BRIEF CONTENTS - Macmillan International Higher Education

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BRIEF CONTENTS

Part I GLOBAL CONTEXTS 1

1 Globalization of Markets and Competition 2 2 The Emerging Global Environment 26 3 Globalization, Societies and Cultures 51 4 Globalization, Sustainable Development and Social Responsibility 81

Part II GLOBAL STRATEGIES 123

5 Designing a Global Strategy 124 6 Assessing Countries’ Attractiveness 167 7 Entry Strategies 194 8 Global Strategic Alliances 213 9 Global Mergers and Acquisitions 248

Part III MANAGING GLOBALLY 267

10 Global Marketing 268 11 Global Operations and Digital Networks 289 12 Global Innovation 321 13 Global Financial Management 342 14 Global Human Resource Management 369 15 Designing a Global Organization 395

Part IV CONCLUSIONS 423

16 Current and Future Trends in Globalization 424 17 Global Strategic Management in Action: Haier – The Building of a Global

Champion, 1984–2016 455

Glossary 464Index of subjects 480Index of names 483Index of companies and organisations 487

Copyrighted material – 9781137584588


xi

List of figures xviiList of tables xxiMini-cases and examples xxivList of acronyms xxviiTour of the book xxviiiCompanion website xxxAcknowledgements xxxi

Introduction to the fourth edition xxxii

Part I GLOBAL CONTEXTS 1

Chapter 1 Globalization of Markets and Competition 2Introduction 2The phenomenon of globalization 2Globalization from a macro perspective 6What are the factors that push for globalization? 6What are the factors that work against globalization? The localization push 10Globalization at the level of the firm 13The global/multi-local mapping 18Summary and key points 20Appendix 1.1 Positioning a business on global/multi-local mapping 21Learning assignments 22Key words 23Web resources 23Notes 23References and further reading 24

Chapter 2 The Emerging Global Environment 26Introduction 26Emerging countries and their development 27Emerging countries and their institutional and business environments 33Emerging countries and global firms 38Summary and key points 45Appendix 2.1 A profile of the BRICS 46Learning assignments 47Key words 47Web resources 48Notes 48References and further reading 49

Chapter 3 Globalization, Societies and Cultures 51Introduction 51The different facets of culture 51National cultural differences 53

LONG CONTENTS



xii LONG CONTENTS

Economic cultures and business systems 61The impact of cultures on global management 64Summary and key points 75Learning assignments 76Key words 77Web resources 77Notes 77References and further reading 78

Chapter 4 Globalization, Sustainable Development and Social Responsibility 81Introduction 81Sustainable development 81Globalization and environmental issues 84Globalization and societal issues 90Global corporations’ ethics and corporate social responsibility 100Global companies and business ethics 103Social responsibility and global firms: an ongoing challenge 107Summary and key points 110Appendix 4.1 Main non-governmental organizations involved in corporate social responsibility 113Appendix 4.2 Major business ethics codes 114Appendix 4.3 The oeCd guidelines for multinational enterprises 116Learning assignments 116Key words 116Web resources 117Notes 117References and further reading 119

Part II GLOBAL STRATEGIES 123

Chapter 5 Designing a Global Strategy 124Introduction 124A company business strategy 125Framework for a global strategy 128Global strategies and the multi-business firm 146Global strategies and the small and medium-sized enterprise (SmE) 147Born global 150Summary and key points 156Appendix 5.1 Measuring corporate globalization 158Appendix 5.2 Selected government support programs 162Learning assignments 162Key words 163Web resources 163Notes 164References and further reading 165

Chapter 6 Assessing Countries’ Attractiveness 167Introduction 167Why is a country attractive? 168market, resources and industry opportunities 169Assessing market opportunities 170



xiiiLONG CONTENTS

Assessing resource opportunities 174Competitive context 176Socioeconomic, political and cultural distance 179Country risk analysis 180Putting it all together 181Summary and key points 186Learning assignments 187Key words 187Web resources 187Notes 188References and further reading 188Appendix 6.1 Models and sources of countries’ assessments 189Appendix 6.2 Comparison of Turkey and egypt, 2014 191

Chapter 7 Entry Strategies 194Introduction 194Why enter? Defining strategic objectives for a country presence 195When to enter? First mover, follower, or acquirer? 197Entry modes: how to enter? 197Comparing entry modes 203Choosing an entry mode 204Summary and key points 207Learning assignments 210Key words 210Web resource 211Notes 211References and further reading 211

Chapter 8 Global Strategic Alliances 213Introduction 213Framework for analysis 213Strategic alliances in a global context 217Global alliances versus local alliances 218Understanding the strategic context and spelling out the strategic value of an alliance 220Partner analysis 222Negotiation and design 228Implementation 234Global multilateral alliances 235Alliance constellation management 237Partner selection 237Joint venture decay and failure 240Summary and key points 243Learning assignments 244Key words 244Web resources 245Notes 245References and further reading 245

Chapter 9 Global Mergers and Acquisitions 248Introduction 248The rationale for cross-border m&As 248



xiv LONG CONTENTS

Cross-border acquisitions performance 251Pre-acquisition 253Integration framework 257Integrating the companies: the transition phase 260Integrating the companies: the consolidation phase 262Summary and key points 264Learning assignments 264Key words 265Web resources 265Notes 265References and further reading 266

Part III MANAGING GLOBALLY 267

Chapter 10 Global Marketing 268Introduction 268Customer behavior, convergence and global segmentation 268Product standardization 270Global branding 271Advertising 274Global pricing 275Global account management 277Global solution selling 279Global marketing positioning 281Fair trade marketing 282Global marketing and its limits 282Summary and key points 284Learning assignments 286Key words 286Web resources 287Notes 287References and further reading 287

Chapter 11 Global Operations and Digital Networks 289Introduction 289The globalization of value chains: offshore production and outsourcing 290Selecting operational sites 291Global manufacturing networks 292Global sourcing 295Global logistics 298The global management of infrastructure projects 300The internet and global operations 302Summary and key points 313Learning assignments 317Key words 318Web resources 318Notes 318References and further reading 319



xvLONG CONTENTS

Chapter 12 Global Innovation 321Introduction 321The international product life cycle model 321Globalization of R&D: benefits and constraints 324management of global R&D networks 325International transfer of technology 329Global knowledge management 330Summary and key points 336Learning assignments 338Key words 338Web resource 338Notes 339References and further reading 339

Chapter 13 Global Financial Management 342Introduction 342Currency risk 343Project finance 346Global capital structure 349Trade finance 354Global financial management and taxation 356Summary and key points 356Appendix 13.1 description of risk linked to infrastructure assets 358Appendix 13.2 A pulp mill project in Indonesia – an example of cash flow adjustment 361Appendix 13.3 development banks providing project equity financing 364Appendix 13.4 official export credit agencies for oeCd member countries 365Learning assignments 366Key words 367Web resources 367Notes 368References and further reading 368

Chapter 14 Global Human Resource Management 369Introduction 369Assignment of personnel: the global human resource wheel 371Expatriate management 372Localization 380Skills development 384Summary and key points 388Learning assignments 391Key words 392Web resources 392Notes 392References and further reading 393

Chapter 15 Designing a Global Organization 395Introduction 395The merry-go-round organizational challenge 395The international division model 398The global functional model 398



xvi LONG CONTENTS

The geographical models 400The multi-business global product division models 403The matrix models 405Alternative structural models 409Regional headquarters in global management 412Summary and key points 417Learning assignments 418Key words 418Appendix 15.1 Types of organizational design 419Web resources 420Notes 420References and further reading 420

Part IV CONCLUSIONS 423

Chapter 16 Current and Future Trends in Globalization 424Introduction 424Global challenges 425Demography and migration 427Asymmetric development 428Regional blocs 430Sustainable development 431Technological developments 433Global risks 434Ethnic, religious and cultural friction 434The future of global corporations 438Summary and key points 442Appendix 16.1 description of global risks and trends 2016 444Appendix 16.2 A simplified methodology for elaborating scenarios 446Appendix 16.3 Five global scenarios 448Learning assignments 450Key words 450Web resources 450Notes 450References and further reading 452

Chapter 17 Global Strategic Management in Action: Haier – The Building of a Global Champion, 1984–2016 455Introduction 455Phases 1 and 2: brand building and diversification (1984–1998) 456The competitive battlefield of China in the 1990s 457Phases 3 and 4: internationalization and global brand strategy (1999–2012) 458Phase 5: networking strategy (2012 onwards) – consolidating global leadership 461Learning assignments 462Notes 463

Glossary 464Index of subjects 480Index of names 483Index of companies and organisations 487



2

c h ap t e r

Globalization of markets and competition1

learning objectives

By the end of the chapter you should be able to:• Define globalization from a macro environment perspective• Identify the forces pushing towards globalization and the forces pushing for localization• Define what globalization means for firms• Identify the various steps of globalization for firms• Make a distinction between multinational and global firms• Spell out the benefits and pitfalls of globalization• Position an industry or a business on the global/multi-local mapping

introductionChapter 1 defines what ‘globalization’ means, firstly from a geopolitical and economic point of view, and secondly for business enterprises. It looks at the many political, technological, social and economic factors that have driven globalization, as well as those restraining it. It describes how many companies have evolved, over time, from ‘national’ to becoming ‘international’, then ‘multinational’ and finally ‘global’ firms. Based on an example, the chapter looks at how a multinational company having foreign subsidiar-ies can become global by extending its operations worldwide and adopting a competitive configuration through strong coordination and integration of its international activities across borders. The benefits and constraints of globalization are both described. Some factors still push towards a local approach to management, on a country-by-country basis, and the factors inducing this localization are analyzed.

Finally the global/multi-local mapping matrix is presented as a tool to position industries, companies and businesses according to the relative importance they place on global versus local approaches. The chapter ends by introducing some of the societal issues associated with globalization.

tHe pHenomenon of GlobalizationSince the 1960s, international trade, investment and migration have all grown much faster than the world economy. Firms have multiplied their presence outside their country of origin, employing more and more people and selling and buying technology internationally (see Table 1.1). More and more products are sold in similar stores, with similar features and carrying a common brand across the globe. Factories that were prosperous in the Western world have been closed and transferred to lower-cost countries. English is now considered the lingua franca for major business transactions. Events happening in one location are visible in real time everywhere thanks to the internet and social networks such as Facebook or Twitter. This is what is commonly referred to as the process of ‘globalization’.

In today’s business world, managers, politicians, journalists and academics commonly refer to concepts such as ‘globalization’, ‘global industries’, ‘global competition’, ‘global strategies’ and so on.



31 Globalization of markets and competition

table 1.1 Globalization data

2014 prices index (base 100 in 1982 at constant rate)

average growth rate 1983–2014

(Us$ bn) 1982 1990 2000 2014

World GDP 77,283 100 162 189 347 4.0%

Trade (export of goods and services) 23,409 100 166 217 546 5.4%

Foreign direct investment (inward stock) 26,039 100 203 553 1,723 9.3%

Foreign direct investment (inflows) 1,228 100 273 1403 1,025 7.5%

Cross-border mergers and acquisitions 399 100 497 2,880 759 6.5%

Sales of foreign affiliates of multinationals* 36,356 100 171 405 702 6.3%

Assets of foreign affiliates of multinationals* 102,040 100 234 700 2,558 10.7%

Exports of foreign affiliates of multinationals* 7,803 100 141 353 583 5.7%

Royalties 310 100 232 461 1,639 9.1%

Employment of foreign affiliates *(number) 75,075 100 136 267 430 4.7%

Daily foreign exchange transactions 5,343 NA 100 135 476 6.7%

* Multinational companies are defined as firms having more than 50% equity in wholly owned enterprises abroad or at least 10% equity in joint ventures.

source: Data from UNCTAD (2015), Table I.5, and Bank for International Settlements (2014).

While those terms are widely used, their exact meaning is often not well understood. For some people, globalization is considered to be the intrusion of foreigners into local communities. Its effect is viewed as a destruction of the social fabric within nations. For others, it means freedom of move-ment, entrepreneurship, an exchange of cultures and harmonization. As far as the corporate world is concerned, some are certain it means ‘to expand the company’s presence abroad’; for others, it means ‘standardizing a product and selling it to the world’; for others still, it denotes an approach to management in which decision making is centralized at corporate headquarters. There are many reasons for this confusion. One relates to the fact that the phenomenon of globalization describes macroeconomic changes and political change, while for the business world it denotes a strategic and managerial issue. While the concept of globalization is relatively new, the phenomenon is not. There have been periods in history when the world was without borders, and citizens, products and money could move around freely. Theories have been developed to explain and advocate free trade and globalization from the macro point of view, and to explain the process of globalization from the business point of view (Insert 1.1). As far as the business world is concerned, before the 1970s the most frequently used terminology, when referring to integrated operating across the world, was ‘international’, ‘multinational’ or occasionally ‘trans-national’. Even if we ignore the East India Company, which started in the early seventeenth century, modern corporations such as Unilever, Nestlé and Procter & Gamble were operating all over the world by the end of the nineteenth century. They are known as multinational companies, but nobody would have called them global 50 years ago. The global concept appeared in the early 1970s and progressively invaded boardrooms, classrooms and editorial offices. What is the exact meaning of globalization? What forces generated it? And what are the consequences for firms?

There is no one well-established definition of globalization. Here we will posit as a working defini-tion: ‘The process by which people, products, information and money can move freely across borders’. As a consequence, markets may tend to converge, providing opportunities for the standardization of products, for production centers to be (re)located to more economical places around the world, and



4 I GLOBAL CONTEXTS

insert 1.1: theories of Globalization

macro theories: free trade and globalization

The theory of comparative advantage, proposed in the early nineteenth century, stated that under free trade, nations will maximize wealth if they export the goods for which they have a rel-ative advantage (Ricardo, 1967). The idea is that countries should concentrate on the production of those goods and services at which they are most efficient and export them, whilst buying in other products from abroad. The total global production of goods and services will then be higher than when separate countries try to produce everything themselves. As a theoretical example, imagine two similar industrial parks, one in Malaysia and the other based in the Philippines, both with 10,000 workers, and both producing electrical products. Both sites employ 5000 workers (half their total effort) to produce computer motherboards and 5000 workers to make videogame consoles. The Malaysian operation is able to produce 10 million motherboards per year and the Philippines’ 8 million, while the Malaysians produce 200,000 consoles to the Philippines’ 250,000. Malaysia has, therefore, demonstrated a comparative advantage over the Philippines for mother-boards and Philippines has a comparative advantage over Malaysia for consoles. The total global output in the current situation will be 18 million motherboards and 450,000 consoles per year. For better results, Malaysia should concentrate on producing motherboards and trading them, while the Philippines should focus its efforts on consoles. In this situation the global output rises to 20 million motherboards and 500,00 consoles, marking an 11% increase in both motherboards and consoles.

