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