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StateofGlobsalisationin2019
• PankajGhemawat
• StevenA.Altman
Globalization,sincetheBrexitandTrumpshocksof2016,hasbeensha
pedbya
tugofwarbetweeneconomicfundamentalsandpolicythreats.Butpre
dictions
thatglobalizationwouldcollapseunderawaveofeconomicnationalis
mhave
provennomoreaccuratethanproclamationsofaflatworldthatdomina
tedthe
globalbusinessdiscourseadecadeago.ThenewDHLGlobalConnect
edness
Index(whichweco-
authoredwithPhillipBastian)demonstratesthattheworld
ended2017moreglobalizedthaneverbefore.While2018broughtnew
obstacles—fromtarifftiffstoblockedacquisitions—
theresultwasashifting
playingfieldratherthananendtoglobalbusinesscompetition.Howsh
ould
executivesthinkaboutbuildingtheirbusinessesamidsuchturbulence
?Since
smartbusinessdecisionsdependonaccurateperceptionsoftheenviro
nment,
executivesshouldbeginwithaclear-
eyedviewofhowglobalizationmeasures
aretrending.
In2017,stronggrowthacrossmostoftheworldpropelledtheDHLGlo
bal
ConnectednessIndextoarecordhigh.Theproportionsoftrade,capital
,
information,andpeopleflowcrossingnationalbordersallincreased
significantly.Thelasttimethathappenedwas2007.
In2018,however,majorpolicythreatsturnedfromrhetorictoreality.
Disputes
betweentheUnitedStatesanditslargesttradepartnerspromptedtit-
for-tat
tariffincreases.Meanwhile,countriestightenedscreeningofforeign
corporate
takeovers,advanceddatalocalizationpolicies,andclampeddownon
immigration.Whilewedonotyethavecomplete2018data,thereisevi
dence
thatsuchdevelopmentshavebeguntoaffectsomeinternationalflows.
Trade
continuedgrowingbutataslowerpacewhileforeigndirectinvestment
(FDI)
flowsdeclined.
Withglobalization’sstrongmomentumrunningupagainstpowerfulh
eadwinds,
itisimportanttorecognizethatmarketintegrationisstilllimitedinabs
olute
terms.Theforeignoperationsofmultinationalfirmsaroundtheworld
generate
onlyabout9%ofglobaloutput.Exportsofgoodsandservicesaddupto
29%of
worldGDP,buteventhatfigurecomesdowntoabout20%ifweadjustfo
r
outputthatcrossesbordersmorethanonce.Surprised?You’reingood
company.
Managerswesurveyedacrosssixcountriesin2017estimatedthese
internationalproductionandtrademetricsat37%and41%,respective
ly.
Thisstrikingjuxtapositionofglobalflowsrunningclosetoall-
timehighsbutstill
fallingfarbelowmanagers’perceptionshighlightsboththeopportuni
tiesand
thechallengesthatglobalizationcontinuestoposeformultinationalfi
rms.
Succeedingacrossbordersanddistancesisstillmuchmoredifficultth
an
winningathome,butsomeofthesamebarriersthatconstraininternati
onal
flowsalsoincreasetherewardsforcompaniesthatfindwaystooverco
methem.
Tohelpbusinessleadersnavigatethrough—andevenprofitfrom—
globalization’sturbulence,weofferrecommendationsforstrategy(h
owto
compete),presence(wheretocompete),architecture(howtoorganize
),and
non-marketstrategy(howtoengagebetterwithsociety):
HowtoCompete?Ifthreatstoglobalizationcontinuetomount,firmsw
ith
marginalcompetitivepositionsabroadareespeciallyvulnerable.As
Warren
Buffetlikestosay,“youonlylearnwhohasbeenswimmingnakedwhen
thetide
goesout.”Asthepolicyenvironmentcontinuestoshift,avoidthetemp
tationto
respondtoeachshort-
rundevelopment.Butdothinkthroughwhetheryour
companyhasalong-
termpathtosufficientadvantagesoveritscompetitorsto
stayinthegame.Ifnot,astrategicretreatmightbewarranted.