World-system theories suggest that globalization is the product of nationalistic, capitalistic, colo-nial and international expansion (Wallerstein, 1974, 2000; Robinson, 2004). For instance, from the sixteenth century the colonial expansion of Spain, Portugal, the Netherlands, Britain and France created a global market for a certain number of commodities. Later, the USA and Japan themselves became colonial imperialistic global powers. In other words, since the appearance of modern shipping vessels and navigation systems, truly global trade has become possible.

Marxism views globalization as the result of the tendency of the return on capital to decrease, forcing capitalists to find new territories to exploit. Lenin argued that the ultimate stage of capi-talism was imperialism.(Marx and Engels, 1848; Lenin, 1917). The argument is that the profits of firms tend to decrease because of intense competition. Firms react by merging and looking for markets outside their national boundaries, creating global oligopolies, for example Lafarge Holcim, Apple, Samsung.

Network society theories see globalization as the result of the vested interests of a transna-tional capitalistic class (managers, politicians, bureaucrats, bankers), as well as of supranational organizations such as the WTO, UN and EU (Castells, 1996; Sklair, 2000). Advances in telecom-munications and the rise of the internet have made it possible for business to be done globally, both in terms of financial transactions and internationally connected production systems.

Technological cultural theories propose that information technologies have led to a convergence of culture (Robertson, 1992; Ritzer, 1993). Very similar in essence to McLuhan’s ‘Global Village’ concept,1 these theories state that thanks to technology, people in different countries increas-ingly tend to share a common culture and consumer choices, making global product design and production possible and desirable.

World 3.0 This theory, developed by Professor Pankaj Ghemawat,2 holds that humanity has followed four stages of social, political and economic organization and trade. The first stage (World 0. 0) refers to the prehistoric period in which societies were organized into thousands of tribes surviving by hunting and gathering, and where human interactions were limited to those between the members of tribes with practically no external trade. The second stage (World 1.0) refers to the formation of political entities in the forms of cities or empires (China, Sumer, Aztec),




governing several thousands to millions of peoples (mainly farmers) under a political power structure (an empire or kingdom). Mostly economically self-sufficient, these states introduced some international, but limited exchange mechanisms (such as trade via the Silk Road). World 2.0 started in the seventeenth century with the colonial expansion of European powers and the crea-tion of nation states. The first multinationals, such as the British East India Company, extended their reach as far as Asia. During the nineteenth century, thanks to transportation and commu-nication innovations, multinational firms from Europe, America and Japan developed. After a decline between the two world wars, global development exploded and saw the formation of the modern business juggernauts such as Nestlé, General Electric and Siemens that we see today. The driving force of World 2.0 in the post-war years was a progressive deregulation and integra-tion of markets. World 3.0 is predicted to evolve, following the global financial crisis of 2008, as a world that is characterized by a high level of market integration but also a high level of govern-ment regulation in what has been called semiglobalization.

micro theories: corporate globalization

Transaction cost theories posit that multinational firms result from the economic benefits of internalizing costs of transaction rather than relying on contracts to regulate contact with inter-national economic agents (Buckley and Casson, 1976).

Resource-based theories suggest that firms take advantage of their proprietary assets (technol-ogy, capital ) to expand their presence in international markets (Barney, 1991).

Resource seeking theories explain the global expansion of firms by their desire to obtain resources they don’t have (Dunning, 1993).

for R&D laboratories to be distributed across countries. As we will see, this implies a more centralized management of firms. Before examining the many aspects of corporate life impacted by the phenomenon of globalization, we will first look at the macroeconomic, technological and political factors that have generated such a global environment, and then look at how firms have changed their operations to take advantages of the new opportunities this environment offers.

insert 1.2: some Global definitions

Globalization is the process by which people, products, information and money can move freely across borders.

Global industries are industries in which, in order to survive, competitors need to operate in the key world markets in an integrated and coordinated way. Industries such as aerospace, com-puters, telecommunication equipment, appliances, power generation, large industrial projects, insurance and re-insurance and corporate data transmission are examples of what a global indus-try means. In these sectors it is difficult to sustain competition if one does not cover (nearly) the whole world as a market, and if one does not integrate operations to make them cost and time effective.

Multinational companies are the companies that operate in various countries outside their coun-tries of origin.

Global companies are multinational companies that operate in the main markets of the world in an integrated and coordinated way. Companies such as HSBC, Apple, Nestlé, Unilever and Nokia are global companies.



6 I GLOBAL CONTEXTS

Globalization from a macro perspectiVeHistorically the world has experienced various periods of intense trade across continents and free move-ment of people and capital, in particular during the nineteenth century after the Napoleonic wars. After a decrease due to the two world wars of the twentieth century, several factors generated the emergence of the new economic environment that we call ‘global’.3 During the 1950s and the 1960s the convergence of several political, technological, social and competitive factors began to shape this new environment.4

WHat are tHe factors tHat pUsH for Globalization?

political factors: liberalization of trade and investments

The main political factor has been the stabilization of post-war peace in Organisation for Economic Cooperation and Development (OECD) countries that allowed the development of free trade among nations. Two main organizations have been the source of trade liberalization – the General Agree-ment on Tariffs and Trade (GATT) (replaced by the World Trade Organization (WTO) in 1995) and the European Union – to which one may add the progressive opening of emerging nations to foreign investments.

The GATT, founded in 1946 by 23 nations, initiated a series of negotiations, called ‘rounds’, aimed at reducing tariff concessions to encourage the liberalization of trade. The Kennedy Round in the mid-1960s, the Tokyo Round in the early 1970s, the Uruguay Round in late 1980s, and the Doha Round in 2001 created an environment that fostered international trade, as shown in Figure 1.1.

The European Community (EC) was established on 25 March 1957 by the Treaty of Rome, which was signed by Belgium, France, Italy, Germany, Luxembourg and the Netherlands. The aim was to create a common market, and economic and political integration among the six member states. As a result goods, people and financial flows could move freely across countries. During the 1970s, the EC was enlarged with the entry of the UK, Ireland and Denmark, followed by Spain, Portugal and Greece in the 1980s, Sweden, Austria and Finland in the 1990s, and Poland, Lithuania, Latvia, Czech Republic, Slovakia, Slovenia, Malta, Hungary, Estonia, Cyprus, Romania, Bulgaria and Croatia in the early 2000s. In 1993 a Single Market which eliminated most legal and bureaucratic barriers was established among the member states. In 1999 a single currency, the euro, was adopted by 19 countries, and passport-free travelling without any border controls was allowed between 26 countries as part of the Schengen Agree-ment signed in 1985. Companies could integrate their operations across Europe to take advantage of a market of 500 million customers and gain economies of scale by specializing and concentrating their operations.

‘Born global’ companies have become multinational immediately upon or soon after being founded.

Globalizing is the phenomenon whereby the competitive structure of industries changes pro-gressively from multinational to global. Industries such as telecommunications, processed food, personal care and retail are in the process of globalization.

Global integration and coordination are the organizational structure and management processes by which various activities scattered across the world are made interdependent. As examples, global manufacturing integration implies the specialization of factories and the cross-shipment of parts between different production sites; global product development requires the coordination of various research centers and marketing teams; global account management demands that dif-ferent country subsidiaries provide a service according to a plan negotiated centrally and so on.




In addition, from 1948 to 2008 the number of preferential trade agreements notified to the GATT/WTO increased from practically none to around 200 per year in the first decade of the twenty-first century.

Finally, in parallel with what was happening in the industrialized countries, the developing nations progressively adopted more positive attitudes towards foreign direct investment (FDI). At first, invest-ment laws were designed to attract foreign investors in order to induce them to produce locally, but over the years the legislation has evolved toward a more open stance, favoring cross-border investments. Between 1992 and 2012, 2592 regulatory changes favorable to FDI were introduced worldwide, compared to 359 unfavorable changes.5

technological factors: transport, communication, education, science and production technology

Another set of ‘push factors’ for globalization are related to technological progress that lowered the cost of transport and communication as well as the unit cost of production through economies of scale or the localization of productive capacities and sourcing in low-cost economies.

Air, rail and road transport and the use of containers in maritime transport have reduced the cost of shipping goods from country to country as well as, in the case of air transport, enabling the travel of managers. The development of telecommunications has reduced the cost of information exchange between business units scattered around the globe (Figure 1.2). On the scientific front, from 2000 to 2007 the number of international students in the OECD countries increased by 59% to reach 2.5 million while the number of international co-authored scientific articles increased by 50%.6

Progress in manufacturing technology gave tremendous impetus to the need to concentrate produc-tion in world-class factories benefitting from huge economies of scale, thus encouraging the rationaliza-tion and integration of production systems. Besides manufacturing concentration, companies have been able to source components or services from low-cost countries, either by setting up their own operations or by purchasing locally.

Another source of economies of scale comes from the need to quickly amortize research and develop-ment (R&D) expenditure. Companies are confronted with dual pressures: R&D budgets are increasing

45%

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01988 1992 1996 2000

Doha RoundChina Joint

WTO

UruguayRound

2004 2008 20120

5000

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Trade($ billion)

Trade(US+EU+Japan)

Tariffs (US+EU+Japan+UK) China trade

China tariff rates

Weighted tariffrates, all products

(%)

15000

20000

25000

5

figure 1.1 Tariff reductions and international trade

source: Created using data from various World Bank Indicators.



8 I GLOBAL CONTEXTS

and the time elapsing between invention and commercialization is becoming shorter. For instance, it took 52 years for television to move from invention to large-scale commercial adoption and production, but the same step took nine years for the first personal computer (IBM 610) and just three years for the iPhone. For major appliances, it took seven years in the 1950s and 1960s to introduce a new model versus two years in the 1970s. The life cycle of Intel’s 286 microprocessor was seven years while the 486 lasted five years.7 As a consequence, companies need to launch products and services at the same time in all major markets in order to be able to recoup their investments.

Finally the advent of the internet has fostered the immediate transfer of media, social networking, and the long distance communication and on-line transactions that constitute the backbone of global communities today.

social factors: convergence of consumer needs

International air transport and the diffusion of lifestyles by movies and TV series have increased the brand awareness of consumers worldwide. Brands like Sony, Nike, Levi or Coca-Cola are known nearly everywhere. Kenichi Ohmae,8 in his book Triad Power, has discussed the ‘Californization of society’ – teenagers in São Paulo, Bombay, Milan or Los Angeles listening to the same music, using the same

figure 1.2 International transportation and communication costs

sources: Author’s own, using data from United Nations, World Trade Report 2008; International Telecommunication Union, Measuring the Information Society Report, 2014.

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Ocean Freight (Tramp Price Index)

a) International transport costs (Base 100 = 1980)

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b) Fixed broadband price as a percentage of gross national income (GNI)

(Base 100 = 2008)

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iPhone or iPad and wearing the same pair of blue jeans and using Facebook, Instagram and YouTube. The convergence of customer behavior and needs is also facilitated by the urbanization and industrialization of societies. The less cultural and the more technical the product, the more likely that it can be standard-ized and appeal to consumers in all countries: smartphones, PCs, elevators, cranes, robots and internet platforms are products for which national differences do not matter much.

competitive factors

The 1960s saw the emergence of Japanese competitors in markets that traditionally had been dominated by American or European companies. Japanese firms, and later Korean firms, adopted a global approach at the very beginning of their international expansion. One of the reasons was that they did not have many national subsidiaries and their international expansion coincided with the opening of trade barri-ers. Right at the beginning they designed products for the world market, creating global brands such as ‘Sony’, ‘Panasonic’ and ‘Hyundai’, and their efficient production systems gave them a cost advantage in electronics and automotive parts. Competitors had to adopt a similar strategy to survive. During the 1990s emerging competitors from China, India and Brazil also entered the global game. China became ‘the factory of the world’ by offering offshore low-cost production sites. In other parts of the emerging world, local manufacturers in Thailand, Indonesia, Vietnam, Turkey and Mexico provided OECD indus-tries and retailers with low-cost garments, toys, tools and furniture.9

Another competitive force that pushed companies to globalize was the globalization of customers. During the 1970s, Citibank created a Global Account Management Unit to service corporate customers with international subsidiaries. Similar phenomena developed in the IT, telecom and consulting sectors, and also in the luxury segment of fashion and perfumes.

Figure 1.3 summarizes these political, technological, social and competitive ‘push factors’ that have fostered globalization.

figure 1.3 Globalization push factors

Globalization

Technologyfactors

TransportTelecommunicationInternetEducationScienceProductiontechnology

••••••

Reduce the cost ofintegration Favor transferof technology Increaseeconomies of scale

Politicalfactors

GATT/WTOEUDeregulation of FDIRegional tradeagreements

••••

Reduce trade andinvestment barriers

Socialfactors

•

•

•

Convergence ofcustomers’ needsEmails, socialnetworks, videosonlineMovies, series

Favor productstandardization and

global brands

Competitivefactors

•••

New global playersMultinational customersEconomies of scale

Induce integrationand coordination



10 I GLOBAL CONTEXTS

WHat are tHe factors tHat Work aGainst Globalization? tHe localization pUsHAs mentioned earlier, globalization is associated with some degree of standardization of products and practices plus a high level of coordination and integration of activities in a company’s value chain. Factors that oppose standardization, coordination and integration therefore work against globalization. One can group those factors into four main categories: cultural, commercial, technical and legal.

