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Goran Svensson È School of Management and Economics, Vaxjo University and School of È È Economics and Comercial Law, Goteborg University, Sweden È
International business, Globalization, Multinationals, Strategy
In literature, different concepts and approaches are continuously being developed. They are developed and used in order to put forward and describe various real world phenomena as the result of research efforts. Different concepts and approaches are also used to position the research performed. Scholars may use concepts and approaches to position themselves and their research in relation to other scholars' research. Concepts and approaches may also be used to limit the scope of a specific research project. Practitioners may use different concepts and approaches to describe their ongoing and future business activities. In addition, they may use concepts and approaches to illustrate and promote a product, a brand, or other issues of importance for the company. The importance that a concept or an approach provides a correct picture is crucial. Otherwise, the supposed receivers or audience may be misled and discontent. Accordingly, there may be a mismatch between the receivers' or the audience's expectations and perceptions if a concept or approach is used ambiguously. Therefore, the importance of well-defined and correctly applied concepts and approaches is a necessity. Existing definitions and applications should reflect unifying features and common denominators in commonly used contexts. Otherwise, scholars, as well as practitioners, may not be able to communicate properly with each other. In addition, the supposed receivers or audience may be misled if a concept or an approach is ambiguous. It may cause confusion and misunderstanding and in the end lead to frustration and dissatisfaction among the potential receivers or audience.
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There are widespread concepts and approaches that are used in various contexts and that do not reflect the same meaning in different contexts, or even catch the core significance of their supposed or original meanings. One such concept or approach is the term ``global strategy'', which is frequently used in different contexts and meanings. There is an evident disagreement of the meaning and the appropriate usage of the concept or approach of global strategy among scholars and practitioners. The term global strategy appears also to be used, both by scholars and by practitioners, in order to attract attention or an audience, and has now become popular jargon. Nevertheless, the multiple meaning and usage of the term is confusing and misleading. There is a necessity to further explore and describe the concept and approach of global strategy. A re-definition of the term may assist in advancing it beyond present boundaries. However, the objective of this article is less pretentious. It is limited to throwing light upon the meaning and usage of an ambiguous term both in literature and in practice. At best, a renewal and refinement of the term global strategy will be achieved. The topic of this article is therefore exemplified and described through the widespread and popular term ``global strategy'', which is widely applied in many different contexts. It is also widely used to represent different meanings, depending very much upon the user. The term global strategy is explored and described in the next section.
The topic of this article provides a discussion on the importance of well-defined concepts and approaches used by scholars and by practitioners in various contexts. It is troublesome when the use of a concept or an approach is ambiguous and confusing. The discussion focuses on, and is exemplified through, the globalization of business activities and the term ``global strategy''. The widespread use of popular jargon cannot cover the fact that a genuine or true global strategy approach appears to be a managerial utopia. The terms ``glocal strategy'' and the ``glocalization'' of business activities are introduced to enhance the accuracy of the present usage by scholars and by practitioners of the term global strategy and the phenomenon often described as the globalization of business activities.
A global strategy
A company's global strategy is closely related to its corporate strategy. The corporate strategy guides the performance of a company's overall business activities and the
Management Decision 39/1  6±18 # MCB University Press [ISSN 0025-1747]
the setting for a pure multidomestic strategy is characterized by the following: that there is no particular pattern of market participation.e. They mean that these differences have to be considered when companies perform and implement their business activities. that the marketing approach is uniform on a worldwide basis. Accordingly. that the product offering is fully standardized worldwide. Keegan and Green (2000. while the global corporation operates with resolute constancy. and resources. 1986). and low need for localized marketing and high advantages of standardized marketing. Grune (1989. p. Yip (1989) provides a detailed framework for evaluating whether and how to globalize an individual company's corporate strategy. but its execution requires far-reaching changes to be made in corporate structures and procedures (e. The global corporation sells the same things in the same way everywhere. each subsidiary is a profit center with decentralized strategy and operations.g. as if the entire world. that the marketing approach is local. it is survival. the multinational companies have three characteristics. Simon-Miller (1986) argues that the adoption of a global strategy may give a competitive advantage. p. 26) define a global strategy as: F F F a design to create a winning offering on a global scale F F F Consequently. Jeannet and Hennessey (1992) argue that a global strategy represents an application of a common set of strategic principles across most world markets. A global company operates as an integrated system in which all subsidiaries are interdependent in terms of operations and strategies.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 allocations of resources to achieve established business goals. Lorenz. a global strategy seeks to maximize worldwide performance through sharing and integration F F F On one hand. they also apply a worldwide approach to the term global strategy. but it does not ignore differences among markets. i. that the location of value-added activities are concentrated ± one activity in each different country. great creativity. 