Question

How can a firm design its organization to enable the firm to be global and act local?

Answer 1

A firm should go for localism while thinking in a global manner. It can do so by framing HR policies which encourage hiring of local talent and nurturing them over the years through proper training and development. While hiring, the firm can adopt global practices in selection and recruitment. It can also frame Purchasing policies which promote buying from local suppliers who in turn may buy the product from national or international suppliers. However the purchasing standards adhered to will be comparable to the standards adopted by some of the global companies in the world (like Casio, General Motors and others).

Regarding arrangement of finance, the firm can borrow money from the local banks or credit unions (while following global standards in managing finance). Moreover, the firm can maintain its corporate account in a local bank.

The advertisements that would be used by the firm to market its products and/or services should reflect the tastes and preferences of the local people and also their heritage. Local artists may often be used to draw the visuals in the advertisements or local musicians’ services may be utilized to sing the jingle (if any). This way local talent will be utilized effectively.

Moreover, if the firm is a manufacturer of products, then the products should be customized as per the needs of the local people. e.g., the fast food giants like McDonald’s and KFC customize their food menus according to the tastes of the people in a particular country (like not keeping any pork or beef item in their menus in India because of religious sentiments).

Further, the firm can persuade its employees to engage in some volunteering activities related to community building. Often the firm can make some charitable donations for the local community.

Lastly, if the firm wants to operate in a big scale not only in its own country but in other countries too, then it can adopt a geographic divisional structure (like Coca-Cola, Nestle and others) to deliver products and/or services which are customized to serve the needs of the particular regions.