1 cultural factors: attitudes, tastes, behavior and social codes

When the consumption of a product or a service is linked to traditions and national or religious values, global standardization is not effective. Some products – for instance, Kretek (tobacco and clove) ciga-rettes in Indonesia or the Pachinko (pinball) game in Japan – are unique to one society and their globali-zation is nearly impossible, although one can argue that with innovative marketing it may not be. For example, Beaujolais nouveau wine, the arrival of which was typically a Burgundian and Parisian bistro event before the 1970s, is now available in Tokyo, Paris or New York on the same day; while Halloween (trick or treat) masquerades, a traditional US festivity, are now common in Europe. This shows that even highly culture-specific items can be appreciated by customers all over the world. However, it remains true that food and drink tastes, social interactions in business negotiations, attitudes towards hygiene, cosmetics or gifts vary from culture to culture, thus hampering a global product design or approach. In the Asia Pacific region, for instance, personal relationship building rather than legal contracts is the normal way to conduct business. One has to spend time and effort in building these personal ties, which in a US context would be largely considered a waste of time.

Religion may play an important role in limiting the effects of globalization, particularly in the domains of national cuisine or cultural products (such as films).

Nationalism can also be considered as an obstacle to globalization to the extent that it promotes a return to trade protectionism and a retreat from international agreements in certain societies (as shown by Brexit).

2 commercial factors: distribution, customization and responsiveness

In some sectors, distribution networks and practices differ from country to country and as a conse-quence the ways of managing the network, motivating dealers and distributors, pricing, and negotiation are hardly amenable to global coordination. For instance, the marketing and distribution of pharmaceu-tical products differs according to the country’s health system. In some countries, such as Japan, doctors sell medicine, while in other countries pharmacists sell to patients who get a refund (or not) from their insurance company, while in yet other cases pharmaceutical products are delivered freely to the patient.

Responsiveness to customers’ demands, as well as customization, are other factors which almost by definition defeat standardization. Private savings or current accounts to individuals, loans to small and medium-sized enterprises (SMEs), mortgages, consulting activities and individual architectural designs are activities in which a local presence and a fast reaction to customers’ requirements are needed for competitive success. Although some practices, processes or methodologies can be standardized on a worldwide basis (consulting, engineering, architecture or auditing, for example), specific customer requests have to be taken into consideration, thus limiting globalization.

3 technical factors: standards, spatial presence, transportation and languages

Technical standards in electrical, civil, chemical or mechanical engineering can create a burden for global companies. The economies of scale and cost benefits of global integration and standardization




cannot be exploited fully when technical standards vary greatly. In certain cases, standards can be changed without major modification – for instance, mobile telephony does not represent a major hurdle for global manufacturing. In other instances, standards are not that easy to accommodate and require a specific local production line. This is mainly the case for beer or foods, for instance.

Spatial presence is a requirement for those industries which need to occupy a physical space in order to create and distribute their products and services. Retail banking, retailing, hotels, local telephones services, hospitals, entertainment, car dealerships are examples of industries where the services have to be produced locally. There are still some advantages in globalizing certain tasks (such as the back office functions of accounting, data processing, global sourcing, transfer of best practices), but the location constraint still limits globalization benefits. In the future, e-commerce is likely to reduce the spatial constraint considerably, particularly when it comes to non-physical services such as banking or movies on demand. E-commerce in physical products can also elimi-nate the spatial constraint as far as the customer interface is concerned, but it is still hampered by logistical constraints. The example of Amazon demonstrates that it is possible for a customer in Paris or in Rio de Janeiro to order a book but the customer will have to bear shipping costs that may eliminate the basic cost advantage of the e-bookstore. This is the reason why Amazon has estab-lished 82 fulfillment centers outside the USA, thus moving toward a more multinational business design.

The impediments of transportation are important if the cost of transport cancels out the benefits of concentrating production. Bulk commodities such as cement or basic chemicals are more economically produced in local plants than in global centralized units, despite the scale economies that could be gained: the cost and the risks of transport cancel out the benefits of centralized production. Similarly, when production systems are not scale-intensive and small productive units can achieve similar costs to large plants – in plastic molding, for instance – there are no major benefits in building a global produc-tion system.

Finally, language can be an additional constraint to global approaches. This can be significant when it comes to customer services, of which training services, personal banking, personal telecommunication and retailing are examples. However, there are two major trends that can reduce language constraints. English has become more and more the ‘global language’, and industries such as graduate business train-ing or high-level consulting can use English without bothering with translation.

4 legal factors: regulation and national security issues

Governments impose regulatory constraints that often work against globalization, either because they limit the free flow of personnel (regulation on working permits), cash (exchange controls, tax), goods (customs duties, quotas), or data (censorship, the internet and controls on electronic data interchange), or because they impose localization constraints (local content, local ownership and joint venture policies).

Over the years, thanks to the GATT/WTO, multilateral agreements (EU, ASEAN, NAFTA and so on), and International Monetary Fund (IMF) requests, government legislation is leaning towards more open contexts that favor globalization. However, some constraints still exist. Some sectors such as telecom-munications, media, banking and insurance are still tightly controlled and some countries (such as China and India) or regional blocks (EU) still impose local content requirements.

Finally, governments are deeply concerned with national security and will prevent foreigners gaining too much control of their defence or strategic sector industries. In the defence sector, for instance, where R&D costs are huge and economies of scale significant, globalization would appear to be fully justified, but is in fact limited because of national security constraints. Since the 2001 Twin Towers destruction in




New York followed by a series of terrorist attacks in London, Madrid, Moscow, Beirut, Nairobi and Paris, governments have adopted measures that constrain the movement of people and products. Security becomes priority.

Figure 1.4 summarizes these localization push factors.

figure 1.4 Localization push factors

Localization

Technologyfactors

StandardsTransportationSpatial presenceLanguage

••••

Reduce the benefits ofeconomies of scale,centralization and

standardization

Culturalfactors

Attitudes, tastesBehaviorSocial codes

•••

Reduce the benefitsof standardization

Commercialfactors

•••

Distribution networksCustomizationResponsiveness

Require differentiatedapproaches to sales

and marketing

Legalfactors

••

RegulationsNational security

Limit free flow ofpeople, goods,

data, cashImpose localization

constraints

the benefits of localization

The benefits of localization, instead of a global integrated and coordinated approach, are essentially customer-oriented benefits that give firms increased market power and ultimately an increased market share. Those benefits are proximity, flexibility and quick response time.

• Proximity is the capability to be close to the market, to understand the customer’s value curve.

• Flexibility is the capability to adapt to customer demands in the various dimensions of the marketing mix: product/service design, distribution, branding, pricing and services. Ultimately, flexibility leads to customization.

• Quick response time is the ability to respond at once to specific customers’ demands.

These three benefits are closely interrelated: proximity provides the basis for flexibility and flexibility provides the basis for a quick response time. All three give a competitive advantage when local cultural, technical, commercial and legal contexts vary so much from country to country.

the benefits and pitfalls of Globalization: the macro picture

In 1817, David Ricardo in his theory of comparative advantage10 showed that it was beneficial to nations to specialize and trade goods in which they had a comparative advantage. This laid the foundation of




trade theory, which itself is the underlying foundation of globalization: in a perfect global setting where goods, people, data and money flow freely, companies can adopt an integrated and coordinated approach to their operations and the competitive battlefield would be the world. Since Ricardo’s time, partisans and adversaries of free trade have exchanged heated debates about the pro and cons of globalization for society. Table 1.2 summarizes those arguments.

table 1.2 The societal benefits of globalization

arguments in favor of globalization arguments against globalization

Creates overall wealth for all nations because specialization increases trade

Imposes a massive strain on labor forces both in developed countries (job destruction) and developing countries (sweatshops, child labor)

Reduces inflation because of cost efficiencies Standardizes customer tastes. Reduces diversity

Benefits customers because of price reductions arising from cost efficiencies

Induces concentration of power in a few global corporationsIntroduces a ‘law of the jungle’ leading to domination by the strongest multinational

Better allocation of natural, financial and human resources

Harms the environment because of unrestrained exploitation of natural resources such as forests

Reduces corruption because of free-market trade Reduces the capacity for nations to protect their national interests, cultures and values

The globalization debate gained political visibility during the 1990s. In Europe, the Treaty of Maas-tricht (signed in 1992) adopted the euro as a single currency, generating a heated debate on the loss of sovereignty and the advantages of further political and economic integration. In 1995, the North America Free Trade Agreement (NAFTA) created similar discussion. In Asia, after the 1997 financial crisis, globali-zation was questioned and, at the end of that decade, the WTO at the Seattle ministerial conference could not set up an agenda for launching another trade round because of public criticism of the whole concept of globalization. Since 2000 and particularly after the world ‘subprime’ crisis of 2008, there has been growing debate about the future of globalization. Some, such as Alan Rugman and others, have announced the ‘end of globalization’,11 a concept that will be discussed in Chapter 15.

Despite all this political turmoil, some analysts think that the world is becoming progressively more integrated. According to the consulting firm McKinsey,12 by 1997 the value of truly global markets represented approximately $6 trillion out of a total world output of $28 trillion (21%). In 1999, the firm anticipated that by 2030 the proportion of global markets would amount to $73 trillion out of $91 trillion (80%). However, as will be seen in Chapter 15, this forecast may be challenged.

Globalization at tHe leVel of tHe firmAs mentioned previously, many firms from Western Europe extended their operations outside their country of origin into the Americas, Asia or Africa, most of them in the form of colonial implantations, from the seventeenth century onwards. Arab merchants penetrated the Southeast Asian region in order to organize trade. Following the industrial revolution, large corporations started the capitalistic move-ment of international investments in infrastructure projects and in the setting up of subsidiaries. The first wave of modern multinational expansion began in 1880 and declined after the First World War. This wave was made of ‘free-standing’ firms, legally incorporated in their native country but extending rapidly internationally via the creation of local subsidiaries. Except for the resource-based multinational,




each local subsidiary was self-standing. By the end of the nineteenth century, firms such as Nestlé, Lever Brothers (Unilever), General Electric and Bayer were representative of this generation of multinational corporations. A second wave of corporate international expansion through local subsidiaries took place after the Second World War, launched by US and European companies and augmented later by Japa-nese companies. In the 1960s local subsidiaries were extended to more and more countries but started to progressively lose their autonomy and become part of an integrated global network.13 Classically, over time firms have followed a sequential evolution, from being exporters, to the setting up of foreign subsidiaries, to the integration of operations across the world. From local, they became international, then multinational and now global. More recently, ‘born global’ companies have assumed a global setting from the beginning,14 a development that will be discussed in Chapter 5.

To illustrate the traditional phenomenon of globalization let us take the simplified example of Otis Elevator Company.

eXample 1.1

Otis Elevators

Otis Elevator Company started in 1853 in New York and was soon selling elevators in Canada and Europe as well. In the 1960s it had many plants, service operations and sales offices all over Europe, where the company grew organically as well as by acquisition. Each subsidiary fought for a share of local markets. Competitors were either local national companies or subsidiaries of rival multinational companies. The Otis sub-sidiaries managed all the activities of the value chain (marketing, design, production, installation

and service). For instance, the French subsidiary designed elevators for the French market, manu-factured them in French factories, sold them with French sales forces and maintained them with a French after-sales organization – the manage-ment was essentially French. In Germany, Otis designed, manufactured, sold, installed and ser-viced elevators for the German market; and the same applied in nearly every major country – see Figure 1.5. In smaller countries, products or com-ponents were exported from major countries’

figure 1.5 A multinational competitive configuration – Otis Elevators in the 1960s

OTIS UK OTIS GERMANY

OTIS ITALY

Design Production Marketing Service Design Production Marketing Service

Design Production Marketing ServiceDesign Production Marketing Service

Competes againstUK and multinational

competitors

forthe UK market

Competes againstGerman and multinational

competitors

forthe German market

Competes againstItalian and multinational

competitors

forthe Italian market

OTIS FRANCE

Competes againstFrench and multinational

competitors

forthe French market




subsidiaries. The operations were self-contained in each country and the results were evaluated on a country-by-country basis. Such a situation had prevailed since the early 1900s. It corre-sponds to what was referred as a multinational or multi-domestic world, in which multinational companies like Otis were competing in each main market of the planet.

By the end of the 1960s several key elements played a role in changing this competitive struc-ture. One country manager at Otis perceived that the European business context was changing. First, the Treaty of Rome in 1957 had created the European Economic Community (EEC), at that time called the Common Market. This meant that tariff barriers across Europe were coming down; it became viable to produce components in one country and export them to other countries. This allowed the company to concentrate on the pro-duction of components in a network of specialized factories across Europe, each of them making one product category or one component. Components could be cross-shipped for ultimate installation in the various client countries. In 2015 Otis operated all over the world as 6 regional organizations, with 200 factories and 12 engineering facilities.

The benefits of such a system were obvious – by concentrating production the company could benefit from economies of scale, and some of the reduction in costs could be passed to the customers in the form of lower prices, lead-ing to higher market share. Products could be designed for an entire market (standardized). Instead of having country segmentation one would have pan-European segmentation based on utilization, that is, high-rise buildings, low-rise buildings and so on.

Standardization would be possible only if cus-tomers in Europe – architects, engineers, real estate developers, housing departments and so on – shared a common view about what an elevator should be. Despite the differences in housing organization across countries, elevators were essentially technical products with very little cultural content and therefore able to be standardized. Only selling methods would vary from country to country. The Otis management perceived this as an opportunity to gain market share in Europe and engaged in the pan-European strategy depicted in Figure 1.6 in which design centers and factories were specialized and interdependent.

figure 1.6 A global competitive configuration – Otis today

DesignProduction

Design Production

Design

OTISEUROPE

Production

Marketing Service

Marketing Service

Marketing Service

Marketing

Local marketLocal market

Local marketLocal market

OTIS UK OTIS GERMANY

OTIS FRANCE OTIS ITALY

Service

Production




From a management point of view this was a radical change: country managers were no longer responsible for the whole value chain, but only for part of it. They were obliged to coordi-nate with other countries through the European headquarters. This led to a very successful story. By 1975, Otis had captured 40% of the European market, while containing Japanese penetration, and competitors were obliged to adopt a similar

strategy if they wanted to survive. This concept was further expanded and today Otis is organ-ized by product line on a worldwide basis. There are still country subsidiaries, which take care of installation, maintenance, public relations and personnel, but product development and manu-facturing are coordinated globally by product line. From being a ‘multinational’, Otis has become the ‘global’ company shown in Figure 1.6.

