JAPAN MNE Insights
Volume 5, Issue 2
April 2019Japan Academy of Multinational Enterprises
TABLE OF CONTENTS

1. Special Essay:
CHANGING MNES
2. Special Essay:
Has Theodore Levitt
Returned?

" This essay starts withan overview of past
research, and then looks
briefly at more recentchanges in large
established MNEs andhow the IB field has – or
has not – dealt withthem. It closes with ashort reflection on thepotential of deeper, casestudy-based research,
particularly on Japanese
MNEs. "

www.mne-jp.org

Special Essay:
CHANGING MNES
D. Eleanor Westney
Professor Emerita MIT Sloan School of Business, USA

In 1972, The Economist published a survey on international businessasserting that “a revolution is coming in international business” (Macrae,
1972: viii) and that the large multinational corporations dominating thecontemporary world of international business were facing a period of decline.
Four and a half decades later, the same magazine has declared that althoughhuge multinational firms dominated the world’s business scene well into thetwenty-first century, they are now “rickety and overextended” and that “theglobal firm is in retreat” (The Economist 2017). The intervening decades
witnessed a succession of similar business press predictions that giant MNEs
were a dying breed, each pronounced as if it had never been made before.
The reasons given for the MNE’s impending doom are remarkably similar
across the decades. In both the 1972 and the 2017 articles, the MNEs’ peril is
attributed to three sets of factors: growing internal complexity of MNEs
making them more and more resistant to effective managerial control;
imminent threats to the openness of the global business environment fromnational governments; and technological changes reducing the MNEs’
advantages of scale and geographic dispersion. Very large MNEs still,
however, have continued to dominate international business and do so to thisday.
These recurring predictions of doom can provide entertaining material
for IB classes (and perhaps instill in our students a healthy skepticism about
what they read in the business press). While it may be easy to ridicule suchdire predictions, however, we should note that there is an underlying realitythat goes unrecognized by the journalists and probably by their readers: thelarge MNEs as they were organized in 1972, such as Unilever, IBM, Shell, or
General Motors, are indeed no longer with us, although the companies stillare. MNEs have survived and indeed flourished by changing over time inresponse to shifting internal and external challenges. How they organize theiractivities and distribute them geographically has been repeatedly transformed
over the ensuing decades.

1Vol.5 Issue 2JAPAN MNE Insights
Yet we can question how well the IB field has understood andportrayed these changes in the very large MNEs, as they moved from theworld of 1972 to that of 2017. When I was asked to contribute an essay to thispublication, I could not resist the opportunity to reflect back on what we havelearned and what we have still to learn about the changing form of the world’s
largest multinational enterprises. Perhaps it is simply the grumpiness of a
recently retired academic, but it seems to me that we in the IB field have notdone a good job of grappling with and understanding the organizational formof the world’s largest MNEs since the turn of the century.
This essay starts with an overview of past research, and then looks
briefly at more recent changes in large established MNEs and how the IB fieldhas – or has not – dealt with them. It closes with a short reflection on thepotential of deeper, case study-based research, particularly on Japanese MNEs.
OVERVIEW OF RESEARCH ON MNE ORGANIZATION IN THE 20TH
CENTURY
During the last three decades of the 20th century, it is possible toidentify two successive “long waves” of IB research on how MNEs organized
their international activities. The first was grounded in Ray Vernon’s Harvard
Multinational Enterprise Project, which began in 1966 and shaped much of thework on MNE organization through the 1970s and well into the 1980s. The
second wave, initiated by the work of C.K. Prahalad, Yves Doz, and Chris
Bartlett in the late 1970s and early 1980s, leading to Bartlett and Ghoshal’s
influential book, Managing across Borders: The Transnational Solution,
dominated work on MNE organization from the late 1980s well into the early
2000s.

