I am a senior manager with 15 years of experience with one of India's leading IT firms, which are supposed to be one of the poster-boys of globalization....But I am not sure if I even understand the meaning of 'globalization' ( I am sure that I'll do better after reading Pankaj's new book on it ). To me, globalization means the conditions for capital and labor to move freely across borders accompanied by cultural and social cross-pollination as well ...if this is true, then we are far, far away from globalization.

While I don't disagree with the assertion that the current state of globalization may be overestimated, I believe the more pertinent argument/illustration would be to demonstrate the delta between where the survey population believes globalization is heading contrasted by an analysis of growth trends in each of the "buckets" represented in the above graph. The survey respondents may be off today, but how far off are they when we look at the future of globalization based on both conservative and aggressive models for growth in the selected areas? Are we realistic with our view of a globalized future, or have we succumbed to unwarranted hype?

Recently, India imported a massive 795000 tonnes of wheat and as a direct consequence, the price of wheat across markets hit a new high. Farmers are committing suicide due to loss of crops, as a result of either too little or too much rain. The white revolution in milk that the country has achieved has deliberately not been replicated in agriculture. Contrast this with the 250 - 300 million cellular phones that are claimed to be operating in India. The so-called globalization has increased the chasm between the 70% who are dependent on agriculture and about 25% who are employed in the organized sector. We would do well to remember, if we care to learn from history, that such social inequities are the seeds from which revolutions have sprouted in the past.

Globalization is reality- there are some points given for its reality
1 many mnc locating their production site at the global level
exmple- hereo honda , suzuki , soni , p and g, and many real estate compnies also , there is reason for the low cost of production , technical professionals availablity , research and development , electricity and we can say as infrastucture, low cost of capital.
2economy also want to increase their foreign exchange, and they promote export , so they made sez , epz
3 If company produce , they want to increase their sales at global level
4 passion for the foreign products

Note- suppose India has all over draugt prone area , there is no food for one year , so we can import from the other contries
so it is became dependablity

IN LAST I WANT TO SAY .....GLOBALIZATION IS DEPENDABLITY

Pankaj's Idea is excellent, no doubt he has a brilliant mind, yes we are really in the Globalization era, we can't avoid it neither it has been thruster up on us, we have to adopt it for our very survival and existence.
India, China have really benefited from Globalization, Globalization is going one step ahead of Ricardo's Comparative advantage. Globalization has really leveraged India's BPO, KPO, and LPO
Business and China's Manufacturing hub.
On the contrary U.S will climb up on the value chain on world best
R& D Units and on Health care industry.
So we are in a crossroad of the global economy and every body will benefit from Globalization .
GLOBALISATION HAS COME AND HERE TO STAY.
Regards,
Debashish Brahma.

I think we should clarify this point: Globalization is in the making-it is not in its final phase yet. Perhaps it looks like Ottoman Army Band's walking-Mehter-Two steps forward, one step backward. But despite hickups, stoppers and other problems, the trend is in the forward direction not backward. Globalization assumes the following:

a-Demand is global-implies marketing globally
b-Supply is global-implies production globally
c-Management is global-implies managing companies globally.

If we take the concept from its context, you can make comments as much as you like. Because you will be looking at one single event or some events only, not seeing the full picture.

I think we should clarify this point: Globalization is in the making-it is not in its final phase yet. Perhaps it looks like Ottoman Army Band's walking-Mehter-Two steps forward, one step backward. But despite hickups, stoppers and other problems, the trend is in the forward direction not backward. Globalization assumes the following:

a-Demand is global-implies marketing globally
b-Supply is global-implies production globally
c-Management is global-implies managing companies globally.

If we take the concept from its context, you can make comments as much as you like. Because you will be looking at one single event or some events only, not seeing the full picture.

Perhaps the perception doesn't match reality; but if you measure the number of times people are touched by the effects of globalization (eg. outsourced call centres, global goods trade flows), globalization becomes quite a real phenonemon, one with real impacts. Perhaps the dollars don't show that yet, but the consumer, customer, employee, and manager impact is very real.

I think we should clarify this point: Globalization is in the making-it is not in its final phase yet. Perhaps it looks like Ottoman Army Band's walking-Mehter-Two steps forward, one step backward. But despite hickups, stoppers and other problems, the trend is in the forward direction not backward. Globalization assumes the following:

a-Demand is global-implies marketing globally
b-Supply is global-implies production globally
c-Management is global-implies managing companies globally.

If we take the concept from its context, you can make comments as much as you like. Because you will be looking at one single event or some events only, not seeing the full picture.

