Multinational corporations (MNCs) in emerging markets are placing strategic decision-making power in their regional and country leaders’ hands. Despite having good access to the front lines, leaders lack the tools and data to ensure that their strategy is resilient in the face of volatility. Data deficiencies in emerging markets are a deeply felt problem for decision makers. Strategic and business plans are based on assumptions that are seldom revisited, and decision makers do not use the right toolkit to compensate for these challenges.
FSG conducted a survey of 226 senior emerging-market leaders at 120 MNCs and discovered that region and country heads tend to have responsibility for five out of six of the most important business strategy decisions in their region. These areas range from sales and marketing to pricing and product mix. Product innovation is the only category for which country and regional leaders do not control strategic decisions.
Despite the superior insight provided by their close proximity to a region or country, surveyed executives report poor data availability and reliability for six of the eight market-data categories considered important to decision making. As a result, decision-making power and overall strategy are weakened.
Plans in emerging markets are highly vulnerable to external disruptions, yet planning is performed in static fashion. Only 40% of survey respondents use scenarios to test the robustness of country plans, and few organizations revisit their plan as their operating conditions change. The survey’s results reveal the gap between what is expected of country and regional leaders and how well they are equipped to plan and execute strategy. FSG advises senior regional leaders not to recentralize strategic control but to better equip regional leaders by emphasizing scenario planning and honing targeted methods to overcome poor data.
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