When multinational firms enter new markets, they have to choose how to manage the formal and informal local rules that can vary greatly. Local institutions and rules matter, and there are clear risks for top executives at headquarters who don’t take them seriously. But constantly adapting to local practices could jeopardize a company’s ability to integrate operations across markets. A study of five globally successful Scandinavian companies identified six tactics that firms can use to address local rules while maintaining competitive advantage: Avoid, alter, adapt, imitate, influence, and innovate.
