Global Integration vs. Local Responsiveness | Assignments Culture and Globalization

MNGT828 – Global Integration vs. Local Responsiveness

Zachary Lewis

Question One:

Discuss whether each of the articles implies pressure for global integration or local

responsiveness – for each, explain why you think so.Identify whether the company is pursuing

an international, global, multinational, or transnational strategy and explain why you think

so.What are the major challenges that the company faces when trying to achieve either global

integration or local responsiveness? Write a short essay on each of the required articles supplying

your answers to the above questions.

Building a Company Without Borders –In this article, the author describes the path taken by

Reckitt Benckiser utilized post-merger to grow and evolve the company. In my view, the article

implies pressure ofglobal integrationdue to the philosophy and approach used to achieve their

success. For example, post-merger they utilized the plethora of cultures and moved them

throughout the company. Additionally, before the multitude of companies merged, they had all

been running themselves independently with a singular focus in mind1. Post-merger, the

company incentivizes its best talent to be able to move around the globe to achieve its goals. This

allowed them to ensure they could get the right people, with the right views and goals, into the

right locations to help redefine the company in its pursuit of success and growth across the globe.

RB was setting itself up to successfully switch from local/single focus to global expansion and

development. The biggest challenge faced by RB was getting their top talent/culture to move

across the world to take on new roles in a new area. RB standardized pay for these roles

incentivized the moves, and truly reward hard-working managers that incentivized them to want

to take the roles.

The Paradox of Samsung’s Rise –Focuses on the transition of Samsung fromlocal

responsivenesstoglobal integrationovera 20-year period. It took them from being a low-cost

original equipment manufacturer to a world leader in R&D, marketing, and design, with a brand

more valuable than Pepsi, Nike, or American Express2. Their approach utilized a formal way to

implement western practices, broaden their cultural practices by bringing foreigners in and

sending locals abroad, and lastly, they protected their long-term plans from short-term issues

financial or otherwise. Samsung over this 20-year journey was on at first a multinational journey

that then expanded fully to a global one. They utilized what made them successful in Japan and

meshed it with “western” approaches and ideas to give them the tools to compete and attract

talent to lead them. The biggest challenge though was also something that helped them prosper

as the introduction/implementation of western practices reduced disruptions but slowed

progress2.

Finding Great Ideas in Emerging Markets –This article focuses on multinational companies and

their ability to bridge the gap fromglobal integrationtolocal responsivenessto be able to adjust

their make strategy and supply chain initiatives to compete in emerging markets. In one example,

the focus is on Briggs & Stratton assembling pumps and generators in Shanghai for the Chinese

market but importing parts from America3. They changed their strategy and focused instead on

creating the products in China for the China and Asia markets. This allowed them to cut down on

manufacturing and shipping costs and be more agile to the local market demands and changes.

They ended the lease of their plant and reinvested the money in a Chines based R&D and design

center3. The biggest obstacle or challenge faced when making this switch is the chance of

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Zachary Lewis Question One: Discuss whether each of the articles implies pressure for global integration or local responsiveness – for each, explain why you think so. Identify whether the company is pursuing an international, global, multinational, or transnational strategy and explain why you think so. What are the major challenges that the company faces when trying to achieve either global integration or local responsiveness? Write a short essay on each of the required articles supplying your answers to the above questions. Building a Company Without Borders – In this article, the author describes the path taken by Reckitt Benckiser utilized post-merger to grow and evolve the company. In my view, the article implies pressure of global integration due to the philosophy and approach used to achieve their success. For example, post-merger they utilized the plethora of cultures and moved them throughout the company. Additionally, before the multitude of companies merged, they had all been running themselves independently with a singular focus in mind^1. Post-merger, the company incentivizes its best talent to be able to move around the globe to achieve its goals. This allowed them to ensure they could get the right people, with the right views and goals, into the right locations to help redefine the company in its pursuit of success and growth across the globe. RB was setting itself up to successfully switch from local/single focus to global expansion and development. The biggest challenge faced by RB was getting their top talent/culture to move across the world to take on new roles in a new area. RB standardized pay for these roles incentivized the moves, and truly reward hard-working managers that incentivized them to want to take the roles. The Paradox of Samsung’s Rise – Focuses on the transition of Samsung from local responsiveness to global integration over a 20-year period. It took them from being a low-cost original equipment manufacturer to a world leader in R&D, marketing, and design, with a brand more valuable than Pepsi, Nike, or American Express^2. Their approach utilized a formal way to implement western practices, broaden their cultural practices by bringing foreigners in and sending locals abroad, and lastly, they protected their long-term plans from short-term issues financial or otherwise. Samsung over this 20-year journey was on at first a multinational journey that then expanded fully to a global one. They utilized what made them successful in Japan and meshed it with “western” approaches and ideas to give them the tools to compete and attract talent to lead them. The biggest challenge though was also something that helped them prosper as the introduction/implementation of western practices reduced disruptions but slowed progress^2. Finding Great Ideas in Emerging Markets – This article focuses on multinational companies and their ability to bridge the gap from global integration to local responsiveness to be able to adjust their make strategy and supply chain initiatives to compete in emerging markets. In one example, the focus is on Briggs & Stratton assembling pumps and generators in Shanghai for the Chinese market but importing parts from America^3. They changed their strategy and focused instead on creating the products in China for the China and Asia markets. This allowed them to cut down on manufacturing and shipping costs and be more agile to the local market demands and changes. They ended the lease of their plant and reinvested the money in a Chines based R&D and design center^3. The biggest obstacle or challenge faced when making this switch is the chance of

