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Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter

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References

  • Bartlett, C. A., & Ghoshal, S. 1989. Managing across borders: The transnational solution. Boston: Harvard Business School Press.

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  • Rugman, A. M. 2000. The end of globalization. London: Random House.

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  • Rugman, A. M., & Verbeke, A. 2004. A perspective on regional and global strategies of multinational enterprises. Journal of International Business Studies, 35 (1): 3–19.

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Authors and Affiliations

  1. Kelley School of Business, Indiana University, USA

    Alan M Rugman (Reviewed by)

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  1. Alan M Rugman
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Spikes, blocs and the “death of distance”International business scholars have a comprehensive understanding of globalization, so it should come as no surprise that current academic research contradicts the “flat world” hypothesis of recent journalistic best sellers (Friedman, 2005). Careful analysis reveals not a seamless and frictionless world following the precepts of Ricardian comparative advantage, but rather a world of spikes and blocs.

Examining an economic map of the world, it is inescapable that agglomeration and linkage economies complement comparative advantage so that economic activity still spikes in the Triad regions of North America, Europe (including Oceania) and Japan (Florida, 2005; Hirschman, 1977). The spikiness is even greater for innovation, where by many measures non-Triad countries barely register (Florida, 2008). Where does all this spikiness come from?

Part of the answer lies in the fact that the Triad regions also function as trading blocs in the form of NAFTA and the EU. Most firms find that economic activity within their home region remains cheaper, easier and more efficient than economic activity in other regions. In a fine analysis of Ghemawat's timely work on semi-globalization, Rugman finds resonance with his own research on regional strategies: very few firms span the entirety of a “flat” world. Distance is not dead, and most firms discover, like Dorothy in the Wizard of Oz, that there is no place like home.

Ram MudambiJIBS Book Review Editor

REFERENCES

Florida, R. 2005. The world is spiky. The Atlantic 296(3): 48–51.

Florida, R. 2008. Who's your city? How the creative economy is making where to live the most important decision of your life. New York: Basic Books.

Friedman, T. 2005. The world is flat: A brief history of the twenty-first century. New York: Farrar, Straus and Giroux.

Hirschman, A. O. 1977. A generalized linkage approach to economic development with special reference to staples. Economic Development and Cultural Change, 25(Supplement): 67–97.

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Rugman, A. Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter. J Int Bus Stud 39, 1091–1093 (2008). https://doi.org/10.1057/palgrave.jibs.8400414

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  • DOI: https://doi.org/10.1057/palgrave.jibs.8400414

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