Emerging markets

Received wisdom dictates that the critical factors for achieving success in emerging markets are understanding customers, markets and cultural differences. Of course, these externally focused basics are vital. Yet we believe enduring success is also fundamentally built on the development of an effective organisation from within.

Hay Group EM research 

Loosen the ties: enabling success in emerging markets

 Loosen the ties: enabling success in emerging markets

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In order to respond effectively to those new customers and their unfamiliar demands, companies need to organise themselves and their people differently. Hay Group has worked extensively with companies in emerging markets since the 1950s. We find western corporations that remain tied to a culture and operating model that have evolved at the corporate centre often fail to connect to their new target markets and struggle to compete with domestic competitors.

Many companies claim to recognise this, yet are still unwilling to adapt their approach, according to our latest research. It shows that few organisations have been willing to address the challenge of managing their business in a way that is truly in tune with emerging markets.

The need for change

Effective organisations must be able to adapt and connect to local markets in order to fulfil their potential – success should not be hampered by restrictions put in place by the corporate centre.
Organisations need to analyse how decentralised their operations, management practices and processes are and work out the right degree of autonomy to give to their divisions in emerging markets.

By loosening the ties sufficiently they can allow the teams in new markets to shine, but maintain enough of a hold to allow the corporate centre to manage risks and add value.