10) offers an explanation of how a global approach differs from a multinational one. an optimal combination of the marketing mix that is identical in design and function. namely that they pursue independent strategies in each foreign market. These world marketers compete on a basis of appropriate value. The formulation of a global strategy is a major challenge in itself. Keegan (1989) writes that a global strategy is based upon scanning the world business environment to identify opportunities. and constant effort. Allio (1989) states that global competitors exploit the similarities between countries to enhance the competitive advantage. and that the competitive moves are integrated across countries. and that the competitive moves are stand-alone by country. and adjusts its products and practices in each. their subsidiaries are essentially autonomous operations. standardized promotions. When a company pursues a global strategy. In contrast to multinational companies. that the product offering is fully customized in each country. or profits. or major regions of it. Dahringer and Muhlbacher (1991) use the È term global to emphasize customer similarities regardless of the geographic areas in which they are located. The multinational corporation operates in a number of countries. Levitt (1983) states that the uniformity of global business activities should be applied on a worldwide basis without local adaptations. The framework emphasizes the potentials for achieving competitive benefits and provides illustrations of companies that have applied globalization issues in their corporate strategies. a multidomestic approach allows the independent development of strategy by country or  . global corporations view the world or its major regions as one entity instead of a collection of national markets. the setting for a pure global strategy is characterized by the following: that there is a significant share in major markets of market participation. Yip (1989. and while they allow headquarters to coordinate financial controls and marketing. In contrast. was a single entity. He means that the global effort takes great discipline. threats. 31) distinguishes between a multidomestic strategy and a global strategy: F F F a multidomestic strategy seeks to maximize worldwide performance by maximizing local competitive advantage. Yip and Coundouriotis (1991) regard the global strategy as a process of worldwide integration of strategy formulation and implementation. On the other hand. Levitt (1983) makes a distinction between the multinational corporation and the global corporation. For example. trends. but the reward is not just success. it looks at the world market as a whole rather than at markets on a country-by-country basis. that the location of value-added activities are restricted to each country. revenues. p. while the multidomestic or multinational competitors exploit the differences between countries. Lewis and Housden (1998) use the term global strategy to represent standardized products.
Kanter and Dretler (1998) advance a different view. Johansson (2000) states that there are four groups of variables that propel companies towards globalization. namely the access to foreign markets. Hout et al. However. the competitive drivers consist of the interdependence between countries and the competitors that globalize or might globalize. Finally. not necessarily an international one. and the increasing number of worldwide mergers. and at the competitor level. the term global strategy implies the focus on similarities. Jeannet and Hennessey (1992) mention a number of reasons for the globalization of business activities such as globalizing for internal efficiency. The global strategy approach may improve the  . that can tighten local integration in the interest of global goals. global customers. and coordination on a worldwide basis. global channels. and transferable marketing. standardization. learning and experience. The overall or the holistic approach of the term global strategy is evident. Levitt (1983. these indicators are independent of each other. at the industry level. differences in country costs and skills. and provide explanations for final decisions. A company with such a global focus formulates long-term strategy for the company as a whole and then orchestrates the strategies of local subsidiaries. The government drivers are classified as favorable trade policies. compatible technical standards. The cost drivers are categorized as economies of scale and scope. homogenization. and product development costs. Sheth (1986) argues that companies doing business in foreign markets probably do so owing to factors other than an emerging universality of consumer needs and wants. Kim and Mauborgne (1993) present five characteristics that are assumed to make a global strategy work. and coordination of business activities on a worldwide basis. ability to refute decisions. 92) is often considered as the first to recognize the trend towards globalization and states that: Companies must learn to operate as if the world were one large market ± ignoring superficial regional and national differences F F F In addition. Finally. he argues that the companies that do not adapt to the new global realities will become victims of those that do. namely the categories of market. twoway communication between head office and subsidiaries. Accordingly. standardization.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 regional units. 1989 and 1992). McCloughry and James (1957) used the term global strategy in the 1950s in their book titled Global Strategy. namely head office's familiarity with local conditions. the market drivers consist of homogeneous needs. cost. and government. The origin and the emergence of the global strategy approach and the globalization of business activities are explored and described in the next section. For example. which means that different levels of globalization may be observed in each area. which stimulate the companies' efforts for the globalization of business activities. Yip (1989) discusses and classifies the globalization drivers. globalizing to compete in homogeneous markets. sourcing efficiencies. The benefits and the advantages of the global strategy approach and the globalization of business activities are explored and described in the next section. Origin and globalization The globalization of business activities and the term global strategy emerged in the early 1980s. Yip (1992) mentions four drivers of globalization. at the market level. The indicators for the globalization of business activities are proposed to be at the customer level. Originally. concentration. and common marketing regulations. consistent decision-making practices. The origin of the term global strategy may be traced principally to the early 1980s due to a number of globalization trends that emerged such as focus on similarities. acquisitions. Benefits and advantages The global strategy approach and the globalization of business activities are encouraged by a number of perceived potential benefits and advantages. and joint ventures. the increasing degree of international standardization of products and standards. in which the term global strategy is synonymous with holistic approach. and globalizing for added synergies. They are sometimes referred to as the four major globalization drivers (Yip. competition. (1982) write that a global strategy is to think of the world as one market instead of as a collection of national markets. He points out three possible reasons for the emerging globalization of business activities in the early 1980s. Furthermore. Dahringer and Muhlbacher (1991) state that a global È approach allows companies to achieve concentration and coordination of activities. favorable logistics. concentration. p.
