Saturday, April 23, 2016

Cultural Advantages for You and Emerging Markets


“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
-       Sun Tzu, The Art of War
In regards to globalization, the majority of the companies know themselves but not the enemy (in this case, emerging markets) and, as a result, lose something.  How do we get to know these little-known or little-analyzed markets in order to better strategize for the next battle?  I would say, know them like you know yourself.  Identify their strengths and weaknesses, their resources, their relationships with other potential enemies or allies, their power position, and their cultural background.  By knowing and understanding the cultural history, being able to make those management or investment calls will mean your own survival within the “hundred battles” and the strategy will result in a harmonious and positive relationship. 
If you’re senior management who would rather not spend its resources and stick to the status quo and to the traditional strategy that has been collecting dust, then I am afraid you will soon be finding yourself either waving a white flag or waiting for the fatal hit to your company.  This is reality though!  We cannot rely on a herd-like or even gut-based instinct in order to make investment decisions.  Solid facts, analyses, and relationships must be formed and developed over time.  So be patient young grasshopper.  You have a lot to learn. 
The globalization shift has unveiled how many countries are truly different from the West and how each has leveraged their own strengths to be more dominant in the global economy.  I watched an excellent video from the Tepper School of Business where Dr. John Hooker, T. Jerome Holleran Professor of Business Ethics and Social Responsibility, gave a lecture to alumni about de(globalization) and business culture.  His theory is that deglobalization will become stronger in the future from rising economic powers leveraged by their own cultural advantages and are reinforced by communication technology.  If this is true, strategy is going to take yet another dramatic turn.  The real question is will we, the West, be open to learning who our future partners in new markets will be and hopefully gain a new context and respect of this relationship?  Do we know that we are very mechanical and like to change our environment whereas India, for example, works in a stronger mental control and patience capacity while working with a close-knit network of people?  Knowing cultural differences and how others see policies, regulations, and law, for instance, will make you know your “enemy” better and yourself through the process.  It’s truly a win-win.

When mapping out new potential markets, add a new criterion to judge: cultural advantages.  You will benefit in more ways than in just dollars and cents.
To watch Dr. Hooker's presentation, click this link: https://www.youtube.com/watch?v=XIG3U96L3XI

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