Global Thinking: Good for Business

One of the great nostrums of business in the 1990s is “Think Global, Act Local.” Any major company that wants to succeed nowadays must do so globally. The fall of the Iron Curtain, the lowering of trade barriers and the formation of ever wider regional trading blocs spell the end of domestic-only market planning. A company that thinks solely in national terms puts itself at risk. Not only is it losing out on profitable markets elsewhere, but its own turf also is up for grabs.

A successful company, however, must adapt to every country and culture in which it wants to operate. It’s no accident that McDonald’s sells noodles in Japan, beer in Germany and soy burgers in India. Unless the hamburger giant acted locally, its global branding would do it little good.

Unfortunately, our tendency as Americans is to do the opposite--we think local and act global. And it is hurting us big-time.

We “think local” when corporations don’t hire and train people based on their potential for work around the world or fail to promote successful overseas employees to corporate headquarters. Our largest companies are not only blue-chip but also blue-blood in terms of senior management.

I remember the American executive who offended a Japanese business delegation. From a local American point of view, he was the logical choice because he was well-acquainted with his company’s products. Unfortunately, he couldn’t stomach sushi. And at the luncheon, it wasn’t his professional expertise that came up.

We “act global” when we simply export products without any thought as to how they will do in specific foreign markets. As a result, large American cars with the steering wheel on the wrong side have gotten stuck in narrow foreign streets. American off-the-shelf phone switching equipment has broken down under constant use in countries that have few telephones. And the whole contest between Apple and Microsoft Windows software formats has been lost in cases where these programs are only offered in English.

In some industries, such as motion pictures, we can still get away with generalized products. “Independence Day” and “The Lion King” were hits worldwide. But other cultures are beginning to demand that media content reflect their issues and values.

Thinking globally and acting locally is not just a matter of business strategy, but something that we need to apply to society as a whole. We “think local” when we give our children inadequate education about the world outside our borders. Most other countries make foreign languages a focal point of their primary education, not an adjunct to the later academic years as we do here. If we don’t train our children to become more at home in the world at large, we are putting them at a disadvantage.

And we “act global” when we try to impose our ideals on others. Perhaps the most outstanding example of this is our yearly review of China’s trading status with the U.S. based on China’s treatment of its own citizens. Most China scholars agree that subtle diplomatic pressure has been more effective in improving human rights in China. They also agree that linking politics with economics undermines the very thing that had led to sweeping liberalization in China in the first place: increased trade and the accompanying commerce in ideas and cultural exchanges.

But the damage doesn’t end there. Tweaking the noses of foreigners has hurt the sales of our satellites, commercial airplanes, jet fighters, cars and other high-value products around the world. Germany, Russia, France and Israel have stepped in to supply these items to countries that once were loyal U.S. customers.

We can expect this loss of business to foreign competitors to continue. As other countries come into their own economically, they seek respect for their customs and belief systems. They resent America telling them how to behave, when most are becoming more democratic. Mexico is only the most recent example.

If we want to retain our leadership and gain our share of the global market, we need to think globally by broadening our education, business planning and management selection to reflect the world at large. And we need to act locally by dealing with other countries as equal partners, not erring dependents.