Why is there inherent tension between global integration and local responsiveness?
Why is there inherent tension between global integration and local responsiveness? As companies change products to cater to local tastes, it becomes harder to consolidate operations and take advantage of global efficiencies.
How global integration and local responsiveness might be successful in the same industry?
The technique of offering standard products in various parts of the globe is called Global Integration. Offering custom products as per the geographical preferences is called Local Responsiveness. Using both strategies in one market can ensure both market penetration and growth for an organization.
Which strategy has high global integration and high local responsiveness?
Transnational
Transnational: High Integration and High Responsiveness The transnational company has characteristics of both the global and multidomestic firm. Its aim is to maximize local responsiveness but also to gain benefits from global integration.
What are the pressures for global integration and local responsiveness?
They suggested seven factors as the pressures for global integration: (1) importance of multinational customers, (2) importance of multinational competitors, (3) investment intensity, (4) technology intensity, (5) pressure for cost reduction, (6) universal needs of customers, and (7) access to raw materials and energy …
What is global integration example?
For example, many new markets like insurance, transportation, and banking services have grown due to it. Furthermore, people now have access to more choices and international brands because of free trade between countries.
How does the integration responsiveness framework work?
In essence, the integration-responsiveness framework is about describing the characteristics of a business and deriving feasible strategies from these insights. The characteristics of a particular business are made up by a set of relevant economic, political and organ- izational imperatives that shape strategy making.
What are the four strategic choices in the integration responsiveness framework?
The four types of global organizational strategies are global, international, multidomestic, and transnational. The global organization focuses on standardization, Page 18 5 integration, centralization, and coordination in order to achieve economies of scale.
What is global integration?
the process by which a company combines different activities around the world so that they operate using the same methods, etc.: Global integration can involve the processes of product standardization and technology development centralization..
What are forms of global integration?
Although there are several factors responsible for this, global integration is one of the most important ones. Liberalization, privatization, and globalization (LPG) are three crucial components of this factor….The following elements were largely responsible for this:
- Liberalization.
- Privatization.
- Globalization.
What are the four strategic choices in the integration-responsiveness framework?
Why is the integration-responsiveness framework important?
The integration-responsiveness (IR) framework is one of the most widely cited and applied concepts in the international business literature. Like other generic theoretical frameworks it is used to explore and explain the management challenges of all types of multinational enterprises (MNEs).
What’s the difference between local and global responsiveness?
However, distinctions have to be made when it comes to specific industries. The Integration Responsiveness (IR) Grid (Daniels et al, 431) illustrates for instance that bulk chemicals require high standardization and central control regarding global integration, whereas local responsiveness is of minor necessity.
Which is an example of integration responsiveness ( IR )?
The Integration Responsiveness (IR) Grid (Daniels et al, 431) illustrates for instance that bulk chemicals require high standardization and central control regarding global integration, whereas local responsiveness is of minor necessity.
Why are international companies focus on global integration?
International companies have an emphasis in knowledge transfer, because most of value they create is from transferring valuable resources to foreign markets. For transnational companies, facing equal pressures from both integration and responsiveness, they adopt a multifocal strategy aiming to achieve both cost efficiency and responsiveness.
Why are global integration pressures important for MNCs?
Global integration pressures are the forces that make MNCs exploit worldwide resources and integrate their activities on a global basis to realize economies of scale and achieve cost reduction. Bartlett and Ghoshal (1998) summarize that the motivation of Global Integration is the need of efficiency.