What an interesting idea to respond to! I am reminded of
Daniel Boorstin ( Harvard and the Smithsonian ) who gave us,
the law of technology; " we are closer to things that are farther
and away from us, and farther away from things that are closer to
us ". Surprisingly, Ghemawat's theories seem to applied in the graph above. Communication matters. Technology matters. And, therefore, distance matters! The CAGE framework suggests approaches culturally and economically which apply to either globalizing or internationalizing economies. ( Globalization and internationalization have different patterns ).
The other posts are erudite as well. One brings up the work of Theodore Levitt; in global telephones; while several of the Governmental models derived from Ghemawat have lessons for how to improve cross border agricultural subsidies without harming domestic producers! ( This does not mean that because the knowledge is there, that people know what to do with it.
CARE, the charity, recently refused a $100 million dollar USAID grant because in their opinion, it would make their work more difficult!).
As for low cost production, the economy shall always seek its efficiencies where ever in the world. Money does not have a flag.
One of my Professors pointed out that there is a real difference between globalization and internationalization. Globalization simply highlights certain particular areas, while internationalization is complete. We would want to get past the hype of globalization due to currency differences, and move toward internationalization.
The United States and other countries could end outsourcing. I think the best direction is toward internationalization. Currency and Governmental action need to protect the interests of domestic populations, as well. Investment matters.

To suggest that globalization is a myth could be misleading and damaging to those struggling with the concept.

Look at it as osmosis, or as balancing act, or as the forces of supply and demand at work. It is all about economics: labor will continue to shift to areas of lower costs and high supply, and talent will continue to be owned by the highest bidder. As long as these forces govern International commerce, globalization will continue to be a growing reality, and despite our preferences, here to stay.

Rosa Black

This morning in the radio: a baby cradle recall in US - 80% of which are China sourced.

Yes, direct business is local (WalMart, Toys Are Us Store ...). (How many consumers do personally direct import a candle, anyway?)

But nevertheless there is some global factor in the value chain.

Globalization can be seen in two views:

The first view is the outflow of products, services, and information (including media, entertainment, culture and emotions) from developed market less developed world while still raw material and labor is out flows from less developed to develop market resulting in a homogenization of consumerist culture across global market that threatens to disrupt and permanently alter indigenous values.

The second view is refereed to globalization in terms of standardization, efficiency and effectiveness, which is enabled by advancement of new political regional cooperation which has led to borderless European community and other regional cooperation in APAC and Africa. Furthermore advancement of telecommunication and ease of global travel and vast immigration of talent around the world and finally fall of the curtain walls of communist which all has resulted to greater knowledge share cross boarders and dialogue of civilizations and surge of technological advancement.

The analysis of globalization can’t be proceed without the above two general approach. While comparison of the telephone calls, direct investment, stock investment and trade are more supporting the first view and number of immigrant, university students, and number publish scientific articles, number of Internet users and penetration of mobile phone will support the argument of second view.
Conclusion is that the first view will lead to grater uncertainty and competition for concurring new markets and exploitation of resources while second view will lead to global cooperation and understanding and eventually lead to closer world and synergy.
Finally, we need to learn new ways of working for cooperation. The Ants and Bees in their colonies are run by swarm behavior while they don’t have any intelligent and we as human (intelligent species) still after many centuries still trying to conquer and manage each others. The real globalize world will be very much a like ants colonies that runs by agree principles and standards while artificial borders wouldn’t exist and people make their own decision to be part of which physical or virtual groups.

I DEFINETLY AGREE ,THAT THE WORLD IS " FLAT " ,IN OTHER WORDS ,I BELIEVE IN GLOBALIZATION AND THE FALL OF BORDERS BARRIER ,EVERYONE SHOULD AND HAVE THE OBLIGATION TO PRESENT AND DISPLAY THERE "COLORS" IN OTHER WORDS TO EDUCATE YOUR NEIGHBORS AND BEYOND ABOUT YOUR CULTURE AND YOUR CONTRIBUTION TO THIS WORLD ,AND INNADVERTADLY EDUCATE YOURSELF ABOUT OTHERS .THAT'S MY FRIEND IS THE WAY AND ONLY WAY ,BUT STILL ALL UNDER THE UMBRELLA OF THE AMERICA.ONLY TRUE WISE MEN WILL UNDERSTAND.THANK YOU ALL .MONY .

What an interesting idea to respond to! I am reminded of
Daniel Boorstin who gave us, the law of technology: "we are closer to things that are fartherand away from us, and farther away from things that are closer to us."

Surprisingly, Ghemawat's theories seem to applied in the graph above. Communication matters. Technology matters. And, therefore, distance matters! The CAGE framework suggests approaches culturally and economically which apply to either globalizing or internationalizing economies.

As for low cost production, the economy shall always seek its efficiencies where ever in the world. Money does not have a flag.

I think we should clarify this point: Globalization is in the making-it is not in its final phase yet. Perhaps it looks like Ottoman Army Band's walking-Mehter-Two steps forward, one step backward. But despite hickups, stoppers and other problems, the trend is in the forward direction not backward. Globalization assumes the following:

a-Demand is global-implies marketing globally
b-Supply is global-implies production globally
c-Management is global-implies managing companies globally.

If we take the concept from its context, you can make comments as much as you like. Because you will be looking at one single event or some events only, not seeing the full picture.

