Having spent over a decade seeking competitive advantage through feverish and largely counterproductive reorganization, downsizing, and reengineering, many manufacturing companies are now attempting, without success, to achieve competitive advantage through globalization. Many are already multinational, since they have divisions in several countries, but multinationals typically consist of a head office that is located in one country and that produces all the ideas, plus subordinate manufacturing divisions that are located in other countries and that simply supply inexpensive labor. In contrast, the ^multicultural multinational, as some call a company attempting globalization, tailors each division’s operations to its country's culture and elicits ideas from employees in all divisions in order to take advantage of local knowledge.

Unfortunately, the emphasis on local expertise and culture conflicts with another goal, global standardization, which offers manufacturing companies huge advantages; including decreases in unit costs of 20-30 percent achieved by running fewer plants and buying from fewer suppliers. 

In the end, managing a multicultural multinational involves resolving a contradiction: applying local knowledge and adapting to each country's culture, while at the same time producing goods as efficiently as possible. Many companies have achieved one of these objectives, but it is hard to think of any company t h at has managed to attain both simultaneously.


According to the passage, global standardization is advantageous to multinational manufacturing companies because it


takes advantage of local knowledge

provides a supply of low-wage labor

decreases the cost of producing goods

elicits ideas from employees in subordinate divisions

improves a division's operations by adapting them to the customs of the division’s country

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