The phenomenon of an active coordinated and integrated presence in the main regions of the world is what ‘global company’ means. It is important to observe that this change gave Otis a competitive advantage and that competitors were obliged to adopt a similar approach if they wanted to survive. Globalization is neither a consultant’s fad nor a management buzzword, it is a competitive imperative in an increasing number of industries. The development of information technologies, the fluidity of capital markets, the advent of megamergers in the telecoms, computer, oil, pharmaceutical, power and car industries – all of these demonstrate that business firms are increasingly behaving as if they were already living in a global world. (See Insert 1.2, Some Global Definitions.)

Historically, the globalization process, according to the stage theory of internationalization,15 can be best described as shown in Figure 1.7. It has evolved in three steps: (1) international trade: export and sourcing; (2) multinational investments: setting up value-adding activities in different countries; and (3) integration and coordination of activities across region and countries.

figure 1.7 The three steps in globalization

Export(Trade)

Internationalization(Multinational)

Global integration(Global)

Centuries agoStarted in seventeenth centurybut mainly early twentieth century

1960s and later

the benefits and pitfalls of Globalization for business

The benefits of globalization can be assessed from two points of view: the business or competitive perspective and the macro, socioeconomic perspective.

The benefits viewed from the macro/socioeconomic perspective have been discussed earlier, so this section will focus on the benefits to a corporation of adopting a global strategy.




Business and competitive benefits can be grouped into four categories: cost, learning, timing, and arbitrage.

• Cost benefits. These come, on the one hand, from economies of scale owing to the standardization of products and processes as well as increased bargaining power over suppliers of raw materials, components, equipment and services; and, on the other hand, from the ability to organize a logistic and sourcing network based on location factors. Examples of economies of scale through standardization are numerous. Otis Elevators was able to lower the cost, and hence the price to consumers of elevators in Europe, by 30% by introducing a pan-European manufacturing system.

• Timing benefits. These come from a coordinated approach to product launching in the early stage of the product life cycle. In a multinational setting, each subsidiary is more or less free to adopt products for its own market. This is sometimes called ‘the shopping caddy’ approach to product adoption. Such an approach generates inefficiencies in the management of the product life cycle since the optimal volume is obtained only after a lengthy process of product adoption by all subsidiaries. A classic example of the deficiency of the ‘shopping caddy’ approach is Philips America’s refusal to adopt the V2000 video system, developed by Philips’ mother company in the Netherlands. As a result, this innovation was not able to gain the volume of sales it needed in the most important world market and lost competitiveness compared to Japanese manufacturers such as Sony and Matsushita. In the late 1960s, the ‘international product life cycle’ theory of multinational product introduction postulated the progressive adoption of products over time according to the level of economic and scientific development of countries (see Figure 12.1). Such a theory is no longer valid. When industries globalize, waiting too long to launch a product can be fatal, particularly if the product has a short life cycle, which is more and more frequently the case. For example, Microsoft launched Windows 2000 at the same time everywhere in the world.

• Learning benefits. These accrue from the coordinated transfer of information, best practices and people across subsidiaries. Such transfer eliminates the costly ‘reinvention of the wheel’ and facilitates the accumulation of experience and knowledge. In Thailand, Unilever formulated and implemented an innovative strategy to produce and market ice cream. The Thai experience served as a template for other countries in the Asia Pacific region, giving the company a first-mover advantage. This example illustrates the benefits that can be gained from a coordinated transfer of best practice.

• Arbitrage benefits. These come from the advantages that a company can gain by using the resources in one country for the benefit of its subsidiary in another country. These can be direct competitive advantages or indirect cost advantages. A competitive advantage can be gained by playing a ‘global chess game’: for instance, engaging in a price war in one country in order to tie up the resources of competitors in that country, thus depriving them of cash flow which could be used elsewhere. This strategy was used by Goodyear, the US tyre giant, in the early 1970s when the French company Michelin moved into North America. Goodyear, which had a small market share in Europe, engaged in a price war that Michelin was obliged to counter by lowering its prices, and de facto reducing its financing scope for its American expansion. Another type of arbitrage comes from differential cost elements such as taxes, interest and possibly risk reduction through the pooling of currencies.

Those four benefits are real but achieving them is subject to certain conditions, and their adoption has to be measured against the real competitive advantage they provide to the firms adopting them.

The benefits in cost reduction obtained by economies of scale are contingent upon the market respon-siveness to standardization and whether customers are price sensitive. If customers are not responsive and prefer tailored products and services to standardization, a global approach is less appropriate. A similar reasoning applies to the benefits of timing. As for purchasing power, it may be limited for culturally sensitive services such as advertising.




The benefits of learning are positive if the experience gained in one country is applicable to another. If this is not the case, there is a timing deficit: the time spent in realizing that one has made a mistake plus the time to learn the new environment. At Euro Disneyland near Paris, two years were lost because the transfer of knowledge from Florida and California did not help the European operation.

The benefits of arbitrage can be offset by the cost of managing the arbitrage and any legal barriers to it that may exist. In the case of tax arbitrage, governments are very careful to make sure that global companies do not abuse their arbitrage power.

Despite those limitations, more and more companies recognize the competitive benefits of globaliza-tion. However, one should be aware there are still some factors that work against globalization and in favor of localization.

tHe Global/mUlti-local mappinGThe two sets of forces – globalization and localization – shape the competitive structure of industries and induce companies to configure their worldwide business systems with the right mix of coordination, integra-tion and decentralization. Global/multi-local mapping is a tool that has been developed to position indus-tries and industry segments according to the relative importance of each set of forces. Figure 1.8 represents a mapping for various industries, while Figure 1.9 does the same for various segments of the banking industry.

The mapping in Figures 1.8 and 1.9 reveals that industries and segments can be broadly positioned into three types of competitive situations:

• Type I: Global forces dominate and firms in those industries can sustain competitive advantage by operating across the world on a coordinated way. There are few advantages to push for local adaptation of products, services and approaches. Efficiency, speed, arbitrage and learning are the competitive drivers. These industries are global, as in the case of microchips, bulk chemicals or civil aircraft.

• Type II: Local forces dominate and flexibility, proximity and quick response are determining capabilities for competitive advantage. Firms can operate independently in different countries; their approaches are different from country to country. Food retailing, consumer banking or voice telephony fall in this category.

• Type III: In these industries there is a mix of global and local forces at play and competitiveness cannot be achieved without achieving the benefits of global coordination and, at the same time, the benefits of flexibility, proximity and quick response time. This positioning is increasingly becoming the dominant competitive battleground for a vast majority of sectors.

Yes

No

Civil aircraft

Microprocessors

Bulk chemicals

Catering

Automobile

Telecommunicationequipment

Package tours

Retail banking

Foodretail

Paint

Corporate bankingInstitutional banking

Global industries in whichfirms can sustaincompetitive advantagesonly if:

they are present in thekey countries of theworld

they integrate andcoordinate theiractivities across theworld in a centralizedmanner

Global-local industries in which firms can sustain competitive advantages independently within theboundaries of countries in which they operate

YesNo

NationalPublic services

figure 1.8 Global-local mapping: different industries have different competitive requirements




Global/multi-local mapping can be used to assess a situation at a point in time or to anticipate evolu-tion over time. It can also serve as mapping for the various activities of the value chain. As we will see in Chapters 7, 8 and 14, a good understanding of industry positioning will help the formulation of business and country strategies, as well as the implementation of an effective organizational design.

In Appendix 1.1 there is a questionnaire that will help analysts and managers to position their business on the global/multi-local mapping matrix.

mini-case 1.1

Mobile telephony industry

Mobile telephony expanded rapidly during the first decades of the 2000s. From 2005 to 2015 the number of mobile subscribers in the world grew from 2 billion (32% of the world’s population) to 6.3 billion (86% of the world population). Accord-ing to the International Telecommunication Union (ITU) the distribution of customers is: Asia Pacific 3.37 billion, Americas 1 billion, Europe 757 million, Rest of the world 808 million.

The industry is divided broadly into three major sub-industries: (1) infrastructure manufac-turers, (2) mobile phone producers, and (3) mobile services operators.

Infrastructure manufacturers

The industry of network equipment manufactur-ing generated $126 billion of revenues worldwide in 2012. It is dominated by major US, European and Asian producers: Ericsson from Sweden, Huawei and ZTE from China, Motorola and Cisco

from the USA and Nokia Alcatel Lucent (Finnish, French, US).

Economies of scale and capital intensity drive the economics of this industry. Over recent years it has experienced a lot of consolidation through mergers and acquisitions.

Mobile phone producers

In 2014 the industry produced 1.878 billion units of mobile phones – a 56% increase since 2009. With 41% of market share, three major companies dominate this industry; Samsung (21%), Nokia/Microsoft (10%) and Apple (10%). The smart-phone segment represents 53% of that market, up from 40% in 2012, and is divided between three operating systems (Android, IOS and Win-dows). Smartphones are constantly upgraded to reduce weight, improve battery durability, add features, and adapt to the internet access technology (3G, 4G).

figure 1.9 Global-local mapping: different segments have different competitive requirements – example of banking

Investmentbanking Global corporate

accounts

Wealth management

Credit cards

Commercial banking

Retail bankingSaving accountsPersonal insurance

Trade financeGlobalapproach

dominates

Local approach dominates

Yes

Yes

No

No




Mobile operators

The global revenues generated by mobile opera-tors were $1150 billion in 2012. Around the world, mobile services are operated mainly by local telephone companies with their own national brands. Some operators, such as Vodafone from the UK which operates in 16 countries or Orange (France) which operates in 19 countries, have developed their presence internationally by acquiring or participating in the capital of local operators.

Most of the consumers use prepaid services for their usage. Operators offer various prepay schemes, as well as add-ons (internet access, mobile banking, emails, games and so on), according to the characteristics of their markets. Customers are divided into individual accounts (roughly 60–95% according to the country) and corporate accounts (10–35%). Some of the corpo-rate accounts are multinational firms that want to benefit from a ‘global’ offer.

Mobile operators purchase their own network equipment and control its installation. They also procure large quantities of handsets that they include in their prepaid contracts at discounted

prices. Apart from Japan and Korea, which use a standard of their own, they operate under one of the two major standards: Global Standard Mobile (GSM) with around 80% penetration, and CDMA (15%).

The key activities of mobile phone operators are:

1. Procurement of network infrastructure, hard-ware and software as well as mobile phones.

2. Network installation and maintenance carried out by equipment vendors plus local infra-structure companies under the control of the service provider.

3. Software developments for new applica-tions and services. From 2008 to 2011 around 300,000 applications for mobile phones and smartphones have been developed in the world. The main applications are games, news and social networking.

4. Marketing and brand management. In each country there is a variety of local brands. Mul-tinational players try to use their global brand (e.g. Orange), although advertising is country specific.

5. Administration, marketing, sales and distri bution.

sUmmarY and keY points1 Globalization is the process by which people, products, information and money can move freely

across borders

a Four factors are pushing globalization:• Political: liberalization of trade and investment reduces trade barriers• Technological: technology reduces the cost of coordination and increases economies of scale• Social: convergence of customer choices encourages standardization and global branding• Competitive: emergence of new competitors induces integration companies to compete on all

fronts with strong coordinationb Four driving forces are acting against globalization:

• Cultural: differences in taste, behavior and social codes reduce the benefits of standardization of products or services

• Commercial: differences in distribution channels and customer interfaces require differentiated approaches to sales and marketing

• Technical: differences in standards, transportation and language constraints reduce the benefits of economies of scale, centralization and standardization

• Legal: differences in regulations and security measures limit free flow of resources and impose localization constraints

Questions1 Using your knowledge, the data provided and the global/multi-local mapping, can you decide

whether mobile telephony is a global industry?2 Can you do the analysis for each component of the industry?3 For mobile operators, which activities are global and which are local?




2 a global company can be defined as a company that operates in the main markets of the world in an integrated and coordinated way. a global company carries out one activity (e.g. manufacturing) or a component of the activity (e.g. manufacturing one sub-part only) of the value chain in one country which serves the company’s worldwide market. a multinational company is a company that operates in the many markets of the world with little or no integration and coordination among operations

3 localization has three benefits:

a Proximityb Flexibilityc Quick response time to customers

4 Globalization has four benefits:

a Costb Timingc Learningd Arbitrage

5 Global/multi-local mapping is used for identifying the competitive requirements of an industry or a business segment and can assist companies in formulating business and country strategies

appendix 1.1 positioning a business on Global/multi-local mappingAssign a score for each question from 1 to 3 (2 points = halfway between the two opposites listed)

1point = 3points =

1 To what extent do customers have similar demands for functionality and design across countries?

Very different Very similar

2 To what extent do products or services have a high proportion of standard components across countries?

Low proportion of standard components

High proportion of standard components

3 To what extent are customers (or distributors) themselves operating in different countries and buying centrally your products or services?

Buying locally Buying centrally

4 To what extent are significant economies of scale in your industry important for the cost of the product (i.e. one needs very high volume to obtain low cost)?

Low economies of scale

High economies of scale

5 To what extent is the speed of introducing new products worldwide important for competitiveness?

Speed is not that important

Speed is very important

6 To what extent are the sales of your product or service based on technical or cultural factors?

Highly cultural Highly technical

7 To what extent can experience gained in other countries by a ‘sister’ subsidiary be successfully applied in other countries?

No great benefits Yes, highly beneficial

8 To what extent do competitors in your industry operate in a ‘standardized’ way across countries and are successful in doing so?

Competitors are localizing

Competitors are successful in standardized approaches

9 To what extent can pricing be different from country to country without introducing dysfunctionalities?

Pricing has to be consistent across borders

Pricing can be very different

10 To what extent does distribution channel management differ from country to country?

Not so different Yes, very different




1point = 3points =

11 To what extent do business regulations and contexts differ from country to country, requiring big differences in local practices?

Not too different Highly different

12 To what extent do products or services require a high degree of interaction with customers (customization)?

Low customization High customization

13 To what extent are transportation costs high compared to the product costs?

Not so high Very high

14 To what extent is the customer interface critical for success?

Not critical Very critical

Questions 1 to 8 represent the importance of global forces while questions 9 to 14 represent the impor-tance of local forces. Divide global forces total by 8 and local total by 6. It is then possible to map a busi-ness in the following matrix:

3

2

1

Local approach dominates

Globalapproachdominates

(Questions 1 to 8 total score ÷ 8)

1 2 3

(Questions 9 to 14 total score ÷ 6)

learning assignments1 Among the enterprises that you know, can you identify one that qualifies as a global company? Why?

