Globalization of Business Enterprise

The course is broken up into eight sessions.

Session 1: Globalization and Globaloney 

This session will focus on how globalized the world is, how the data in that regard compare with people’s intuitions on the subject, possible reasons for the discrepancies observed, and their implications.

Session 2: The CAGE Distance Framework

This session will focus on understanding the cross-country differences that underlie observed levels of globalization, summarized in terms of the CAGE distance framework, where “CAGE” is an acronym for Cultural, Administrative (institutional and political), Geographic and Economic distances among countries.

The four sessions that follow will look in greater depth at each of the components of the CAGE framework and their implications for business.

Session 3: Cultural Distance

This session will focus on cultural distance, which encompasses differences in religious beliefs, race/ethnicity, language, and social norms and values.

Session 4: Administrative Distance

This session will focus on administrative differences, by looking at how international differences in capital and labor systems affect the ways in which business enterprises are structured and governed around the world.

Session 5: Geographic Distance

This session will look at how cross-border interactions are influenced by physical distance and by other geographic considerations, such as whether contiguity, within-country distances to borders, access to the ocean, topography, and even time zones. Attention will also be paid to the degree to which cross-border interactions are regionalized.

Session 6: Economic Distance

Consumer wealth and income and the cost of labor are the most obvious (and related) determinants of economic distance between countries. This module will focus on these and others differences such as availability (or lack) of resources, inputs, infrastructure and complements, and organizational capabilities.

Session 7: The Implications of Distances for Business Strategy

This session will review three broad strategies for dealing with differences:  Adaptation to adjust to differences across countries to achieve some local responsiveness; Aggregation, to overcome some of the differences across countries and thereby unlock  cross-border economies of scale/scope; and Arbitrage to exploit some of  the differences across countries in order to achieve absolute efficiency.

Session 8: The Implications of Distances for Personal Strategy

This session will focus on the individual rather than the company level and will discuss, in particular, some of the implications for personal development. It will also provide a course summary.