GLOBAL VS LOCAL

Global Industries vs. Local or Regional

[Name of the Student]

Global Industries vs. Local or Regional

Introduction

In business there is a tendency for the units are getting bigger. This increase in size is due to a business logic aimed at raising capital and transnationalization. Mergers and acquisitions have given rise to new and huge organizations as a strategy to increase its market share and to respond to patterns of international competition and the opportunities arising from liberalization and regional integration.

The challenge facing by the multinational is to achieve gigantic structure of the organization through coordination of various semi-autonomous units. The author explains this idea through a metaphor. For him the structure of the organization should be like that of a man holding in his hand, a large number of balloons. Each has its own height; all that man does is hold the strings firmly. This led to the cultural field implies that the multinational firm can maintain certain general features of their culture-in its various subsidiaries, and, on the other hand, local culture imposes its specific characteristics (Business Excellence, 2011).

Discussion

The local organization is free while conditioned by the global organization. It requires that the subsidiaries have autonomy and freedom and at the same time, one must need some order of unity and coordination at the global structure. Therefore, a central control is necessary, while certain local initiatives.

So far, the author discussed aspects of the relationship between the parent company and its subsidiaries, now the focus is on the integration of the latter to their local environment and the author also tried to find out the reasons that help the firms to go global and the other remains local or regional.

Strategy for Global Firms

In this sense, there are certain questions that need to be considered: what should be the strategy of the multinational? Should seek to adapt to local practices and social relations or should try to innovate by introducing new ways of doing things and new technology? The headquarters may want to establish subsidiaries to act autonomously thus allowing them "soak" with the cultures of different countries or, conversely, may seek to exercise central control over the subsidiaries impose certain ways of doing things, without having into account the culture that surrounds them. In the latter case, the insensitivity to local customs and little understanding about other ways of acting and thinking can cause resentment and recrimination in the local environment (Eckel & Egger, 2012, pp. 210-19). The multinational company has to understand the local culture cannot be overlooked for being a difficult variable to measure.

Therefore, the policies and decisions of multinationals cannot come solely from the parent company, but they must be adapted to specific local conditions. Avoid falling into the tendency to bypass local differences, in order to develop comprehensive and consistent organizational policies, regardless of the existence of demands and processes of each country, i.e., the specificity of the different populations.

Importance of Local Stake Holders

In this sense, there must be an appropriate structure for the participation of local stakeholders in decision-making and in the planning of ...