The debate of standardization verses adaptation has lasted for the last 52 years.(The McGraw-Hill Companies, 2003) . To standardize or adapt when going or planning to go international is the most difficult and delicate decision to make for any company. This decision may affect all the operations of businesses of the company i.e. Human Resources, Marketing, Research & development, Production and Finance. Every company has a different outlook towards foreign markets, this outlook is explained by three models which help the company analyze whether they should standardized or adapt in international markets.
THREE MODELS TOWARDS FOREIGN CULTURE
Ethnocentric is defined as evaluating others culture according to the preconceptions originating in the standards and customs of one’s own culture. (Oxford Dictionary) Ethnocentrism is a social – psychological dynamic term used to describe human behavior in diverse cultures. The heart of ethnocentrism is belief system of one’s own company, culture, or country. The term ethnocentrism has a set of principles, which are used to different people between different groups or culture on basis of superior-inferior, strong-weak, or trustworthy-untrustworthy. Ethnocentrism is embedded in numerous areas of communications among diverse set of people. Ethnocentrism decides the fate of company’s behavior while conducting business globally. According to trade and marketing experts, to standardize a product can be harmful as consumers from assorted cultures would not accept product that do not match their culture.
According to Calof.L, ‘Polycentrism is an individual’s attitude towards going international which is linked consecutive stages in development of international operations.’ The polycentric angle uses adaptation in every market and brings differentiation in the marketing mix as per the culture of their focus market. This differentiation will help the consumer to relate to the product offered. In the polycentric approach the firm sets up offices in different countries whose market they target and each of these offices have their own policies and procedures. (e.g.: Snickers is eggless in India as compared to other countries as most Indian do not consume egg) The logic of polycentric is ‘when in ROME, do as the Romans.’ This means that the parent company lets the global offices make decision that relate to local practices.
The geocentric model is a mix of ethnocentrism (standardization) and polycentric (adaptation). The overall goal as per the geocentric model is collaborate the headquarters and subsidiaries in different countries. This model understands the differences and similarities between global markets and thus a takes a balanced decision to form appropriate strategies. Approaches of the geocentric model are biased towards marketing, human resources, production policies and finance that try to fuse global and local...