Leadership Matters More than Ever
Although roots of globalization can be traced back to the 10th century (or even earlier), it is its unprecedented growth and rapid technological advancements, in the past few decades, which have made globalization a popular concept. Globalization has many definitions, but if one were to ascribe one-word meaning to the concept of globalization, a majority would choose ‘inter-dependence’ as its simplest meaning. Globalization and inter-dependence have become synonymous in many circles. It is true we are more connected than ever. We are increasingly mobile- thanks to the Internet- Facebook and alike. Paddy Ashdown, a veteran British diplomat, summed up this interdependence as, “Today, everything is connected to everything else. We are now interdependent. We are now interlocked as nations, as individuals, in a way which has never been the case before.”
However, the idea of globalization has also evolved. What started out as sweeping and unprecedented phenomenon has mellowed over time and morphed into regional, and gated. While some may accept globalization as largely unquestioned. We all know that globalization has also emerged as controversial, as evidenced by protests around the world. In addition, a growing number of respected economists, sociologists, and political scientists have started to vehemently criticize the current phase of globalization. It is true that globalization has connected us and created a larger middle class in many emerging countries. However, it has widened gaps between “haves” and “have-nots” — or winners and losers of globalization. Branko Milanovic in his book entitled, “Global inequality: a new approach to the age of globalization” offers an explanation. Looking at the income levels between 1988 and 2008, he demonstrates that among the big winners were the world tycoons, merely 1% with more than 99% of the world’s wealth, and the middle class in newly emerging economies. However, among the big losers — or those who gained little or nothing — were those at the bottom, and the middle working classes in developed countries. This odd distribution of income has been referred to as the elephant curve. Joseph Stiglitz has argued that the current phase of globalization may not be the only reason for this widening gap, but it is one of the major reasons.
Emphasizing the ‘social’ in global
I make two observations here. First, globalization is proven itself to be paradoxical in many ways. For example, while globalization has connected us (and in many ways, made us interdependent), it has also been driving us apart. Second, globalization is an inter-disciplinary concept that is multi-dimensional in its nature and impact. How? Let me explain in simple terms:
a) Globalization has its economics, in terms of changing income levels, trade surpluses or deficits etc. Economics is the ‘global’ in the idea of globalization and most often addresses convergence of ideas.
b) Globalization influences and is influenced by the political discourse, which is very local. Oftentimes, politics has taken a center stage around the world, thereby emphasizing divergence or even parallel trends.
c) Finally and most importantly, globalization relates to the individual and the societies they form. This is its social side. Globalization, by reducing boundaries and increasing global mobility, has brought about major cultural shifts. However, it is still the case that, while many scholars and practitioners have paid more attention to the economics and politics of globalization. Social aspects of globalization, in comparison, have received scant attention.
Unfortunately, the result of a fragmented view of globalization (where some have focused on the global economics and others — may be- on the local politics) is that we have not completely understood globalization’s deep impact. By isolating local from the global- or convergence from divergence, we have ended up heightening dissatisfaction among the general public. Interestingly, while we described it as a concept that brings inter-dependence, we have failed at adequately connecting the many dimensions of its diverse impact.
As I said before, levels of inequalities have grown globally, and the gaps between rich and the poor have resulted in a global backlash, in terms of protests and varying degrees of nationalistic political discourse around the world. We have been witnessing an “our country first” mentality displaying skepticism or outright hostility toward globalization around the world. Let me explain the basis of this populism on cultural changes- their convergence and divergence, to highlight importance of social aspects of globalization further.