" The Harvard
Multinational Enterprise
Project (HMEP) had amajor impact on the
study of MNE
organization in IB. "(a) The First Wave: The HMEP and the Strategy and Structure of MNEs
The Harvard Multinational Enterprise Project (HMEP) had a major
impact on the study of MNE organization in IB. In its first stage, a large teamof researchers collected data, primarily from public sources, such as annual
reports, press releases, and business press articles, on 187 American Fortune
500 companies with manufacturing subsidiaries in 5 or more countries. Laterin the 1970s data collection expanded to include Western European andJapanese MNEs.
When the project began, in the second half of the 1960s, global
economic growth had been accelerating over the past decade and theinternational activities of American firms were expanding rapidly. American
managers were asking how best to move from an organization dominated by
the home country to one that could more effectively operate abroad asinternational expansion became increasingly central to company strategy. As a
1964 Harvard Business Review article by two McKinsey consultants
demonstrated (Clee and Sachtjen, 1964), much of the managerial attention
focused on organizational architecture as the potential solution. The article laidout the strengths and weaknesses of three basic architectures for MNEs: theinternational division, the geographic structure, and the worldwide productstructure. These architectural categories were picked up in the HMEP research
design, with the additional of an architecture that was emerging in the late1960s and early 1970s: the matrix of geography and worldwide product2

Vol.5 Issue 2JAPAN MNE Insights

divisions.
The architectural approach was grounded in Alfred Chandler’s
influential 1962 book, Strategy and Structure. Chandler developed a stage
model of the shift from a functional to a product divisional structure, where
the architecture changed with the firm’s strategy of product diversification.
Its focus on organizational architecture and its link with diversification,
together with the stage model of organizational change, shaped the HMEP.
Stopford and Wells (1972) produced an influential model based on the U.S.
data, mapping the four MNE architectures (international division, worldwide
product divisions, geographic divisions, and matrix) onto a two-by-two grid,where the two variables were product diversification in foreign markets andgeographic diversification (measured as % of foreign sales). They positedthat companies began with an international division structure, moved either toa product or geographic structure, depending on whether product orgeographic expansion proceeded first, and culminated in the most advanced
structure, the matrix. Analyses of Western European MNEs (Franko, 1976)
and Japanese MNEs (Yoshino, 1976) under the HMEP umbrella adopted thestage model approach, though in both cases the researchers found that theinternational division continued as the architecture for much more extensive
internationalization than was the case for American MNEs. Franko also
identified an MNE form in Europe not evident among the American MNEs:
the “mother-daughter” structure, in which foreign subsidiaries wereconnected to headquarters by strong informal relationships across the top
management teams rather than by formal systems or reporting lines.
However, this recognition that MNEs based in different home countries
might differ initially in their architectures for their international activities andeven that they might follow different organizational paths as they expanded
internationally did not prevent IB researchers from positing that “advanced”
MNEs would share a similar architecture, regardless of home country,
internationalization trajectory, or industry. This assumption became deeply
embedded in IB approaches to MNE organization.

" Stopford and Wells(1972) produced an
influential model basedon the U.S. data,
mapping the four MNE
architectures(international division,
worldwide productdivisions, geographic
divisions, and matrix)
onto a two-by-two grid,where the two variables
were productdiversification in foreign
markets and geographic
diversification (measured
as % of foreign sales)."(b) The Second Wave: The Network MNE
The second wave of IB research on the organizational form of large
established MNEs also originated at Harvard Business School, but provided amarked contrast to the HMEP and was quite separate from it. The key early
researchers were HBS graduate students in the 1970s (C.K. Prahalad, Yves
Doz, and Chris Bartlett), all students of the Business Policy professor, Joe
Bower and unconnected with the HMEP, though it was still underway while
they were at HBS. They continued to work together after graduating from
HBS. All three had extensive experience as MNE managers before returning
to graduate work, and were strong advocates of working with executives toaddress current organizational and strategic challenges.
The challenges in the 1970s and early 1980s differed significantly
from those of the 1960s that had informed the HMEP, including an abrupt
shift from world economic expansion to stagnation and competition fromJapanese companies that were leveraging new transport and communications
technology and the declining restrictions on cross-border trade to benefit

