Globalisation and Strategic Choice: How Multinational and Local Company Perspectives Differ:: A Spanish Case Study

Abstract

Strategic implications arising from globalisation are less clear-cut for executives in local companies, particularly in more peripheral countries such as Spain, than those suggested by general strategic prescriptions often more appropriate to Multinational Companies (MNCs). Local companies’ strategic choices are heavily constrained as a result of limited resources and distinctive evolutionary paths, and alternative theoretical perspectives on offer may be relevant, but to different extents. Theorists such as Porter emphasise market power and market positioning, whereas, more recent competence- and resource-based perspectives stress more internal issues such as technology and control of factor markets. Both sets of issues may be both pertinent and complementary for MNCs, but smaller local companies may require much greater emphasis on resource-based considerations. This study investigated the strategic priorities arising from globalisation as perceived by senior executives in eight MNC and nine independent vehicle component companies in Spain, and also as seen by customers. We confirmed this difference in emphasis for local independent companies as opposed to MNCs. More surprisingly, it emerged that for both types of companies there appears to be some shift of emphasis as globalisation proceeds, stage by stage, highlighting the need for some dynamic perspective. Strategies and policy choices of companies are distinguished and categorised for the two groups using two diamond configurations, providing some indication of required future policy shifts for companies so far less advanced in terms of their exposure and response to globalisation.