Tag Archives: Redefining Global Strategy

R U Global — Resources for World Leaders: Redefining Global Strategy

Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter, by Pankaj Ghemawat. Boston: Harvard Business School Press, 2007.

Reviewed by Harold Henkel, Associate Librarian

Since the publication of The World is Flat in 2005, Thomas Friedman has emerged as the leading guru on what we are told is a new globalized world. In over 500 pages of unsourced anecdotes and recounted conversations, Friedman drives home his thesis that technology has created an unprecedented (flat) state of affairs, in which business and capital move around the world, unimpeded by distance and national borders. But is it all really so simple? Not according to professor of global strategy Pankaj Ghemawat, who has little time for Friedman’s book or method. In a revealing footnote, Ghemawat writes, “Friedman’s book is hard to engage with directly, since its 450-plus pages contain no tables, charts, footnotes, or list of references.”

Redefining Global Strategy is divided into two main parts. Part 1 is devoted principally to an exposition of the significance of the author’s thesis that “the current state of the world is one of semiglobalization: levels of cross-border integration are generally increasing and, in many instances, setting new records, but fall far short of complete integration and will continue to do so for decades.” The implication of a semiglobalized world is that there is no textbook for managing global operations. As it has ever been, international business entails added risk, and managers and entrepreneurs have to be able to think strategically, beginning with the question of whether they should globalize at all.

Having demonstrated how cultural, administrative, geographic, and economic differences still matter, Part 2 focuses on what Ghemawat calls the AAA strategies for global value creation:

  • Adaptation strategies that adjust to differences across countries.
  • Aggregation strategies that overcome differences across countries.
  • Arbitrage strategies that exploit differences across countries.
    • The final chapter of Redefining Global Strategy summarizes and recaps the main themes of the book. Ghemawat emphasizes that doing business internationally requires a strategy, and strategy involves hard analysis—not “playing pinball to the headlines” or reacting to “global bogeymen that don’t have a scientific basis.” The book concludes with a five-step process to help managers begin the process of competitive analysis and strategy formulation in global operations.

      Redefining Global Strategy is not a quick read. The author’s intended audience is business leaders and entrepreneurs whose decisions have consequences and therefore are in need of a serious and authoritative consideration of the subject. To decision-makers who prefer to take Thomas Friedman and others like him as guides to the future, Ghemawat has this warning: “Buying into this version of an integrated world—or worse, using it as a basis for policymaking—is not only unproductive. It is dangerous.”1

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      1Pankaj Ghemawat, “Why the World Isn’t Flat,” Foreign Policy no. 159 (March 2007): 60.