3Vol.5 Issue 2JAPAN MNE Insightsfrom economies of scale and location advantages in a new way. Executives of
established MNEs shifted from a concern with expansion abroad and building
capable country subsidiaries to a focus on integrating their geographicallydispersed operations more effectively.
In contrast to the HMEP, these researchers focused on strategic processes
rather than structures; they drew on the contingency theory of Lawrence andLorsch rather than the work of Chandler (developing the widely-used Global
Integration/Local Responsiveness framework); they worked with in-depth casestudies rather than quantitative data; and they were strongly committed to what
we now call “action research” (that is, developing a deep knowledge of specific
MNEs by working closely with the management team to address important
strategic issues). However, they shared the assumption that MNEs would
converge from variation based on home country and “administrative heritage” toa single model. Ironically, even the terminology for this ultimate model wentfrom variation (heterarchy, multi-focal firm, transnational) to convergence (thenetwork MNE). This core group expanded in the 1980s (early recruits were
Gunnar Hedlund in Sweden and Sumantra Ghoshal) and by the 1990s, thetransnational network model of the MNE dominated IB research on established
MNEs, leading to a wide body of research on subsidiary roles, headquarterssubsidiary relations, and flows of various resources across the MNE network.
Increasingly, in the 1990s, much of the analysis of MNC networks drew on thetheory and methodology in organizational sociology around the emergence of
network organizations. The network model has dominated IB research on MNEs
to this day, even as the phenomenon itself has been changing.

" The key early
researchers were HBS
graduate students in the
1970s (C.K. Prahalad,
Yves Doz, and Chris
Bartlett), all students of
the Business Policy
professor, Joe Bower andunconnected with the
HMEP, though it was still
underway while they wereat HBS."(c) The 21st Century: Coming to grips with a changing phenomenon
Two important organizational changes that began in the 1990s but
accelerated in the early 2000s changed MNEs significantly. One, not specific to
MNEs, was the increasing resort to outsourcing of supply chains and support
activities (such as IT); the other, specific to MNEs, was the fragmentation ofcountry subsidiaries. Surprisingly, IB researchers have been quicker to come toterms with the former than with the latter.
Both developments were stimulated by Japanese business models andenabled by rapidly developing information and communications technologies.
Japanese MNEs had recreated their supplier networks as they expanded abroad,and the outsourcing of components and subsystems to suppliers and close
relationships with them were central aspects of the “lean production” model
based on the Toyota production system adopted first by American and later byEuropean manufacturers. Japanese MNEs were the first to set up functionallyseparate subunits instead of the conventional country subsidiary. When Japanesecompanies expanded abroad, they first set up marketing subsidiaries, thenmanufacturing subunits, and then, sometimes, R&D units. These were not folded
into a unified country subsidiary on the conventional Western MNE model but
reported back directly to their functional units in Japan and were much more
tightly integrated with their counterparts in the home country than with othersubunits in the same country. In the 1980s, IB scholars criticized this model aslacking in local responsiveness, but by the early 2000s most Western MNEs
were breaking their country subsidiaries into similarly specialized functionallyfocused subunits that reported to functional managers in global product units.
This enabled greater centrally-directed integration across locations; it also4Vol.5 Issue 2" Doz, Santos, andWilliamson (2001)
focused on innovation tobuild their model of “themetanational” as the next
step “beyond thetransnational”. "" What the 21st century
IB models have incommon with the 20th
century models is theassumption of
convergence fromvariety towards a single“ideal type” (in both theWeberian and thenormative senses) of the
MNE. "

