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Multinational companies turning multilocal

Whilst political Europe struggles to establish its structures, European multinationals have long recognised the importance of the local context. But only recently have these companies started to turn it into a tool which can be advantageously used in the global business arena. The concept and development of the multinational multilocal company can be attributed primarily to two leading European firms: ABB and Unilever. Both have organisational structures characterised by strong networks of different operating units and a corporate head office providing key functions. Localism is deeply embedded in their corporate culture. ABB has strong historical roots in two of the smallest European countries, Sweden and Switzerland. Unilever has enjoyed an Anglo-Dutch culture since the merger of the British Lever Brothers and the Dutch Margarine Unie in 1929.

Compared to North American multinationals such as Mars, their local units have retained a relatively high degree of autonomy and are responsive to the specific demands of local markets. This has created a federative organisation, typical for multinational multilocal companies, in which corporate success is an aggregate of local success. The federative structure has been the critical success factor in transforming local potential into corporate competitive advantage: Each local unit operates a vast data warehouse of social values, experiences and ethnical treasures. They all generate new ideas which are then spread throughout the organisation. Signals from the local units enable the organisation to fine-tune existing strategies and function as an early-warning system if global trends start to change. As in any political organisation, the smaller the local operating unit is the more difficult it becomes for a local concept to gain acceptance in large groups. All depends on which role the unit will take in the multinational multilocal corporation.


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