2 In Figure 1.8, why are saving accounts positioned low on global approach and high on local approach while investment banking is high on global approach and low on local approach?

3 In Figure 1.8, food retailing is positioned as a local business, with a very low globalization score. However, in the press, companies like Tesco, Walmart or Carrefour are described as ‘global retailers’. Explain this discrepancy.

4 What are the social factors that have pushed for globalization and which have been pushing against it?

5 What are the benefits of having a local approach?

6 When the Otis Elevator Company introduced the change described in Example 1.1 (p. 14), there was a lot of resistance from the various heads of the European subsidiaries. Why? What arguments do you think the people hostile to globalization used?

7 Can Apple be classified as a global firm? Why did you make that assessment?




key words• Arbitrage benefits

• Comparative advantage

• Global companies

• Global industries

• Global/multi-local mapping

• Globalization

• International product life cycle

• Multinational companies

Web resourceshttp://knowledge.insead.edu/ INSEAD

http://www.business-week-global.com/ Businessweek magazine

http://www.mckinseyquarterly.com/ McKinsey Quarterly

http://unctad.org/en/Pages/Home.aspx UNCTAD

https://www.bcgperspectives.com/ Boston Consulting Group

http://www.wto.org/ Provides information about the WTO

http://www.imf.org/ Provides statistics and papers from the IMF

companion websiteVisit the companion website at www.palgravehighered.com/lasserre-gsm-4e for a multitude of weblinks and resources, self-test questions for revision and a searchable glossary.

notes1 McLuhan (1962).

2 Ghemawat (2011).

3 James (2001).

4 Yip (1992).

5 UNCTAD (2008, 2015).

6 UNCTAD (2008).

7 Baker and Hart (1999); Qualls et al. (1981); Michel et al. (1996).

8 Ohmae (1985).

9 OECD (2010).

10 Ricardo (1967).

11 Rugman (2000); James (2001); Langlet (2013).

12 Lowell and Fraser (1999).




13 Jones (2005).

14 Chetty and Campbell-Hunt (2003); Li, Qian and Qian (2015); Tanev (2012.

15 Johanson and Vahlne (1977).

references and further readingBooks and articles

Baker, M. and Hart, S. (1999) Product Strategy and Management (London: Prentice-Hall).

Bank for International Settlements (2014) 84th Annual Report, Bank for International Settlements, http://www.bis.org/publ/arpdf/ar2014e.pdf, accessed 4 May 2017.

Bartlett, C.A. and Ghoshal, S. (1989) Managing Across Borders: The Transnational Solution (Boston, MA: Harvard Business School Press).

Barney, J.B. (1991) ‘Firm resources and sustainable competitive advantage’, Journal of Management, 17(1), pp. 99–120.

Buckley, P. and Casson, M. (1976) The Future of the Multinational Enterprise (London: Macmillan).

Castells, M. (1996) The Rise of the Network Society, Vol. I of The Information Age: Economy, Society, Culture (Oxford: Blackwell).

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480

INDEX of SUBJECTS

AAbsorption mode of integration,

258, 265, 464Acculturation, 332, 373–374,

378–379, 389, 392, 394, 464Advertising agency, 107, 274, 286, 464Alliance, 133, 143–144, 157, 162, 209,

213–238, 242–246, 254, 464, 466–468, 470–471, 473, 476–479

Arbitrage, 17–18, 21, 23, 142, 233, 275–276, 278, 284–286, 464

Arbitrage benefits, 17, 23Asymmetric development, 425, 428,

442, 450, 464

BBack office, 11, 136, 291, 294–295,

318, 464Best practices, 11, 17, 215, 235, 254,

258–259, 267, 273, 321, 331, 333, 337–338, 340, 385, 391, 401, 410, 412, 416, 439, 464–465

Black swans, 424Blue Ocean Strategy, 139–140, 465Bond market, 353Born global, 6, 14, 150–151, 165–166,

465BOT, 279–280, 302, 316–318, 329,

356, 465Bottom of the pyramid, 33, 37–38,

47, 400, 465Brexit, 10, 345, 366, 385, 424, 430Bribe, 90–91, 93, 100, 111, 116, 465BRICs, 28, 29, 31, 32Bruntland Report, 81Business etiquette, 68, 76–77, 465Business strategy, 123–127, 156, 163,

177, 203, 288, 308, 335, 465, 471Business systems snalysis, 61–64

CCAGE framework, 179, 187, 466Californization, 8, 268, 286, 466Capabilities fit, 213–214, 222–223,

225–226, 239, 244, 252, 466Career plan, 376, 390, 392, 466Center of excellence, 332, 338, 466Child labour, 96, 120–121Clash of Civilization, 51Clusters, 53, 57, 59, 75, 129, 134, 156,

166, 172–173, 177–178, 183, 187, 312, 324, 335–337, 466

Co-location, 326–327, 332, 338, 466Codes of Conduct, 51–52, 81, 93, 106,

120–121, 470Combination, 37, 113, 136, 171,

175–176, 183, 195, 197, 209, 247, 271, 281, 292, 302, 309, 324, 328, 330, 338, 379, 384–385, 433, 446–447, 449, 462, 466

Comparative advantage, 4, 12, 23, 36, 466–467

Compensation, 62, 202, 211, 372, 374, 376–377, 379, 381, 383, 390, 392, 409, 467, 477

Competitive context, 126, 145, 167–168, 176, 181, 186, 196, 400, 404–405, 466

Conference of the Parties (COP), 85Constellations, 236, 244, 467Convergence, 4, 6, 8–9, 20, 79,

267–269, 284, 286, 411, 437, 466–467

Corporate culture, 52, 77, 140, 144–145, 227, 240, 382, 467

Corporate Social responsibility, 82, 100–101, 103, 105, 113–116, 121, 467

Corporate strategy, 125–126, 146, 156, 163, 467, 471

Corruption, 1, 13, 33–35, 43, 45, 47, 74, 81–82, 84, 90–95, 98, 100, 102–103, 105, 107, 110–112, 114–116, 118, 120–121, 179–180, 185, 187, 190, 193, 437, 444, 465, 467, 479

Cost leadership, 124, 135, 139, 146, 157, 163, 468

Cost of living, 171, 291, 376–377Country ‘diamond’, 177, 187Country life cycle, 173, 187, 468Country risk analysis, 123, 167, 180,

187, 468Crosslisting, 342, 349, 351, 358, 367Cultural fit, 209, 213–214, 222–223,

226–227, 239, 244, 252, 468Cultural heritage, 56, 65, 77, 468Customer value curve, 171, 269, 286,

468Cybercrime, 436, 443, 450

DDeath valley’, 209, 233–234, 239–240,

244Deglobalization, 426, 450, 469

Differentiation, 37, 52, 55, 124, 126, 136, 139, 146, 157, 163, 177, 227, 253–254, 271, 305, 344, 357, 449, 458–459, 469

Distribution function, 315, 318, 469Dotted-lines relationship, 469Due diligence, 200, 248, 252,

254–255, 264–265, 469

EE-Procurement, 296–298, 305, 315,

317Ease of Doing Business, 33, 36, 45,

47, 74, 169, 183, 185, 188, 193Eco-friendly, 82, 84, 88, 111, 469Economic cultures, 53, 61, 77, 469Electronic Data Interchange (EDI),

289, 296, 318, 469Electronic marketplaces, 296, 318,

470Emerging countries champions,

47, 470Emerging country, 27, 37, 43, 47,

200, 391Entry modes, 197–198, 203–204,

210–211, 470Environmental Preferable

Purchasing (EPP), 88Environmental crisis, 117, 470Ethics, 81, 93–95, 100–101, 103,

106–107, 111, 114–115, 117, 119, 121, 368, 375, 470

Expatriate package, 376, 378Expatriates, 138, 199, 332, 369,

371–375, 380–383, 390, 392–394, 399, 414, 470

Explicit knowledge, 330, 338, 466, 470

Externalization, 330, 338, 470Extractive agenda, 225, 239, 244, 470

FFair process, 244, 246, 262, 265–266,

470First mover, 142, 163, 196–197, 208,

210, 212, 470, 478Fit Analysis, 200, 223, 225–227, 239,

254, 466, 471Five forces, 176–177Franchise, 198, 200, 209–210, 312,

334, 471Front office, 294–295, 314, 318, 471



481INDEX of SUBJECTS

GGini index, 74Global /Multi-local mapping, 18–19Global accounts, 276, 278, 285–286,

471Global business strategy, 125, 163,

471Global Capability Index, 131, 156,

160–161, 163, 471Global chess, 17, 142, 471Global companies, 5, 10, 18, 23, 51,

64, 81, 93, 95, 103, 110, 112–113, 124, 141–142, 145, 235, 267, 274–275, 296, 321–322, 325, 328–332, 342, 356–357, 375, 380–381, 418, 471

Global corporate strategy, 125, 146, 163, 471

Global hub, 292, 314, 395, 417–418, 471

Global industries, 2, 5, 18, 23, 166, 419, 471

Global leaders development, 392, 472

Global managers, 81, 369, 371–372, 381, 384–392, 472

Global positioning, 124, 128, 133, 135–136, 144, 146, 156–157, 163, 374, 472

Global Revenue Index, 124, 131–132, 156, 158, 160, 163, 472

Global solution selling, 267–268, 279–280, 285–286, 472

Global Supply Chains, 298Global warming, 82–85, 102,

110–111, 428, 431, 443, 450, 472Globalization, 7, 9–27, 37, 51, 53, 55,

57, 61, 65, 67, 69, 71, 73, 75, 77, 79, 81–85, 87, 89–91, 93, 95, 97, 99, 101–103, 105, 107, 109, 111, 113, 115, 117, 119, 121, 123–124, 128, 131, 133, 137–138, 143, 146, 148, 157–158, 161, 214, 218, 246–247, 250, 267–268, 288–290, 305–307, 310–311, 317, 319–320, 322, 324, 329, 336, 349, 355, 368, 385, 397, 403, 408, 414–415, 419, 421, 423–427, 429–431, 433–443, 445, 447–455, 469, 472–473

Government incentives, 43, 123, 178Grand Tour, 183, 187, 472

HHedging, 243, 267, 342–348, 356–357,

367, 468, 472Hierarchy of needs, 268–269, 286,

472Hostage Risk, 302Hub, 134, 146, 158, 174, 187, 196, 208,

292, 314, 395, 411, 415, 417–418, 471–472

Human rights, 1, 81–82, 84, 95, 97–99, 102, 105–106, 108, 110, 112–117, 119, 121, 307, 472, 477

I Incentives, 42–43, 123, 149, 169, 176,

178, 186–187, 189, 227, 258, 291, 348, 368, 379, 381, 473

Individualism, 54–55, 62, 75, 77, 228, 382, 473

Individualized corporation, 438–440, 443, 450, 473

Industry 4.0, 308–309Industry analysis, 176–177, 186–187,

473Industry culture, 52, 77, 227, 473Infrastructures, 151, 169, 176, 292Innovation, 17, 25, 114, 127, 145,

154–155, 157, 166, 169, 197, 203, 210, 218, 221, 254, 267, 291, 293–294, 307–308, 313, 321–327, 329, 331, 333–341, 399, 401, 403–404, 406, 421, 428–429, 452, 456, 461, 469, 473, 475

Institutional voids, 35, 37, 45, 47Integration process, 244, 257–258,

260–261, 264–265, 438–439, 443, 473

Intellectual property, 40, 267, 321, 333, 335, 338, 340, 473

Interface management, 244, 260, 265, 473

Internal stickiness, 331, 338, 340, 473International divisions, 418International product life cycle, 17,

23, 321–322, 336, 338, 473Internet, 4, 8–9, 11, 19–20, 47, 103,

134, 150–151, 171, 192, 196, 219, 243, 250, 253, 263, 267–268, 275, 289, 295–296, 299, 302–311, 315–320, 380, 400, 416, 435, 437, 445, 449–450, 461–462, 465, 469–470, 477, 479

Islamic finance, 348–349, 368

JJoint venture, 11, 40, 65, 82, 93–94,

107–108, 151, 195–198, 200–201, 203–206, 208–210, 213, 219, 221–223, 228–232, 234, 238–244, 246, 329–330, 333, 336, 356, 388, 458–460, 462, 470, 473–474

Joint venture decay, 209, 240, 244, 473Joint venture for market entry, 222,

238, 244, 474

KKnowledge management, 305,

308–309, 321–322, 328, 330–331, 333, 337–338, 394, 474

LLearning alliances, 219–220,

228–229, 234, 237, 244, 474Liability of Foreigness, 142, 149, 164,

166Licensing, 41, 65, 102, 123, 138, 144,

157, 177, 194, 198, 200, 202, 204–205, 210–211, 237, 241, 272, 329, 334, 470, 474

Local managers, 93, 371, 380, 383, 388–389, 391–392, 400

Locally recruited personnel, 380Location, 11, 17, 135, 137, 140–141,

143, 157, 169, 174, 177, 186, 190, 196–197, 208, 267, 289–291, 313, 317–319, 324–327, 331–333, 335–336, 338, 344, 361, 379, 433, 466, 472, 474

Logistics, 40, 47, 136–139, 143, 173, 176, 215, 254, 261, 270, 282, 286, 289–293, 296, 298–301, 307, 312–315, 317–319, 329, 400, 405, 407–408, 413, 461, 474

MMaastricht (Treaty of), 13Macroeconomic indicators, 474Market opportunities, 37, 148,

150, 167, 169–170, 186–187, 190, 474

Market segmentation, 171, 187, 474Marketing positioning, 281, 285–286,

474Matrix, 2, 19, 22, 145–147, 158, 267, 273,

370, 395–398, 403–411, 414–415, 417–419, 421, 461, 474, 476

Megacities, 427, 442, 450, 474Mentoring, 379, 390–392, 474Metanational, 321, 331, 333, 338,

340, 438, 440, 443, 450, 452, 475Middle class, 27–30, 37–38, 45,

47–49, 72, 171–173, 186, 189, 195, 445, 470, 475

Middle-class Effect, 171Missions, 376, 392, 475Modularization, 271, 286, 475Multi-cultural teams, 64–65, 67, 76Multinational companies, 3, 5, 14,

