VASSOLO Roberto Santiago
Coherencia Sistémica
Harvard Business Review Latin America
Harvard Business Publishing
Año: 2007 vol. Marz p. 58 - 67
The quest for international growth often leads MNCs to enter emerging markets, where they stand at odds to navigate through economic, political and social turmoil. While uncertainty in developed markets is mainly caused by competitive forces, in developing economies competition is coupled with the absence of adequate institutional frameworks. Market turbulence takes different shapes in Latin America. The region’s particular environmental traits pose a series of trade-offs to MNCs both at strategic and organizational level. These trade-offs touch upon the core of MNCs’ sources of competitive advantage and affect key resources and capabilities. Executives resolve these trade-offs by choosing and heavily investing in one extreme of the equation. MNCs have thus developed valuable capabilities in one direction, leaving other opportunities unexplored. This approach, which we call bipolar, results from applying ready-made global solutions to regional settings. In so doing, executives give preeminence to those areas of the organization corporate headquarters expects them to. They trust models with proven success in developed countries to yield fast response to market changes in a region where market volatility, institutional instability and external shocks demand more than standardized strategies. This excessive trust in bipolar solutions may have left MNCs more exposed to environmental turbulence than they ever suspected. To sustain and increase their competitive advantage in Latin America, MNCs must constantly perfect their adaptive capabilities. Adaptation does not consist of choosing among extremes; it is a permanent, ever-evolving exercise MNCs should undertake comprehensively. Adaptation spans from strategy through leadership to the organization, both as a managerial skill and an organization design task. We propose a systemic approach based on common patterns of adaptation identified among highly successful MNCs in Latin America. The systemic approach takes trade-off analysis to the next level, rising above the crossroads imposed by the bipolar alternatives to reach an integrative solution. Instead of dominating in a specific dimension, MNCs following this approach bring harmony to both sides of the trade-off equation. Stretching their arms in several directions simultaneously, MNCs can tap the capabilities and resources required at each time to respond to market turbulence. In so doing, they resort to tailor-made solutions.