JAPAN MNE Insights
facilitated the integration of acquired companies into MNE networks as M&A
became an increasingly important mode of international expansion, especiallyin mature industries. The dominance of the network model of the MNE allowed
IB researchers to assimilate this change into their current models and simply
refer to them as “country subunits” without exploring the implications for local
responsiveness or for the complexity of MNE structures.
Recognition of the growing importance of external partners andsuppliers has shifted attention in strategy and in IB towards the “enterpriseecosystem”. Doz, Santos, and Williamson (2001) focused on innovation tobuild their model of “the metanational” as the next step “beyond thetransnational”. More recently, Peter Buckley has drawn on economic
geography, the sociological work of Gary Gereffi and others on global supply
chains and development, and of course on the economic theory of the firm, topropose “the global factory” as the model of the contemporary MNE. The
metaphor of “orchestration” has become increasingly common in IB (and in
Strategy) to describe the management challenge of the MNE ecosystem, but the
implications for the organizational architecture of the MNE in the broadest
sense of structures, systems, and processes have yet to be explored.
What the 21st century IB models have in common with the 20th century
models is the assumption of convergence from variety towards a single “idealtype” (in both the Weberian and the normative senses) of the MNE. One reason
may be that IB has been imprinted by the economics idea of “the theory of thefirm” – one general model. Another may be a manifestation of what criticalorganizational theorists have identified as the proclivity of business schools andconsultants for identifying a “one best way” towards which enterprises mustmove (and for which they require the insights and expertise of the academics
and consultants). More defensible is the proposition that large established
MNEs share a common global institutional and competitive environment thatexercises similar pressures on their organizations and leads to convergence.
However, recent developments in organizational evolutionary theory
have suggested that large complex organizations may respond differently tochanges in the same environment, because of differences in their internal
selection regimes. In IB we have remarkably few empirical studies comparing
how two or more MNEs have evolved over time in response to the changing
international business environment, including their geographic footprint,changes in the organization of their foreign subunits, the changing compositionof the top management team (in terms of reporting responsibilities rather thanpassports), the changing nature of their publicly-announced partnerships with
global organizations. Bartlett and Ghoshal’s transnational research owed muchof its impact to its careful research design: three industries, each with three
MNEs from a different home region. They demonstrated that MNEs in thesame home region shared similar features across the three industries anddiffered from each other at the time of their study. But they did not seriously
consider that Japanese and European and American MNEs might be evolving
towards different organizational forms, postulating instead that all ninecompanies were moving to a single form, the transnational. Even earlier, apassing observation in Franko’s HMEP-based study of European MNCs in the
1970s suggested the importance of geographic footprint: the best predictor ofabandoning the mother-daughter structure was not geographic or product5Vol.5 Issue 2JAPAN MNE Insights

diversification but whether the company had a large and successful operationin the U.S. IB perhaps missed an opportunity to explore the influences ofhome country and geographic footprint on the trajectory of organizationalchange in MNCs when Alan Rugman put forward his argument that MNEs
were regional in both footprint and strategic orientation (by which he meant
one or two but not three regions), not global. IB scholars (and I plead guilty
to this personally) tended to focus on Alan’s somewhat polemical attack on
the concept of global strategy. Why did we not engage in an organizational
comparison to see if MNEs with different regional footprints might differ in
how they were organized and how they changed as they extended and/or
deepened their regional presence, and whether they differed from the small
number of firms that qualified as “global” in Rugman’s typology?
A recent editorial in the Journal of International Business Studies
stated that understanding corporate globalization is a “missed target” in IB
research (Verbecke et al, 2018). It also quoted approvingly Alan Rugman’sassertion that if every member of the AIB studied just one internationallyoperating firm in great depth “the state of IB research would improvedramatically” (ibid., p. 1108). I would argue that, in particular, studying
Japanese MNEs longitudinally holds enormous promise for understanding
the interactions between the changing international business environment
and MNE organizational form. Japanese MNEs were the first non-Westernenterprises to expand internationally, emerging as MNEs in the 1970s when
Japan’s controls on outward FDI were dismantled. IB as a field has tended tosee Japanese MNEs as “immature” and destined to become more like their
Western counterparts over time, rather than recognizing the extent to whichin the 1980s they represented a new organizational form of the MNE, thefirst to construct specialized local subunits instead of country subsidiaries
and, especially in the motor vehicle industry, engaged in an unprecedentedly
intense translation of domestic production organization into their foreign
operations. How the Japanese MNEs that were the focus of such intense
study in the 1990s have changed in the ensuing decades would be apotentially rewarding focus of study. Pragmatically, Japanese company-level
data are often richer than in the U.S. or Europe, and we have seen how
important this can be in the enormous contribution made by the analysis ofJapanese MNEs on the topic of entry mode, thanks to Shige Makino’s
introducing the Tōyō Keizai database to the Ivey Business School (though
once again, the IB field has rarely recognized that these are, in fact, Japanesedata on Japanese MNEs).
In spite of The Economist’s predictions, MNEs continue to dominate
international business. Understanding how they have responded and continue
to respond to the changing and increasingly unpredictable global
environment remains a central challenge in the IB field. We need to do a
better job of it, and an important first step is abandoning our longstanding
assumption that all MNEs will converge on a single model.