Zachary Lewis untested ideas or initiatives crashing and burning with no success. One way to overcome this in the article is to be willing to experiment and develop innovating-hunting strategies like GE^3. How to Win in Emerging Markets: Lessons from Japan – This article does a great job of focusing on the two companies that have utilized local responsiveness to gain advantages and growth in emerging markets while also showing why others in Japan are failing to do the same. Daikin and Unicharm really did their homework and put the time and effort in to ensure they could win in emerging markets. They did this by going after the middle market, allowing them to reach the masses. Unicharm for example redesigned diapers, and sourced material locally to cut prices by 40%; developed close relationships with traditional mom-and-pop retailers; and hosted events with wholesalers, giving attendees volume discounts^4. Their transnational approach had both companies far ahead of Toyota, Nissan, Honda, etc. The challenges faced by companies on this journey are being able to form partnerships and have the R&D capacity to tweak their products to reduce costs to be able to compete in the lower markets than they’re used to. This is where Daikin and Unicharm shined though, and it really sets them apart. L’Oréal Masters Multiculturalism – This article focuses on L’Oréal’s ability to master the in- between and be both a global force to reckon with and keep its local appeal and depth. built a portfolio of brands from many cultures—French, of course (L'Oréal Paris, Garnier, Lancôme), but also American (Maybelline, Kiehl's, SoftSheen-Carson), British (The Body Shop), Italian (Giorgio Armani), and Japanese (Shu Uemura). The company now has offices in more than 130 countries, and in 2012 over half its sales came from new markets outside Europe and North America, mostly in emerging economies^5. The key to them overcoming the challenges of this journey involved assigning team members with multicultural experience to their new product development. This helped them bridge the gap in these new areas by leveraging experiences to remain the leader in product development. They also manage to introduce 20% of total products as “new” every year^5. Another way to overcome obstacles was to ensure as they grew internationally so did their international exposure to their leadership. However, they had to be strategic in this approach to not rock to the boat too much with competing cultures/practices. The Growth Opportunity That Lies Next Door – This article focuses on the growth and global integration pressure faced by Cosméticos. Cosméticos, is a Brazilian beauty giant that for some 30 years has been attempting to move, with decidedly mixed results, into developed markets even as the opportunities in its region have grown stronger and stronger^6. The biggest challenge this company faced as it worked to move globally was the lack of competent management staff to lead them in their new areas of business. Their strategy though as a multinational is to sell premium mass-market cosmetics and personal-care products to middle- and upper-class consumers^6. They utilize a direct sales approach to get this done, which utilizes independent salespeople to market and distribute the products. This approach plays well locally and regionally, but it does not translate well to a global scale or model. In their advancement to cross the globe, they’re still only able to dominate nearest their starting point. How We Did It: CEO of Ozon on Building an eCommerce Giant in a Cash-Only Economy – This article focuses on the company Ozon, the unlikely path their CEO took to attain her position, and

Zachary Lewis upside down and be willing to stay the course to get it right. For example, Samsung’s mindset and ambition to westernize its company and strategy have allowed it to be a household name that makes a plethora of top-notch products. Another example is the Daikin and Unicharm companies in Japan fully championing the approach to go global by going local and utilizing their wins in Japan to compete and win in new markets. Third, is that no matter how profitable or for some “glamorous” this seems, it takes hard work, tenacity, and determination to truly win in these spaces. These companies must be 5 steps ahead of their competition, but also, they need to stay ahead of customers across regions or continents and ensure they don’t lose sight of what’s next or what’s going out of style or desire. Ultimately, I think it would be fascinating to see an update on these articles as it reflects what I would go through in the post-pandemic time and how they weathered not only that storm but the decade in-between now and then. I think the approaches of companies that were driven by local responsiveness would have managed to avert some supply chain issues and ensure they could corner demand changes more quickly during these times. However, I also think the ones utilizing the global integration approach would have been able to utilize their cost benefits and universal operation methods to more quickly reacting for their whole company than having to define multiple approaches depending on locality/region. It was nice to get a well-rounded view and synopsis of both aspects in these articles. It was also fascinating to see how functional and rewarding both pressures can be while also how challenging they were as well. Companies who were fully aware of who and what they were, but also willing to change and adapt to strategies quickest are most successful. And further, the ones that whether they were focused on global or local utilized multicultural approaches had great success and could overcome barriers better than their competitors. References:  Building a Company Without Borders, Bart Becht, HBR, April 2010  The Paradox of Samsung’s Rise , Tarun Khanna, Jaeyong Song, and Kyungmook Lee, HBR July-August 2011  Finding Great Ideas in Emerging Markets, Nathan T. Washburn and B. Tom Hunsaker, HBR, 9/  How to Win in Emerging Markets: Lessons from Japan, Shigeki Ichii, Susumu Hattori, and David Michael, HBR, 05/  L'Oréal Masters Multiculturalism, Hae-Jung Hong and Yves Do, HBR, 06/  The Growth Opportunity That Lies Next Door, Geoffrey Jones, HBR, 08/  How We Did It: CEO of Ozon on Building an eCommerce Giant in a Cash-Only Economy, Maelle Gavet, HBR, 08/  How Jeff Bezos aims to conquer the next “trillion-dollar market.”, Vivienne Walt, Fortune Magazine, 2016  Alibaba and Lessons from China’s Innovative Digital Giant, MING ZENG, HBR, 10/

Zachary Lewis

Global Integration vs. Local Responsiveness, Assignments of Culture and Globalization

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