The game's rules are essentially simple but there is extensive room to maneuver. If business were actually conducted internationally with one set of clear rules used by all, then it would be like chess. A chess master can play against many others, given the highly structured nature of the game's processes. A poker master takes on a different kind of complexity, and in that, the reading of others’ minds, characters, behavior patterns, and interactions becomes crucial. The essential challenge of the global mindset is that, whereas you might think you are playing chess against several opponents, you are actually playing poker.

With the globalization of business, a relevant question is how might people deal with others from fundamentally different backgrounds (cultural, ethnic, functional, etc.)? Many authors (Rhinesmith, 1992; Paul, 2000; Gupta & Govindarajan, 2002; Kefalas, 1998, just to mention a few) suggest that managers working in international contexts require a specialized way of thinking about the environment in which they operate, a so-called “global mindset.” In the current chapter, we discuss the evolving notion of a “global mindset” and contrast it with extant work on the related concept of “cultural intelligence” (Earley, 2002; Earley & Ang, 2003; Earley & Mosakowski, 2004; Thomas & Inkson, 2004).

Inherent in the meaning of global mindset is the dilemma of an appropriate level of analysis at which we define, measure, and research this construct. This chapter addresses the individual level of analysis using social cognition, which explains how the development process of global mindset helps individuals make sense of unfamiliar stimuli, broaden their cognitive capacities, adjust their behavior accordingly, and have a positive influence on others. Our recently developed core construct of positive psychological capital, or PsyCap (Luthans, Youssef, & Avolio, 2007), and the overarching process of authentic leadership development (Avolio & Luthans, 2006) are used to explicate the theoretical social cognitive framework. The “influence on others” implies a leadership process, and that is why we address the role that global mindset may have in the authentic leadership development process (Avolio & Luthans, 2006).

While there is strong agreement that globalization is spreading rapidly, there is no agreement on what globalization actually means and how it is measured. Giddens (1999) defines globalization as “the worldwide interconnection at the cultural, political, and economic level resulting from the elimination of communication and trade barriers.” He further defines it as “…a process of convergence of cultural, political, and economic aspects of life” (reported in Inkpen & Ramaswamy, 2006, p. 13). Govindarajan and Gupta (2001) define globalization as “growing economic interdependence among countries as reflected in increasing cross-border flows of three types of entities: goods and services, capital, and know-how” (p. 4).

Developing successful relationships with people from different cultures is challenging by definition. Several reasons account for this, including people's tendencies to have preconceived notions about how the world works (or should work), how individuals behave (or should behave), and which behaviors are acceptable (or unacceptable). These ideas are largely influenced by our personal experiences and the cultures in which we grew up. We tend to approach intercultural interactions based on our own perceptions, beliefs, values, biases, and misconceptions about what is likely to happen (Kluckhohn, 1954; Geertz, 1973; Hofstede, 1980, 1991; Trompenaars & Hampden-Turner, 1998; Schneider & Barsoux, 2003; Steers & Nardon, 2006). As a result, when we engage in exchanges with people from different cultures we often find that the consequences of our actions are different from what we expected or intended (Adler, 2002). The results can range from embarrassment to insult to lost business opportunities.

The schematic diagram shown in Fig. 1 suggests that a global mindset evolves in the cultural context of industry-specific, organization-specific, and person-specific antecedents that are salient in the context of the global manager and the environment in which he or she functions. Taken clockwise, we discuss the relevance of various factors that comprise these three important domains and how these domains interact with the overarching cultural contexts salient in the domestic as well as in the international business environment. In Table 1, we present the various factors in industry-specific, organization-specific, and person-specific domains that either facilitate (provide opportunities) or hinder (act as constraints) the development of global mindset and global managers.

The authors of the various chapters in this book have approached the concept of global mindset from diverse perspectives and have defined it differently. Levy et al. in this volume define global mindset as a highly complex cognitive structure distinguished by an openness to and expression of multiple cultural and strategic realities on both global and local levels and the cognitive capacity to moderate and assimilate across this diversity. More specifically, global mindset is typified by three corresponding dimensions: (1) an openness and attentiveness to multiple realms of action and meaning, (2) a complex representation and expression of cultural and strategic dynamics, and (3) a moderation and incorporation of ideals and actions oriented toward both global and local levels (Chapter 1 of this volume). At the core of their definition is the awareness of and openness to multiple realities, meanings, and perspectives.