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Journal of Management review ties leaders' international experience to stronger company performance
Bath's Fei Qin and co-authors tie leaders' international experience to higher growth, profit and stock performance in a Journal of Management review. The links are associations, and Qin says the payoff depends on the kind of experience and how a leadership team shares it.
The Scientist · Science desk
What happened
- Qin's co-authors are Klaus Meyer of the Ivey Business School and Sabina Tasheva Nielsen of the University of Sydney, and the work covers chief executives, founders, senior teams and boards.
- Firms led by executives with more international experience often invested more in innovation and were better at earning returns on that spending.
- Those leaders were more likely to back and carry out international expansion, including entering new markets, making acquisitions abroad and growing faster overseas.
- International experience was also linked to a better grasp of governance and risk, and to more support for sustainability and corporate social responsibility.
- Outcomes depended on the type and relevance of the experience, the dynamics of the leadership team, and the organizational and industry context.
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Why it matters
- cost Judging the length, breadth, variety and cultural distance of a candidate's experience asks more of search firms and nomination committees than a yes-or-no line on a CV, and the hiring side pays for that extra diligence.
- decision Nomination committees now face a team-level choice: whether international experience should sit with one executive or director, or be spread across several.
- precedent Qin's argument includes smaller and purely domestic firms, so the paper is likely to be cited in hiring decisions well beyond multinational boardrooms.
The paper's title says what kind of evidence this is: "The Impact of Strategic Leaders' International Experience on Organizations: An Integrative Review and Multilevel Framework" [3]. By that description it is a synthesis of research plus a framework built on top, so it inherits whatever controls the underlying studies had [3]. The phys.org account sticks to the language of correlation. Leaders with international experience "are often associated with" stronger organizational performance, it says [1]. The account does not say how many studies or firms the review covers, give an effect size for any outcome, or report a separate result for local firms.
The expansion result is where cause and effect are hardest to separate [7]. Leaders who have worked abroad may push a company overseas. But a company that already plans to go overseas has good reason to hire someone who has worked there, and it may then grow for reasons the hire did not cause. Tracking the same firms before and after such a leader arrives would start to tell the two explanations apart.
Qin defines international experience more widely than a posting abroad. "International experience is much more than simply spending time abroad," she said, adding that it can be built through formative years abroad, education, work assignments or exposure to different cultures and business environments [4]. She also takes the argument beyond global companies. "More importantly, its value is not limited to multinational firms with global operations. It can also help smaller or local firms become more entrepreneurial, creative and innovative," Qin said [5].
She is direct about the limits, saying "the benefits are not guaranteed. Its value depends on context" [10]. The most practically useful part of the framework is about teams. "It matters whether that experience is concentrated in one individual or distributed across the leadership team," she said [11].
She sees value in both arrangements. Shared experience "gives people common reference points and can strengthen confidence in collective decision-making," Qin said. Leaders who have worked across different countries or institutional environments "may also identify different opportunities and challenge assumptions that might otherwise go unquestioned" [12].
I think the case for treating international experience as a skill to assess in hiring and board selection holds, as long as Qin's conditions are met. Organizations "should move beyond simply asking whether a leader has international experience and instead consider the nature of that experience and its length, breadth, variety and the degree of cultural and institutional distance involved," she said [13]. The evidence as described supports asking those questions about a candidate and about the team around them. It does not yet show that hiring for the experience will lift a firm's growth or its share price.
What to watch
- Whether the full Journal of Management paper lists the studies it reviewed and reports effect sizes, especially for domestic and smaller firms.
- Any study that follows the same companies before and after an internationally experienced CEO or director arrives, the design that could test which way the link runs.
- Whether search firms or nomination committees start scoring the length, breadth and cultural distance of candidates' experience, as Qin recommends.