Highlighting ‘within country’ difference
In the past few decades, globalization and technological advancements have brought about many cultural and value changes, leading politicians, economists, businesses and sociologists around the world to debate the question of “value change” with fervor. Overall, we have witnessed the growing impact of the western values globally (or convergence). At the same time, we have debated the enduring influence of local cultural values worldwide (i.e. divergence) as well as the emergence of global cultures. While, scholars and practitioners primarily focused on value changes and shifts across nations in analyses, relatively little attention, has been paid to value differences withincountries. For example, while NY City, Washington DC, and Tokyo may have appeared to be globalizing, smaller segments within these bigger cities or other smaller cities, in fact, stayed in the shadows. Gradually, cities and communities started growing apart. Over the course of time, we (as management scholars) concluded that societies change the way they want to and at a pace that in unique to them (thus establishing the idea of crossvergence). True. However, we mostly adopted an outside perspective and viewed cultural change as broad and macro phenomenon- thereby neglecting the within-country differences,which continued to widen. For example, if you think about the American culture and how it has evolved for the past few decades, it is important take generations, educational levels, gender, race, Midwest, East coast, West coast and Southern states (and differences there within) into account.
Based upon my research, I have identified at least four cultural groups at the global level. These groups highlight the “within country’ differences that I have just mentioned- and are very relevant to the overall divergence, convergence and crossvergence debate in globalization. Quite paradoxically, these cultural groups are also illustrative of what we consider to be the ‘irreversible’ impact of globalization. Distinct value systems of each group clearly demonstrate existence of tensions within countries, which have begun to play out in politics and economics quite significantly:
1. The first cultural group, which I refer to as the Global Elite, is the highly skilled and educated individuals who are globally mobile. They are global citizens, partake in the knowledge transfer globally and contribute to the phenomenon of brain circulation. They are advocates of integration of worldwide markets. Research indicates they have financially, intellectually and culturally benefitted from the recent phase of globalization.
2. I have referred to the second group as the Global Eager. These are the growing middle-class mostly in emerging economies, which has also benefitted financially from the globalization. Their standard of living has been raised. They aspire to continue to advance their skills and raise healthy progressive families.
3. I have referred to the third group as the Global Angry. These individuals have lost their jobs to low-wage workers elsewhere and are feeling lost. They may also be angry because of loss of their identity and ways of living. Milanovich’s elephant curve clearly identifies this group.
4. I have referred to the final group as the Global Neglected. These are the poorest of the poor, living below US$ 1 a day. Although globalization promised to lift these people out of poverty but has failed to do so. They are also referred to as the base of the pyramid (or BoP) communities.
The rise of populism is fueled by the global angry (for example) in France, and USA as elsewhere. Their expectations, experiences and values appear to be in direct contrast to those of the global elites in their own countries. I believe it is disconnects among these groups that has been fueling internal tensions, influencing policies, moving politics and making headlines. It is worth noting that the global angry in USA may have a lot more in common with the global angry in Brazil, Russia and Saudi Arabia.
We all know that growing levels of socio-economic inequalities have negative implications for individual well-being, organizations, and political systems. Excessive inequalities devalue human dignity, and have led to educational under-achievement, and lack of access to capital. Overall, there is a pressing global need to address social imbalances.
Morgenson (2014), a Pulitzer Prize winning business editor stated that, “True leadership is sorely lacking” globally. The Edelman Trust Barometer, based upon thousands of respondents in 26 countries, attests to a serious crisis of confidence in leaders among its respondents. However, there is a ray of light for the business leaders here. The Edelman survey also indicates business is viewed as the only one that can make a difference.
From this perspective, at this point in human history, leadership matters more than ever in that it is crucial for stimulating economic, social and political changes that promote human development. Human development is ‘a process of enlarging people’s choices’, as per the Human Development Report. It is true that the choices themselves may be infinite, change overtime, and may vary across nations. However, it is leaders (with their immense power and influence) who can begin to establish a culture that promotes collective well-being and protects human dignity. We need leaders with a sense of purpose and responsibility- those who take a keen interest in addressing social concerns and possess a strong ability to make change happen. We need leaders who understand the complexity of the environment within which we operate, and are aware of the ‘crisis of mistrust’. I would argue that this should be the essence of contemporary leadership, regardless of the label we assign it.
Excerpt from a paper presented at an international conference in 2017.
