When to standardize and when to adapt: understanding the effects of Islamic prescriptions on strategic choice-making of multinational enterprises

Purpose Given the growing cross-national homogeneity of consumer behavior, the standardization strategies outperform the adaptation strategies. However, standardization has proved presque impossible, even when circumstantiated by globalization. This study aims to answer the questions “is religion (Islam) a contextual stricture that makes standardization strategies less workable? and what processes are involved that give rise to homogenized (heterogenized) consumer spending, translating into demand convergence (divergence) and finally determining the firms’ strategic choice – standardization or adaptation? Design/methodology/approach This theoretical piece is based on information gathered from systematic literature reviews, critiques of relevant theories, usool-e-fiqha and personal observations and experiences. Using theoretical analysis, it furnishes a conceptual framework that advances convergence tradition in business strategy. The authors theorize in a way that the contingent patterns of their arguments combined with existing literature capture the subject in a logical and empirically testable propositional format. Findings Taking an illustration of Islam, this study suggests that the likelihood of consumption behavior homogenization between Muslim and global consumers as well as the likelihood of demand convergence between Islamic and global markets depends on the degree of the permissibility of the product use under Islamic prescriptions, religiosity and sense of identity of Muslim consumers. Firms favored by one large homogenous consumer market adopt standardization strategy and may attempt to extenuate the religious contrasts across nations. Research limitations/implications This study adopts a conceptual approach and is devoted to theorization. However, it calls for empirical research to examine whether the inferences the authors make here hold in real strategic choice-making situations. Practical implications This study answers a normative question: When should a firm use an adaptation or standardization strategy? It identifies the product categories for managers, where the likelihood of consumer behavior homogenization between Muslim consumers and global consumers exists that translates into the convergence of demand between Islamic markets and global markets and paves the way for a successful standardization strategy. Originality/value The strategic choice between standardization and adaptation is known as a longstanding and unsettled discussion. Although researchers have a consensus that standardization or adaptation is a context-specific decision, studies that consider the effects of religion (Islam) on strategic choice-making are virtually scarce. This first study of its nature undertakes this task and acutely examines a pervasive interplay between the consumers’ product preference and the consumers’ religion, religiosity and identity.