Standardisation Versus Adaptation in a Globalisation Context
Standardisation versus Adaptation in a Globalisation context
Challenge
This is the challenge facing primarily multinational firms whether to standardise their local offering or adapt/localise it for the market they are selling into. According to De Wit and Meyer (2010), the question facing managers is whether they should anticipate and encourage global convergence by emphasising global standardisation, centralisation and coordination or should managers acknowledge and exploit international diversity by emphasising local adaptation, decentralisation and autonomy. In other words as St Augustine (534-430) put it “when I am in Milan, I do as they do in Milan; but when I go to Rome, I do as Rome does”.
Technology influencing standardisation
What is strongly influencing globalisation in today’s context is technology. Technology is driving converging commonality according to Levitt. Firms benefit more from commonality i.e. standardisation than adaptation to the local market. I would suggest that globalisation has been good for the world consumer in both rich and poor countries. This has largely been achieved through standardisation. In particular, corporations have benefited from this standardised approach through economies of scale in production, distribution, marketing and distribution.
Who benefits?
As a consequence, the consumer has greatly benefitted in the rich and poor countries as goods have reduced in cost. It may be argued that this is purely for the consumption of goods but not necessarily for the communities that may have once manufactured these goods in either rich or poor countries. It can have devastating consequences once the manufacturer moves out of the local community. Kanter (Best of HBR 1995) would suggest it does not as she puts it “Does globalisation have to be at the expense of local community? Not at all if that community can become a world-class source of concepts, competence or connections.”
Why Standardise?
Standardisation is in
Challenge
This is the challenge facing primarily multinational firms whether to standardise their local offering or adapt/localise it for the market they are selling into. According to De Wit and Meyer (2010), the question facing managers is whether they should anticipate and encourage global convergence by emphasising global standardisation, centralisation and coordination or should managers acknowledge and exploit international diversity by emphasising local adaptation, decentralisation and autonomy. In other words as St Augustine (534-430) put it “when I am in Milan, I do as they do in Milan; but when I go to Rome, I do as Rome does”.
Technology influencing standardisation
What is strongly influencing globalisation in today’s context is technology. Technology is driving converging commonality according to Levitt. Firms benefit more from commonality i.e. standardisation than adaptation to the local market. I would suggest that globalisation has been good for the world consumer in both rich and poor countries. This has largely been achieved through standardisation. In particular, corporations have benefited from this standardised approach through economies of scale in production, distribution, marketing and distribution.
Who benefits?
As a consequence, the consumer has greatly benefitted in the rich and poor countries as goods have reduced in cost. It may be argued that this is purely for the consumption of goods but not necessarily for the communities that may have once manufactured these goods in either rich or poor countries. It can have devastating consequences once the manufacturer moves out of the local community. Kanter (Best of HBR 1995) would suggest it does not as she puts it “Does globalisation have to be at the expense of local community? Not at all if that community can become a world-class source of concepts, competence or connections.”
Why Standardise?
Standardisation is in
Bibliography: Levitt (1984) The Globalization of Markets, 2-21. Available from Business Source Premier [Accessed 22 November 2011] Kanter (2003)Thriving locally in the Global Economy, Harvard Business Review 119-127. Available from Business Source Premier [Accessed 24 November 2011] De Wit, B and Meyer R (2010) Strategy: Process, Content, Context 4th Edition, South Western Cengage Learning Douglas, S and Wind Y (1987) The Myth of Globalisation. Available from Business Source Premier [Accessed 23 November 2011]