Every global company’s competitive advantage depends on its ability to coordinate critical resources and information that are spread across different geographical locations. Today there are myriad organizational mechanisms that global corporations can use to integrate dispersed operations. But the most effective tool is the global business team: a cross-border team of individuals of different nationalities, working in different cultures, businesses and functions, who come together to coordinate some aspect of the multinational operation on a global basis.
It is virtually impossible for a multinational corporation to exploit economies of global scale and scope, maximize the transfer of knowledge or cultivate a global mind-set without understanding and mastering the management of global business teams. That, however, is easier said than done. In our study of 70 such teams, we discovered that only 18% considered their performance “highly successful” and the remaining 82% fell short of their intended goals. In fact, fully one-third of the teams in our sample rated their performance as largely unsuccessful.1 How can companies reverse the weak performance of faltering global business teams? First, they must understand the obstacles to success that global business teams confront. Then they can take concrete steps to avoid those pitfalls and build effective and efficient teams.
Why Global Business Teams Fail
Domestic teams and global teams are plagued by many of the same problems — misalignment of individual team members’ goals, a dearth of the necessary knowledge and skills, and lack of clarity regarding team objectives, to name a few. But global business teams face additional challenges resulting from differences in geography, language and culture. Teams can fail when they are unable to cultivate trust among their members or when they cannot break down often-formidable communication barriers. The results of our survey of 58 senior executives from five U.S. and four European multinational organizations confirm that important, unique challenges confront global business teams — challenges that tend to exacerbate the more common problems all teams face. (See “The Challenge of Managing Global Business Teams.”)