Crossing borders in a world where differences still matter by pankaj ghemawat harvard business school press. Globalization, the international integration, is adapted by an organization by adapting various approaches. For example, us companies would likely win over european ones should cuba open up its border to fdi. Ghemawat is the anselmo rubiralta professor of global strategy at the iese business school at the university of navarra in barcelona, the jaime and josefina chua tiampo professor of business administration at harvard business school, and the author of four. The cage comparator analysis tool examines international flows and helps identify untapped opportunities for companies and countries. Cage distance framework, a powerful strategic tool toolshero. The report is covering the weekly session of the classes on e learning and has discussed the lessons taught in e learning clark. The cage framework for countrylevel analysis cultural differences. Ghemawat 2007 specifies the components of cage distance framework on an example. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Pankaj ghemawat born september 30, 1959 is an indianamerican economist, professor, global strategist, speaker and author known for his work in the study of globalization. The week 3 and week 5 has been analysed here to understand the topics properly and then the.
Strategy and the business landscape is based on contemporary research in the field of. In 1983, theodore levitt, the late harvard business school professor and editor of the. Pankaj ghemawat disagrees with both and his case, backed by data, can be convincing. Jun 27, 2012 it helps to have friends in high places. So says pankaj ghemawat, the most prominent flatworld skeptic in business circles today. This note introduces the cage distance framework, which is used to identify and prioritize the differences between countries that companies must address when developing crossborder. The framework was developed by pankaj ghemawat, a professor at the university of navarra iese business school in barcelona, spain. Pankaj megawatt ghemawat is an international strategy guru who developed the cage framework the analytical framework used to understand country and regional differences along the distance dimensions of culture, administration, geography, and economics. In this work, ghemawat proposes the cage distance framework that allows firms to consider four.
See table 1 for a summary and the readings assigned for module ii for additional discussion. Describe about the business strategy for cage framework. Ghemawat, strategy and the business landscape, 3rd edition. Custom analysis covering 184 countries and over 100 types of international activity. Adding value 1 pankaj ghemawat this note introduces the adding value scorecard and uses it to identify and calibrate the levers through which global strategy can create or destroy value, and to assess alternative strategy options. In this work, ghemawat proposes the cage distance framework that allows firms to consider four dimensions of international distance cultural, administrative, geographic, and economic when planning global expansion. In order to prove this point, ghemawat provides interesting data to prove that crossborder flows of goods, services, capital, information and people are actually a lot more limited that most.
Managing differences the central challenge of global strategy by pankaj ghemawat broader lessons pankaj ghemawat ph. The acronym cage stands for culture, administrative, geographical, and economic. One of the framework was identified by ghemawat aaa framework in which the three as. Global prosperity and how to achieve it, and he takes the stage to ask an important question. The more two countries differ across these dimensions, the riskier the target foreign market.
May 27, 2015 globalization, the international integration, is adapted by an organization by adapting various approaches. Pankaj megawatt ghemawat is an international strategy guru who developed the cage framework the analytical framework used to understand country and. Ghemawat socalled aaa framework offers three generic approaches to global value creation. Pankaj ghemawat is professor of business administration at the harvard business school. Pankaj ghemawat is the global professor of management and strategy and director of the center for the globalization of education and management at the stern school of business at new york university, and the anselmo rubiralta professor of global strategy at iese business school. In this work, ghemawat proposes the cage distance framework that allows firms to consider four dimensions of. An analysis of pankaj ghemawats distance still matters. Tool kit companies routinely exaggerate the attractiveness of foreign markets, and that can lead to expensive mistakes. Heres a more rational approach to evaluating global opportunities. This note introduces the cage distance framework, which is used to identify and prioritize the differences between countries that companies must address when developing crossborder strategies.
Strategy and the business landscape is based on contemporary research in the field of strategy and adopts a valuefocused, firmcentered perspective that promotes an analytical approach to strategy. Learn vocabulary, terms, and more with flashcards, games, and other study tools. International strategy, cultural distance and management policies. Ghemawat asked his friend pascal lamy, director of the world trade organization, to estimate this figure excluding the doublecounting and triplecounting. It may also be used to understand patterns of trade, capital, information, and people flows. Whether, it is in the best interest of foreign corporations to back a view of a flattening world now rather than later in order to challenge controversial views of a western dominated media and.
