A leader can no longer view their role comparable to a line assembly job where there is specialization and mastery of rote ways of conducting their business in one type of environment. To have a competitive edge in today’s world, leaders are required to have a more geocentric mindset which requires different cultural competencies and adaptation to new environments. As economies rapidly change and companies try to expand and increase their markets, reduce labor costs and get tax breaks, there is a shift towards transplanting the business abroad. In order for this move to be successful, it would require people who can adjust and redesign how the business that they are in charge of is handled. Levy et al did a great job of explaining this when they state, “to be effective, transnational managers need both the culturally specific knowledge and adaptation skills required in international firms, and the ability to acquire a worldwide perspective and to integrate the worldwide diversity required in multinational firms. The transnational manager must be discrete when choosing to be locally responsive and when to emphasize global integration.”
True geocentric leaders do not believe in one size fits all, homogenous way of thinking as the headquarters. In contrast, their mindset is to “produce a collaborative and cooperative effort on the parts of both headquarters and all subsidiaries to establish worldwide standards, and permissible local standards variations. (Moran et al).Geocentric leaders would focus on adopting practices that achieves the overall objectives. This means striking a balance between what works in the parent location and what is needed in the geographical location that they are leading. Communication is paramount as the following sectors are addressed so that the company’s overall objectives are attained. The impact of the leaders competencies can be seen in the following areas.
Global leaders and the workforce: Adaption is very important with the workforce. While a U.S originated leader may be comfortable with a participative type of leadership, this may not work well in other cultures, for instance, it may be deemed insubordinate for an employee in Japan to voice their opinion to someone in a superior position. When there is a clear distinction and emphasis in the power distance in a culture, there is less ease in sharing and collaborating by the employee. Where a leader may come from a masculine cultural context, the aggression may be viewed as conflict, which is avoided in other cultures. It is important that when leading the charge in a different culture that the leader develops a strategy by using Hofstede’s five cultural dimensions as a guide in understanding how the workforce operates. An excellent tool can be found on http://geert-hofstede.com/countries.html
Global leaders and the customers: There are a few examples of companies where geocentrism is in force for instance KFC has “a vegetarian thali (a mixed meal with rice and cooked vegetables) and Chana Snacker (burger with chickpeas) to cater to vegetarians in India” and Viacom’s MTV channels are “branded accordingly as MTV India, MTV Korea, MTV China and MTV Japan and use more local employees with use of local language” (Manish 2010) while playing music that is suited to the respective cultures. While the entire menu was not changed by KFC, they did consider local spices (e.g. curry) and infused them in some of the options in their menu.
http://giftssendtokolkata.com/kfc/chana_snacker.jpg
http://www.indianshowbiz.com/wp-content/uploads/2012/12/image006.jpg
They even involve their customers by collaborating on social media; a sure way of letting the host country know that their input matters.
http://blinksolution.com/projects/kfc-india-curry-crunch-campaign/
Another example where leaders think and act globally and locally is with McDonald’s, a hamburger chain. McDonalds does not offer beef options in India due to customer preferences. The global leader is still achieving the objectives of the head office but has modified their strategy to match the needs and preferences of their local market.
Global leaders and the society: As MNE’s expand worldwide their impact to the economics and society in general is certain. As they infuse employment opportunities into developing countries, poverty concerns are ameliorated and there is a boost in spending within the country which can potentially lead to economic growth within the country. As social learning is encouraged, it creates an even more dynamic and educated workforce which again has the potential for promoting growth for the country or region.
References
Manish, J. Glocalization Examples- Think Globally and Act Locally. Retrieved from: http://www.casestudyinc.com/glocalization-examples-think-globally-and-act-locally
Moran, Abramson, Moran (2014): Managing Cultural Differences. Chapter 4
Orly Levy, Schon Beechler, Sully Taylor and Nakiye A Boyacigiller http://www.palgrave-journals.com/jibs/journal/v38/n2/fig_tab/8400265t1.html
I am thoroughly impressed with this blog. I like how you tied together competing locally and globally with examples of large corporations. Do you think it is a smart idea to compete a local level first before competing globally? I think competing locally first is a good way for international firms to begin their success rate because they need to compete at a local level before broadening their range in order to make sure their product works. I like how you tied together McDonalds acting globally on all fronts; they are a company who have mastered thinking on a global scale by accomodating their products with the satisfaction of those across the globe.