marketing institutions.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 access to market drivers such as common customer needs. since they may be pushed aside by stronger and more competitive global competitors. enhanced customer preference. the research of domestic and foreign markets. Jeannet and Hennessey (1992) argue that there are various factors limiting the global strategy approach and the globalization of business activities. purchasing. marketing. and procedures across locations. making of standardized facilities. 92) states that companies: F F F benefit from enormous economies of scale in production.e. the finding of new partners. the developing of new buying and selling opportunities. p. 2000). For example. distance activities from the customer. sourcing advantages. production shifting. and creating compatible incentives. new segments. An example of government drivers is the introduction of ISO9000. For example. which is a global standard of quality certification (Johansson. and increased competitive leverage. exploiting the flexibility of a global network. such as arbitrage opportunities (i. leverage opportunities (i. the purchasing of comprehensive support services. In addition companies are stimulated by cost drivers such as economies of scale. financial markets. either as a result of economies of scale or economies of scope. Keegan (1989) mentions two motives for the globalization of business activities. Concentration means centralized decision making which is normally combined with a high degree of standardization of business activities. namely the concentration and the coordination of business activities. improved quality of products and programs. marketing. global customers. and combined global resources. the gains from spreading activities across multiple product lines or businesses). Kogut (1985) identifies a set of global opportunities. He also mentions some major drawbacks such as reduction of responsiveness to local needs. Companies that fail to pursue global opportunities will eventually lose their domestic markets.e. Dahringer and Muhlbacher (1991) argue that two major È advantages may be obtained in the implementation of the global strategy approach and the globalization of business activities. customer service. distribution. Furthermore. manufacturing operations. they refer to market characteristics. economies of scope (i. all of which  . Improved quality may be achieved through focusing resources on a smaller number of products and programs. and management F F F Keegan and Green (2000) and Simon-Miller (1986) also argue that the global strategy approach and the globalization of business activities may lead to substantial competitive advantages in the marketplace. and leading markets. tax minimization. The experience curve may also be improved through the coordination of business activities. and information arbitrage). software development. Yip and Coundouriotis (1991) conclude that the use of a global strategy approach can potentially achieve one or more of four major categories of benefits. increased currency risk. and marketing across international boundaries. Enhanced customer preferences may be obtained through increasing global availability. the combining of global resources and using more locations for attack and counter-attack may lead to an increased competitive leverage. namely reduced costs. companies who go global provide a strong incentive for other firms to follow. and suppliers. Segal-Horn (1996) mentions other potential benefits of a global strategy approach and the globalization of business activities such as the cost savings/reductions and the restructuring of international logistic operations. reduction of adaptation to local customer behavior and the marketing environment. reduced costs may be achieved through gaining economies of scale from pooling production and other business activities.e. unions. the advantages may influence the design. advertising. One is to take the advantage of opportunities for growth and expansion and the other is survival. enhanced customer preference. all of which may be sacrificed. too. industrial conditions. methodologies. Levitt (1983. packaging. improved quality. new niches. The global strategy approach includes specific tasks such as the organizing of worldwide efforts. Finally. and enhancing bargaining power with governments. Lamont (1996) writes that the global strategy approach encourages initiatives to find new markets. mentions a list of benefits that may be achieved through the globalization drivers such as cost reductions. and recognition. moving to lower cost countries. global channels. global coordination and political risk). serviceability. and the managing of the costs of international transactions. Allio (1989) argues that a global strategy becomes critical when the need for local adaptation is low and the benefits from global systems are high. and duplication across countries. and local competitiveness. transferable marketing. Finally. distribution. Yip (1989). and legal restrictions.