Morespecifically,considerwhetheryourcompanyneedstorebalance
across
thetime-
testedinternationalstrategiesofaggregation(leveragingscalable
assetsacrosscountries),arbitrage(exploitingdifferences,e.g.inlabo
urcosts),
andadaptation(adjustingtodifferences).Aggregationandarbitraged
irectly
createvalueacrosscountries,sothinkfirstaboutyourapproachtothos
etwo
strategies.Presenttrendssuggestmanyfirmsmayneedtotilttoward
aggregationoratleasttobemorejudiciousintheirrelianceonarbitrage
.Note
howthe“newNAFTA”(UnitedStates-Mexico-
CanadaAgreement)reduces
opportunitiesforarbitrageinautomotivemanufacturingbylimitingt
heuseof
labourpaidlessthan$16perhour.
Adaptationcanextendthegeographicreachofaggregationandarbitra
ge,butit
comesatacostintermsoflostscaleeconomiesordiminishedaccesstof
oreign
inputs.Whenbarrierstoglobalizationrise,boostingadaptationvialoc
alizationis
alogicalresponse,butonewithclearlimits.Ifyouhavetolocalizesom
uchthat
younolongerhaveasignificantadvantageoverlocalcompetitors,you
mayhave
toreconsidertheoptionofretreatingfromsomemarkets.
WheretoCompete?Inanimperfectlyintegratedworld,whereyousho
uldgo
dependsverymuchonwhereyouarecomingfrom.Abouthalfofallthe
internationalflowswetrackonthe2018DHLGlobalConnectednessin
dextake
placebetweencountriesandjusttheirtopthreeoriginsanddestination
s,which
areoftenneighbouringcountries.Evenifwelookattheworld’slargest
multinationalsrankedbyforeignassets,thesubsetofthesefirmsthatr
elease
country-by-
countrysalesdatamakeabout60%oftheirrevenuesinjustfour
countries(athomeandintheirtopthreeforeignmarkets).So,thequesti
onof
wheretocompeteisasalientoneforvirtuallyeverymultinationalregar
dlessof
size.
Prevailingpolicytrendspointtoselectivechangesincountries’openn
essto
internationalbusiness.TradeandinvestmentbetweentheUnitedStat
esand
Chinaisinthecrosshairs,butbarriersarecomingdownbetweenmanyo
ther
countries.Severalmajortradeagreementsweresignedin2018,includ
ingthe
11-countryComprehensiveandProgressiveAgreementforTrans-
Pacific
Partnership(CPTPP),theAfricanContinentalFreeTradeAgreement
(AfCFTA),
andtheEuropeanUnion-JapanEconomicPartnershipAgreement.
Thesetrendsimplythatfirmsshouldcontinuetoprioritizemarketsby
weighing
theiropportunitiesinparticularcountriesagainstthecultural,
administrative/political,geographic,andeconomic(“CAGE”)dista
ncesbetween
them.What’snewisthatadministrative/politicaldistancesarechangi
ngfaster
thantheyusuallydo.Firmscannotreconfiguretheiroperationswithea
chshiftin
avolatilegeopoliticalenvironment,butnowmaybethetimetoinvesti
nnimbler
supplychains,toreviewcontingencyplanning,andsoon.Whiletradet
ensions
arealreadycrimpingglobalgrowth,somefirmsandevensomecountri
escould
profitfromthem.TheInternationalMonetaryFund,forexample,pred
ictsshort-
rungainsforCanada/Mexico,theEurozone,andJapanfromtariffesca
lation
betweentheUSandChinaundersomescenarios.
HowtoOrganize?Ifyourcompanychangesitscompetitivestrategyor
its
geographicfootprint,adjustmentstoitsorganizationalarchitecture
mayneedto
follow.AtilttowardaggregationcouldrequirestrengtheningyourR&
Dfunction
tobolsteryourtechnologicaledge.Boostingadaptation,ontheotherh
and,
usuallyimpliesfortifyingtherolesofin-
countryleadersabroad.Andanymajor
shiftinacompany’sgeographicfootprinthasknock-
oneffectsforreportingand
decision-makingstructures.
FURTHERREADING
Oneconvenientwaytothinkaboutpotentialorganizationalchangesis
interms
ofthreequestions:Whatstructure?Wholeads?Andhowdoweworkto
gether?
Structuralchangesarethemostdisruptive,butmorecomplexstrategie
s,suchas
thosecombiningsubstantialamountsofaggregationandadaptation,o
ften
requiremorecomplexorganizationalstructures.Companiesthatado
ptthem
oftenorganizebyregionoremploymatrixorganizations.Turningtow
holeads,
manymultinationalshavelongstandingdeficitsintermsofnationaldi
versity.
