Donna ZellerJune 2015

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Cosmopolitan Leadership: A Leadership Model for Virtual

Corporations

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Importance of Research

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As the virtual model becomes more widespread, it has the potential to “become the most important organizational innovation since the 1920s” when the likes of Pierre S. DuPont and Alfred P. Sloan “developed the principle of decentralization to organize giant, complex corporations” (Business Week Archives, 1993).

The Cosmopolitan Leadership Theory is timely and pertinent to address the issues that are part of the virtual operations taking place across cultures.

Virtual Corporations: Structures

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Virtual CorporationsMay be built on a network of companies that

temporarily merge to meet the immediate demands for a service or product

May satisfy start-up requirements for a new business

May provide a permanent point of operations; a fact that is becoming more common

Allows any size business to compete in the global market

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Virtual Corporations: Risks

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Risks“Proprietary information or technology may escape”

(Business Week Archives, 1993).Management will face new challenges in “learning to

build trust with outsiders and manage beyond their own walls” (Business Week Archives, 1993).

“The raw syntagmatic applications of globalization as an economic paradigm have failed to take into account the ecological impact, demographic issues, the erosion of democracy, and the impact of new technologies that accompany it” (Tiffin & Rajasingham, 2003, p. 123).

Virtual Corporations: Advantages

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The hierarchy of the traditional ‘brick and mortar’ corporation is not needed; therefore, more can be done with decreased layers of management

The virtual corporation is a lean corporation with fewer costs for real estate, overhead, and maintenance (Margolis, 1999).

Virtual Corporations: Defined

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• This version of the Cosmopolitan Leadership theory will rely on the following definition of a virtual corporation: – A “network of companies, suppliers, customers,

even erstwhile rivals linked by information technology to share skills, costs, and access to one another’s markets (Businessweek Archives, 1993).

– It may or may not have a central office or a permanent strategic mission; most definitely, it will have no hierarchy and no vertical integration” and will likely operate without boundaries (Businessweek Archives, 1993).

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Leadership

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Effective leadership, as defined by Northouse (2013), “is a process whereby an individual influences a group of individuals to achieve a common goal” (p. 5).

Some prominent leadership theories: Place the ideals of ‘people-oriented skills’ at the top

of the list. Others, debate of nature vs. nurture skills.

Core leadership skills, strategy, action, and results, are identified as the foundation of effective leadership; while adaptive leadership skills are the intangible qualities.

Leadership Challenges

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• Much of the current leadership research focuses on what is needed to make virtual teams successful; not on why a virtual venture did not succeed– The lack of business success of a virtual venture

is attributed to various reasons; such as communication and mismatched strategies.

– In addition, insufficient organizational leadership is considered to be a contributing factor to failures.

– Many current leadership practices are based on the roles of leaders and followers that may be interpreted differently in the virtual world.

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Cultural Differences, Time Sensitivities, Working Norms

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Leadership requires:The ability to understand Asynchronous

Synchronization—working with the challenge of cultural differences, time sensitivities, and working norms” (Elfrink, n.d.).

An understanding that a virtual corporation, “contemplating an entry into a foreign market…will need to assess in advance relevant beliefs of the market and specifically beliefs and values of individuals….” (Albaum, 2012, p. 121)

Emotional & Cultural Intelligence

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Cultural Differences, Time Sensitivities, and Working Norms will require:Emotional Intelligence:

“The ability to recognize and understand emotions in themselves and in others and then to use that awareness to manage behavior and relationships” (Bradberry & Greaves, 2012, p. 129).

Cultural Intelligence (CQ):The “attitude and skill that enables individuals to

adapt effectively across cultures”, will become an ongoing area of development for all workers; not just for management (Brewster, Sparrow, & Vernon, 2007, p 55).

Sustainable Relationships

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Sustainable Relationships:A key factor in leadership, are built on “trust

between, and ethical behavior of the parties to a relationship” (Albaum, 2012, p. 121).

The trust issue can be even more complicated in virtual corporations, where relationships and behaviors may span divergent cultures and are largely viewed via technology.

Hedberg, Dahlgren, Hansson, and Olve (1997) found that the single most important ingredient is “trust in the…’organizational glue’ that keeps the virtual organization from coming apart. Some leaders in their studies even use the phrase ‘high-trust culture’ to describe this glue” (p. 19).

Leadership in a Virtual, Global Environment

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The question remains, are the leadership skills, traits, and roles applicable in an organization where business is carried out in a virtual, global environment?Leadership is affected by technology that addresses

“problems which are complex, quickly altering, knowledge based and global” (Wexler, 2006, p. 16).

Basically, “leadership turns from control by the few…, to the flexibility of knowledge inputs from the many” (Wexler, 2006, p. 16).

Therefore, understanding objectives, behaviors, relationships, beliefs, values, and assumptions is an important part of the role of Cosmopolitan Leadership.

Cosmopolitan Leadership: Theory

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The Cosmopolitan Leadership Theory is concerned with providing a framework for leadership in virtual organizations.

The theory will emphasize the development of a cosmopolitan or ‘world citizenship’ style that recognizes the influence of worldviews and cultures.Cosmopolitans are described by Hannerz (1992) as

“those people who ‘provide points of entry into other territorial cultures’” (Saran & Kalliny, 2012, p. 283).

