Effective Leadership in a Global Environment

Abstract: Leaders of today have the challenge to lead in a complex, rapidly changing, multicultural context. In most industries, leaders perform tasks on a global level and they are required to have the necessary competencies to be more effective. It is a well-known fact that organizations are still negatively affected in terms of competitiveness and growth, due to leaders` lack of capabilities to lead effectively. Furthermore, despite the previous academic contributions, global leadership still remains a developing field to be explored. Previous studies on the global leadership listed various competencies to lead to effectively in a global environment. However, a limited evidence was provided to support direct relationship between those competencies and the global leadership effectiveness. Moreover, previous studies have concentrated mainly on defining global leadership competencies, but there is still a gap to understand which of those competencies makes global leaders effective. There is also a strong need for conducting more empirical studies in the field. In response to this gap, the purpose of this research is to identify necessary competencies for global leadership effectiveness and test them empirically. Structural Equation Modelling was used as a research method with the data collected from a questionnaire of 175 respondents worldwide, mainly located in Europe. The results of the research showed that Cross-Cultural Experience, Cultural Flexibility and Stress Tolerance predict global leadership effectiveness. Furthermore, detailed explanation of each competency that predict global leadership effectiveness were provided. The results of this research have both theoretical and managerial implications. Firstly, it proves empirically and quantitatively the relationship between identified competencies and global leadership effectiveness. Secondly, the results of the research contribute to the existing literature where there is a limited amount of research that focus on understanding global leadership competencies and global leadership effectiveness.