Theirseniorrankslookmuchmoreliketheirhomecountriesthantheirt
arget
markets.Ifadaptationisapriority,amorerepresentativeleadershipte
ammay
berequired.Andcarefulconsiderationofhowpeopleworkacrossunit
shelpsto
avoidexcessivefocusonthelinesandboxesoftheorganizationalchart
.Thinkin
termsofhowtolinkrelationships,incentives,andinformationflowsto
bring
peopletogetheracrossgeographicandfunctionallines.
HowtoEngageBetterwithSociety?Thebacklashagainstglobalizatio
nisalso,
inpart,abacklashagainstbigbusiness.Accordingtothe2018Edelman
Trust
Barometer,however,thepublicstilltrustsbusinessmorethangovern
ment,and
themajorityofrespondentsfeltthat“CEOsshouldtaketheleadonchan
gerather
thanwaitingforgovernmenttoimposeit.”Forfirmsoperatingacrossp
olitical
divides,suchasUSmultinationalsinChina,thisrequiresaleadertowa
lka
tightropebetweencompetingnationalinterests.Andcompetinginter
estswithin
countriesexacerbatethechallenge.
Tokeepyourbalance,don’tfallfortheillusionthatyourcompanycanb
e
regardedasalocalfirminallofitsmarkets.Emphasizetherealbenefits
your
companybringstothecountrieswhereitoperates,butdon’tfeignfalse
allegiances.Rememberthatmembersofthepublictendtocarefarmore
about
citizensoftheirowncountrythantheydoaboutforeigners.Accordingt
oone
survey,Americanswouldbemuchmoresupportiveofahypotheticaltr
ade
policythataddsonejobintheUSattheexpenseof1000lostabroadthan
a
policythatsacrificesonejobintheUSbutcreates1000abroad.Insucha
context,
aleaderwhotriestobea“citizenoftheworld”islikelytobeviewed,asU
K
PrimeMinisterTheresaMayfamouslyputit,asa“citizenofnowhere.”
Furthermore,sincemostbusinessisstilldomesticratherthaninternati
onal,
muchofthesocietalangeraboutglobalizationreallyhasdomesticroot
causes—
andcanonlybeaddressedthroughharddomesticpolicycompromises.
Concerns
aboutinequalityintheUS,forexample,canhardlyberesolvedbyreduc
ing
importssincetheUSisalreadytherichcountrythatimportstheleastrel
ativeto
thesizeofitseconomyandstillranksnearthetoponinequality.Engagi
nginthe
domesticpolicyarenaabouttechnologicalchange,taxpolicy,labour
market
regulation,andsoon,canbeperilousforeventhemostwell-
intentionedleaders,
butbusinessleadersneedtoweighintoadvancethesedebates.
Wecannotpredictwithconfidencewhetherthecomingyearwillbring
ahigher
oralowerlevelofglobalization.Butwecansafelysaythatinternationa
lflows
andtheconstraintsthatbordersanddistanceimposeuponthemwillbot
h
continuetomatter.So,thebiggestwinnersregardlessofwhethergloba
lization
goesupordown,arelikelytobecompaniesthatembraceglobalization’
s
complexityratherthanpurelylocalorglobalvisionsoftheirbusiness
environments.
Page Number
Group Members Names
Group Number
Class
Date
Project
Title
Introduction
[Introduce the company/business and Six Sigma, ISO 9000, or
OSHA]
Issues
[Discuss the issues that the company/business experienced]
Solution
s
[Discuss the solutions that were used to handle the issues]
Conclusion
[Summarize your findings]
Lessons Learned
[What lessons have you learned from your research?]
[Choose one] Works Cited, Bibliography, References
HOLMES INSTITUTE
FACULTY OF
HIGHER EDUCATION
HC3031 Trends in the Global Business Environment
Assignment 1 Individual report
Assessment Details and Submission Guidelines
Trimester T1 2019
Unit Code HC3031
Unit Title Trends in the Global Business Environment
Assessment Type Assignment 1
Assessment Title Individual Report
Purpose of the
assessment (with ULO
Mapping)
Students are required to construct a mini-Literature Review of
any one article from
week 1 to 6 and submit as a report.
Weight 20 % of the total assessments
Total Marks 20
Word limit Not more than 1500 words
Due Date Week 6 Friday 11.59 pm
Submission
Guidelines
due date
along with a completed
Assignment Cover Page.
