Multinational companies have been operating for decades, and many people believe that these are organizations that fully enjoy the benefits of globalization. It is assumed that these businesses enhance their competitiveness through their diversity. However, Ghemawat emphasizes that the majority of multinationals are deeply rooted in their home countries (94). These roots are apparent in terms of their strategy, as well as employees’ perspectives. The author notes that cosmopolitan companies are likely to be the most successful businesses in markets as the boundaries in the global market are blurred or even non-existent. This paper focuses on the ways companies may utilize to become truly cosmopolitan as well as the discussion of Maslow’s Hierarchy of Needs Theory as it is related to cosmopolitan organizations.
Cosmopolitan companies are organizations that acknowledge various differences and use a set of strategies to manage them. The strategies employed are the adaptation, arbitrage, and aggregation (Ghemawat 97). Adaptation implies the identification of differences and responding to the needs of local people. Aggregation is the strategy that aims to overcome differences and create the environment with no particular roots and links. Arbitrage involves the use of differences to achieve various goals. Ghemawat argues that it is important to use these each of these approaches depending on the situation and set goals.
In order to develop a cosmopolitan organization, it is essential to concentrate on three major domains such as strategies, leaders, and people. Strategic planning should involve the appreciation of various differences and the use of the three approaches mentioned above. Organizations should treat each market differently but try to create the cross-border environment. It is crucial to utilize the most effective management theories. For instance, highly acclaimed Maslow’s theory of needs is not applicable to cosmopolitan organizations. Maslow emphasizes the differences that exist as he places significant value on such needs as safety (stability and certainty) and affiliation (sense of belonging) (McGrath and Bates 56). Some points of this theory can be helpful, but its use should be limited. Managers should not try to develop environments where some cultures prevail, as the only prevalent culture can be the organizational one.
The focus on leadership is crucial as well. Businesses have to invest in their leaders’ training and development. Formal education that involves spending a significant amount of time in different countries can be beneficial. Spending time in different subsidiaries can also help in developing truly cosmopolitan leaders. It is also important to hire people who have multicultural backgrounds as they can help others to accommodate to the values of a cosmopolitan organization (Ghemawat 98). As for employees, extensive cross-border communication, as well as linear hierarchies, can be instrumental in creating cosmopolitan companies. Employees should communicate and work on projects to increase their awareness of other cultures and become able to operate in cross-border environments.
In conclusion, cosmopolitan companies are the future of the business world as technology helps in removing barriers. However, modern organizations (including multinationals that have been operating in different countries for decades) have difficulties with transforming into cosmopolitan ones. In order to achieve this goal, it is critical to focus on such levels as strategic planning, leadership, and human resources management. People are still deeply rooted in their countries, which poses certain threats to their effective collaboration with representatives of other regions. Proper management can help people and organizations overcome these barriers and focus on achieving business goals.
Ghemawat, Pankaj. “The Cosmopolitan Corporation.” Harvard Business Review, vol. 89, no. 5, 2011, pp. 92-99.
McGrath, James, and Bob Bates. The Little Book of Big Management Theories:… And How to Use Them. 2nd ed., FT Press, 2017.