Learn about the polycentric approach to globalization for the SHRM Senior Certified Professional (SHRM-SCP) certification exam. Discover how companies adapt to local norms while maintaining profitability.
Table of Contents
Question
Which best describes a company with a polycentric approach to globalization?
Answer
Local cultural norms are understood and implemented locally. In the polycentric orientation, entities are allowed a large measure of independence as long as they are profitable and may adapt to local culture and legal compliance as needed.
Explanation
A company with a polycentric approach to globalization is one that allows its local entities a significant degree of autonomy and independence, as long as they remain profitable. Under this orientation, the company recognizes and adapts to the cultural norms, practices, and legal requirements of each local market where it operates.
Key characteristics of a polycentric approach include:
- Local adaptation: The company’s subsidiaries or branches in different countries are encouraged to understand and implement local cultural norms, business practices, and legal compliance measures. This allows them to better serve the local market and integrate into the local business environment.
- Decentralized decision-making: Local managers are empowered to make decisions based on their understanding of the local market, without always needing approval from the company’s global headquarters. This enables quicker decision-making and responsiveness to local needs.
- Focus on profitability: While local entities are given a large measure of independence, they are still expected to remain profitable and contribute to the overall success of the company. Financial performance is a key metric in evaluating the effectiveness of the local entity.
- Limited global standardization: Unlike ethnocentric or geocentric approaches, a polycentric approach does not emphasize global standardization of products, services, or processes. Instead, it prioritizes local adaptation and responsiveness.
Companies adopting a polycentric approach believe that success in international markets is best achieved by allowing local entities to deeply understand and adapt to the unique cultural, social, and legal landscape of each market. This approach can be effective in highly diverse global markets but may limit opportunities for global synergies and knowledge sharing across the organization.
SHRM Senior Certified Professional (SHRM-SCP) certification exam practice question and answer (Q&A) dump with detail explanation and reference available free, helpful to pass the SHRM-SCP exam and earn SHRM-SCP certification.