Global markets are changing the relationship between firms and nation-states in important ways, says HBS professor Mihir A. Desai. His new working paper, "The Decentering of the Global Firm," offers a practical framework for business leaders to think strategically about where to locate their company's financial and legal homes, and managerial talent. Q&A with Desai.
Firms such as Caterpillar are typically considered American companies by virtue of history while Honda, for example, is regarded as a Japanese company. However, the archetypal multinational firm with a particular national identity and a corporate headquarters fixed in one country is becoming obsolete as firms continue to maximize the opportunities created by global markets. The defining characteristics of what makes a firm belong to a country—where it is incorporated, where it is listed, the nationality of its investor base, the location of its headquarters functions—are no longer bound to one country. Why are these changes taking place, and what are their consequences? This paper places the increasing mobility of corporate identities within the broader setting of transformations to the "shape" of global firms over the last half century.
Published in 2008
Many students say legendary Harvard Business School marketing professor Ted Levitt changed their lives inside his classroom and out. "Ted Levitt was the most influential and imaginative professor in marketing history," HBS professor and senior associate dean John Quelch eulogized on the occasion of Levitt's death in 2006. Colleagues and students remember a life and times. From HBS Alumni Bulletin.
Some 900 Harvard Business School students were asked to recreate a study assessing the potential "offshorability" of more than 800 occupations in the United States. Their findings: It might be a larger number than we thought.
The movement of business activity from developed economies to developing economies—commonly called offshoring—has become the focus of heated debates. Behind these debates lies a pivotal question of scale: How much business activity and how many jobs are at stake? Official statistics are nearly silent, and private-sector researchers vary widely in their estimates of the number of U.S. jobs that have moved offshore, will move offshore, or could move offshore. In an effort to address this gap in prior literature, Princeton economist Alan Blinder released an innovative working paper in 2007 in which he personally reviewed more than 800 occupations in the United States, assessed the "offshorability" of each, and used the evaluations to estimate the total number of U.S. jobs that might be offshorable. Here, HBS research associate Troy Smith and Professor Jan W. Rivkin describe an online exercise that allowed 152 teams of HBS MBA students, collectively, to recreate Blinder's study and to develop insights about the future of offshoring.
In state capitalism, is the operative word "capitalism"? State capitalism is neither to be applauded nor feared, judging from the tone of responses to May's column. Jim Heskett sums up. Online forum now closed.
Published in 2007
Corporate R&D labs used to be the key for companies to create competitive advantage. But in the 21st century, innovation is moving out of the lab and across the globe. That's why Harvard Business School professor Alan MacCormack and his research collaborators believe that a real source of competitive advantage is skill in managing innovation partnerships.
Japanese automakers create single products and brands for worldwide consumption, while Ford customizes products for local markets. You know who won. Why do global brands work? What makes them work? Professor John Quelch provides some answers.
With apologies to Thomas Friedman, managers who believe the hype of a flat world do so at their own risk, says HBS professor Pankaj Ghemawat. National borders still matter a lot for business strategists. While identifying similarities from one place to the next is essential, effective cross-border strategies will take careful stock of differences as well. A Q&A and book excerpt follow.
Collaboration is becoming a new and important source of competitive advantage. No longer is the creation and pursuit of new ideas the bastion of large, central R&D departments within vertically integrated organizations. Instead, innovations are increasingly brought to the market by networks of firms, selected according to their comparative advantages, and operating in a coordinated manner. This paper reports on a study of the strategies and practices used by firms that achieve greater success in terms of business value in their collaborative innovation efforts.
India? South Africa? Russia? Which are the best countries for a firm to invest in? In a new book, Professor Richard Vietor looks at the economic, political, and structural strengths and weaknesses of ten countries and tells readers how to analyze the development of these areas in the future. Read our Q&A and book excerpt.
After a string of forced nationalizations of private enterprises in the 1960s and 1970s, the pendulum swung back and companies were again encouraged by host countries to build and run major infrastructure projects such as power and water. But a set of new property protections has done little to manage the risk in many of these politically unstable environments. Professor Louis T. Wells, coauthor of a new book on making foreign investment safe, discusses the current landscape.
By acquiring Anglo-Dutch steel firm Corus, India's Tata Steel is now one of the world's top five steel makers. Professor Tarun Khanna says the fact that the deal is the largest out of India and generated by the private sector makes this a notable event. But now comes the hard part—making the merger work. Can Tata avoid mistakes made by Chinese companies? From The Economic Times/India Times.
Published in 2006
When TV Nova launched as the first private television channel in post-communist Czechoslovakia, few anticipated the business drama behind the scenes. HBS professor Mihir Desai explains what managers can learn from one unlucky investor's experience.
