The document discusses the need for companies to adopt a "cosmopolitan approach" to be truly global. It notes that most people will never leave their home country, and news and culture is still largely domestic. It argues that while customers, employees, and suppliers are deeply rooted locally, managers must understand cultural differences across borders. The document presents strategies for adaptation, aggregation, and arbitrage to both address differences and exploit opportunities across markets. Finally, it stresses that developing cosmopolitan leaders requires management training, international experience, and appreciation of diversity rather than seeking to eliminate cultural distances between countries.
1. The Cosmopolitan
Corporation
Source: Pankaj Ghewmat (Harvard Business Review Press, 2011)
2. How Deep are the Roots
• “The truly global company has no
home base” – HBR Survey
• 90% of the world’s people will never
leave the country where they were
born
• 2% of all telephone calling minutes are
International
• 95% of the news people get is from
domestic sources
3. The case of ABB and News Corporation
• ABB – ASEA+ Brown, Boveri (Swiss)
ASEA -Almana Swenka Electrius Akitiepolaget
• Rupert Murdoch
4. Need for Cosmopolitan Approach
• Firm’s, Customers, Employees,
Investors, and Suppliers are deeply
rooted in their home country
• Need for managers to adopt
• Understanding the culture and
differences
5. The Law of Distance - Martin
Heidegger
• Differences in Geography, Culture etc.
• Reduce cross border interaction
• How about a global strategy and global
organization?
• Note the differences
• Understand the differences
• Never deny the existence of differences
8. Cosmopolitan Strategies – AAA
• Adaptation – Adjust to differences and
respond to local needs
• Aggregation – Overcome differences to
achieve economies of scale across
borders
• Arbitrage – Exploiting differences by,
buying low in one country and selling
high in the other
9. Use of Opportunities
• Global Growth Patterns
• Western Markets Slowing Down
• Western Companies Targeting India
and China
• Understanding the Differences
• Consider the Local Competitors
• Identify key Potential Markets
• Targeting 2-Tier and 3-Tier Cities
• Adaptation is Key
10. Creation of a Cosmopolitan
Corporation
• Need for a diverse management team
• Country level, Regional level and Global
level decisions
• Impact of foreign managers and
managing the diversity
11. Making of a Cosmopolitan Leader
• Globalizing Management Education
• Conceptual Frameworks
• Longer and Deeper Immersion
(Expatriation, UCLA Exe MBA)
• Projects and Networks – International
Projects
• Assessment Tools
12. “Global success requires that companies
appreciate diversity and distance rather
than seek to eliminate them”
Pankaj Ghemawat