Between going ‘native’ and remaining ‘rooted’, do global companies have a choice?

USA Feb 17, 2020, 05.06 PM(IST) Written By: Wajahat Qazi

'Champion of globalisation' Photograph:( Reuters )

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Technological advances made it possible even for small firms to set up ‘global shops’.

The third wave of globalisation, which some hold has veritably ended, presented an array of choices and challenges to firms of all sizes and forms. The whole world was a potential market for firms, as barriers to trade, commerce and business fell rapidly. 

Technological advances made it possible even for small firms to set up ‘global shops’. ‘Thinking global’ and holding an international mindset became mantras and buzzwords.  

While management gurus dwelt on these themes and popularised these, going global presented conceptual, structural and emotional challenges. How was a firm to organise itself? What structures and practices should it adopt? What management philosophy was the most prudent and germane? Should be firm be global and local? How would the new global or glocal orientation impact and determine hiring and management practices? If, say, the global manager had to mobile and ‘rootless’, was there a price to pay for this? And last, but not the least, was the firm going global to remain rooted in its headquarters with tinkering at the edges or go native?

Different firms adapted to the opportunities and challenges presented by globalisation differently. But, there were a few common thematic areas of concern and review like, for example, the multidivisional firm catering to a homogenous domestic market was no longer the panacea to organisational design and structure. Firms adopted different structures that helped them cope with the demands and needs of a global market.

While firms like McDonald that had standardisation built into them could with a wee bit of variation and adjustment to local tastes could get away with its peculiar management practices, other firms had different approaches. Many remained rooted in their countries of origin, but gave managers in other counties some degree of autonomy and discretion. A few delegated power to managers of other countries and tried to develop a synthesis.

But, whatever a given management practice a firm adopted, cultural differences presented a challenge. The question was how to maintain coherence and cohesiveness given the diversity of talent available in the global market place? One answer that presented itself was to socialise managers into the broader and larger philosophies of a firm and role rotation. 

The premise appears to have been that this would create a workable synthesis that would gel with the objectives of firms. However, problems inhered in this approach; the main pertained to acculturation, culture shocks and personality changes of managers.

Another approach that was tried and is practised to some extent contemporarily is a virtual workplace wherein a given manager or technocrat did not have to move from his or her home. Technological advances made it possible to work from remote locations. This approach also helped in cost reductions.

The menu of choices that firms had was many and each chose what seemed to be the best fit for it. But now, it is held that globalisation is in retreat and the world is deglobalising. Would this impact firms’ choices of hiring, locational, basing and management choices and decisions? It would appear that while globalisation may have slowed, it may not be irreversible, especially vis a vis firms and their needs for value, profits and market shares and competition thereof. In this schema then, firms might not retreat from going global but might adapt till there is more clarity. However, the business will not atrophy and insular given that expansion for most businesses and firms is in the nature of an imperative. What then would be the most appropriate hiring and managerial practices for firms in a changing environment?

The world contemporarily remains fluid-politically, economically and culturally but a firm with an international or even global orientation still has choices about hiring and management practices. There still exists a global market for talent. A parochial and narrow approach to hiring would mean that firms choose and pick talent only from their home bases but this homogeneity could potentially undercut them and present a competitive disadvantage. The yardstick for firms with respect to hiring talent, and developing a robust skill base should be merit. An ethnocentric approach even though has some advantages but, in the final analysis, nothing beats talent and merit. Besides the utilitarian benefit that talent and meritocracy offer, there is also the aspect of inherent good involved in it.

But a global talent pool and hiring from it presents cultural problems. Cultural differences might be the chasm that a firm might flounder into. Can it be obviated? The answer is yes. Key is developing and cultivating intercultural competences, sensibilities and sensitivities under the overall management rubric of firms.  

Firms inhabit a world that is on the cusp of a transition. While some aspects of these transitions might be ephemeral, others could be enduring. But a commitment to hiring from a global talent pool and retaining the best talent would be something that firms should not forfeit. This might even constitute a public good that also contributes to value generation for firms. The choice then between ‘going native’ and remaining rooted becomes superfluous as a given firm with a diverse talent pool becomes a microcosm of the world itself!

 (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)