Reprint: R1105F
Never mind what you’ve heard about the world being flat. Today’s global landscape is marked by unbalanced growth, protectionism, and ethnic, religious, and linguistic divides. Differences still do matter.
The ideal of a truly global, stateless corporation has become popular, but it simply isn’t possible to achieve, says the author. Look at Rupert Murdoch’s News Corporation. A major player from Australia to the United Kingdom to the United Sates, the company made huge blunders in its move into TV services in Asia, ignoring English-speaking residents’ preference for local-language content and touting satellite TV as a threat to totalitarian regimes everywhere (prompting a ban on satellite dishes by the Chinese government). News Corporation had transcended its Australian origins but not its roots in English-speaking democracies.
Crafting a global strategy and organization is possible, but you must focus on understanding the differences among people, cultures, and places—not on eliminating them. One tool that can help you get a handle on the most critical differences is a rooted map, which sizes countries according to measures that reflect a particular nation’s perspective, such as the amount of industry services they purchase from domestic companies.
A cosmopolitan approach may lead firms, at least in the midterm, to concentrate more on adaptation to local markets than on aggregation or arbitrage. It has various other implications as well. Firms will have to think about how to readjust their organizations to better manage external distances, and they must cultivate leaders who know how to bridge cultural and national differences.