economic nationalism in the form of protective policies or tax incentives for domestic producers must be considered. Lindell and Karagozoglu (1997) go on to apply the global strategy approach in an international context. Simon-Miller (1986) writes that in planning global strategies. competition. a diversity of the usage and the application of the global strategy approach are revealed. each phase represents a viable strategic response to then-existing challenges and opportunities. they argue that the companies that do not embrace a global strategy approach will be placed at a competitive disadvantage. The product itself is standardized. Kogut (1985) states that the key to understanding a global strategy is to find the ways in which competitive positions in one national market change the economics for entry into other countries and into other product lines. marketing should play the part of tailoring rather than standardizing to support an overall strategic position. industrial conditions. Kenyon and Mathur (1987) write that international banking also has led to banks taking a competitive marketing view. McCarthy and Puffer (1997) use the concept of global strategy in terms of a multinational context. Domzal and Unger (1987) state that a global strategy approach emphasizes consumer similarities across geographic borders and strives for standardized marketing strategies. Koepfler (1989) also uses the global strategy concept. Their usage of the global strategy concept implies that firms strive to identify global segments that share the same psychographic characteristics. and how they structure and manage their operations. (1999) write that if the business objective is to penetrate a local market in a developing region of the world. positioning. Accordingly. or even multinational approach to business are losing out to the competitive [ 10 ] . they recognize that there are differences between markets. while minimizing local differences. Rabstejnek (1989) emphasizes the importance of the basics of a global strategy approach. then the global strategy would almost certainly require investment at the licensing or joint venture level. though it is also expressed in terms of global strategies. characteristics. The ultimate outcome of these potential benefits and advantages is dependent upon the extent to which they are theoretical potentials and influenced by obstacles in the global business environment. Those adopting global strategies aim at dominance by offering a wide variety of products. The other is when the subsidiary's output level is completely determined by the parent company to maximize the latter's global profits. and other elements that may be necessary in domestic markets. Henley (1989) touches the area of international business. but at the same time acknowledges the sensitivity to cultural characteristics. This signifies that the global strategy approach is adapted to the specific business environment.and medium-sized R&D-oriented firms in the internationalization process in Scandinavia and the US. Strategic investment flexibility is found to depend on a company's original entry strategy and tolerance of risk. For example. as well as its assessment of the specific legal and political environment. but concludes that the strategy must fit the products and the services to the practices and the languages of different markets.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 emphasize adaptations of the global strategy approach and its related business activities. but the branding. Furthermore. market readiness for its products or services. rather than being a planned process. Their focus is mainly on the international level. he argues that global strategies succeed by creating market procedures that shape products to fit national needs. customs. Katrak (1983) studies two cases of global strategies in multinational firms. Porter (1986) argues that in some global strategies. Most of them emphasize the importance of adaptations to local conditions. One of the cases is when the subsidiary is allowed to act as an autonomous unit to maximize its own profits. Ellwood et al. although they use the global strategy concept. He argues that. national. and promotion may have to be modified to reflect local conditions. and the investment required to establish a sustainable competitive position. At the same time. Malnight (1996) develops an evolutionary perspective on how multinational corporations define their global strategy. where they locate their key resources. Bender (1985) argues that enterprises that continue to adopt a regional. In addition. the global strategy approach and the globalization of business activities assume the achievement of benefits and advantages. while those adopting a segmentation strategy target a narrow range of products and customers. Usage and application This section is dedicated to presenting a selection of references that use and apply the term global strategy in various contexts. As the presentation proceeds. and circumstances in the marketplace. Their study investigates the challenges and the organizational responses of small.
13). In addition. or place and earn a good return F F F (Kotler. if at all. Scholars and practitioners refer to a global strategy approach when they actually mean international or multinational. 26). (1997) used the global strategy approach in a corporate culture context using the concept of multi-domestic strategy. 17) writes: In some global strategies marketing should play the role of tailoring and not standardizing to support an overall strategic position. Orlando (1997) argues that the relationship between cross-national diversity and firm performance is contingent upon a global strategy approach. and is of three components. Hammerly (1992) emphasizes the necessity for matching global strategies with national responses. which is a step backwards in terms of a marketing approach that recognizes local conditions. In addition. she argues that the popularity of the global strategy approach has caused the term to be overused and misused. p. Wind (1986) introduces an approach to think globally and to act locally. the necessity of tailoring the global strategy is inevitable (e. 1997) or as Porter (1986. It suggests that the overall design follows a worldwide perspective. market. Segal-Horn (1996) argues that few companies lend themselves to ``naive'' global strategies. One might say that the concept appears to be misleading. and to the different strategies and capabilities of their subsidiaries. misused and abused. since all strategies require some degree of adaptation to regional and national Accordingly. Yip (1992) provided a guide on how to implement a ``total global strategy'' successfully. Bartlett (1982) concluded that some arrangements actually hindered the implementation of global strategies. The arrangements he referred to were that each company had already developed networks of strong independent country subsidiaries. but that every detail of the strategy takes into account the country characteristics and cultural differences. 1996.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 advantages of global organizations. the usage of the term global strategy is often applied in the context of international or multinational contexts. and deliver standard products and services across national boundaries (Segal-Horn. Ralston et al. He writes: By following the strategy of think globally. the unique advantages of each host country.g. One involves internationalizing the core strategy by adapting it to the various international markets. and sometimes abused. it is appropriate to design. he writes: F F F The issue can be framed in the following way: Under what circumstances can a company in Country X sell its product in Country Y without changing product. 13). For example. and that an organizational structure thus had developed in which the country managers' knowledge of the national operating environment gave them a dominant role in key decisions. Kotler (1986) argues that there are circumstances where a multinational company can gain benefits through increased standardization of its marketing mix. misused and abused The previous paragraphs have indicated that the usage of the global strategy approach is misleading. Misleading. making them more independent of a formulated global strategy. p. In addition. p. There are also circumstances where this strategy would hurt the company. Evidently. characteristics. Champy. For example. In developing a global strategy. there are authors who reinforce the global strategy concept further by using other words such as ``total''. and circumstances. they refer to it in a general sense of anything connected with doing business outside the domestic market: The core of the standardization/adaptation debate in international strategy is the question of how far. Kotler (1986) regards Levitt's approach (1983) as going back to a sales approach. 1986. Anand and Delios (1996) used the concept of multi-domestic strategy to describe Japanese subsidiaries in India that operated independently in terms of the multinational corporation's global strategies. This means that the necessity for local adaptations is acknowledged. conditions. promotion. standardizing marketing can lead to competitive advantages that support the overall global strategy F F F [ 11 ] . act locally F F F changes in the world force us to move away from thinking domestically F F F avoid the pitfalls of inappropriate global standardization and F F F employ marketingoriented approach and take advantage of our understanding of the local conditions in each one of the world markets F F F (Wind. It is concluded that foreign entrants to the region should be aware of. 1986. p. Finally. In some cases. In addition. and be able to respond to. price. misused. other economic factors and business considerations that are important include the combined effects on the business of varying rates of exchange along with different inflation rates in different nations.
