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The Impact of Cultural Perspectives on Global Business Strategies
The present world is characterized by globalization, and organizations are faced with
cultural issues that affect their operation and choice making. The four major approaches to
managing cross-cultural differences in global business are described in the article titled “Global
Business Strategies for Responding to Cultural Differences” as the Global Strategy, the
International Strategy, the Multidomestic Strategy, and the Transnational Strategy. Each of them
represents a distinct approach to the globalization versus localization dilemma, and the role of
international culture in this case is to define which of the strategies is going to fit best into a
specific business environment.
The Global Strategy focuses on the concept of standardization in order to obtain the
benefits of scale on the international level (Luo, 2021). It tends to view the world as a global
market and aims at providing standardized products and services. This model has been employed
by Apple and McDonalds and other such companies by ensuring that the branding, marketing
and products are standardized across the borders. However, there are two factors originating
from the international culture that affect this strategy greatly. Although standardization helps to
improve efficiency, it does not take into account the cultural differences in preferences, behavior
and expectations. For instance, a product developed to suit the American consumers may not be
acceptable in the Japanese or Indian culture. Therefore, when employing a global strategy, it is
necessary to carry out cultural analysis to avoid offending local customers even if the general
strategy is uniform.
The International Strategy entails the expansion of domestic operations into the
international markets with little adjustment (Shoham, 2021). This strategy is most suitable for
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firms with products or services that are closely associated with a brand or technology. The role
of culture in this model is rather restrained in comparison to other models, and the emphasis is
made on using home-country knowledge in foreign markets. However, the cultural factors are
still relevant. For instance, marketing and communication must be done in the local language and
culture, social norms, and beliefs. When it comes to the international strategy, it is possible to
note that the failure of adapting the messaging to the cultural norms of the target audience will
lead to a decrease in the effectiveness of this approach. Therefore, even when operating at a
relatively minor level, there is a need for organizations to be keen on cultural differences to make
their products popular.
On the other hand, the Multidomestic Strategy focuses more on the local environment
rather than on the global environment. Multinational companies using this model adapt their
products, services, and business processes to local environments in different countries or regions
(Jain, 2024). This strategy has a strong cultural relation with the international culture since it
aims at integrating itself to the local culture. Nestlé is a good example of this, as it adapts its
product portfolio to the local palate and eating preferences. The success of the multidomestic
strategy can be achieved only if the company is willing to accept and recognize cultural
differences. This include hiring local managers, undertaking cultural analysis and giving much
freedom to the subsidiaries. Although this strategy may raise the operational level and expenses,
it helps to establish better relations with local consumers and stakeholders.
The fourth one is the Transnational Strategy which is the most complicated among the
four and aims at both global integration and local adaptation. This model consists of a matrix
form of organization to provide a central control and at the same time, local implementation
The Impact of Cultural Perspectives on Global Business Strategies
The present world is characterized by globalization, and organizations are faced with
cultural issues that affect their operation and choice making. The four major approaches to
managing cross-cultural differences in global business are described in the article titled “Global
Business Strategies for Responding to Cultural Differences” as the Global Strategy, the
International Strategy, the Multidomestic Strategy, and the Transnational Strategy. Each of them
represents a distinct approach to the globalization versus localization dilemma, and the role of
international culture in this case is to define which of the strategies is going to fit best into a
specific business environment.
The Global Strategy focuses on the concept of standardization in order to obtain the
benefits of scale on the international level (Luo, 2021). It tends to view the world as a global
market and aims at providing standardized products and services. This model has been employed
by Apple and McDonalds and other such companies by ensuring that the branding, marketing
and products are standardized across the borders. However, there are two factors originating
from the international culture that affect this strategy greatly. Although standardization helps to
improve efficiency, it does not take into account the cultural differences in preferences, behavior
and expectations. For instance, a product developed to suit the American consumers may not be
acceptable in the Japanese or Indian culture. Therefore, when employing a global strategy, it is
necessary to carry out cultural analysis to avoid offending local customers even if the general
strategy is uniform.
The International Strategy entails the expansion of domestic operations into the
international markets with little adjustment (Shoham, 2021). This strategy is most suitable for
, 2
firms with products or services that are closely associated with a brand or technology. The role
of culture in this model is rather restrained in comparison to other models, and the emphasis is
made on using home-country knowledge in foreign markets. However, the cultural factors are
still relevant. For instance, marketing and communication must be done in the local language and
culture, social norms, and beliefs. When it comes to the international strategy, it is possible to
note that the failure of adapting the messaging to the cultural norms of the target audience will
lead to a decrease in the effectiveness of this approach. Therefore, even when operating at a
relatively minor level, there is a need for organizations to be keen on cultural differences to make
their products popular.
On the other hand, the Multidomestic Strategy focuses more on the local environment
rather than on the global environment. Multinational companies using this model adapt their
products, services, and business processes to local environments in different countries or regions
(Jain, 2024). This strategy has a strong cultural relation with the international culture since it
aims at integrating itself to the local culture. Nestlé is a good example of this, as it adapts its
product portfolio to the local palate and eating preferences. The success of the multidomestic
strategy can be achieved only if the company is willing to accept and recognize cultural
differences. This include hiring local managers, undertaking cultural analysis and giving much
freedom to the subsidiaries. Although this strategy may raise the operational level and expenses,
it helps to establish better relations with local consumers and stakeholders.
The fourth one is the Transnational Strategy which is the most complicated among the
four and aims at both global integration and local adaptation. This model consists of a matrix
form of organization to provide a central control and at the same time, local implementation
