Making Local Knowledge Global- Case Study

Cerny, K. (1996). Case Study: Making local knowledge global. Harvard Business 

A case study that suggests solutions to the problem of stagnant information flow.

This article is a case study that suggests solutions to the problem of stagnant information flow within Lexington Labs, a global pharmaceutical company.  Although the company as a whole enjoys the knowledge base necessary to success globally, sales teams in different national markets often repeat the same mistakes.  Since they are only worried about the bottom line for their specific market, they neglect to pass on any information to others within their organization.  As a result, Lexington Labs' competitors are beginning to gain a larger market share as global communication begins to play a larger role in successful international sales. 

 Lexington Labs still enjoys a high rate of success in markets where sales teams have performed well, but the company suffers drastically as a result of unnecessary expenditures in both time and money, in essence having to "solve the same problem twice".  Lost revenues are apparent, not to mention the opportunity cost of missed potential business.  As a whole, the company is undergoing a communication catastrophe that has come to light slowly as the role of global communication has come to play a more prominent role in the formula for success in the global economy.

 Different experts in the industry offer similar solutions.  Identifying the problem is a great start, but implementing immediate action is the only solution.  Some consultants suggest that an international team of the company's top performers should be formed and tasked with creating a proper and systematic flow of information.  Managers who are hurting the organization as a whole by not communicating, even if they are successful in their individual markets, should be removed swiftly of their attitudes do not change.  In addition, several experts agree that a compensation system must be put in place that leverages the success of the company as a whole with pay incentives.  Given the tools to succeed, sales teams must be given incentive to use the tools.

 Other consultants suggest that tools and incentive alone are not enough.  Systems do not work without the human element.  People must want to communicate.  The culture of the entire Lexington Labs organization must be drastically altered.  One expert recommends hiring a psychologist to study the company and suggest solutions.

 All of the consultants agree on one thing.  Lexington Labs must turn the black and white boundaries of national borders to gray areas, and it must do so without sacrificing local sensitivity.  Isolationism is the trait of a company that is wounded, and territorial success means nothing if the entire organization is doing poorly.  To compete globally in a highly technical field such as the pharmaceutical industry, Lexington Labs must truly become a global entity.

This article provides a good example of how communication within a worldwide firm is vital to its success in competing worldwide and how firms that originate domestically must expand their communication practices to encompass their expanding global markets in order to be successful.

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