CRISC Certified in Risk and Information Systems ControlGovernanceMedium
A global e-commerce company is expanding into new markets, each with unique consumer protection laws, tax regulations, and cultural preferences for online transactions. To ensure consistent governance while respecting local specificities, the company needs to adapt its global policies and procedures. Which governance model best facilitates this balance?
- AA decentralized governance model where each local market develops its own policies.
- BA 'Glocal' governance model, combining global overarching principles with local adaptation.
- CA hybrid model that allows local teams to choose between global and local policies based on convenience.
- DA centralized governance model where all policies are uniform globally.
Show answer & explanationAnswer & explanation
Correct answer: B. A 'Glocal' governance model, combining global overarching principles with local adaptation.
A 'Glocal' governance model (combining global and local) is ideal. It provides a consistent set of overarching global principles and standards for efficiency and brand consistency, while allowing for necessary local adaptation to comply with specific laws, regulations, and cultural preferences in each market.
Why the other options are wrong
- A. A decentralized model risks inconsistency, loss of central control, and potential failure to leverage global best practices or economies of scale.
- C. Allowing local teams to choose based on convenience introduces inconsistency and potential for non-compliance or sub-optimal risk management.
- D. A purely centralized model would likely lead to non-compliance and cultural friction in diverse local markets.
Localized Governance Model
A governance approach that establishes overarching global principles and standards while allowing for necessary adaptations to meet specific local legal, regulatory, and cultural requirements.
- Balances global consistency with local relevance.
- Ensures compliance across diverse jurisdictions.
- Supports operational efficiency and cultural acceptance.
Memory trick: Think 'Glocal' like a Global brand with Local flavors. Core recipe is same, but ingredients adapt.