23, 41, 56, 95, 99–100, 119, 138, 148, 276, 278, 368, 471, 475

NNational/ethnic culture, 77Negotiations, 1, 6, 10, 51, 64–66,

68–69, 71, 76, 78, 106, 150, 200, 232–234, 281, 302, 334, 356, 403

Network architecture, 293, 313, 318, 475

Network effects, 141, 150, 164, 269



482 INDEX of SUBJECTS

Networked organization, 325, 338, 440, 443, 475

OOEM, 39, 41, 46–47, 127–128, 175,

415, 417, 459–460, 475Offshoring, 39–40, 47, 289–290, 294,

309, 313, 320, 475Offsourcing, 39–40, 47, 475Options, 107, 203, 211–212, 219,

224–225, 247, 253, 344–345, 348, 357, 367, 475–476

Organizational culture, 74, 79, 267, 397, 412, 418, 476

Organizational fit, 209, 213, 222–223, 227, 239–240, 244, 476

Organizational processes, 397, 418, 476

Organizational structure, 6, 142, 145, 215, 227, 262, 397–398, 402, 410–411, 414–415, 417–418, 421, 446, 467, 472, 476, 479

PPartner analysis, 200Partner selection, 200, 209, 214,

237Pay and Productivity, 175Performance evaluation, 227, 326,

337, 381–382, 391, 397Piggybacking, 141, 148, 150, 162,

296, 476Plant competencies, 314, 318, 476Polish plumber, 385Political partner, 238, 244Post-acquisition process, 252–253,

265, 476Power distance, 54, 58–59, 75, 77,

476Pre-acquisition process, 252–253,

265, 476Preservation mode of integration,

258, 265, 476Procurement, 20, 39–40, 70–71,

94–95, 120, 136–137, 140, 175, 198, 203, 210, 215–216, 219, 231, 260, 267, 279, 285, 289, 292–293, 295–298, 301, 304–305, 307–308, 313–315, 317–318, 358, 457, 470, 476

Professional culture, 52, 77, 476

Project finance, 342–343, 346, 356–357, 360, 368

RReal option, 194, 203, 210, 476Regional headquarters, 64, 76, 127,

144, 147, 198, 281, 385, 388, 391, 395, 400, 412–415, 418, 421, 477

Regionalization, 24, 430, 450, 477Representative offices, 138, 144, 148,

197, 203, 208, 210, 382, 477Retention, 257, 381, 390, 392, 477Roles, 56, 231, 260, 262, 289,

292–293, 314, 317, 328, 380, 384–385, 387, 391–392, 395, 397, 400, 410, 412–413, 415, 418, 438–439, 443, 472–473, 475–477

SScenarios, 424–425, 431–432, 436,

441, 443, 446, 448–454, 477Segmentation, 15, 37, 136, 171–173,

187, 268, 270, 273, 286, 291, 474, 477

Sharing agenda, 225, 244, 477Silent language, 51, 53, 75–78Skills, 62, 94, 137, 148, 166, 184, 196,

199–200, 209, 220, 231–232, 235, 240–241, 282, 292–293, 314, 327, 369–370, 373–376, 379–380, 384–387, 389–393, 411, 418, 439–440, 452, 472, 477

Small and medium-sized enterprise (SME), 147

Smart Factory, 309, 477Socialization, 328, 330–331, 338, 426,

442, 477Socially responsible investment

(SRI), 117Sprinkler model, 274, 284, 286, 478Stand-alone value, 256, 265, 478Strategic fit, 209, 213–214, 222–225,

238, 241, 244, 252, 478Strategic role, 314, 318, 478Sub-optimization, 276, 285–286,

419, 478Symbiotic mode of integration, 258,

264–265, 478Synergies value, 244, 256, 265, 478

TTacit knowledge, 330–332, 338, 470,

478Tax evasion, 81, 99–100, 436, 444Technology transfer, 88, 116, 200,

202, 219, 221, 231, 267, 321, 329–330, 337–338, 340, 478

Tenure, 376–379Trade finance, 19, 342–343, 354, 356,

358Transfer, Adapt, Create model, 143Transnational, l, 4, 24–25, 49, 108,

115, 120, 122, 124, 131, 145, 158, 165, 189–190, 267, 374, 395, 397, 403, 410–411, 414–415, 418, 420, 426, 436, 438, 454, 479

Transnational Index, 124, 131, 158Turnkey project, 279, 300, 316, 318,

479

UUncertainty avoidance, 54–55, 58,

75, 77, 479

VValuation, 123, 189, 214, 219, 230,

232, 248, 252–256, 264–266, 343, 346–347, 357, 367–368, 476, 478–479

Value chain, 10, 16, 19, 21, 37, 39, 124, 126, 129, 136–139, 143, 148, 156–157, 163–164, 225, 293, 311–312, 314, 455, 461, 466, 477, 479

Value curve, 12, 134–135, 139, 156, 163, 171, 173, 269, 281, 285–286, 468, 479

Value proposition, 101, 124–126, 129, 134–136, 139, 156–157, 163–164, 254, 409, 465, 479

Venturing agenda, 225, 239, 244, 479

WWaterfall mode, 314Weak signals, 424Web, 2.0, 303, 308, 319–320, 479Wholly owned operations, 194, 197,

210, 479Window of opportunity, 196–197,

199, 208, 210, 212, 479



483

INDEX OF NAMES

AAaker, David, 287Abid Aslam, 189Abida, Rib, 189Ablett, Jonathan, 452Ackenhusen, Mary, 420Adarkar, Ashwin, 211Adil, Asif, 211, 245Adler, Nancy, 78, 393Aguar, Marcos, 48Akadar, Adhwin, 245Albert, Michel, 53, 61, 64, 78Alexander, Marcus, 165, 263Allen, Thomas, 339, 340, 420, 454Almodóvar, Paloma, 166Ammer, John., 368Amsalem, Michel, 339Andersen, Torben, 394Anderson, Erin, 118, 119, 122, 211Ansoff, Igor, 450, 452Anwar Habiba, 368Ariño, Africa, 245Arnold, David, 211Ashkenas, Ronald, 266Asin, Amy, 247, 266Attali Jacques, 451, 452Augier, Mie, 339Austin, James, 188

BBadaracco Joseph, 118, 119Baden, Fuller, Charles, 237, 246Bader, T, 164, 165Bailey Warren, 368Baker, Michael, 23, 24Banerjee, Neela, 119Bank, John, 211Barnett, Carole, 421Barnevick Percy, 386, 408, 421Barney, Jay, 5Barsoux, Jean, Louis, 51, 64, 79, 393Barth, Karen, 287Bartholomew, Susan, 393Bartlett, Christopher, 24, 145–146,

164–165, 384, 393, 395, 420, 421, 438, 440, 451, 452, 473, 479

Bartmess, Andrew, 319Bazigos Michael, 420, 421Beamish, Paul, 211Beneviste, Guy, 452Berger, Peter, 53, 61, 64, 78Besanko, David, 126, 165Besouri, Christopher, 48

Birkinshaw, Jujian, 287, 421Bjorkman, Ingmar, 394Bleeke, Joel, 245, 265–266Bloch, Nicolas, 49Bloom, Helen, 394Boele, Richard, 121–122Bolt, Olivia, 452Borcuch, Artur, 307, 319Boutellier, Roman, 339–340Bowonder, B, 339Brake, Terence, 78, 205Brett Jeanne, 78Brewer, Thomas, 188, 250Brodbeck, Felix, 78Brown Lester, 71, 271, 382, 408, 452Buckley, Peter, 5, 24, 164, 166Budhwar, Pawan, 393Bughin, Jacques, 319–320Burns, Jennifer, 96, 119

CCadbury, Adrian, 100, 118–119Cadot, Olivier, 119Campbell, Andrew, 24, 165, 463Capron, Laurence, 245, 246, 266Casson, Mark., 5, 24Castells, Manuel, 4, 24Cave, Bill, 319Cavusgil, Tamer, 49, 211Cerny, Keith, 319Chaddick, Brad, 188–189Chalkiti, Kalotina, 393Chattopadhyay Amitava, 37, 49Chenh, Simon, 189Chesbrough, Henry, 339Chetty Sylvie, 24Chhokar, Jagdeep, 78Chiesa, Vittorio, 339Chu, Chi, Ning, 78Chui, Michael, 319, 320Chung, Peter, 368Ciarlante Deana, 269, 288Cladderton, Lisa, 421Clyde, Smith, Deborah, 421Coltman, Tim, 319Connely, Catherine, 211Contractor, Farok, 99, 118–119, 211,

356, 360, 368Court David., 48, 82, 307Cowking, Philippa, 273, 288Crawford, Robert, 96, 119, 408, 421, 463Cunha, Olao, 171, 172, 189Cunningham, Mark, 246

DDambal, Anirudha, 339Danis, Wade, 319Dastmalchian, Ali, 78David, Arnold, 12, 51, 96, 287, 466Davidson, William, 165, 246, 265, 266Davies, H, 246, 392–393Davis, Stanley, 421Dawar, Niraj, 37, 49de Bettignies, Henri, Claude, 388, 393de la Torre, Jose, 245–246, 265, 266de Meyer, Arnoud, 246, 266, 291, 293,

317, 319, 324, 339, 340De Smet, Aaron, 421Deloumeaux, Lydia, 319DeMonaco, Lawrence, 266Deng Xiao Ping, 32Dent, Stephen, 72, 96, 245–246DePamphilis, Donald, 266Devinney, Timothy, 319Devlin Clarian, 452Dewhurst, Martin, 420–421Dhingra, Dhruv, 320Doherty, Bob, 287–288Donalson, Thomas, 118–119Dore, Ronald, 53, 61, 64, 78Doremus, Paul, 165, 452Dorfman, Peter, 78Dornier, Philippe, Pierre, 319Dos Santos, Jose, 332, 340, 438, 452Dowling, Peter, 393Doz, Yves, 25, 145, 164–166, 218, 222,

224, 235–236, 245–246, 324, 331, 339–340, 370, 393, 421, 438, 440, 451, 452, 467

Dragonetti, Nicolas, 287, 288Dranove, David, 165Dunchin, Faye, 119Dunfee, Thomas, 118, 120Dunning, John, 24, 128, 164–165Durrieu, François, 246

EEccles, Robert, 265–266Edstrom, Anders, 374, 375, 393Eiteman David, 368Engels, Friedrich, 4, 24Engle, Allen, 393Enrique Luiz, 452Erdmenger, Christoph, 117, 120Ernst David, 96, 163, 211, 245, 246,

266, 291, 319Eun, Cheol, 368



484 INDEX OF NAMES

Evans, Paul, 305, 306, 379, 393Evans, Philip, 319

FFadiman, Jeffrey, 117, 119Falck1, Olivier, 119Fang, Tony, 69, 78Farndale, Elaine, 394Farrell, Diana, 49, 189Faulkner David, 165Fender, Michel, 319Ferdows, Kasra, 291, 293, 317, 319Festing, Marion, 393Finlay, Paul, 166Flamant, Anne, Claire, 421Florescu, Elizabeth, 451, 452Francis, Duzanne, 266, 424Franko, Larry, 421Fraser, Jane, 23, 24, 49Freeling, Anthony, 274, 287, 288Friedheim, Cyrus, 246Friedman, Thomas, 101, 452Frynas, George, 166Fukuyama Francis, 424, 450, 452

GGahuri, Pervez, 78Galbraith, Jay, 374–375, 393Gasman, Olivier, 340Gassmann, Olivier, 339Gatignon, Hubert, 211Gee, Francesca, 245, 246Geertz, Clifford, 52, 78Gerch, Ulrich, 189Geringer. Michael, 245–246Gersh, Ulrich, 49Ghadar, Fariboz, 266Ghauri, Perez, 118, 119, 211Ghemawat Pankaj, 23, 24, 164, 165,

179, 188, 189, 191, 393, 466Ghoshal, Sumantra, 24, 145–146,

164, 165, 266, 384, 393, 402, 420, 421, 438, 440, 451, 452, 473, 479

Ghosn, Carlos, 215, 217, 228, 231, 245, 246, 309, 387

Giddy, Ian, 368Glen, Jack, 212Glenn, Jerome, 449, 451, 452Gomez Casseres, Benjamin, 236,

245, 246Gompers, Paul, 211Goodwin Jason, 15, 24Goold, Michael, 164–165Gravelle, Jane, 118, 119Gregersen, Hal, 374, 375, 380, 392,

393Greve, Henrich, 232, 245, 246Gröschl, Stefan, 393Guey, Huey Li, 420, 421Guisinger, Stephen, 188, 189Gupta, AnilK, 49, 78

Gupta, Vipin, 49, 78Gwartney, James, 49

HHabeck, Max, 257, 265, 266Hadjikhani, Amjad, 118, 119Hagel, John, 451, 452Haigh, Ronald, 291, 319Halevy, Tammy, 246Hall, Edward, 53, 77, 78Hamel, Gary, 165, 218, 222, 224, 235,

236, 245, 246, 451–452, 467Hammond, Allen, 452Hampden, Turner, Charles, 53, 55,

78, 79Hanges, Paul, 78Hankinson, Graham, 273, 288Harbison, John, 247, 266Harding, David, 452Harrigan, Kathryn, 245, 246Harris, Jonathan, 421Hart, Susan, 23, 24Harter, Jim, 420–421Harvey, Michael, 452Harzing, Anne, Wil, 393Haspeslagh, Philippe, 246, 257, 259,

265, 266, 464Hawawini, Gabriel, 265, 266, 368Hazan, Eric, 320Hebert, Louis, 245, 246Heblich, Stephan, 118, 119Heck, Nick Van, 166Heenan, David, 145, 164, 165Heike, Fabig, 121, 122Heilbroner, Robert, 452Hennart, JeanFrançois, 368Hennebel, Ludovic, 97, 120Hess, David, 118, 120Heywood, Suzanne, 421Hofstede, Gert, 53, 54, 77, 78, 382, 393Hogan, Harold, 421Holliday, Charles., 89, 117, 120Holmes, Gary, 257, 265, 266Holstein, Williams., 392–393House, Robert, 78, 103, 130, 162, 237,

298, 310, 334, 344, 377, 453Howell, Llewellyn, 188, 189Hsieh, Tsun, yan, 392, 393Humes, Samuel, 24Huntington, Samuel, 51, 53, 57, 77,

