Global success requires that companies appreciate diversity and distance rather than seek to eliminate them
- Unbalanced Growth : The threat of protectionism brought on by persistently high unemployment, particularly in developed countries.
- New age of secession on tribalism
- The aftermath of the financial crisis of 2008 -> A reassessment of what it means to be a global manager or corporations.
- Immanuel Kant : ' Abandoning allegiances to nation, race, and ethos ' in favour of world citizenship.
- Guru Kenichi ohmae - ' The Invisible Continent' (Book)
-> Depicting a world in which businesses largely ignore geographic boundaries when serving markets and building supply chains.
The Reality of Roots
- The vast majority of firms are deeply rooted in their home countries.
- The icons of globalisation are less global than the rhetoric suggests.
- The most of people don't leave their countries where they were born in.
- Strategy : in the medium term companies should emphasise adaptation more than aggregation more than aggregation or arbitrage.
- Organisation : Companies must think about how to reduce or exploit external difference by managing internal, organisational distances.
- People : Corporations will have to develop a cosmopolitan mind-set in people who have normal or typical attitudes and biases.
- It is not just firms that are deeply rooted in their home countries; It is their employees and customers.
- World 1.0 : Distinct nation-states
World 2.0 : The stateless ideal
World 3.0 : The reality
Building a Cosmopolitan Understanding
- A rooted map resembles world maps that size countries according to measures such as population and GDP.
-> You need to make comparisons across maps and think about what kinds of distance influence the patterns they reveal.
- Distance is important on international trades in terms of the weight of products
The more expensive the products are , The further They go.
- Rooted mapping is not just a global exercise. You need to analyse differences across regions and within countries as well.
- Trade agreements and new communications and transportation technologies can contract distance ( though the impact of new technologies is often overblown)
- Companies are realising that widely dispersed, low-cost supply chains make them vulnerable to protectionism, rising transportation costs, and quality issues.
Crafting the Cosmopolitan strategy
- AAA strategies : Adaptation, Aggregation, Arbitrage
> Adaptation : Try to adjust differences to between countries and respond to local needs.
> Aggregation strategies : Attempt to overcome differences to achieve economies of scale and scope
across national borders.
> Arbitrage : seek to exploit differences - by say, buying low in one country and selling high in
another.
- In the medium term it may make sense for many companies to emphasise adaptation more than aggregation or arbitrage, given the public current sentiment toward globalisation.
- The rationale for strengthening adaptation
1. If companies become more respectful of differences, people may be less inclined to demand protectionism.
2.When companies acquire foreign assets with little apparent rhyme or reason, as many did before the crash, they come across to the public as voracious and greedy.
-> Showing regard for the sovereignty, uniqueness, and internal diversity of foreign markets can go a along way toward improving companies' reputations and, more broadly, the environment in which business as a whole has to operate.
3. Adaptation strategies are better suited to the opportunities opened by the shift in the locus of global growth.
Designing the Cosmopolitan Organisation
- The most critical ingredient in a world that demands adaptation is a diverse management team.
- When it comes to innovation, Many firms are similarly readjusting internal distances to reduce their sensitivity to external distances.
- Corporate R&D labs located close to home in advanced markets may excel at creating technology, but firms seeking to develop products and business systems for markets abroad will increasingly need the informed creativity that only boots on the ground in these markets can provide.
- Simply adding foreigners to the management ranks won't make a firm cosmopolitan
1. Their numbers must reach a critical threshold; a few token foreigners will probably have little impact.
2. When you put people of various nationalities together in a single corporation, you have to manage that diversity very carefully.
Cultivating the Cosmopolitan Leader
- Companies can help their employees develop cosmopolitan attitudes by pulling on four keys
1. Conceptual frameworks
- Bring order to the mass of facts about foreign countries and help fine-tune excutives' perceptions.
2. Longer and deeper immersion
- It is necessary to develop a true appreciation of how the culture, politics, and history of a region affect business there, that tends to require months, not weeks or days.
3. Projects and networks
- that cross international borders soften the ethnocentrism of the executives that participate in them.
4. Assessment tools
- can help companies get a read on mangers' global skills and knowledge, and target areas for improvement.
- A handle on levels of and changes in cross-border integration of markets of various types.
- An understanding of how differences between countries can influence cross-border integrations and how to look at them at the industry level.
- Awareness of the benefits of additional cross-border integration, and some perspective on the problems it's alleged to produce.