As I stated earlier, very good job tying various concepts together showing how several companies successfully integrated the geocentric view into their business model much to their success.
I’ve been thinking more and more about this topic, and one subject stuck with me specifically that I thought was worthy of a deeper dive. MNE’s expansion in poorer areas leading to positive impact that weren’t necessarily related to their bottom line is something that I think is important.
After thinking more about this, I started searching for exactly what this impact might look like. I found a simply outstanding article by Rosabeth Moss Kanter (2011) published in the Harvard Business Review. Kanter (2011) takes this lesson to a level that frankly I found inspiring and shows the value of leadership on a global scale. She expands upon the typical thought of a leader as driving profits to someone who inspires and effects organizations on a larger scale.
Kanter (2011) succinctly states, “In companies that think of themselves as social institutions, work is emotionally compelling and meaning resides in the organization as a whole rather than in a less sustainable cult of personality. Top leaders exemplify and communicate the company’s purpose and values, but everyone owns them, and the values become embedded in tasks, goals, and performance standards.”
Kanter (2011) uses real examples such as:
• The diverse Mahindra Group who defines its mission as “many companies united by a common purpose—to enable people to rise.”
• PepsiCo created an organization unit called Global Nutrition Group complete with a Global Health Officer to drive their goal of gradually moving toward a healthier product for consumers and even guides new acquisitions and investment. This instills a mission that transcends geography for PepsiCo employees. Through employee led initiatives, PepsiCo also established a development center in Peru to help lead discovery of a new variety of potato that would thrive in southern climates and be more sustainable while assisting local farmers in the Andes.
• Robert McDonald, Procter & Gamble new CEO in 2010, institutionalized the company’s Purpose, Values, and Principles values, by creating a business strategy around improving the lives of the world’s consumers.
• P&G West Africa has placed a measurable goal in every employees review: How many more lives have I touched this year? This has led to employee involvement in reducing infant mortality, teaching postnatal care, and providing immunizations. Not to be discounted is the emotional impact on P&G employees themselves. They feel the impact of their work; they are saving lives, and they know it.
• IBM sends top leadership development candidates on month long projects around the world.
Many companies and NGO’s are partnering to combine both economic and human benefits such as Coke/WWF, Mexico/PepsiCo, P&G/West African hospitals, and IBM volunteer work after tsunamis, hurricanes and earthquakes.
Here are a few points Kanter (2011) makes that I think drive home this message:
• “Institutional logic holds that companies are more than instruments for generating money; they are also vehicles for accomplishing societal purposes and for providing meaningful livelihoods for those who work in them.”
• “In developing an institutional perspective, corporate leaders internalize what economists have usually regarded as externalities and define a firm around its purpose and values.”
• “[Corporate leaders] undertake actions that produce societal value—whether or not those actions are tied to the core functions of making and selling goods and services.”
• “If companies are to serve a purpose beyond their business portfolios, CEOs must expand their investments to include employee empowerment, emotional engagement, values-based leadership, and related societal contributions.”
• “Only if leaders think of themselves as builders of social institutions can they master today’s changes and challenges.”
• “Purpose and values—not the widgets made—are at the core of an organization’s identity, and they can guide people in their efforts to find new widgets that serve society.”
What is our role as leaders? I think Kanter (2011) puts it best saying, “Great companies identify something larger than transactions or business portfolios to provide purpose and meaning. Meaning making is a central function of leaders, and purpose gives coherence to the organization.”.
Kanter, R. M., (2011). How Great Companies Think Differently. Harvard Business Review. Retrieved from https://hbr.org/2011/11/how-great-companies-think-differently
Nice job tying geocentric mindsets, Hofstede’s five cultural dimensions, shift in products to meet local cultures, and finally social media involvement to customers which shows how these companies engaged at every level. That doesn’t happen without leadership at multiple levels driving this.