On a recent trip to China, Steven C. Wheelwright noted an increasing interest in entrepreneurship, globalization, and competitiveness. Most of all, the Chinese have an increasing thirst for management education.
Relatively few multinational companies truly understand or take advantage of international finance. Professor Mihir A. Desai tackles the subject in a new book, International Finance: A Casebook. Here’s a Q&A.
If you were an advisor to the senior managements of these companies doing business in China, what would you propose that they do?
Published in 2005
A regional understanding should be part of your overall global strategy, says Professor Pankaj Ghemawat. One key: Recognize that regions don’t stop at national borders. An excerpt from Harvard Business Review.
Yes, you understand your company needs to compete in emerging markets. But which country is the best fit for you? A Harvard Business Review excerpt by Tarun Khanna, Krishna G. Palepu, and Jayant Sinha.
Published in 2004
To be successful in a global world, countries need to build on comparative advantages, says HBS professor Richard H. K. Vietor. But exploiting natural resources isn't the only answer.
Published in 2003
Even if the World Trade Organization rules in favor of your country’s government, it may not mean the end of a business dispute. HBS professors Rawi Abdelal and Laura Alfaro explain why.
Should your global strategy optimize scale or exploit differences? HBS professor Pankaj Ghemawat suggests a mix-and-match strategy in this excerpt from Harvard Business Review.
Theodore Levitt’s work was outrageous—and outrageously smart. HBS professors Richard S. Tedlow and Rawi Abdelal put "The Globalization of Markets" in perspective.
The global brand is a hard nut to crack. In a session devoted to these seemingly all-powerful brands, professors and practitioners exposed the fault lines.
Are executives who ask this question overreacting to current events? Or, if the current geopolitical events are merely symptoms of a greater and longer struggle, should we begin to think about devaluing, discounting, or postponing global initiatives in favor of more predictable business investments "closer to home"?
Published in 2002
Theories of competition and strategic planning are essential ingredients in running a global business. In this excerpt from Business History Review, HBS professor Pankaj Ghemawat outlines their development.
How should smart companies position themselves in the global economy? By training a historical lens on the process of globalization and thinking about strategies that can take advantage of its current, intermediate state—what HBS professor Pankaj Ghemawat calls "quasiglobalization."
Published in 2001
HBS professor Michael Porter, and Jeffrey Sachs, director of Harvard's Center for International Development, discuss the ramifications — especially after September 11—of the WEF's Global Competitiveness Report 2001-2002. Is this a time of retrenchment, or opportunity?
Ever wanted to judge a Harvard Business Review case study? Here's your chance. Help DataClear decide whether or not to go global. Authored by Harvard Business School associate professor Walter Kuemmerle.
Why do some firms in emerging economies quickly rise above the rest? What are their competitive secrets? New research by HBS professor Rogelio Oliva and his colleague Fernando F. Suarez suggests a few answers.
Published in 2000
Many of today's huge—and pricey—cross-border mergers are based on a mistaken assumption, write Pankaj Ghemawat and Fariborz Ghadar in the Harvard Business Review. In the face of globalization, they say, companies may have better alternatives than the pursuit of the big deal.
Western financial institutions, consultants and academic advisors alike have
often urged the breakup of the large, diversified business groups that dominate
the private sector in many emerging economies. But a rush to dismantle
these groups would be a mistake, say HBS Professors Tarun Khanna and Krishna Palepu.
Planning R&D facilities in the new global economy calls for a complex
decision making process, based in part on whether a particular site is intended
to tap local knowledge or to support a company's manufacturing and marketing
abroad. HBS Professor Walter Kuemmerle offers a look at two
contrasting foreign-based R&D decisions in this excerpt from his article in World View: Global Strategies for the New Economy (HBS Press).
Published in 1999
Often overlooked in the move into the international arena, a comapny's heritage can have a major impact on how it adapts to the new environment. In this excerpt from the second edition of their pioneering book Managing Across Borders: The Transnational Solution, HBS Professor Christopher A. Bartlett and Sumantra Ghoshal examine one aspect of that heritage: the influence on a company of its nation's history, infrastructure and culture.
Clusters—critical masses, in one place, of unusual competitive success in particular fields—is one of the key concepts of HBS Professor Michael Porter's seminal book The Competitive Advantage of Nations. Porter's ongoing
research into clusters confirms that, even in an age of increasing globalization, these local centers of knowledge, relationships and motivation are a vital source of competitive advantage for advanced and emerging countries alike. Porter talks about competition in the global economy and other topics in this recent interview.