WE SHOULD have been skeptical about the false ideal of statelessness from the start
- Unbalanced Growth : The threat of protectionism brought on by persistently high unemployment, particularly in developed countries.
- New age of secession on tribalism
- The aftermath of the financial crisis of 2008 -> A reassessment of what it means to be a global manager or corporations.
- Immanuel Kant : ' Abandoning allegiances to nation, race, and ethos ' in favour of world citizenship.
- Guru Kenichi ohmae - ' The Invisible Continent' (Book)
-> Depicting a world in which businesses largely ignore geographic boundaries when serving markets and building supply chains.
The Reality of Roots
- The vast majority of firms are deeply rooted in their home countries.
- The icons of globalisation are less global than the rhetoric suggests.
- The most of people don't leave their countries where they were born in.
- Strategy : in the medium term companies should emphasise adaptation more than aggregation more than aggregation or arbitrage.
- Organisation : Companies must think about how to reduce or exploit external difference by managing internal, organisational distances.
- People : Corporations will have to develop a cosmopolitan mind-set in people who have normal or typical attitudes and biases.
- It is not just firms that are deeply rooted in their home countries; It is their employees and customers.
- World 1.0 : Distinct nation-states
World 2.0 : The stateless ideal
World 3.0 : The reality
Building a Cosmopolitan Understanding
- A rooted map resembles world maps that size countries according to measures such as population and GDP.
-> You need to make comparisons across maps and think about what kinds of distance influence the patterns they reveal.
- Distance is important on international trades in terms of the weight of products
The more expensive the products are , The further They go.
- Rooted mapping is not just a global exercise. You need to analyse differences across regions and within countries as well.
- Trade agreements and new communications and transportation technologies can contract distance ( though the impact of new technologies is often overblown)
- Companies are realising that widely dispersed, low-cost supply chains make them vulnerable to protectionism, rising transportation costs, and quality issues.
Crafting the Cosmopolitan strategy
- AAA strategies : Adaptation, Aggregation, Arbitrage
> Adaptation : Try to adjust differences to between countries and respond to local needs.
> Aggregation strategies : Attempt to overcome differences to achieve economies of scale and scope
across national borders.
> Arbitrage : seek to exploit differences - by say, buying low in one country and selling high in
another.
- In the medium term it may make sense for many companies to emphasise adaptation more than aggregation or arbitrage, given the public current sentiment toward globalisation.
1. If companies become more respectful of differences, people may be less inclined to demand protectionism.
2.When companies acquire foreign assets with little apparent rhyme or reason, as many did before the crash, they come across to the public as voracious and greedy.
-> Showing regard for the sovereignty, uniqueness, and internal diversity of foreign markets can go a along way toward improving companies' reputations and, more broadly, the environment in which business as a whole has to operate.
3. Adaptation strategies are better suited to the opportunities opened by the shift in the locus of global growth.
Designing the Cosmopolitan Organisation
- The most critical ingredient in a world that demands adaptation is a diverse management team.
- When it comes to innovation, Many firms are similarly readjusting internal distances to reduce their sensitivity to external distances.
- Corporate R&D labs located close to home in advanced markets may excel at creating technology, but firms seeking to develop products and business systems for markets abroad will increasingly need the informed creativity that only boots on the ground in these markets can provide.
- Simply adding foreigners to the management ranks won't make a firm cosmopolitan
1. Their numbers must reach a critical threshold; a few token foreigners will probably have little impact.
2. When you put people of various nationalities together in a single corporation, you have to manage that diversity very carefully.
Cultivating the Cosmopolitan Leader
- Companies can help their employees develop cosmopolitan attitudes by pulling on four keys
1. Conceptual frameworks
- Bring order to the mass of facts about foreign countries and help fine-tune excutives' perceptions.
2. Longer and deeper immersion
- It is necessary to develop a true appreciation of how the culture, politics, and history of a region affect business there, that tends to require months, not weeks or days.
3. Projects and networks
- that cross international borders soften the ethnocentrism of the executives that participate in them.
4. Assessment tools
- can help companies get a read on mangers' global skills and knowledge, and target areas for improvement.
- A handle on levels of and changes in cross-border integration of markets of various types.
- An understanding of how differences between countries can influence cross-border integrations and how to look at them at the industry level.
- Awareness of the benefits of additional cross-border integration, and some perspective on the problems it's alleged to produce.
WE SHOULD have been skeptical about the false ideal of statelessness from the start
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