Business Today

The world not-so-flat

A voice of reason in a world swept up in the (Tom) Friedman mantra.

     Print Edition: January 27, 2008

Redefining Global Strategy
Redefining Global Strategy

By Pankaj Ghemawat
Harvard Business
School Press
Pp: 257
Price:$29.95 (Rs 1,198)

Congratulations, Pankaj Ghemawat. Congratulations for keeping your head and sight in a world that so completely believes that it is flat. And congrats, most of all, for having the courage to tell managers what they really need to know: that the world is a lot flatter these days, but it is not as flat as what some would have us believe. To globe-trotting managers of multi-national corporations, the premise of Ghemawat’s (professor of global strategy at IESE Business School in Barcelona) argument would have been long obvious. Despite tariffs around the world coming down, information technology connecting more people around the globe than ever before, and the world becoming a global village, it’s a fact that the parts that make the globalised whole are, while linked, quite different from each other. Cultures, customs, regulations, politics, beliefs, varying levels of education and prosperity all mingle in complex ways to create barriers that can either stymie or force change in the best thought out global strategy. Examples of this in India range from Posco’s current troubles with regulators to McDonald’s McAloo burgers to Citibank’s Suvidha bank account. Conquering global markets is not as simple as catching the next flight to Delhi or Shanghai. If you need further proof, just consider the impasse in world trade talks.

In Redefining Global Strategy, Ghemawat argues that the world is not flat but semiglobalised, and that borders still exist and they matter when it comes to strategy making. However, instead of focussing too much on the physical boundaries, Ghemawat, who joined the Harvard faculty when he was 23 (he’s still with Harvard, though on leave), urges managers to look at global differences in terms of a “CAGE” framework: that is, cultural, administrative/political, geographic, and economic dimensions. This framework, he argues, will make differences visible, help understand the liability of foreignness, compare foreign competitors and discount market sizes by distance. In other words, it will help managers focus on the differences that matter the most to their respective industries. But the tool that managers are likely to find most useful is Ghemawat’s “Adding value scorecard”. Using the celebrated example of Mexican cement giant, Cemex, the author explains what Adding is all about: adding volume, decreasing costs, differentiating industry attractiveness, normalising risks, and generating and deploying knowledge.

If one distils what Ghemawat is telling managers, it is not to rush into globalisation just because everyone else seems to be doing so. Instead, they should consider the value that such moves are likely to generate. In a world where globalisation has been adopted as an unquestioned truth, that’s sane advice.

— R. Sridharan

India arriving
India arriving

By Rafiq Dossani
AMACOM
Pp: 291
Price: $24 (Rs 960)

The title suggests the theme of the book quite clearly. India Arriving is yet another book that traces this country’s tortuous history from Independence, through the years of socialist stagnation to the current era when things at last seem to be moving along. The book, which touches all the bases, from the rising influence of the individual states in the Union, to the diverse outcomes of federalism, to faith and tolerance, etc., essentially offers an NRI’s take on India. The language is lucid and it reads well. Only, an informed reader will spot numerous howlers that would be more at home in a book written in the 1970s than now. For example, the author suggests that the giant cutouts of Tamil politicians in Chennai are, in a subliminal manner, a way to get the upper castes to pass by their feet. Then, he says, Indira Gandhi went back on her Garibi Hatao programme by, among other things, not raising taxes. This particular howler is all the more surprising since Dossani was, at one point, editor of a leading Indian business magazine. A cursory question to one of his former (and older) colleagues would have elicited the answer that Indira Gandhi’s regime raised income taxes to 90 per cent-plus levels.

You can read it for the markers and for some of the concerns it raises, but otherwise, it really is old wine in a new bottle.

Arnab Mitra

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