Director of the center for the globalization of education and management. Begin by considering the example summarized in exhibit 21, which plots walmarta s operating margin by country in 2004 against the distance between each countrya s capital and walmarta s headquarters. The upper portion of the table lists the key attributes underlying the four dimensions of distance. Strategists pankaj ghemawat and jan rivkin appear in the hbr february 2006 edition. Cage distance framework, where cage is an acronym for cultural, administrative institutional and political, geographic and economic distances among countries. The cage distance framework identifies cultural, administrative, geographic and economic differences or distances between countries that companies should address when crafting international strategies. Jun 23, 2015 pankaj ghemawats aaa framework to evaluate global strategy june 23, 2015 dennisbarber in recent due to the volatile nature of various factors like economic conditions, dynamic nature of market factors, etc. Cage distance framework, where cage is an acronym for cultural, administrative. Crossing borders in a world where differences still matter by pankaj ghemawat harvard business school press boston,massachusetts isbn. The cage distance framework is a tool that can be used to uncover important differences between various countries that companies should take into account when deciding on their strategy. The cage distance framework identifies cultural, administrative, geographic and economic differences or distances between countries that companies should address when crafting. Fundamentals of global strategy a business model approach.
Seduced by market size, the illusion of a borderless, flat world, and the allure of similarities, firms launch onesizefitsall strategies. Pankaj ghemawat questions globalization effects european. Semiglobalization and international business strategy pankaj ghemawat harvard business school, boston, ma, usa correspondence. Pankaj ghemawats aaa framework to evaluate global strategy june 23, 2015 dennisbarber in recent due to the volatile nature of various factors like economic conditions. As summarized in table the cage framework, the cage cultural. Apr 02, 2014 the fact that ghemawat was accused of thinking of the world as round in his talks over in india, make me wonder about corporate backed subsidiaries. By contrast, similarities along these dimensions suggest great potential. In it, they examine why large differences in economic performance exist, and how competitive advantage. He is the author of several widely influential articles on investment, disinvestment, and. Friedman assumes that the world is becoming much more globally integrated. Ghemawat 2001 proposes an analysis model known as the cage, which.
The cage distance framework identifies cultural, administrative, geographic and economic. Adaptation strategies strategies that seek to increase revenues and market share by tailoring one or more components of a firms business model to suit local requirements or preferences. In it, they examine why large differences in economic performance exist, and how competitive advantage may be created. Adding value 1 pankaj ghemawat this note introduces the adding value scorecard and uses it to. Pdf strategic analysis on cage framework and triple aaa. Pankaj ghemawat is the global professor of management and strategy and director of the center for the globalization of education and management at the stern school of business at new.
He created the dhl global connectedness index and the cage distance framework. Introduction of the cage comparatortm as a tool to analyze. Ghemawats blog examines a number of ways that globalization can affect countries, individuals, and markets. This perspective, says ghemawat, blinds firms to a contrasting strategy. It was written by pankaj ghemawat, a professor of global strategy at the iese business school in barcelona who served as open pdf files through vfp a faculty member. Clearly, apocalyptically minded authors have overstated the case for globalization, says ghemawat. Adding value scorecard 1 adding value1 pankaj ghemawat. Ghemawat is the anselmo rubiralta professor of global strategy at the iese. He is the global professor of management and strategy and director of the center for the. Pankaj ghemawats aaa framework to evaluate global strategy. Associate editor of this journal, and was sponsored by the university of miami center for international business. Seduced by market size, the illusion of a borderless, flat world, and the.
Friedman discussed the fact that the word is becoming easier to do global business in. The cage distance framework the cultural, administrative, geographic and economic cage distance framework helps managers identify and assess the impact of distance on various industries. The cage distance framework the cultural, administrative, geographic and economic cage distance framework helps managers identify. Dr p ghemawat, harvard business school, soldiers field road, morgan hall 227, boston, ma 02163, usa. Why do so many global strategies faildespite companies powerful brands and other bordercrossing advantages. First, to create an advantage, a firm must configure itself to do something unique and valuable. The cage distance framework helps companies because it can evaluate countries. Semiglobalization and international business strategy.
May 06, 20 ghemawat backs up his contrarian view, that the world is actually only about 10 to 25 percent globalized, with a fascinating set of statistics. The cage framework can be used to compare the chances of success of different countries in a given foreign market. The customers willingness to pay for a product is the maximum amount of money that a customer would be willing to pay in order to obtain this product the suppliers opportunity cost is the smallest amount of money a supplier will accept for the product i. But crossborder differences are larger than we often assume, explains pankaj ghemawat in redefining global strategy. Aib insights vol 16 no 4 2016 q4 michigan state university. The report is covering the weekly session of the classes on e learning and has discussed the lessons taught in e learning clark and mayer 2016. The expanded version of his dhl global connectedness index pdf, released in november 2012, measures the depth and breadth of 10 types of international flowsand finds them lacking. Ghemawats 2001 model proposes the analysis of the cultural.
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