" Understanding how they
have responded andcontinue to respond to thechanging and increasingly
unpredictable global
environment remains acentral challenge in the IB
field. "6

Vol.5 Issue 2JAPAN MNE Insights

References
Clee, G.H. & Sachtjen, W.M. (1964). “Organizing a Worldwide Business.” Harvard Business Review
42-6: 55-67.
Doz, Y., Santos, J., & Williamson, P. (2001). From Global to Metanational: How Companies can win in
the Global Economy. Boston: Harvard Business School Press.
Franko, L.G. (1976). The European Multinationals: A Renewed Challenge to American and British Big
Business. Stamford, CT: Greylock Publishers.
Macrae, N. (1972). “The future of international business.” The Economist January 22: v-xxxvi.
Stopford, J. M. & Wells, L. T. (1972). Managing the Multinational Enterprise: Organization of the Firmand Ownership of the Subsidiaries. New York: Basic Books.
The Economist (2017). “Multinationals: The retreat of the global company.” January 28. Available athttps://www.economist.com/briefing/2017/01/28/the-retreat-of-the-global-company.
Accessed
December 18, 2018.
Verbecke, A., Coeurderoy, R., & Matt, T. (2018). “The future of international business research on
corporate globalization that never was…” Journal of International Business Studies 49-9: 11011112.
Yoshino, M. (1976). Japan’s Mutlinational Enterprises. Cambridge, MA: Harvard University Press.

7Vol.5 Issue 2JAPAN MNE Insights

Special Essay:
Has Theodore Levitt Returned?
Yoshihiro Oishi
Professor of School of Business Administration
Meiji University, Japan

Theodore Levitt’s paper, Globalization of Markets, was published in the
Harvard Business Review in 1983. The famous paper asserted the standardizationof global marketing. Levitt argued that technological development incommunication, transportation, and travel generated “Global Customers” who
prefer standardized products to localized ones. In his opinion, every company
should adopt standardized marketing for these homogenous global customers.
Standardized global marketing is inevitable but can also remain selective. For
example, Levitt leaned global marketing strategy toward standardization, whereas
Bartels [1968] and Keegan [1969] retained the balance between standardization
and adaptation of global (international) marketing. In another example, Drucker[1969] presented the idea of the “global shopping center,” which Levitt seemed tohave adopted, and Ohmae [1990] has called this interlinked world a “borderlessword.” Finally, Hisatomi [1991] demonstrated that when customers acrossEurope, the U.S.A., and Japan decide on which passenger car to buy, they
consider the same five of the top six criteria to aid decision making.
As a matter of course, there were many opinions that went against Levitt,such as Fisher [1984], M & MD [1984], Boddewyn, Soehl and Picard [1986],
Kotler [1986], Wind [1986], and Douglas and Wind [1987]. They pointed out thatclimate, culture, political systems, governmental regulation, competitive situation,
consumer behavior, and consumer preference still varied greatly across different
nations. Wind [1986] and Douglas and Wind [1987] wrote that Levitt’s proposed
homogeneous world was “myth,” even though Levitt explained that thetechnological development in communication, transportation, and travel led to asomewhat homogenous world. These arguments were made in the era when there
were no personal computers (PCs), internet, social networking services (SNS),
smartphones, LCC, electronic money, mobile payment systems, etc. Even if, in
Levitt’ age, the world appeared to be moving toward homogeneity, especiallywhen compared to the 1960s and the 1970s, it is argued here that this was not thecase. It instead remained in the process of homogenization, that is, in the processof convergence.
Levitt’s paper was a result of not only technological development but
also popular Japanese products. In the 1960s and the 1970s, Japanese companies
succeeded in mass production and mass sale of quality, inexpensive products.
They sold to the world, in particular to the U.S.A. Many were products liketextiles, apparel, calculators, transistor radios, TVs, cameras, and automobiles.
Levitt perhaps incorrectly believed that because Japanese products werestandardized, their marketing would also be standardized, and that this wasinevitable and marketing would not be selective in the homogeneous world.
Further, he felt that world consumers were willing to purchase standardized,
quality, inexpensive products, in turn ignoring or deprioritizing their local tastes.

