Some international management experts contend that globalization and national responsiveness are diametrically opposed forces, and that to accommodate one, a multinational must relax its efforts in the other. In what way is this an accurate statement? In what way is it incomplete or inaccurate?
The Correct Answer and Explanation is :
The statement that globalization and national responsiveness are “diametrically opposed forces” suggests a tension between the forces of global integration and local adaptation. Globalization refers to the process of businesses and other organizations operating on a global scale, standardizing products and services, and leveraging economies of scale. National responsiveness, on the other hand, refers to the need to adapt business strategies, products, or services to meet the specific needs of local markets. This often involves adjusting for cultural, economic, legal, and consumer preferences that differ from one country to another.
The idea that these forces are diametrically opposed is accurate in the sense that companies may face difficult trade-offs between standardizing products for global efficiency and localizing products to cater to specific market needs. For example, a multinational company may decide to standardize its product to reduce costs and streamline production but may lose out on market share if the product does not meet the specific tastes or regulations of a local market. In such cases, achieving the right balance can be challenging because the company must either focus on cost advantages through globalization or prioritize customization for local needs.
However, this perspective is incomplete and somewhat inaccurate because it overlooks the possibility of a flexible strategy that balances both forces. In reality, companies do not always have to choose between globalization and national responsiveness. Many multinationals have successfully integrated both approaches, often using a strategy known as “glocalization.” This strategy involves developing globally standardized products while allowing for local adaptations in certain aspects such as packaging, marketing, or features. For instance, McDonald’s offers a globally consistent menu with localized variations, like the McSpicy Paneer in India.
Thus, while there are challenges in balancing globalization and national responsiveness, it is not necessarily an either-or situation. Many companies find ways to manage both forces effectively, achieving global efficiency while meeting the unique needs of local markets.