Editorial: Globalization as a reality in world grain industry

by Emily Buckley
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Within a few months of the start-up of World Grain magazine in the autumn of 1982, Theodore Levitt, then a highly regarded professor of marketing at the Harvard Business School and now retired, wrote an article that played a role in the launching of this embryonic publication in a field where he probably had scant awareness. Writing two decades ago in the Harvard Business Review, Professor Levitt sounded what has since become a rallying cry for businesses committed to the globalization of the markets they serve and the products they make. The article in question, "The Globalization of Markets," primarily argued that consumer tastes around the world were homogenizing to the point that global markets of unbelievable size were in the process of being created for standardized products. Examples the professor cited ranged from Coca-Cola to transistor radios, from MacDonald’s fast food to Volkswagen automobiles.

For World Grain the Levitt article raised many questions. It also provided encouragement to this new publication that was itself based on the premise that the handling and storage of grain, and also its processing, depended on the same skill sets, as well as the use of similar plants and equipment, regardless of where business was done around the world. Very simply, the founding belief was that the "world of grain" comprised a truly global business. Even two decades after this beginning, when the Levitt article still prompts considerable debate, it is heartening to know that this founding assumption has proven correct. In the early 1980s, not very many people agreed with this premise. Now, 20 years later, it’s instructive to recall how Professor Levitt’s point of view proved helpful to the launching of a publication based on an idea that was untried.

In recalling the thought processes in the early 1980s of those concerned with these matters, one question looming large was whether the consumer products of the grain industry would become the same regardless of country. Certainly, flour milling, as a process or system for producing flour from wheat, was similar, if not identical, across national boundaries. The idea, though, of consumer products like bread, where two decades ago the range of quality, taste and texture around the world varied less widely than currently, would homogenize seemed far-fetched. Rather than believing in homogenization, it seemed wiser to seek to understand how globalization would affect how products are "shaped and reshaped," how knowledge of what is happening in one area may affect products in other areas. And that is also true of the more congenial sectors like flour milling, where learning about innovations in one part of the world has turned out to be beneficial to operators in a broad range of lands. Indeed, World Grain sees facilitating that interchange as central to its mission.

Debate still flourishes about Professor Levitt’s conclusions. But his central thesis about the importance of interchange between areas of the world has become increasingly influential, not just to the world grain and grain processing industries, but to many other businesses. No one argues he was totally right in what he said about globalization, only that his insights have been the primary engine for a great deal of valuable management thinking.

When it comes to the universe of more than 100 countries reached by World Grain, the goal of serving as a point of interaction for how grain is marketed, stored and milled may be considered the beneficiary of Professor Levitt’s insights into how companies and their managers may influence the way a particular market evolves. Two of his successors at Harvard say his legacy is the realization that "the global market is not what firms find; the market is what firms make of it." These same insights, after two decades, are very much the guiding principles of this magazine in seeking to serve grain-based foods around the world.