Going global F F F It starts with recognizing that the world has no center F F F customers will differ from country to country and that they will expect you to respect those differences. p. but more often the term is used to indicate a strategic approach to compete in that worldwide marketplace. a strategy must involve sales or operations in another country. He also writes: Coca-Cola is always cited as the classic global product. To most people the Roth and Morrison (1992) write that the implementation of a global strategy requires coordinating subsidiary activities across country locations. Hamel and Prahalad (1985) conclude that a global strategy must look beyond lower costs and product standardization. He concludes: only certainties are that globalization has become fashionable. These dynamics have not been used to represent the cultural diversity that may hinder the work being done to integrate and coordinate efforts as required by global strategies. 11). while to others it implies a shift towards global products as well as global brands. Sugiura (1990) focuses on how a global strategy may be localized. giving the illusion that markets are becoming global F F F (Sheth. for many. not to say bewildering. but a concept of multiple markets and writes: In conclusion. p. the term global is usually applied as the traditional multinational term. due to differences between national cultures. 1986. Four localizations are described in terms of the products. 51). p. protective policies or tax incentives for domestic producers). and should think in new ways about world competition. Kogut (1985. Grune (1989) comments that in its broadest sense the term global describes the worldwide marketplace. 1986. Kanter and Dretler (1998) present an examination of the usage of the terms ``global'' and ``globalization'' by executives and by media. Roth and Morrison (1992) also introduce an alternate approach in which subsidiaries within multinational organizations are given worldwide mandates to manage specific products or product lines. Evidently. that globalizing means tacking on acquisitions or alliances in other countries.g. He also states that the usage is not clear and writes that: The permutations of meaning are confusing. it means the globalization of industries. the production. the profits. and the management in order to achieve customer satisfaction. the apparent globalization of business activities may be questioned. Palich and GomezMejia (1999) conclude that companies that desire to expand internationally require managerial adaptation. that globalization requires abandoning country images and values. To some people. In addition. 1997. Learn this or stay at home (Champy. we often mistake global competition for global markets. and that it represents a daunting new challenge of indefinable proportions F F F (Lorenz. As most markets become more divergent within each country. 25). that the term global is synonymous with international. They conclude that four [ 12 ] . global is just a replacement term for international and to many readers the term global strategy suggests a company represented everywhere and pursuing more or less the same strategy. and that to qualify as global. the company should take into account these barriers and discrepancies. To some people the term describes a truly global homogenization. In this context. The assumption often made is that such coordination must be managed by headquarters. the adaptation may also affect the core product itself of a so-called global product. p. 37) concludes: However. that globalizing means becoming a stateless corporation with no national or community ties. p. Lorenz (1986) argues that the term globalization has no single meaning. 12). because it is a pragmatic necessity for any company that wants to sell globally. this approach tends to produce overlapping segments across countries. In planning global strategies. For example.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 Champy (1997) states that companies must value cultural and ethnic diversity. Simon-Miller (1986) comments that the socalled open world markets may be characterized by economic nationalism (e. His usage of the global term appears to be more in accordance with an international or multinational approach. Jeannet and Hennessey (1992) write that. Sheth (1986) concludes that we do not need the concept of global versus domestic markets. 1989. centralization is constrained by the need to maintain a careful balance between local subsidiary responsiveness and the coordination of the global benefits F F F balancing is critical F F F Accordingly. without much integration or change. Yet I understand that when CocaCola introduced its Fanta orange drink around the world it was willing to adapt ± offering a more tart taste in Germany and a sweeter drink for Italy (Grune. that a global strategy means doing everything the same way everywhere. meaning simply having a presence in other countries whether or not there is any connection among activities across countries. which indicates the prevalence of six major myths or misunderstandings.
