The Global-Local Tension: Vodafone CEO Vittorio Colao Leading with 'International Values and Local Roots' (B)

Vittorio Colao, CEO of telecommunication giant Vodafone, must respond to reports of disturbing accounting practices at two of Vodafone’s operating companies. In one case, €60 million have been misreported due to a series of failures to check manual accounting processes. The situation has been escalated to Vodafone’s audit committee, which expects Colao and his team to act drastically. In the second case, €7 million have been misreported through deferred recognition of costs into the future. The two cases challenge Colao’s organizational model of International Values and Local Roots that aims to maintain productive tension between global mandates and local practices. Colao meticulously designed his model based on the key value of trust, his unwavering convictions earning him the moniker of the ‘benevolent dictator.’ Colao is acutely aware that his response to the accounting discrepancies will be a referendum on his leadership for over 120,000 employees worldwide. If he doesn’t make the right decisions, the consequences will reverberate throughout the organization and erode confidence in the value of trust that he relentlessly worked to establish.