" Wind [1986] andDouglas and Wind
[1987] wrote that
Levitt’s proposed
homogeneous world was“myth,” even though
Levitt explained that thetechnologicaldevelopment incommunication,transportation, andtravel led to a somewhat
homogenous world. "8

Vol.5 Issue 2" Millennials have
similar characteristics
across countries andmake up a large portionof the population in eachcountry."

JAPAN MNE Insights
In the first place, since they got homogeneous, they would love to buy
similar products.
In today’s world, high-tech products such as the internet, Skype,smartphones, SNS, Wi-Fi, Bluetooth, 5G, artificial intelligence (AI) andBlock Chain have become commonplace. Technology has developed
remarkably in the last 35 years. In addition to these technological changes,
the modern world has given rise to the Millennials (Millennial Generation or
Generation Y, young people who were born from 1980 to about 2000). This
generation is increasingly global and has more in common than most othergenerations. Research shows that Millennials are digital natives. They use
SNS frequently, check electronic word-of-mouth before purchase, buy
products and services via their smartphones, and share their feelings before,
during and after the use of these products. Millennials emphasize usage
rather than ownership, cherish work-life balance, like ethical consumption
and living, and respect diversity. (PwC 2015; ManpowerGroup 2016;
Deloitte 2017 and 2018; and Mizho 2018).
Millennials have similar characteristics across countries and makeup a large portion of the population in each country. Chart 1 shows that in2016, Millennials became the largest generation in the U.S. labor force.
Another report from the Pew Research Center predicts that the millennial
population will reach 76 million by 2036 and will remain the largest
population (Fry 2018a).

Chart 1: Millennials became the largest generation in the labor force in 2016
the U.S. labor force, in millions

Note: Labor force includes those ages 16 and older who are working or looking for work. Annual averages shown.
Original source: Pew Research Center analysis of monthly 1994-2017 Current population Survey (IPUMS).
Source: Fry [2018b].

This trend repeats across many other countries. Manpower [2016]
predicts that the workforce share of Millennials will be 35 percent in 2020,the largest generation next to Generation Z (post-Millennials). Generation Z,
however, is considered too young to purchase expensive products likehouses, passenger cars, TVs and so on. Millennials will thus remain the mostpowerful consumers in many countries for a considerable period.
Research on Millennials, however, began only recently, and thefield is still relatively new, whereas exploration into Generation X, Y, and Z
have longer histories. Table 1 shows that research on Millennials began in

9Vol.5 Issue 2JAPAN MNE Insights

2015, and research on Generation X, Y, and Z started before 2010. As of 9th
November 2018, 189 papers were written on Millennials, and 78 on Millennial
Generation. This is in comparison to 4582 papers on Generation X, 709 on
Generation Y, and 739 papers on Generation Z. It is widely known that Generation
Y accounts for most of the Millennials or Millennial Generation, but, the words of“Millennials” or “Millennial Generation” did not become popular in the academic
world until 2014.
Table 1: Number of "Generation X", "Millennial Generation" and "Millennials"
on Web of Science(unit: single)
year

2000

2005

2010

2011

2012

2013

2014

2015

2016

2017

2018

Generation X

1,687

2,124

2,840

3,122

3,355

3,501

3,911

4,422

4,780

5,357

4,582

Generation Y

206

280

425

473

499

519

556

687

766

831

709

Generation Z

284

337

417

430

498

530

565

647

714

799

739

4

6

16

16

21

21

24

50

62

77

78

1

2

25

16

23

28

30

81

136

208

189

Millennial
Generation
Millennials" Research on
Millennials,
however, began only
recently, and thefield is still relatively
new, whereas
exploration into
Generation X, Y, andZ have longer
histories. "Source: search on Web of Science, author conducted on 9th November 2018.