since it contributes to the overall confusion of corporate worldwide strategies.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 lessons may be learnt. The term is therefore not suitable. p. Daft (2000. The historical strength of the company came from operating as a ``multi-local'' business that for decades relied heavily on the insight of local bottling partners. p. but acting locally. Coca-Cola pursues an assumed global strategy. and cultural destinies. 54). 20) states: As a result. The term global strategy tends to be misleading. and standards of integrity and quality of the Coca-Cola Company. the direction was to go global in order to expand geographically into many of the countries in which the company does business today. if only temporary. and sometimes abused. the Coca-Cola Company sees itself not as a global organization. policies. Accordingly. 1957. and the need to understand a corporation's culture. 1994). and it fits within fundamental values. local cultures. To be in high favor of local ultimate consumer adaptations is emphasized as crucial for their business activities to be prosperous. Daft (2000. but affords himself the best chance of a peace. That is because its global strategy is to allow its businesses in more than 200 countries to act according to local need. Therefore. As globalization continued. which will leave him in possession of what he has gained F F F (McCloughry and James. and media that are important to a particular country or geographical area (Anonymous. during the twenty-first century. F F F nimbleness. and maintaining them. So we are placing responsibility and accountability in the hands of our colleagues who are closest to those billions of individual sales F F F The Coca-Cola case The Coca-Cola Company is often mentioned as a global company that possesses a network of global products and global business activities. 20). Globalization forced changes to appear so fast that many countries could hardly manage the new global environment. 20) comments that: F F F the global success of Coca-Cola is the direct result of people drinking it one bottle at the time in their own local communities. speed. It is obvious that the term global strategy causes myths and misunderstandings amongst scholars and practitioners. then they have the authority and responsibility to do so. and transparency and local sensivity had become essential to success F F F (Daft. their multi-local strategy approach is still going strong and adequately for the company's worldwide business activities. but emphasize the importance of localizing the war and preventing it from becoming a general world struggle. local laws. Implications and consequences In the previous sections. Hence. allowing for differences in packaging. p. Instead of applying a global strategy. distribution. McCloughry and James (1957) use the term global strategy in terms of war strategies. It appears to be a managerial utopia of a global strategy approach. it is likely to be a strategy of thinking globally. economic. he states: [ 13 ] . At the same time. and so on. a large number of local and national leaders began to question the suitability of the ongoing worldwide business development. but as a multi-local enterprise (Anonymous. In addition. Finally. the need to respect local cultures. misused. it has been illustrated that there are a large number of scholars and practitioners who use the term In addition. 2000. responsiveness and local sensivity F F F This signifies that if their local colleagues develop an idea or a strategy that is the right thing to do locally. In the 1970s and 1980s the company was moving towards consolidation and centralized control. the global strategy is localized through a specific geographic marketing plan. according to Daft (2000) this will be the source of achieving successful and prosperous business activities. In the 1990s the world began to move in a different direction. 1988). It is apparent that a company such as the Coca-Cola Company has realized the weaknesses and the deficiencies of applying a genuine or true global strategy approach in their worldwide business activities. The potential managerial utopia of the global strategy approach in a managerial context is briefly illustrated through the brief application of the Coca-Cola case in the next section. namely the need for integration across functions and divisions. At the time. the very forces that were making the world more connected and homogeneous were simultaneously triggering a powerful desire for local autonomy and preservation of unique cultural identity F F F The world was demanding greater flexibility. p. They commenced ensuring their sovereignty over their own political. the need to manage change. F F F thereby not only achieves the maximum concentration of force upon his immediate object. they will be accountable for the outcomes of the idea or strategy.
