Navigating growth in emerging markets: six rules for improving decision making between corporate and local leadership

Abstract

Purpose

We argue that in order to achieve sustainable profitable growth in emerging markets, MNCs need to rely less on preexisting corporate management models and more on a flexible, principle‐based set of practices that can change from market to market and even from year to year.

Design/methodology/approach

The article focuses on six key practices: how long‐term direction is established and reviewed; how the emerging market business fits within the organizational structure; how roles and decision rights are defined between headquarters and the local leadership; how local decisions are prioritized and how fast they are made; how resource allocation can be made more flexible; and how performance is monitored and managed.

Findings

To fully capture the emerging market growth opportunity, MNCs must strike the right balance in each of these six areas, surmounting the inevitable tension between global standards and on‐the‐ground realities.

Originality/value

Multinational corporations are scouring the globe for growth, and increasingly they are finding it in emerging markets. But the potential pitfalls of this approach are substantial – and often underestimated. This paper outlines an approach that will help local and corporate leaders steer the path to long‐term success more nimbly than standard models.

Citation

Olsen, T.A., Pinto, M. and Virji, S. (2005), "Navigating growth in emerging markets: six rules for improving decision making between corporate and local leadership", Journal of Business Strategy, Vol. 26 No. 6, pp. 37-44. https://doi.org/10.1108/02756660510633019