How social blind spots pose a danger for multinationals
H&M’s ‘racist’ bungle reflects a much wider challenge confronting multinationals entering emerging markets, writes Frank Horwitz
The managers of global companies operating in emerging market economies should sit up and take note of what is happening in SA with multinational retailer H&M. It may seem like a simple error in judgment about an advertisement but it reflects a much wider challenge confronting multinationals entering emerging markets. What led to stores closing, protesters damaging outlets and financial losses as well as reputational damage speaks to a wider misunderstanding or blind spot about the cultural and social realities of other contexts that extend into the operations and strategy of a business. This is not the first time that H&M has blundered. Two years ago, the Swedish retailer was involved in another furore about a different marketing campaign at its flagship Waterfront store in Cape Town, with remarkably similar racial lines. Over the past year, Nike and retailer Zara have faced criticism for labour practices in Vietnam and Turkey — more examples of western multinationals operating in ...