the term ``global''. it is possible that a company's global strategy approach may be to adapt the corporate strategy of each market to local conditions. and circumstances. and pertaining to the whole world. characteristics. etc. which seems to be quite a common feature in many of the cited references. Two different words. pertaining to the relations between nations. Just of few of the cited references apply the global strategy approach according to these dictionaries. Normally it seldom refers to anything more than a worldwide strategy that is adapted to local conditions.. Furthermore.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 global strategy in one way or another. The term ``international'' signifies. or series of maneuvers or stratagems for obtaining a specific goal or result F F F In The New Shorter Oxford English Dictionary on Historical Principals (1993. They state that the multinational strategy involves the implantation of autonomous affiliates operating comparably to the parent company. For example. Hence. Such global strategy does not accomplish the requisites of a genuine or true global strategy approach. misuse and abuse the term. However. the application of a genuine or true global strategy approach is often poor. and circumstances. such as Random House Webster's Unabridged Dictionary and the Oxford English Dictionary. p. This signifies that the use of the term global strategy does not usually reflect a genuine or true global strategy approach. The global strategy is. in Kanter (1994) executives point out that there is a significant difference between simply having offices in several countries and developing a genuine or true global strategy. which signifies. unclear and doubtful. 812) signifies: F F F pertaining to the whole word. a strategy pertaining to the whole world. in one way or another. but adapted to the local market. However. seem to be more appropriate in terms of describing the usage and the application of the global strategy approach in many of the cited references. according to the author of the present article. In addition. business theory. For example. A few of these have been briefly presented. according to Random House Webster's Unabridged Dictionary (1997. 1101) ``global'' means: F F F pertaining to or embracing the whole of a group of items et cetera. They are collected from two widespread and acknowledged American-English and British-English dictionaries. of or pertaining to two or more nations or their citizens. misuse and abuse of the term global strategy. its usage and applications are often disparate. 3085) ``strategy'' means: F F F The art or skill of careful planning towards an advantage or a desired end F F F In game theory. in The New Shorter Oxford English Dictionary on Historical Principals (1993. locally adapted to national. The global strategy approach sometimes appears to be an etiquette or expression that is used just to improve the image or the attractiveness of a specific publication or a company's strategic approach. method. comprehensive and total. alternative or potential strategy concepts. according to Random House Webster's Unabridged Dictionary (1997. [ 14 ] . 1880) signifies: F F F a plan. there is a tendency to mislead. of a formula that is known to be successful in the originating country. p. It signifies also a misleading. In order to clarify the core meaning of the global strategy approach some definitions are provided. worldwide F F F The term ``strategy''. 996): F F F between or among nations: involving two or more nations. The use of the global strategy concept appears to reflect a tendency by scholars and by practitioners to use generally attractive and popular concepts or jargon. outside the national frontiers of the retailer. according to Random House Webster's Unabridged Dictionary (1997. namely ``international'' or ``multinational''. having members or activities in several countries. Global strategy corresponds to a reproduction. worldwide and universal F F F Likewise. Consequently. Salmon and Tordjman (1989) distinguish between a multinational strategy and a global strategy in terms of the internationalization of retailing. regional or continental characteristics. Most cited references handle the term global strategy differently to the way it is defined in well-recognized American-English and British-English dictionaries. p. the frequent use of the global strategy approach since the mid-1980s seems to be the result of the wearing out of other suitable. p. In addition. applied worldwide. p. Shearlock (1993) states that British Airways had to pull together the disparate threads of its global strategy. the author argues that a few of the cited references properly apply to the global strategy approach. but the focus is on the global strategy approach as a whole. misuse or abuse in the cited references of the present research. a plan for successful action based on the rationality and interdependence of the moves of opposing or competing participants F F F The term strategy does not implicate any assumed mislead. and implemented universally. characteristics.
Glocalization means that the standardization versus the adaptation. multinational. There is a continuum from the local adaptations of worldwide strategies on one side.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 transcending national boundaries or viewpoints F F F . In The New Shorter Oxford English Dictionary on Historical Principals (1993. a local strategy approach recognizes the necessity to consider locally related issues in the performance of business activities in the marketplace. Accordingly. They have been used and applied among executives in international and multinational corporations. since it explicitly recognizes the importance of local adaptations and tailoring in the marketplace of business activities. The glocal strategy approach also recognizes that there has to be a balance and harmony between the standardization versus the adaptation. as well as among scholars in the field of international business. pertaining to. Accordingly. p. the global strategy approach to manage worldwide business activities appears to be a managerial utopia. The glocal strategy approach reflects the aspirations of a global strategy approach. An international strategy approach refers to the local strategy approach of business activities that is in part applicable beyond the home market's boundaries. Of a company or other organization: operating in several or many countries F F F Accordingly. multinational or other adaptable strategy approaches. A worldwide strategy Figure 1 The concept of ``glocal strategy'' [ 15 ] . it comprises typically international and multinational strategy issues. The global strategy approach has an emphasis on the standardization and homogenization of business activities across existing markets all over the world. In an empirical context. In addition. of business activities. noting or pertaining to multinationals F F F The New Shorter Oxford English Dictionary on Historical Principals (1993. and the homogenization versus the tailoring. 1856) defines the term ``multinational'' as: Comprising or pertaining to several or many nationalities or ethnic groups. and global strategy approaches (see Figure 1). p. of. international. A glocal strategy approach and glocalization of business activities The introduction of the terms ``glocal strategy'' and ``glocalization'' may be a compromise to improve the present usage of the term global strategy. However. while a multinational strategy approach is applied when a wide selection of foreign markets is targeted through the business activities. The international and multinational strategy approaches acknowledge also the necessity for local adaptations of business activities in the different markets targeted. while the necessity for local adaptations and tailoring of business activities is simultaneously acknowledged. etc. Final remarks The issues of globalization of business activities and global strategies emerged in the 1980s and have been a popular topic since then. the focus on balance and harmony are crucial in a company's glocal strategy approach and its glocalization of business activities.. and the homogenization versus the tailoring. It differs from the global strategy approach. 1397) the word ``international'' means: F F F agreed on by many nations. the concept of glocal strategy is introduced to provide an improved accuracy of the present usage of the global strategy approach among scholars and practitioners. 1263) ``multinational'' refers to: F F F large corporation with operations and subsidiaries in several countries. or involving several nations. The ``glocal strategy'' concept comprises local. though any kind of genuine or true global strategy will not be successfully implemented on a worldwide basis. the global strategy approach is more like a managerial utopia. The harmony is achieved since the concept explicitly comprises the spectrum from local strategy issues to global strategy issues through the ``glocalization'' of business activities. Therefore. used by. and the universal or global strategies without adaptations on the other side. p. of companies' business activities are optimized. most of the cited references are proposed to be in accordance with traditionally international. or able to be used by many nations F F F In Webster's Unabridged Dictionary (1997.
