The Golden Triangle for MNCs:

One of the most complex challenges that multinational corporations (MNCs) face is harmonizing the opposing forces of standardization versus localization. Based on a large-scale survey of headquarters (HQs) and subsidiaries of American, Japanese and German MNCs, we provide evidence that MNCs can no longer afford to define standardization simply as the worldwide adoption of HQ practices. Standardization can take place towards two different poles: HQ practices and global best practices, wherever they originate from. As we believe managing the challenge of localization versus standardization towards either HQ or global best practices is the key to MNC success we call it the Golden Triangle for MNCs. We also argue that it is often standardization towards global best practices that is more relevant than either standardization towards HQ practices or localization. Hence our study supports what have been called geocentric or transnational corporate models, where worldwide learning and knowledge transfer is paramount, regardless of where the knowledge in question originates.