Summary: Globalization & Offshoring

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• 1 Week 1

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• What are the four basic aspects of globalization?

  1. Trade and transactions
  2. Capital and investment movements
  3. Migration and movement of people
  4. Dissemination of knowledge 

• What are the two most recent drivers of globalization?

  1. Falling barriers to trade and investment
  2. Technological Innovation 

• How can globalization be measured, and what do these measures mean according to Ghemawat?

  Depth = how much of the given activity that could take place either within/ across national borders is international rather than domestic
  
  Breadth = distribution of a country’s international flows with the global distribution of the same flow in the opposite direction 

• What is Ghemawat's perspective on international business and which implications does it offer?

  1) Differences between countries are larger than generally acknowledged 
  2) Semiglobalized perspective offers room for cross-border strategy to have content distinct from single-country strategy

• What are two proposed laws of globalization by Ghemawat?

  The law of semi-globalization: International interactions, while non-negligible, are significantly less intense than domestic interactions. 
  The law of distance: International interactions are dampened by distance along cultural, administrative, and geographic dimensions and are often affected by economic distance as well.

• Why is the Fortune 500 not so globalized?

  Nearly half of their affiliates are located at home. Tendency towards less affiliates, international affiliates dropped faster. Within the triad of US/EU/AS Asian MNEs are the only ones that increased the number of international affiliates and they chose to reinforce their regional presence.

• What are according to Kobrin the three structural drivers for globalization?

  1) Networked MNCs
  2) Dispersion of technology
  3) Complex global supply chains

• What are three proposed future scenarios by Kobrin and what are their implications?

  1) Muddle through -> Brexit compromise and congress blocking the harshest Trump measures and China/US modus operandi. 
  2) Irrational exuberance -> hard Brexit, determined Trump implements anti- trade and investment measures resulting in countermeasures and thus a trade war. Populist parties control a number of EU countries with anti-Islam measures.
  3) Billiard table world -> bowing to nationalism and anti-globalization pressures countries restrict flows of capital and goods. Cost of this becomes greater than the populations are willing ot bear. Populist opposition results in never ending cycles

• 2 Week 2

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• Why is it important to take distance into account in international business?

  Distance introduces friction and complexity to cross-border activities and increase the challenges of achieving and sustaining successful cross-border activities

• Which three aspects does distance affect directly and what is the result of this?

  1) FDI choice -> firms are less likely to invest in high distant countries (Uppsala model)
  2) Entry mode choice -> higher distance is less equity entry mode
  3) Affliliate performance -> Cultural distance limits the ability of a MNE to generate rent when entering new domains