79, 434, 451, 452Husted, Bryan., 117, 120Huston, Larry, 340Hwang, Peter, 211Hyde, Dana, 265, 266

IIfzal, Ali, 48, 49Inglehart, Ronald, 79Inkpen, Andrew, 246Isono, James, 266

JJackson, Terence., 79James, Harold, 23, 24, 189, 374Jaruzelski, Barry, 339, 340Jasperen, Frederick, 212Javidan, Mansour, 78Jemison, William, 246, 257, 259, 265,

266, 464Jenkins, Rhys, 118, 120Joachimsthaler, Erich, 287Johanson, Jan, 24Johnsson, Latham, Gerd, 84, 119Jokinen Tiina, 386, 393Jones Geoffrey, 24Jones, Jeannette, 166Jordan, Lisa, 453

KKandemir, Destan, 49Kandemir, Destan, 49Kang, Jun, Koo, 368Kaplan, Norton, 453Karch, Nancy, 287Karmokolias, Yannis, 212Katsoulakos, P, 118, 120Kaufmann, Daniel, 118, 120Kawelis, Pavos, 319Keller, William, 165, 274, 452Keller, William., 287, 288Kelly, Nataly, 288Kennedy, Robert, 6, 421Kets de Vries, 127, 386, 393, 396, 421Khanna, Tarun, 35, 37, 48–49, 392,

393Kharas, H, 49Khou, Julia, 246, 266Kiessling, Timothy, 452Kim, Chan, 139, 140, 164, 165, 211,

246, 265, 266, 465, 469, 470Kim, Daewan, 48, 49Kim, Soonhee, 340Kiss, Andrea, 319Kitching, John, 251, 265, 266Klincewicz, Krzysztof, 246Knight, Gary, 96, 165Kogut, Bruce, 211, 245, 246Kolk, Ans, 120, 121Koller, Thimothy, 189Kotabe, Masaaki, 319Kremenyuk, Victor, 79Krishna, L.N, 245–246Kröger, Fritz, 266Kuemmerle, Walter, 340Kulatilaka, Nalin, 211Kumar, Nirmalya, 339, 340

LLahiri, Nandini, 339, 340Lanes, Kersten, 266Lange, Glenn, Marie, 119



485INDEX OF NAMES

Langlet François, 23–24Lasserre, Philippe, 38, 48, 49, 189,

340, 368, 375, 383, 392, 394, 413, 414, 421

Latukefu, Alopi, 319Laurent, André, 53, 56, 77, 79Lavoie, Johanne, 393Lawrence, Paul, 25, 52, 78–79Lawson, Robert, 49Leal, Donald, 118, 119, 122Lee, Hyangsoo, 340, 349Lehni Markus, 89, 117, 120Leite, Carlos, 118, 120Leonard, Barton, Dorothy, 327, 339,

340Lessard, Donald, 265, 266, 347, 368,

468Levitt, Theodore, 268, 288Lewis, Richard, 58, 79Lhabitant, François Serge, 50Li, J, 340Li, Jiatao, 24, 44, 295, 296, 320, 340Lieberman, Marvin, 211, 212Liesch, Peter, 165Lindner, Andrew, 294, 319Lloyd, Reason, Lester, 148, 164, 165Lorenzoni, Gianni, 237, 246Lorsh, Jay, 52, 79Lowell, L. Bryan and J, 23–24Luermann, Timothy, 211, 212Luk, S.T.K, 393Lund, Suzan S, 320Luo, Yadong, 211, 212Luostarinen, Reijo, 164, 166Lynn. Isabella, 232, 246

MMadura Jeff, 368Magdeleine, Jocelyn, 319Magni Max, 48, 50Malnight, Thomas, 278, 287, 288, 421Mankin, Eric, 235, 246Manyika James, 307, 320Marceto, Alonso, 453Marx, Karl, 4, 24Mauborgne, Renée, 139, 140, 164,

165, 246, 265, 266, 465, 469, 470Mauri, Alfredo, 246Mauro, Paolo, 118, 120Mazaroll, T, 164, 165McDougall, Patricia, 165, 166McLaughlin, Kathleen, 287McLuhan Marshall, 4, 23, 24Mead, Margaret, 52, 79Medina, Danielle, 78Mei, Jianping, 368Melander, Erik, 451, 453Mendenhall, Mark, 79, 393, 394Meyer, Erin, 53, 54, 56, 57, 77, 79, 246,

266, 291, 293, 317, 319, 324, 339, 340, 463

Michaels, Ronald, 25Michel, Daniel., R. Salle and, 23, 24,

370, 388Micklethwait, John, 24Middleton, Stuart, 165Midgley, David, 319Mikko, Kosone, 164, 165Milberg, William, 318, 320Millar, Roderick, 368Miller, Robert, 212, 250, 253, 319Mirza, Hafiz, 24Mitchell, David1, 245, 246, 257, 265,

266Mitroff, Ian, 453Moffett, Michael, 368Monaghan Pau, 117, 120Montgomery, Cynthia, 421Montgomery, David, 211, 212Morley, Micael, 393Moss Kanter, Rosabeth, 246Mugha, Terryn, 148, 164, 165

NNarasimhan, Laxman, 48Narayandas, Das, 288Nichols, Martha, 95, 118, 120Niron, Hashai, 164, 166Noda, Tono, 287–288Novicevic, Miroland, 452

OOhmae, Kenichi, 8, 23, 25, 166, 268,

287, 288, 466Olshavsky, Richard, 25Oppenheim, Jeremy, 24Ormiston, Charles, 49Oviatt, Benjamin, 165–166

PPaauwe, Jaap, 394Palepu, Krishna, 35, 48–49Parker, Philip, 109, 249, 268, 287,

288Parsons, Andrew, 79, 394Patel, Dhiren, 452Pauly, Louis, 165, 452Pearce, Robert, 326, 339, 340Pélissié du Rausas, Matthieu, 320Peng, Mike, 25, 39, 40, 21, 212Perlmutter, Howard, 145, 164, 165Pernia, Ernesto, 48, 49Peters, Tom, 420, 421Piketty, Thomas, 451, 453Pilat, Borcuch, Mardalena, 319Pinson, Christian, 287, 288Pisany, Ferry Jean, 451, 453Piskorsi Nikolaj, 397, 421Plas, Géraldine, 117, 120Pope, Jeremy, 118, 121Porter, Lyman, 394

Porter, Michael, 25, 125, 135, 136, 139, 164, 166, 176, 177, 178, 186, 188, 189, 190, 319, 320, 324, 340, 466, 468, 469

Poy Seng Ching, 383, 393Prahalad, C.K., 25, 37, 48–49, 145,

164, 166, 181, 188, 189, 235, 246, 415, 420, 421, 465

Probert, Joselyn, 246, 266Pucik, Vladimir, 393, 421Puranam, Phanish, 340Purshe, William, 266Purushothaman Roopa, 48, 50

QQian, Zhengming, 24Qualls, William, 23, 25Quelch, John, 272, 287, 288, 394

RRaleigh, Clionadh, 451, 453Rangan Subramanian, 25, 232, 245,

247, 319–320Redding, Gordon, 53, 61, 78, 80, 188,

189, 191, 394Reed Hall, Mildred, 53, 77, 78Reich, Robert., 165, 235, 246, 452Reinert, Uwe, 49Reinhart, Forest L, 104, 118, 121Rennie, Michael, 165–166Resnick, Bruce, 368Retchman, René, 121–122Ricardo, David, 4, 12–13, 23, 25, 466Ricks, David, 51, 77, 79Rieger, F, 392, 394Riesenbeck, Hajo, 274, 287, 288Rigman, Tom, 212Ritzer’s George., 25Robertson, Roland, 25Robinson, William., 25Rodrik, Dani., 426, 451, 453Rogers, Jerry, 188, 189Ronen, Simcha, 53, 57, 79Root, Franklin, 212, 303Rosenweig, Philip, 394Ross, Jerry, 246Rossi, Carla, 340Rottenberg, Stephanie, 392, 394Rouse Ted, 49Rowley, Tim, 246Roxburg, Charles, 451, 453Rugman, Alan, 13, 23, 25, 162, 164,

166, 430, 451, 453Russ, Meir, 166

SSaari, David, 453Said, Rémi, 251, 320, 385, 424Sakkab Nabil, 340Salacuse Jeswald, 66, 67, 78–79



486 INDEX OF NAMES

Salehyan, Idean, 453Salle, Robert, 24Samek, Robert, 393Santos, Indhira, 332, 340, 438, 451,

453Scahus, Robert, 49Schaefer, Scott, 165Schein, Edgard, 52, 79Schmidheiny, Stephan, 120Schneider, Suzan, 51, 64, 79,

206–207, 212, 278Schule, Randallr, 393Schütte Hellmut, 45, 107, 121, 189,

268, 269, 287, 288, 408, 414, 420, 421, 463

Schwartz, Gordon, 288Schwartz, Kevin, 340Scullion, Hugh, 393Seurat, Sylvère, 339, 340Sheffield, Charles, 120, 453Shengliang, Robert, 340Shenkar, Oded, 53, 57, 79Shih, Stan, 415, 416, 421Shipilov, Andrew, 246Shirodkar, Abhay, 339Sigala, Marianna, 393Sinatra, Alessandro, 247, 266Singer, Mark, 451–452Singh, Harbir, 247, 266, 326Singh, Jasjit, 39, 207, 212Singh, Satwinder, 339, 340Sinha, Jayant, 49Sklair, Leslie, 4, 25Slone, Robert, 340Smith Ring, Peter, 118Smith Shi, Christiana, 287Smith, Craig, 121Smith, Kenneth, 266Solberg, Carl Arthur, 246Soubbotina, Talyana, 48, 49, 84, 121Spadini, Alessandro, 397, 421Spar, Deborah, 96, 102, 119, 246,

266Sparrow, Paul, 393Spekeman, Robert, 232, 245–246Staack, Volker, 340Stahl, Günter, 79, 375, 392, 394Stalk, Georges, 164, 166Stamenov, Kalin, 320Steen, Mattheew, 165Steinhubl, Andrew, 246, 266Steward, Pamela, 394Stiglitz, Joseph, 424, 450, 451, 454Stiles, Philip, 394Stonehill, Arthur, 368Stopford, John, 145, 164, 166, 397,

398, 420, 421

Stoyan Tanev, 165, 166Stumpf, Siegfried, 78, 79Sunshine, Russell, 68, 78–79Szulanski, Gabriel, 331, 340

T Tahilyani, Naveen, 48, 49Taleb, Nassim, 451, 454Tan, Ja, 49, 69Tanev Stoyan, 24–25Tanzi, Vito, 118, 121Tao, Zhigang 200–4., 266Taylor, William, 420, 421Teece, David, 339Terwiesch, Christian, 340Thill, George, 327, 339, 340Tichy, Noel, 421Tides, Setting, 452Tolstoy, Daniel, 247Toulan, Omar, 287Träm, Michael, 266Trap, Daniel, 84, 119Trevor, Jonathan, 394Tribewalla, Vikas, 287, 288Trompenaars, Alfons, 53, 55, 61, 64,

77, 79Tung, Rosalie, 372, 392, 394

UUsunier, Jean Claude, 78

VVahlne, Jan, Erik, 24Vaiman, Vlad, 394Vaish, Paresh, 211, 245Valla, Jean Paul, 24Van Ruysseveldt, Joris, 393Van Tulder, Rob, 120, 121, 340Vance, Charles, 392, 394Vanhonacker, Wilfried, 211, 212Varma, Suvir, 49Verdin, Paul, 166Vereecke, Andreé, 291, 293, 317, 319Vernon, Raymond, 321, 322, 339, 340Viallet, Claude, 265, 266, 368Viscio, Albert, 247, 257, 258, 266Vishwanath, Vijay, 49Vitaro, Richard, 247, 266Von Krogh, George, 247, 265, 266von Zedtwitz, Maximilian, 339, 340

WWack, Pierre, 451, 454Walker, Thomas, 78

Wallerstein, Immanuel, 4, 25Wang, Hayan, 44, 45, 49, 416, 421Wang, J.T, 421Watts, Philip, 120Webb, Allen, 118, 119Weerawardena, Jay, 165Wei, Shang, Jin, 118, 120, 121Weiman, Jens, 118, 120Welch, Lawrence, 164, 166Wells, Louis, 145, 164, 166, 302, 319,

320, 397, 398, 420, 421Welters, Carlijn, 120Wheeler, David, 82, 121–122White, James, 120, 133, 140, 185,

270, 271, 329, 336, 412, 454, 455, 457

Whitley, Richard, 53, 61, 64, 78, 80Willes, Pierre, 421Williamson, John., 48, 50Williamson, Peter, 33, 39, 49, 50, 287,

288, 340, 421, 438, 452Wilson Dominic, 48, 50, 211, 212,

245, 247Wilson, Keeley, 324, 339, 340Wilson, Thomas, 266Witt, Michael, 61, 78, 80, 188, 189,

191Woetzel, Jonathan, 320Wong, Y.H, 392, 394, 420Wong, Rieger, D, 392, 394Wooldridge, Adrian, 24Wouter, Ahina, 420, 421Wright, Patrick, 394Wurster, Thomas, 305, 306, 319

XXie, Zhenzen, 340Xu, Yi, 165, 340

YYahiaoui, Dorra, 393, 394Yamagushi, Takeo, 392, 394Yandle, Bruce, 122Yasheng, Huang, 48Yeung, Arthur, 421Yip, George, 23, 25, 166, 287, 288,

306, 307, 319, 320Yoshino, Michael, 232, 245, 247, 421Youval, Alsmon, 48, 50Yue, Deborah, 243, 274, 340

ZZaheer, Srilata, 164, 166Zeutchel, U, 78, 79Zoubir, Yahia, 50



487

INDEX of CoMPANIES AND oRGANISATIoNS

AAccenture, 280, 287, 304Acer, 40, 136, 161, 410–411, 415–417,

420–421Adidas, 106Agence Française de

Développement, 356Air France, 260Airbnb, 310, 318Airbus, 130, 219, 236, 278, 300, 366Alcatel, 19, 251, 263, 304Alfa, 42, 251Allianz, 274, 288Alstom, 280Alza, 229–230, 246, 253Amazon, 11, 108, 271, 298–299, 304,

