1. Identify the policy implications for MNEs who fully believed in the globalization scenario of Professor Levitt?
After professor Levitt of Harvard Business School popularised the term globalisation in 1983, many MNEs jumped into the global market to practice his widely accepted theories and to imply their policies relevant to his ideas on globalisation. The policies implied were role of technology, standarisation of products, enormous economies of scale, centralisation of decisions and homogenising of products. The role of technology nowadays has become a necessity that everything is dependent on it. Technology is obviously inseparable to gloabalisation. From purchases, production, distribution and promotion, everything is just done more convenient with technology. According to Levitt, with the technology’s role in a global setting, the whole world will converge making it as one global market. As an effect, products are standardised sourcing out from great economies of scale. Purchases are done in bulk, advertising costs are extended out in media markets, and management’s specialisation is increased. Since there isn’t any need for a lot of products to be made available in the market, decision-making has to be centralised and the market homogenised making the world as a global village. Levitt’s influence was well known that companies like Saatchi & Saatchi, Coca-Cola, MTV, and Mcdonalds believed in him.
2. Why do others dispute the validity of this scenario?
Although MNEs have been truly successful in starting to practice Levitt’s theories, the long run, they realised that something is going wrong. Local enterprises are becoming less competitive, because the dominance of global brands and global market was obvious. But then, local demands are still prevalent. More people still demanded for local products to satisfy their local tastes. Some people also demanded for the protection of their social and...