- domestic: focus on home market and export;
- international: focus on local responsiveness and transfer of learning;
- multinational: focus on global strategy, low cost and price competition;
- global: focus on both local responsiveness and global integration.
(Please note that Adler and Ghadar use the same terms as Bartlett and Ghoshal,
but attach them to different phases, which could be confusing.)
The cultural component hardly plays a role in the first phase (domestic).
Management operates from an ethnocentric perspective and can afford to
ignore the influence of foreign cultures. The attitude towards foreign buyers –
which is a somewhat arrogant one – is the following: ‘We allow you to buy our
product’ (Adler and Ghadar, 1990: 242). By contrast, in the second phase
(international) the cultural differences of each foreign market are highly
important when entering into external relations. From the polycentric per-
spective, product design, marketing and production will concentrate on find-
ing a good match between the product and the preferences and style of the
relevant foreign market segment. That is why production is often transferred to
the relevant country and/or region.
During the third phase (multinational) the product must be globalized to
such an extent that competition with other ‘global players’ emphasizes a lower
cost price as a way of keeping up with price competition. This has less to do
with emphasizing cultural sensitivity than with the exploitation of cost advan-
tages arising from price differences between production factors in each coun-
try and/or region, and with the exploitation of economies of scale. It is,
however, important that a certain internal sensitivity or awareness develops of
the various cultural differences (cultural diversity) within the global concern.
Finally there is the fourth phase (global). In addition to cost advantages and
low prices on the world markets, the products and services must at the same time
meet standards of high quality. This quality is expressed in the adaptation of the
product to the tastes, preferences and/or specifications of the individual markets
and market niches. Adler and Ghadar (1990: 243) describe this as follows:
Successful corporations understand their potential clients’
needs, quickly translate them into products and services, pro-
duce those products and services on a least-possible-cost basis,
and deliver them back to the client in a culturally appropriate and
timely fashion.Cultural sensitivity becomes crucial, not only internally but externally as well.
Figure 3.1 illustrates the relative importance of the cultural component and
the direction of the interaction between organization and environment in the
various phases.
International HRM 69