In 2018, DO-HOUSE Inc. (one of the leading research companies in Japan)
partnered with me to conduct new research aimed at capturing the characteristics ofMillennials. We concluded interviews with eight Japanese companies, and ourcounterpart in New York is conducting interviews with several U.S. companies.
While we have accumulated qualitative data, we performed quantitative webquestionnaire research in Japan, the U.S.A., China, and Thailand, from 9th through17th July 2018. Sample sizes were 602 in Japan, 592 in the U.S.A., 575 in China,
and 533 in Thailand, 2302 responses in total. To compare Millennials to Generation
X, we used similar samples from each generation, as well as from male and female
participants.
Chart 2 shows the common characteristics of Millennials across four
countries. As they are often referred to as Digital Natives, we eliminated questions
that related to digital. Chart 2 reveals that, first, the overall shape of the four lines(representing each country) are almost similar. Second, Japan has a lower level ofawareness across almost all question items compared to the other three countries. A
contributing factor may be the tendency for the Japanese to answer questions in amoderate manner. The only exception to this is “I have lived in at least two
countries.” Third, individuals from China and Thailand have a higher level ofawareness compared to those from the U.S.A., partly because individuals from thesetwo countries are more likely to answer in a less moderate manner than those fromthe U.S.A.

10

Vol.5 Issue 2JAPAN MNE Insights

Chart 3 shows that U.S. Millennials (both male and female) have a higher level of awarenessthan Generation X. Our new book to be issued 2019 will explain those more detail.

Although Millennials and Generation Z are becoming increasingly homogeneous (to be more
precise, in the process of convergence) across the world, this does not mean that multinational
corporations should adopt standardized marketing. Another misunderstanding of Levitt in addition to the11Vol.5 Issue 2JAPAN MNE Insights

strategies of Japanese companies is that he thought homogeneous consumers led to standardized
marketing. Environmental surroundings and other macro factors should not always dictate marketingstrategies (Takeuchi and Porter 1986). Even if consumer “needs” are homogeneous, their “wants” aredifferent. Moreover, companies can determine their marketing strategies along with their corporate
philosophy and policy in addition to their products and environmental issues. Companies such as
Apple, IKEA, MUJI, and UNIQLO prefer standardized marketing all over the world. Although theyknow each country (market) has unique and various wants, they continue to strive for standardized
marketing.
Chart 4 presents my analytical perspective on global marketing. Initially, the environmental
decision model was dominant (Cateora and Hess 1966). In later works, the relationship among
environmental factors, product or industrial factors, and corporate factors have been frequently
discussed (Rau and Preble 1987; Jain 1989). My opinion puts stress on corporate factors, which
precede other factors. Corporate factors, especially the intent of top management or corporate DNA,takes the most critical role of global marketing.

Since Samiee and Roth [1992], significant empirical research on global marketing has been
conducted. It is still not clear, however, which strategy is more successful – standardization or
adaptation. This may be an eternal issue for global marketing. It is well known that neither
standardization nor adaptation can succeed in isolation, and the optimal choice is somewhere on the
spectrum between standardization and adaptation. We have already found several strategies for
success, such as Hybrid Measures (standardizing part of marketing mix and adapting others), Common
Factors Measures (standardizing core factors and adapting sub-factors), Multi-Pattern Measures(foreign affiliates can select one of multi-pattern, and can adapt some contents), Supply Chain
Management Measures (meeting the change of host market via good SCM, that is, fastening the leadtime and simultaneously minimizing the inventory) (Oishi 2017). Of course, other measures may
remain. I cannot refer them in detail here because of width of paper.
Although Levitt cannot return, his contribution to the field is significant. Companies must stare at12

Vol.5 Issue 2JAPAN MNE Insights

homogeneous markets or segments like Millennials across the world. Levitt is right when he insists that
adaptation is not the only answer. Companies can, and should, select their own strategies according totheir philosophy and policy.

