Globalization, ‘Best’ Management Practices, and Cultural Awareness

The Country Director Silva dives into his management books and reads them with new eyes, while doing some serious soul searching to raise the cultural awareness of himself and his management team. Ghemawat developed the CAGE framework, describing four areas of distance and subsequent risk for multinational companies, and Silva understands his subsidiary has hit the C of Cultural distance. Deeper layers of culture are situated within the unconscious minds, creating a blind spot for many managers and Silva recognizes this to be true for his predominantly Portuguese management team. Another model is the EPG model of Perlmutter, the global strategic profiles of multinationals: ethnocentric, polycentric, and geocentric profiles. Silva notices that his ‘best’ management practices emanate from HQ, are not as culture neutral as he thought and that his present structures are not capable to create sufficient internal information flow. He realizes he needs to become more geocentric. He then formulates the ultimate goal: to research culture much further and develop a culture-specific intervention. The objective is to embark on a transformative change process that will be vested in simple, genuine, and logical local concepts.