Implications for Executive Education

Still another facet of the in our view excessive emphasis on localization in the international business domain is illustrated by the abundance of teaching cases describing the failure of cross-culturally insensitive, almost xenophobic “expatriates” who refused to localize. For instance, consider the case of the American expatriate in Chile who refused to try local food and even local beer, being uninterested in learning from or mingling with locals. Although his refusal to show an interest in local customs might have contributed to this expatriate’s failure abroad, this type of cases do not prove that successful adaptation equates to full localization. In our opinion, these cases fail to illustrate an equally important phenomenon; that is the case of expatriates who, in their desire to accommodate to local norms, failed to preserve core elements of the global business model, which in turn would have prevented their failure. Very few cases talk about how expatriates who easily gave up their standards because they did not conform to counterproductive local norms such as lax deadlines, lack of accountability, bribes, and a going with the flow mentality, ended up paying a high price for their hurried and thoughtless localization. Unfortunately, classroom discussions of the need to achieve a balance between global and local concerns are often biased, because they unduly emphasize the need to be flexible, which is frequently pictured as the need to adjust one’s practices to local usages. Much less common are cases that pinpoint the failure of firms that, obsessed with the need to localize, ended up losing their innovative advantage, or cases where a strategically insightful executive understood the importance of sticking to certain global practices in spite of local opposition.

Consider for instance the case of the marketing director working for a fast-moving consumer goods multinational in charge of relaunching a soft drink that had not been initially successful in an emerging market. This executive refused internal pressures from local managers to change the contents of a new cartoon-based advertising strategy for this soft drink. Internal critics of the advertising campaign argued against it on the grounds that using cartoons represented an extreme deviation from the type of advertising that local consumers were used to for this type of product, and hence it will confuse consumers. The marketing director insisted on keeping the advertising campaign in sync with the global platform calling for cartoon- based ads, because she understood how these ads represented an aspira- tional society associated with the brand, as well as the synergies that result from such global efforts. Within one year, the soft drink in question has exceeded the sales goal by 14%, and gained a 2.4% marketshare.

Among instructors of international business courses and seminars, the roots of the preference for content that advises executives to localize are understandable. Undoubtedly, instructors who encourage executives to become well-traveled, worldly, and sophisticated “cosmopolitans” who can seamlessly mingle in today’s multicultural business environment are likely to become popular. After all, becoming a cosmopolitan, worldtraveling James Bond-like executive is a charming proposition. The downside of this approach is that, by ignoring the less appealing but probably more critical need to stick to the innovative drivers of the firm’s strategy, we may be doing a disservice to those whom we claim to be training for an international assignment.

After all, even James Bond stood by some cultural norms of his home country when on assignment, as attested by his preference for a tuxedo over local clothing on most social occasions... Humor aside, tipping the balance in favor of cosmopolitanism overlooks the fact that success on an international assignment is often determined not only by the willingness to accommodate to a different culture, but precisely by the refusal to relax certain, innovative aspects of one’s business strategy simply because they do not conform to local norms. The ability to discern the truly innovative aspects of the global strategy that should not be compromised is a must amongst international executives, who should tirelessly hold on to these innovative aspects in spite of the losses in local popularity that they these executives are likely to endure.

In other words, training executives to manage global and local concerns should not be equated to an exercise in physics where the goal is to calculate the mid-point of perfect equilibrium between two vectors. Specifically, managing the global-local dilemma does not always require tipping the balance in favor of the local side. Because much of this literature emphasizes the need to adopt local usages, preparation for international assignments should probably emphasize the global side, which includes strengthening the need to preserve the innovative potential of a global-platform strategy that would otherwise succumb to the inertia of local forces.

 
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