WEEK 1 DQ 1 - ETHNOCENTRIC, POLYCENTRIC,

REGIOCENTRIC AND GEOCENTRIC MANAGEMENT

ORIENTATIONS

WORD COUNT: 852

INTRODUCTION
Today, the world is a much-interconnected marketplace
than it was 5 decades ago. The ease of international travel,
technology and the Internet have been cited by many
scholars as key factors that have accelerated the pace at
which the world has really shrank. However, trade and
economics have probably played greater role than the 3
factors mentioned earlier. The need for expansion has
driven inter-company competition. The quest for growth has
driven the need to conquer new geographies. Mrak (2000)
posited that internationalization of production, trade across
international borders and capital flow across countries are
major drivers of globalization. Protectionism is a major
restraining force against globalization. Protectionism and
globalization seem to be in constant struggle for dominance.
However, as events of the last few decades have shown,
globalization is winning the battle against protectionism.
One country that seems to have embraced both sides of this
paradox is China. In a bid to attain world economic
dominance, it has protected the Chinese market against
major global brands (mostly with U.S. and Western origins)
like Apple and Google for decades while exporting its cheap
local production to these same countries. Today, China has
overtaken a number of countries on key economic and
manufacturing indices (Morrison, 2014). China overtook
Japan to become the second largest world economy a few
years ago. It has been predicted that if it maintains current
GDP growth, China will even overtake the U.S. to become
worlds largest economy by 2017. (PWC, 2013)

The ERPG framework measures the attitude and response of
an organization towards market opportunities. These
attitudes are a reflection of the companys assumptions,
values and beliefs on what the world truly is. (Keegan et al,
2013)

ETHNOCENTRIC MANAGEMENT ORIENTATION
Ethnocentrism happens when an organization (or a person)
sees the world and the opportunities therein from the point
of view of its own superiority. It could also express itself as
an indifference towards even bigger opportunities than the
ones of the companys country. This indifference can be as a
result of bias, prejudice or simply ignorance. Foreign and
domestic operations are viewed differently from the point-of-
view of superiority. In the early days, Nissan was a more
ethnocentric organization as it expected American owners of
Nissan to replicate the Japanese culture of covering the
hood with blanket to prevent engine freeze during winter.
On a personal and domestic note, I believe that despite the
seeming globalization of the Heineken beer and the
company, quite a number of its staff in foreign operations
are still ethnocentric, believing in the superiority of the
Dutch system and business values/ assumptions on almost
all issues from manufacturing to marketing and
advertising. In my interactions with Heineken Nigeria as
advertising clients, I have had to attempt to correct and
liberalize most of their views and reconcile it with the
Nigerian cultures. One of such TV advertising that ran in
Nigeria but did not resonate with the target audience is
The Date TV commercial which can be found at
(https://www.youtube.com/watch?v=57zo8O5pDXc)

POLYCENTRIC MANAGEMENT ORIENTATION
This school of thought believes that all views are important
and somewhat equal. It encourages local operations to
adapt business strategies to the needs and wants of local
consumers and opportunities. It believes that every country
is different from the other and reflects this thinking in how
it approaches each market. PepsiCo international, another
client of my organizations clients (Insight Communications
http://insightnigeria.com/base/) appears to be a more
polycentric organization. Not only does the local office
determines and executes its business strategies, the
packaging of the Pepsi bottle in Nigeria is also unique. In
addition to this, we develop local advertising for the Nigerian
consumers of Pepsi. PepsiCo and every organization with
this mindset can be considered as multinationals.

REGIOCENTRIC MANAGEMENT ORIENTATION
This is a larger version of ethnocentric orientations
decisions are not made at national levels but at regional
levels. It assumes that consumers and business challenges
as well as opportunities are similar at regional levels and as
such, should be approached with the same solution at
regional levels. General Motors used to be a good example of
Regiocentric Company when designs of vehicles were done
at regional levels rather than national or global levels.

GEOCENTRIC MANAGEMENT ORIENTATION
This considers the entire world as one single potential
market and develops global strategies for it. A geocentric
company sees similarities and differences in different
markets as opportunities and develops a global strategy to
appropriate them (Keegan, 2013). Today, GM is more of a
geocentric organization than it was 2 decades ago. It sees
the phenomenal success of Toyota and learnt its lesson.

CONCLUSIONS
The implications of each of the above orientations vary with
the dynamics of the market and with time. Consumers from
countries with strong national identities and values tend to
consume local brands at the expense of imported or
international brands. Consumer ethnocentrism is quite
common in countries like China and possibly Japan. (Yoo et
al, 2005) where they have adversarial attitude towards
imports. This is true until recently in most of these
countries, including Russia.

REFERENCES:
Mrak, M. (2000) Globalization: Trends, Challenges and
Opportunities for Countries in Transition. United
Nations Industrial Development Organization, Vienna,
2000. Available Online from
http://www.unido.org/fileadmin/import/userfiles/puf
fk/mrak.pdf. Accessed 21st March 2014

Morrison, W.M. (2014) Chinas Economic Rise: History,
Trends, Challenges, and Implications for the United
States. Congressional Research Service. Available
Online from:
https://www.fas.org/sgp/crs/row/RL33534.pdf.
Accessed 21st March 2014

PWC (2013) The BRICs and beyond: prospects,
challenges and opportunities. World in 2050. Pwc
Economics Available Online from:
https://www.pwc.com/en_GX/gx/world-
2050/assets/pwc-world-in-2050-report-january-
2013.pdf. Accessed 21st March 2014.

Keegan, W.J. & Green, M.C. (2013) Global marketing.
7th ed. Upper Saddle River: Prentice Hall.


Yoo, B and Donthu, N (2005) The Effect of Personal
Cultural Orientation on Consumer Ethnocentrism:
Evaluations and Behaviors of U.S. Consumers Toward
Japanese Products. Journal Of International
Consumer Marketing. Vol. 18(1/2) 2005 by The
Haworth Press, Inc. Available Online from:
http://iba8010kelly.alliant.wikispaces.net/file/view/A
d+Article1.pdf. Accessed 21st March 2014.