-
pt Arial font and 2 cm
margins on all four sides of your page with appropriate section
headings and page
numbers.
reference sources must be cited in the text of
the report, and
listed appropriately at the end in a reference list using Harvard
referencing style.
Page 2 of 5
HC3031 Trends in the Global Business Environment
Assignment 1 Individual report
Assignment 1 Specifications
Assignment Structure:
The articles selected as the ‘gateway’ to the literature on the
various topics are nominated in the
Lecture/Tutorial Schedule. Choose one of these articles from
week 1 to 6 as your core article.
Provide a brief summary of the core article enough to identify
four key questions arising from that article
which you will research.
Identifying keywords in the article will also assist your further
research.
Using Proquest, do a literature search identifying at least one
article relevant to each of the four key
questions that you have identified. Then summarize each of the
articles you have linked to the four key
questions and demonstrate its link to the question you have
identified in the core article.
You are actually constructing a mini-Literature Review. You
must complete it with a Bibliography in
Harvard referencing style.
Following elements would help students construct the individual
report
Introduction: The introduction includes a statement of the
problem, briefly explains the
significance of your topic study and acts as a way to introduce
the reader to your
definitions and background.
Body: The body of the review identifies the findings of studies
that have been conducted
on the topic.
General: In general, the assignment shows a sense of direction
and contains a definite central
idea supported with evidence. The writing is logical and the
ideas are linked together in a
logical sequence. The ideas are put together in a way that is
clear to the writer and to the
reader. The assignment is not just a listing of articles or
researches but rather a flowing
narrative incorporating both prose and citations.
Discussion: The discussion summarizes the body of your
literature review and highlights the
most important findings (in your opinion). There is a sense of
completion to the whole piece
in this section. Conclusions are drawn based on your analysis.
Conclusion: There is a consensus or disagreement on the topic.
The discussion includes any
strengths and weaknesses in general of the research area. You
discuss implications of the findings
and/or areas for further research.
Format: The paper, including all citations, headings and the
reference page(s), follows
Harvard format. The reference page contains a bibliographic list
of the sources of information
used and cited in your paper.
Page 3 of 5
HC3031 Trends in the Global Business Environment
Assignment 1 Individual report
Marking criteria
Marking criteria Weighting
INSERT DETAILS
Introduction 2
Body 4
General 4
Discussion 4
Conclusion 3
Format: 3
TOTAL Weight 20%
Assessment Feedback to the Student:
Page 4 of 5
HC3031 Trends in the Global Business Environment
Assignment 1 Individual report
Marking Rubric
Excellent
(4)
Very Good
(3)
Good
(2)
Satisfactory
(1)
Unsatisfactory
(0)
Introduction
Statement of
problem
introduced with
explanation of
significance to
the topic
Statement of
problem
introduced
briefly
Attempted to
introduce
statement of
problem and
significance to
the topic
Background
information
written, but
unclear
Does not meet the
criteria
Body Clearly identified
the finding of
studies
conducted for
the topic
Finding of
studies
identified
Good attempt
in identifying
the topic
questions
Finding
questions
unclear
Unrelated finding
and questions to
the topic
General In general, the
assignment
shows a sense
of direction and
contains a
definite central
idea supported
with evidence
The ideas are
put together
in a way that
is clear to the
writer and to
the reader
The
assignment
is just a
listing of
articles or
researches
A good
attempt at
constructing
central idea
but not
supported
with evidence
Lacks a sense of
direction, no
central idea
Discussion Excellent
summary of
body of your
literature
review, most
important
findings
highlighted
There is a
sense of
completion to
the whole
piece in this
section.
Conclusions
are drawn
based on
analysis
Well
summarised
literature
review
Lacks sense of
completion,
conclusions
not drawn
Unclear findings
Conclusion Well discussed
consensus or
disagreement
on the topic
Discussion
includes
strengths and
weaknesses of
the research
area
Implications
of the finding
discussed well
Findings
discusses
vaguely
Unrelated,
unsupported
findings
Format Includes all
citations,
adequate
proquest
references in
Harvard style,
meets all the
academic writing
elements
Inadequate
proquest
references,
Harvard
referencing
followed,
meets
academic
writing
elements
Harvard
referencing
followed,
meets
academic
writing
elements
Harvard
referencing
not evident,
several
academic
writing
elements
missing
Harvard
referencing not
followed, does not
meet academic
writing elements
Page 5 of 5
HC3031 Trends in the Global Business Environment
Assignment 1 Individual report

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