308Amnesty International, 97–99, 106,

113–114, 119Australian and New Zealand

Academy of Management (AZAM), 165

Apple, 4–5, 19, 22, 106, 127, 141, 159, 263, 268, 271–273, 298–299, 356, 400

Asahi, 274Asea Brown Boveri (ABB), 280,

382–383, 386, 393, 421, 438Asia Pacific Economic Cooperation

(APEC), 114, 430, 443Asian American Free Labour

Association (AAFLA), 96, 102Asian Development Bank (ADB),

364Asian Development Bank (ADB),

364Aspen Institute, 113Association Of South East Asian

Nations (ASEAN), 11, 430, 443AT&T, 144, 271, 278AtKearney, 163, 319Aventis, 250, 260

BBangladesh Garments

Manufacturers and Exporters, 106, 174–175, 182, 429, 460

Bank for International Settlements,, 24

Bank for International Settlements,, 3, 24, 121

Basf, 335–336, 339, 407–408, 421Bayer, 14, 250, 253

Benetton, 202, 275–276, 288Bharti Airtel, 251Bhopal, 102Blablacar, 310–311Boeing, 130, 278, 299Bombardier, 403–404Booz-Allen Hamilton, 258, 340Boston Consulting Group, 23, 41,

48, 189Bridgestone, 131, 161British East India Company, 5British Petroleum (BP), 159British Telecom (BT), 144, 278Brookfield Global Relocation

Services, 79, 392–393BSR (Business for Social

Responsibilty), 105, 118–119Business Environment Risk Index

(BERI), 190Business Impact, 105Business Monitor Intenational

(BMI), 188, 190Business Monitor International,

188, 190BYD, 44–45

C Canon, 129, 438Cap Gemini, 278, 280Cargill, 195Carrefour, 22, 39, 104, 132, 134, 136,

143, 194–195, 295Caux Roundtable, 95, 101, 114CDC Capital Partners, 335, 365Center for Corporate Citizenship,

81–82, 103–105, 113, 120, 227, 239, 330

Centre for Asian Business Cases, 421Chaeron Pokphand, 42Ciba Geigy, 246Cisco Systems, 38, 230, 263, 304Citibank, 9, 142–143, 271, 278, 288,

410, 421Coca Cola (Coke), 37, 272Cochlear Pty, 151COFACE (Compagnie Française

d’Assurance pour le Commerce Extérieur), 188, 191, 355, 365

Colgate Palmolive, 371–372, 394Columbia Studio, 25, 28–29, 34, 189,

246, 252–253, 266, 319, 417Cornhill, 274Corning, 236–237

Corpwatch, 101, 117, 426, 452Council of Europe, 95

D Dabhol Power Corporation, 302, 320Daewoo, 37, 242–243Daimlerchrysler, 376Dell, 318Deloitte’s, 49Deutsche Telecom, 304Disneyland, 18

E Earth Policy Institute, 452E-Bay, 318ECGD (Export Credit Guarantee

Department), 355, 366Economic Intelligence Unit (EIU),

78–80, 122, 165–166, 189, 247, 266, 278, 280, 340, 368, 393–394, 421, 453

Economic Intelligence Unit (EIU), 190Electrolux, 133, 136, 266, 272, 458–459Elsewedyelectric, 42Embraer, 27, 42, 73Enron, 280, 302, 320Ericsson, 19, 129, 263, 278, 288Ernst & Young, 163, 291, 319Essilor, 154–155Etisalat Group, 109EU Emissions Trading Scheme (EU

ETS), 86, 119Euromedia, 107Euromoney, 367Euromonitor, 49, 458European Bank for Reconstruction

and Development (EBRD), 364European Commission (EC), 6, 119,

161, 430, 452European Economic Community

(EEC), 15, 430European Foundation for

Management Education (EFMD), 119

European Union (EU), 4, 7, 9, 11, 28, 85–87, 111, 119, 160, 174, 192, 276, 322, 356, 366, 385, 430, 443, 452

Eximbank (Export-Import Bank), 355, 366

F Facebook, 2, 9, 268, 271, 303–304,

308, 477



488 INDEX of CoMPANIES AND oRGANISATIoNS

Fatabella, 42Federal Credit Insurance

Association (FCIA), 355Fiat, 242Food and Agriculture Organization,

119Forrester Research, 304Foster, 103, 149, 237, 274, 307, 396, 449Framatome, 202France Telecom, 146Francolor, 246, 266Fraser Institute, 49FreemarketsOnline, 320Fuji Xerox, 229

GGallup International Association, 90Gartner, 304, 318GATT (General Agreement on

Tariffs and Trade ), 6–7, 9, 11Gemplus, xxvi, 150–151General Electric (GE), 5, 25, 14, 39,

159, 246, 251, 271, 302, 321, 460

General Motors (GM), 107, 219, 229, 241–243

Getinge, 249GE-Snecma, 219, 233Global Compact, xxi, 105, 115Global Insight, Global Leadership and

Organizational Behavior Effectiveness (GLOBE ), 7, 57–60, 77–78, 84, 93, 117, 131, 136, 142, 227, 268, 271, 335, 377

Global Sullivan Principles, 105Golden Agri Resources, 42Goodyear, 131, 142, 160, 161Google, 104, 106, 271, 304, 308GreenBiz, 113Greenpeace, 101–102, 114Gucci, 38, 276

HHaier, 27, 251, 455–463Harvard Business School, l, 24–25,

35, 104, 135, 141, 165–166, 179, 189, 191, 211, 246, 266, 288, 319–320, 340, 394, 420–421, 452, 463

Heineken, 272Hewlett Packard (HP), 106, 120, 278,

280, 327HSBC, 5, 104, 106, 129, 152–153Huawei, 42, 263, 304Human Rights Watch, 114Hyundai, 9, 40

IIBM, 8, 54, 236, 262, 271, 276, 278,

280, 304, 382, 411–412

IMD (International Institute for Management Development), 39, 190

Inditex, 311–312IndoMedia, 107Infosys, 27, 42INSEAD, 23, 39, 49, 79, 80, 107, 109,

119, 121, 207, 212, 243, 246, 266, 288, 319, 334, 340, 355, 370, 386, 388, 393, 407, 420–421, 463

Institute For The Future (IFTF), 452Intel, 8, 136, 271, 273Intergovernmental Panel on Climate

Change (IPCC), 431, 453International Service Systems A/S

(ISS), 402International Bank for

Reconstruction and Development, 453

International Chamber of Commerce (ICC), 355

International Finance Corporation, 11, 23, 101, 118, 120, 170, 367, 424, 435, 445, 450, 453

International Finance Corporation (IFC), 365

International Herald Tribune, 119International Labor Organisation

(ILO), 95–96, 98, 106, 115, 118, 120, 384

JJardine Matheson, 202Jollibee, 42JP Morgan, 266JVC, 235

KKennedy Round, 6, 421Kenya Flower Council, 106, 176Kocholding, 42Kyoto Agreement,107, 111, 216

LLafarge Holcim, 4Lenovo, 27, 262Li & Fung, 296Light Up The World (LUTW), 108–109Lockheed, 102Louis Vuitton Moet Hennessy

(LVMH), 38Lucent, 19, 251, 263, 304Lukoil, 42

M3M, 106, 410, 420, 438Maastricht (Treaty of), 13Maghreb Arab Union (MAU), 430, 443Mahindra & Mahindra, 38

Marks & Spencer, 25, 106, 311–312McDonald, 136, 271, 273, 281, 295McKinsey, 13, 23–25, 30, 48–50, 77,

117, 163, 166, 189, 211, 245–246, 251–252, 265–266, 280, 287–288, 303, 308–309, 319–320, 393–395, 397, 421, 452–453, 463

Mercedes-Benz, 28, 141, 268Merck Sharp and Dohme (MSD), 334Mercosur, 430, 443Michelin, 17, 131–132, 142–143, 161,

319Microsoft, 17, 19, 164, 263, 271–272,

276, 465Midland Bank, 259Millennium project, 436–438, 443,

449, 452Miniwatts Marketing Group, 320Mitsubishi, 40, 159, 215Monsanto, 250, 253, 380Moody’s Investor Service, 353MOSOP (Movement for the Survival

of the Ogoni People), 82Motorola, 19, 44, 236, 263, 321

NNational Intelligence Council (NIC),

425, 451, 453Natura Cosméticos, 283Natura Cosméticos, 283–284NEC, 263Nestlé, 3, 5, 14, 106, 129, 159, 271–272,

321, 323–326, 328, 340, 394New York Time, 101Nike, 8, 95–96, 102, 119, 275, 296Nissan, 130, 159, 214–217, 220, 222,

224–228, 230–235, 245, 262, 309, 343, 387, 421

Nokia, 5, 19, 44, 129, 251, 263, 304, 440

Nortel, 263, 304North American Free Trade

Agreement (NAFTA), 11, 13, 408, 430, 443

Nummi, 219, 229, 242

OOlam International, xx, xxvi, 407Oracle, 278, 297, 304Orange, 20, 278, 304Organization for Economic

Cooperation and Development (OECD), 6–7, 9, 23–24, 27–29, 33, 35–36, 45, 48–49, 84, 90–94, 99, 106, 115–118, 120, 148–149, 162, 164, 166, 170, 173, 183–184, 188, 191, 290, 318–320, 348, 355, 361, 365–366, 368, 426, 428–429, 449–451, 453

Otis Elevator Company-, 14–17, 22, 24



489INDEX of CoMPANIES AND oRGANISATIoNS

Oxfam Interanational, 114Oxford Economics, 24, 78–80,

119–121, 165–166, 189, 340, 421, 436, 449, 451, 453–454

PPanasonic, 9, 458–459Petronas, 27, 42Peugeot, 129, 242Pew Centter on Global Climate

Change, 113Philips, 17, 133, 136, 151Pirelli, 131Pixtech, 237Political Risk Services(PRS), 191Price Waterhouse Coopers (PWC),

451, 453Pricewater House Cooper, 451, 453Prince of Wales Business Leader

Forum, 105Procter & Gamble, 3, 129, 136, 396

QQualcomm, 251

RRanbaxy, 27Raytheon, 130RCA, 182, 321Renault, 130, 214–217, 220, 222,

224–228, 230–235, 245, 262, 309, 421

Renault Nissan, 214–217Reuters, 106, 304, 409Rio Tinto Zinc, 159Rome (Treaty of), 6, 15, 93, 430Royal Deutch Shell, 82, 102, 104, 108,

118–119, 121–122, 129, 159, 296, 371–372, 382, 436, 449, 451, 454

SSaatchi and Saatchi, 275, 278SAIC, 243Samsung, 4, 19, 37, 40, 124, 127–130,

217, 263, 272, 459SAP, 280, 297, 304Sasol, 42Saurer, 39Schneider Electric, 51, 64, 79,

206–207, 212, 278Siemens, 5, 48, 129, 159, 236, 237,

278, 309, 335–336, 339, 458Smithkline and Beecham, 259–260,

262, 266Snecma, 219, 232, 246Sony, 8–9, 17, 40, 129–130, 136, 246,

252–253, 266, 271–272, 321South African Brewery, 27, 250–251,

253

South African Brewery, 250, 274Southern African Development

Community, 430Standard and Poor’s, 353Star Alliance, 144, 218, 236, 456–457Starbucks, 106Sunna Design, 150–151Swatch, 136, 275–276, 281Swift, 236Swire, 202

TTata, 36, 37TCL, 37Tesco, 22, 143Teva-Allergan, 251The Economist, 268, 452Thomson Corporation, 235, 266,

275, 321Time Warner, 304Tokyo Round, 6Total, 97, 102, 120Toyo Ink, 246, 266Toyota, 40, 44, 129, 159, 219, 225,

229, 242, 271Toys R’Us, 106Transparency International, 35,

90–94, 99–101, 114, 117–118, 120–121, 310, 467, 479

Tyco, 421

UUber, 310–311, 318, 320United Nation Conference on Trade

and Development (UNCTAD), 3, 23, 25–27, 30, 41, 48–50, 131–132, 158–159, 166, 175, 178,

182, 188–189, 211, 250, 265, 319–320 United Nations Educational,

Scientific and Cultural Organization (UNESCO), 121, 424

United Nations Choldren’s Fund (UNICEF), 95, 118, 121

Unilever, 3, 5, 14, 17, 39, 103–104, 129, 136, 272, 281, 283, 286, 382, 396–397

Union Carbide, 102Union des Banques Suisses (UBS),

299, 377United Nations (UN), 25, 82, 84, 97,

101, 103, 105, 115, 117, 120–121, 131, 189, 320, 333, 340, 384, 427–428, 436–437, 443, 451, 454, 472, 479

United Nations Conference on Environment and Development (UNEP ), 87–88, 117, 121, 454

United Nations Office on Drugs and Crime(UNODC), 115, 451, 454

United States Environmental

Agency (USPA), 85, 117, 121Universal Studio, 51–52, 97–98, 105,

280, 426, 442, 472Unocal, 97, 120Uruguay Round, 6–7, 176, 384, 417,

430US Agency for International

Development(USAID), 365US Fireman’s Fund, 274

VVisa, 236–237, 271Vodafone, 20, 159, 271, 278Volkman, 39Volkswagen, 159, 242, 308, 329Volvo, 230, 273

WWal-Mart, 22, 39, 143, 271Washington Consensus, 32–33,

49–50Westinghouse, 202, 272Whirlpool, 132–133, 458World Bank, 7, 24, 29, 31–32, 34, 36,

48, 50, 74, 84, 87, 92, 95, 101, 118, 121–122, 170, 172, 174, 181, 186–190, 193, 322, 356, 365, 384, 424, 428–429, 451, 453–454

World Business Council for Sustainable Development, 81, 114, 117

World Economic Forum, 105, 175–176, 189–190, 193, 384, 424, 426, 434–435, 445, 448, 451, 454

World Resources Institute, 85–86, 122

World Trade Organisation (WTO), 4, 6–9, 11, 13, 23, 25, 319–320, 424

WPP Group/Young & Rubicam, 271, 275, 454

WWF( World Wild Fund), 84, 87, 117, 122

XXerox, 229

YYahoo, 304, 307, 350Yellow Tail, 139–140YouTube, 9, 268, 304

ZZain, 251, 253Zanussi, 266, 272Zara, 311–312Zee Entertainment, 402Zenith, 321



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