The paper "Influencing the Decisions Made by Multinational Companies" Is a wonderful example of a Management Case Study. The world could be described as increasingly becoming homogeneous especially with the advent of globalization since most goods offered in most markets are identical with markets also having similar characteristics to a large extent. It has been said that globalization has made the world homogeneous. For instance, when one visits big cities across the world, one will notice a lot of homogeneity in their architecture as well as businesses in terms of designs and products being offered.
For example, brands like Starbucks, Gap, Zara, Nike, and MacDonald’ s will be found in almost all major cities of the world. In addition, we find signs in almost all cities in English though the city might not be in an English speaking country. All these are signs that the world has become homogeneous (Mark, 2014). But is this the actual truth? Is the global business/marketing environment homogeneous with multinationals operating in similar environments in all their markets? In other words, will the MacDonald in Japan be run in a similar way to the one in New York while offering identical products?
This essay examines the extent to which the world is still not homogeneous and how this influences decision making by multinationals. The world is still not homogeneous Currently, the world can be said to be homogeneous as far as technology is concerned with fluidity o communication as well as ability to travel globally having increased such that people nowadays are no longer confined to only buying/ consuming what is specific to their nation, traditions, status or class but are now increasingly able to explore and consume globally thus making the world more homogeneous.
In addition, the traditional sumptuary laws and restrictions have increasingly been removed. There has also been increased democratization and democratization of fashion hence making them available and consumed by people everywhere. Global food and fashion chains found everywhere paint a picture of a homogeneous world which is seen to have made the individuality of different cultures disappear. According to Lee (2003), the world has become increasingly homogeneous. However, despite the presence of such homogenized commodities and fashions, it is worth noting that consumption of such commodities cannot be said to be homogenized.
In addition, the world is not homogeneous to a large extent because the boundaries that divide countries still exist. In other words, the world is still not homogeneous to a large extent since markets are divided by different cultures, politics, and economics. The world is still not homogeneous politically Different markets in the world are still operating while confined in national territories. This calls for multinationals to understand the political systems of the countries in which they operate or where they would want to establish their branches (Kamal, 2013).
This is because while some political systems are safe for business, others provide a hostile business environment. For example, some markets such as the USA are democracies while others such as China are not true democracies. For democracies, everyone including the government is under the law and follows the rule of law. On the other hand, markets that are authoritarian in nature are usually not characterized by protection of the rule of law since those in authority do what they want.
A good example of an authoritarian market is North Korea where the leader does as he pleases. In addition, different markets are still characterized by trade barriers which differ from market to market meaning that there is no homogenous operating environment. Such trade barriers include protectionism policies aimed at protecting domestic businesses from competition. For instance, multinationals may be confronted with differing levels of tariffs in different markets imposed on imports. Multinationals may also face import quotas that differ from market to market. Different markets are also faced with different levels of political unrest (Douglas, 2004).
For instance, while the US market may be considered safe, the Syrian market, as well as the Iraq market, is characterized by war and terrorism. Hence, while there is free movement of goods and commodities in the US as well as the fluidity of communication, the Iraq and Syria market have their distribution systems clogged up by war and terrorism. In such markets, employees of multinationals may even become targets of terror while embargoes may also prevent a certain multinational from operating in a certain market.
This shows the extent to which the world is not homogeneous. It is also worth noting that while economic integration may be seen as helping the world to become homogeneous, it is worth noting that it only helps the markets within a certain economic integration treaty to become homogeneous which may, in fact, lockout goods from other markets from accessing the integrated economic block. For instance, countries within the EU zone prioritize goods originating from member states thus making trade harder for countries outside the block to trade with them in effect making the world less homogenized.
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