Leveraging Cultural Diversity in Emerging Markets

Marcus Goncalves, Finn Majlergaard

• Publisher: Business Expert Press
• Year: 2015
• Print ISBN:
  9781631573132
• eBook ISBN:
  9781631573149
• Topic: Economics
• Subtopic: Comparative Economics
• Index: Economics

Leveraging cultural diversity is an important element for competing in the global market. Understanding the overall macroeconomic landscape of emerging and frontier markets enables corporations and international business professionals to fully realize the potential for strategic globalization. Most transnational and multinational corporations have made substantial progress in their globalization efforts by establishing operations in several countries and offshoring certain processes to countries with capabilities and growth potential. However, while these recent globalization efforts have their roots in cost arbitrage, successful companies must understand that globalization can be a means for shoring up competitive advantage to diversify intellectual capabilities and growth and improve quality enhancement opportunities. This book looks at how one can move forward from the current situation. Most people still see cultural differences as a barrier to success. The authors demonstrate how one can, instead, leverage from the cultural diversity and create better, more competitive companies, better leaders, and hopefully a safer and more sustainable world.

Chapter 1

Understanding Emerging
Markets

Economy and Culture

An Overview of Emerging Markets

As economic globalization has brought down trade and investment barriers and has connected far-reaching countries in an integrated global supply chain—and emerging markets seem to be converging with the world’s “rich industrial countries”—distinguishing these economies from developed markets may seem to matter less than before.

Well, we disagree. One fundamental premise of this book is that businesses still need to distinguish emerging markets—collectively from developed markets and individually from each other. In addition, international business professionals need to understand the cultural aspects of each of these countries and regions, so that they are able to leverage the cultural diversity of these markets.

It is important, therefore, that we stabilize the term emerging market. What is it, or better yet, what is it not? Economists at the International Finance Corporation, within the World Bank, coined the term, emerging markets, in 1981, when the group was promoting the first mutual fund investments in developing countries. Since then, references to emerging markets have become ubiquitous in the media, foreign policy and trade debates, investment fund prospectuses, and multinationals’ annual reports.

Defining Emerging Markets

These groups of emerging economies are not easy to define. Although the World Bank coined the term emerging countries more than a quarter of a century ago, it only started to become a household term in the mid-1990s.1 After the debt crises of the 1980s, several of these rapidly developing economies gained access to international financial markets, while they had liberalized their financial systems, at least far enough to enable foreign investors broad access into their markets.2 From a small group of nations in East Asia, these groups of emerging economies have gradually grown to include several countries in Latin America, Central and Eastern Europe, the Middle East, as well as a few countries in Africa. The leading groups today are the ASEAN (Association of South East Asian Nations); the BRICS (Brazil, Russia, India, China, and South Africa); the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa); and the MENA (Middle East and North Africa) groups, in addition to what Jim O’Neil calls the N-11, or next-eleven emerging economies, a focus of much discussion in this book.

The definitions of the term, however, still vary widely, often reduced to the unhelpful tautology that emerging markets are “emerging” because they have not “emerged.” To understand emerging markets, we need to consider carefully the ways in which they are emerging and the extent to which they are genuine markets. Although this is not the objective of this book,3 we provide here an overview o...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Abstract
• Contents
• Preface
• Acknowledgments
• Chapter 1: Understanding Emerging Markets
• Chapter 2: Economic and Cultural Transformations at Emerging and Frontier Markets
• Chapter 3: Coping with Differences and Promoting Interactions
• Chapter 4: Clash of Civilizations or Cultural Synergies?
• Chapter 5: Global Individualism
• Chapter 6: Western or Christian and Muslim or Arab Heading Towards Inevitable Conflicts: Really?
• Chapter 7: Benefiting from Cultural Synergies
• Chapter 8: Commonalities in Cultures: Fruitful Reconciliations
• Chapter 9: Emerging Markets Do Not Want to Be Like the West
• Chapter 10: The Lesser Importance of National Cultural Identities
• About the Authors
• Advance Quotes for Leveraging Cultural Diversity in Emerging Markets
• References
• Bibliography
• Index
• Ad Page
• Backcover