References
Bartels, R. [1968]. Are Domestic and International Marketing Dissimilar?, Journal of Marketing, 32[3]:56-51.
Boddewyn, J. J., Soehl, R. & Picard, J. [1986]. Standardization in International Marketing: Is Ted Levittin Fact Right?, Business Horizons, 29. [6]:69-75.
Cateora, P. R. & Hess, J. M. [1966]. International Marketing, 3rd ed. Homewood, Illinois: Richard D.
Irwin.
Deloitte [2017]. The 2017 Deloitte Millennial
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Fry, R. [2018a], “Millennials projected to overtake Baby Boomers as America’s largest generation,”PeW Research Center (http://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-babyboomers/). Accessed December 20,2018.
Fry, R. [2018b], “Millennials are the largest generation in the U.S. labor force,” Pew ResearchCenter(http://www.pewresearch.org/fact-tank/2018/04/11/millennials-largest-generation-us-laborforce/). Accessed December 20,2018.
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7,2018.

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Ohmae, K. [1990]. The Borderless World: Power and Strategy in Interlinked World Economy, New
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Japan Academy of Multinational Enterprises
2017-2019 Executive Board
President
Kazuhiro Asakawa (Keio University)
Vice President
Masahiro Ida (Hannan University)
Tetsuya Usui (Nihon University)
General Affairs
Yoshihiro Oishi (Meiji University)
Takeshi Fujisawa (Kwansei Gakuin University)
Hiroshi Hoshino (Kyusyu University)
Takeshi Ohtowa (Kanto Gakuin University)
General Planning and Publications Commitee
Yasuro Uchida (University of Hyogo)
Tomokazu Seki (Rikkyo University)
Syohei Tabata (Kindai University)
Akio Tokuda (Ritumeikan University)
Best Book and Paper Award Commitee
Masayuki Furusawa (Kindai University)
Shigeto Morokami (Meiji University )Takeshi Ohtowa (Kanto Gakuin University)
Syohei Tabata (Kindai University)
International Relations
Chie Iguchi (Keio University)
Masashi Arai (Asia University)
Tamiko Kasahara (University of Shizuoka)
Takahide Yamaguchi (University of Hyogo)
Program Commitee
Naotoshi Umeno (University of Hyogo)
Hiroshi Hoshino (Kyusyu University)
Motoyuki Kanetsuna (Nanzan University)
Yukiko Shinomiya (Kindai University)

MNE Academy Journal, Editorial Team
Editor-in-Cheif
Akio Tokuda (Ritumeikan University)
Editors
Yasuro Uchida (University of Hyogo)
Tomokazu Seki (Rikkyo University)
Takahide Yamaguchi (University of Hyogo)
Public Relations
Tamiko Kasahara (University of Shizuoka)
Masashi Arai (Asia University)
Motoyuki Kanetsuna (Nanzan University)
Takeshi Fujisawa (Kwansei Gakuin University)
Eastern Chapter
Tomokazu Seki (Rikkyo University)
Chie Iguchi (Keio University)
Shigeto Morokami (Meiji University )Yasuro Uchida (Toyama University)
Western Chapter
Hajime Baba (Kansai University)
Yukiko Shinomiya (Kindai University)
Akio Tokuda (Ritumeikan University),
Takahide Yamaguchi (University of Hyogo)
Executive Secretariat and Directors
Head Office: Yoshinori Yasuda (Soka University)
Eastern Chapter: Masashi Arai (Asia University)
Western Chapter: Hajime Baba (Kansai University)
AuditorTakuya Fukazawa (Tokyo Fuji University)
Shingo Nishii (University of Hyogo)

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Vol.5 Issue 2JAPAN MNE Insights

Japan MNE Insights will be published twice a year on the AMNE official website(www.mne-jp.org). Please feel free to contact with the editorial team if you have any question
or request.

Japan MNE Insights Editorial Team
Editor-in-Cheif
Tamiko Kasahara (University of Shizuoka)
EditorMasashi Arai (Asia University)
Hironori Uchibori (Hakuoh University)
Motoyuki Kanetsuna (Nanzan University)
Takeshi Fujisawa (Kwansei Gakuin University)
Japan MNE Insights Editorial Team is currently located at
Office of Dr. Tamiko Kasahara,
University of Shizuoka, School of Management and Information
52-1 Yada, Suruga-ku, Shizuoka, 422-8526, Japan
TEL/FAX:+81-54-264-5435 (direct)
Contact e-mail address: kasahara@u-shizuoka-ken.ac.jp
Copyright @ Japan Academy of Multinational Enterprises (Japan)

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