Living abroad can make you a more confident manager, Exeter professor suggests
The UK's most confident and successful corporate managers live abroad during their formative years, new research from the University of Exeter Business School has claimed.
The study found corporate managers widely exposed to more than one culture before the age of 23 are more likely to be confident taking difficult and risky decisions, such as acquisitions.
It looked at more than 2,000 acquisition decisions taken by board members at 561 UK listed companies, and found that managers who live or study in cultures other than their own more readily take difficult strategic decisions such as deciding to acquire foreign companies.
Grzegorz Trojanowski, associate professor in finance at the University of Exeter Business School, and co-author Dorota Piaskowska, of University College Dublin, say corporate managers with wide exposure to different cultures tend to see doing business in foreign countries as providing great opportunities, and they expect to get a positive result from their business activities in these markets.
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The study found that, on average, UK company boards have four executive members, most of whom are male.
While 18 per cent of all senior managers are foreigners, in 60 per cent of companies all board members are UK citizens. The study found that 22 per cent of executives come from a mixed cultural background or have spent significant periods of time at a foreign school or university.
The researchers found a direct link between the international background of board members and the activity of the firm in foreign markets.
"The more international the makeup of a board, the more likely the company is to have business activities abroad," said Professor Trojanowski.
"The UK is one of the most diverse countries on earth and this cultural mix has a positive impact on the business focus of British firms, which tends to be disproportionately international.
"Globally there are 40 per cent more first-generation migrants living in the world today than in 1990 meaning the global population is becoming more diverse. Businesses not only need to deal with this diversity, they have an opportunity to tap into this demographic to employ cross-culturally competent employees and managers."
Managers who were exposed to multiple cultures in their youth were found to be more comfortable making decisions based on intuition in the absence of hard facts.
However, Professor Trojanowski warned: "Confidence, often a key attribute among successful executives with a lot of international experience can be a double-edged sword. It may result in an over optimistic perspective and possibly lead to excessively risky behaviour."