A worldview is a way of describing the universe and life within it, both in terms of what is and what ought to be (Koltko-Rivera, 2004, p. 4).

Theoretical Framework

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The Cosmopolitan Leadership Theory recognizes that virtual corporations are changing the nature of multiculturalism from a specific ethnocentric focus to one that is pluralist and cosmopolitan” for everything from marketing and consumerism; thus, affecting organizational leadership dynamics (Saran & Kalliny, 2012, p. 284).

Strengths of the Theory

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Provides a framework for a weak area in virtual organizations, leadership in a multicultural global setting that is linked by technology

Calls attention to the change from an ethnocentric worldview to a pluralistic and cosmopolitan one that affects leadership; hence, the need to understand behaviors, relationships, beliefs, values, and assumptions from an array of fluid cultural characteristics

Provides some basic understanding for the inherent changes that will need to be recognized in the traditional organizational dynamics (Northouse, 2013).

Criticisms of the Theory

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A lack of research and limited experience that is based on virtual organizations; therefore, the theory requires analysis and testing.

The aforementioned strengths are not validated by substantial evidence.

Some corporations have both a ‘virtual’ and a ‘brick and mortar’ component, the theory does not address the need for a combination of leadership approaches.

Identifying the differences in cultures is one issue; however, keeping up-to-date with changes in those cultures is another

While the idea of evolving globalization is taken into consideration, it does not completely identify how the differences play out in leadership in the virtual corporation.

Applications

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The Cosmopolitan Leadership Theory provides a framework for virtual organizations to recognize the global, worldview, and cultural components that influence leaders as well as followers.

Fundamentally, organizational structures, business processes, and the expanse of technology are changing the leaders’ roles from a command-and-control stance to an adaptive and collaborative one in a borderless venue. Therefore, the framework needs to be developed along with

strategic initiatives; and not as an afterthought. In addition, cultures and worldviews are not a stagnant

concept that can be applied to a particular geographic region; thus, frameworks should not be considered an established principle.

In summary, the Cosmopolitan Leadership role is accessible to everyone in the organization; and its premise is subject to change as needed.

Cosmopolitan Leadership Theory

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References

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Albaum, G. (2012, April-June). The relationship between psychic and cultural distance and business ethicality attitudinal values of future business leaders. Journal of Global Marketing, 25(2), 112-123.

Bradberry, T. & Greaves, J. (2012). Leadership 2.0. San Diego, CA: TalentSmart Brewster, C., Sparrow, P., & Vernon, G. (2007) International Human Resource

Management. (2nd ed.), London: CIPD. Businessweek Archives (1993, February 7). The virtual corporation.

Businessweek Archives. Retrieved from http://www.bloomberg.com/bw/stories/1993-02-07/the-virtual-corporation.

Deloitte (2014). Value of connectivity economic and social benefits of expanding internet access. Retrieved from https://fbcdn-dragon-a.akamaihd.net/hphotos-ak-ash3/t39.2365/851546_1398036020459876_1878998841_n.pdf.

Elfrink, W. (n.d.). Thought leadership the virtual corporation. Cisco. Retrieved from http://www.cisco.com/web/IN/about/leadership/the_virtual_corporation.html.

Hedberg, B., Dahlgren, G., Hansson, J., & Olve, N. (1997). Virtual organizations and beyond. Discover imaginary systems. West Sussex, England: John Wiley & Sons, Ltd

References Koltko-Rivera, M. (2007, March). Feature article: Leadership and

worldview: What in the world is a worldview? Integral Leadership Review. Retrieved from http://integralleadershipreview.com/5395-feature-article-leadership-and-worldview-what-in-the-world-is-a-worldview/

Margolis, J. (1999, Spring). Finding real success in a virtual corporation. GSB/Chicago. Retrieved from http://www.chicagobooth.edu/magazine/spring99/virtualcorp.html.

Montero, P. & Montero, J. (2010/2011) Work Unchained: Workshifting and the Competitive Edge of The Anywhere Office Retrieved From http://www.youcanworkfromanywhere.com/reports/work-unchained-special-report.pdf.

Northouse, P. G. (2013). Leadership: Theory and Practice (6th ed.). Thousand Oaks, CA: Sage Publications.

Saran, A. & Kalliny, M. (2012, November-December). Cosmopolitan: Concept and measurement. Journal of Global Marketing, 25(5), 282-291.

Tiffin, J. & Rajasingham, L. (2003). The global virtual university. New York, NY: RoutledgeFalmer.

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References Verbeke, A., Schultz, R., Greidanus, N., & Hambley, L. (2008)

Growing the Virtual Workplace. Northampton, MA: Edward Elgar Publishing Inc.

Wexler, M. (2006, September). Leadership in context: The four faces of capitalism. Northampton, MA: Edward Elgar Publishing Inc.

Zuckerberg, M. (2014, March). Connecting the world from the sky. Retrieved from https://fbcdn-dragon-a.akamaihd.net/hphotos-ak-ash3/t39.2365-6/851574_611544752265540_1262758947_n.pdf.

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