p. 20-34. Barlett.A. Without it. Journal of World Business. 3 No. The present discussion focused on. the globalization of business activities and the use of the global strategy approach. September/October. and some scholars as well. the contribution and relevance of the term global strategy is questioned. J. R. i. A. the author argues that the misusage of the global strategy approach amongst scholars and practitioners is widespread. The global strategy approach is often nothing more than a question of international or multinational strategy approaches. pp. and Delios. ``glocalization'') is simultaneously acknowledged. 14 No. Accordingly. the use of the global strategy approach that does not refer to the universality or the worldwide applicability of business activities is widespread. misused and abused multicontextually in the field of international business. References Conclusions The topic of the present article has provided a discussion on the importance of welldefined concepts and approaches used by scholars and by practitioners. In one way or another. 5. ``Coca-Cola's staffing philosophy supports its global strategy''. acting and thinking ``glocally''. 2000. and circumstances to a certain extent. March/April. The widespread usage of popular jargon cannot cover the fact that a genuine or true global strategy approach appears to be a managerial utopia. Anonymous (1994). 3. it is assumed that the global strategy approach has to be adapted to local conditions. C. 9 No. Journal of Business Strategy. In Allio. in most areas it is not suitable to apply a genuine or true global strategy. 31 No. Therefore. but acting locally. Planning Review. (1982). Note 1 This section is to a large extent based upon an interview with the chairman and chief executive of Coca-Cola Company. and was exemplified through. p. Accordingly. 20). Nevertheless. The use of the global strategy approach is argued to be confusing and not appropriate in most contexts. Personnel Journal. (1989). Usually. and circumstances. Vol. 2. Vol. The use of the global strategy approach indicates that it is misleading. 4-7. [ 16 ] . Accordingly. we'll succeed because we will also understand and appeal to local differences. The lack of universality and worldwide application of the global strategy approach is argued to be evident among scholars and practitioners. Scholars need a unifying conceptual framework that bears basically the same underlying core meaning. 22-7. characteristics. since local adaptations of the business activities usually have to be taken into consideration in the marketplace. Vol. Vol. Anonymous (1988). 50-62. in The Financial Times (27 March.Goran Svensson È ``Glocalization'' of business activities: a ``glocal strategy'' approach Management Decision 39/1  6±18 has at least to be adapted to local conditions. 2000. ``How multinational organizations evolve''. in the academic field of research and its pertinent publications. ``Formulating global strategy''. Research may be positioned wrongly and may mislead the audience or the potential readers. For some practitioners. and circumstances. ``How Coke markets to the world''. The 21st century demands nothing less F F F literature. Fall. we do business in societies F F F In our future.J. Apparently. (1996). The usage of the concept is also multi-contextual. Douglas Daft. Nevertheless. 3. A compromise is proposed to be the term ``glocal strategy''. pp. the terms ``glocal strategy'' and the ``glocalization'' of business activities are introduced to enhance the accuracy of the present usage by scholars and by practitioners of the term global strategy and the phenomenon often described as the globalization of business activities. Anand. misused and sometimes abused. The Journal of Business Strategy. this may be perceived as a matter of semantics.e. all assume that the global strategy approach has in part to be adapted to local conditions. The usage and the applications focus on the international and multinational contexts. The usage of the term global strategy is confusing and not appropriate. It is troublesome when the usage of a concept or an approach is ambiguous and confusing. the use of the global strategy approach is misleading. Therefore. pp. Fall. characteristics. pp. while the necessity for local adaptations and tailoring of business activities (i.e. the point of departure was the term ``global strategy''. characteristics. which in part reflects the aspirations of a global strategy approach. they will not be able to communicate effectively with each other. ``Competing globally: how Japanese MNCs have matched goals and strategies in India and China''. 20): F F F we must remember we do not do business in markets. It is implicitly argued that the terms international strategy or multinational strategy provide a better description of what is often referred to as a global strategy. or as the CEO of the Coca-Cola Company concludes (Daft. the existence of well-defined concepts and the correct usage and application of concepts and approaches are of crucial importance. it is a matter of thinking globally.
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