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Executive Interviews: Interview with Pankaj Ghemawat on Global Strategy
January 2008


Pankaj Ghemawat
Anselmo Rubiralta Professor of Global Strategy at IESE Business School
the Jaime and Josefina Chua Tiampo Professor of Business Administration at the Harvard Business School.


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  • What changes should global companies be prepared for in the next decade or do you think little change is ahead?
    What will persist, for the next few decades at least, is the reality of semiglobalization. But within that frame, here are some broad pointers about how a company might improve on the common expedients of sailing in one direction until striking a sandbar, playing pinball to the headlines, or simply marking time:

  1. Anticipate bumps and detours, even if you do believe that the world will eventually become much more integrated. Volatility of this sort is

    relation to the BRIC economies that Friedman and others emphasizes as centers of value creation in the 21st century.But even companies that are supposed to be sophisticated about emerging markets trip up on this point by entering at the top of the cycle and exiting at the bottom. (U.S. companies have a particularly bad reputation in this regard.)

  1. Pay attention to other predictable surprises as well. A number are in the air as far as the general global environment is concerned: global warming, different kinds of meltdowns in the Middle East, China and India, and the United States, among other possibilities, a global liquidity crisis, a general sociopolitical backlash against globalization, and so on. Notions of a global governance gap reinforce the idea that a shock of this sort might have a persistent effect. How many such shocks is your company prepared for?

  2. Add to predictive power by taking things down to the industry and company level. Shocks, cycles, and trends vary greatly across industries and companies in their effects, in ways that greatly reduce the usefulness of trying to fit one world-historical conception to all of them. Focus on the risks and questions that are most likely to affect your company, and how they will do so. Thus, even the effects of something as potentially far-reaching as global warming depend on whether one looks at the issue from the perspective of a financial investor, a construction firm, an automaker (whose reaction would also depend on its focus on large vs. small cars) or a potential supplier of cleaner energy, to cite some varied examples.

  3. Recognize the importance of business in shaping broad outcomes-including those related to the future of globalization. The previous points might have seemed to suggest that outcomes will unfold independently of what businesses decide to do. But for many key uncertainties, that is clearly not the case. In particular, business leaders cannot and should not stick their heads in the INTERVIEW 6 sand in response to issues as fundamental as the controversies that swirl around globalization. And exaggerations about the actual extent of globalization typically do not help defuse such controversies, which brings me back to the point with which this Interview began.

  • Is it going to be China Vs India or should it be China and India? What are the implications of each one of this (may be a preposterous) perspective?
    In many cases, of course, the competition between China and India isn't zero-sum, and the answer in most such eventualities should be "both." But to focus exclusively on such cases would be to deny the existence and importance of tradeoffs-in terms of both resources and managerial bandwidth. When there is a trade-off between China and India, how should it be resolved?

    Based on the CAGE framework for thinking about the differences between countries that I have developed-and applied to this specific problem in more detail-in my book-China seems more attractive than India to generalpurpose U.S. investors on many geographic and economic grounds, but less attractive on a number of cultural and administrative grounds

    That summary statement should be elaborated in four respects. First, the choice of perspective is key. From West Europe, the comparison looks different: Although China is more distant geographically, India's English language capabilities are of narrower relevance. And for purposes of offshoring, both East Europe and, to a lesser extent, North Africa are much closer to West Europe than either India or China.

1. Global Expansion Case Study
2. ICMR Case Collection
3. Case Study Volumes

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