Charity Ah Loo
MGMT 3304
July 28, 2014
Written Assignment #3 – p. 131 Discussion Question #7
Discuss the difference between global consistency and local adaptation. What are the
benefits and liabilities of each approach?
As businesses enter the global marketplace, they must choose between a policy of global
consistency or one of local adaptation. Global consistency refers to a policy where all offices
and facilities of a business use the same guidelines and procedures regardless of what country
they are doing business in. In this case, all offices and places of business function in the same
way. On the other hand, local adaptation is a policy where procedures are modified to adapt
specifically to the country in which it does business. Though each policy is different, there are
benefits and liabilities to each approach.
The difference between global consistency and local adaptation is the difference between
a centralized and decentralized approach to management. Corporate leadership might prefer the
centralized policy of global consistency because it simplifies decision making. At the corporate
level, a decision made for one country is the same for all countries where an organization
conducts business. We see this with the Starbucks menu. It is possible to go to any country that
has a Starbucks and order the same drink, in the same plastic cup, using the same recipe.
In contrast, a policy of local adaptation is preferred by local managers because it allows
them to make decisions in accordance with their country’s regulations, laws, and economy to be
successful in that market. An example of this would be McDonalds which sells, in lieu of the
Big Mac, the Maharaja Mac in India. This burger, originally made with lamb, was developed
because cows are deemed sacred and therefore not eaten in India. In this case, McDonalds chose
to adapt to meet the local market demand.
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Charity Ah Loo
MGMT 3304
July 28, 2014
There are benefits and liabilities to either policy. Global consistency increases cost
efficiency and productivity by using standardized rules and procedures throughout the world.
Materials and supplies can be purchased on a larger scale to gain price breaks. Processes and
procedures can be refined over time to improve efficiency and effectiveness. Training methods
and materials can be reused which results in a consistent practice and product. At the same time,
global consistency does not allow for flexibility. Because it does not account for the unique
situations that exist in a given country, some management procedures may not be suited to the
country’s market or culture.
This is where local adaptation is beneficial. This policy is flexible; allowing local
management to determine how best to be successful in a particular country’s market. It takes
into consideration culture, market, and people to determine its practices and procedures. Of
course, in doing so, it does not benefit from the efficiency and productivity gained from
standardization.
While global consistency and local adaptation are different, each one has a place in the
global marketplace. The ideal scenario is a balance of both global consistency, perhaps in the
areas of human resources and accounting, and local adaptation, in the areas of marketing and
product development. Human resources and accounting would likely vary little from country to
country thereby benefiting from standardization. Marketing and product development might be
more successful if geared to the unique audience.
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