I am very reluctant to write critically about Professor Ghemawat; I not only have read his book "Commitment" but I raced to get his book "Redefining Global Strategy," and it was just released late this month. Additionally, his article "Flexibility v. Commitment," is beautifully written and is a must read in any strategy class I teach.

Having said that, I do offer some comments for discussion. First, the proportion of FDI to total capital investment may fail to capture the true extent of globalization because many firms now look to outsource much of their requirements and support services to willing third parties. Consequently, using a metric that would best calibrate the degree of globalization at a time when firms looked to extend themselves in a non-integrated fashion may be misleading. Second, communication across borders increasingly is being handled digitally either in the form of email or, more recently, VOIP. I have communicated frequently with Brazil, China and India over the past decade and can count actual phone calls I have made on one hand. Third, I have my students read Bartlett and Ghoshal ("Managing Across Borders") and Ghemawat's recent HBR article in which he lays out the three As (aggregation, adaptation and arbitrage) and ask them to critically evaluate the added value of Ghemawat's contribution. In other words, is it most "old wine in new bottles." In other words, did Bartlett and Ghoshal through their description of the transnational firm recognize fully the benefits of arbitrage when it came to locating firm activities globally while capturing both the benefits of scale and adaptation.

I don't dispute the central theme of Professor Ghemawat that differrences still matter (and matter greatly). I very much look forward to reading and learning from his new book and I promise to keep my mind open to the unique contributions made by Professor Ghemawat.

Globalization is a reality. Globalization is the ongoing process that deepens the relationships and interdependence among countries today. I can argue the point strongly based on situations that presently exist in the foreign country I am working that globalization, if not monitored carefully, can have an impact on national sovereignty, promote growth that is detrimental to the environment and skew income distribution.

There are, however, anti-globalization sentiments around the globe. Groups in several countries press their governments to promote nationalism by raising barriers to trade and forging partnerships in international organizations and treaties. These sentiments are as a result of the standardized policies of the World Trade Organization, World Bank, International Monetary Fund and global warming.

On the positive side, globalization is one of the best ways to access labor, natural resources and markets. In the 1970’s and 80’s several top corporate managers in major multinational corporations had no passports and did not understand the importance of cultural differences among employees and markets as a resource. Globalization has opened the door for many companies to temporarily assign their key managers around the world to expand executive thinking and to facilitate decentralized corporate decision making (mobility of the minds).

It is also important to note that tremendous strides have taken place in the areas of communication and transportation, technology, liberalization of cross-border trade and resource movements, increased global competition, changing political situations, expanded cross-national cooperation. In addition, more countries are cooperating on transnational issues.

From my perspective, globalization is inevitable and will hinge on technological advances in transportation and communication that will enable consumers all over the world to demand the best products for the best prices, regardless of their origins.

My final view is that globalization will continue as governments around the world continue to embrace openness to international trade and direct foreign investment. In the long run it is inevitable that globalization will be primarily regional. (E.g. CARICOM, MERCOSOUR, APC. EU. NAFTA.).

Very Important topic
Neville Swaby

Re. 'Globaloney' - Pankaj Ghemawat's 9/5/2007 article entitled Globalization Myths Versus Reality.

Interesting article, enlightening research, and useful observations.

If one could measure the increased connectivity, sharing, or movement of information and of social and cultural values, we might see a 'globalization value' closer to that perceived by those polled than to the 'real' value, i.e. a higher level of ‘globalization.’ Unfortunately, I suspect the same would not be true if we could measure a 'globalization value' for political values.

Thanks for the interesting read.

F. Hoefert

Being a person who had studied Pankaj's book "Competitive Strategy" which was prescribed as a course book in my MBA from Indian Institute of Foreign Trade, New Delhi, I must say that in India, much needs to be accomplished in terms of globalisation. It is only rhetoric used and domestic companies tend to treat this concept as watering down the desi approach. In my view, Pankaj is correct that it is a long way for us to erase the bounderies and the actual effect of globalisation is yet to arrive.

When I teach Globalization, I start by defining it as an industry-by-industry phenomenon of gradual movement from 100% domestic---> internationalisation-->multinational-->globalized sales and sourcing. I like to use a chart on the Evolution of the Global Corporation that has these 4 columns, and some 16 rows by functional activity, namely accounting, HR, Labor relations, etc. What matters is not the distinction between estimates and reality, but at the margin what a given firm( or nation-state) in an industry is encountering. Carlos Ghosn( Renault/Nissan) is looking at a $5,000 TATA car in India (and maybe exports to China); The UK government, lacking depositor insurance, had to bail out Northern Rock when depositors panicked about the safety of their funds; the French government saw DANONE as a "strategic asset" they could not possibly allow to fall into "foreign hands." Some of the affected industries are not obvious: eyeglasses(Essilor); Shampoo (L'Oreal), Cookies--the food kind-- (LU,Kraft). Sure, Friedman et al exaggerate; but the lessons they preach (Adapt, don't play ostrich or wall yourself in)are valid. You can see in the history of India during the Indira Gandhi "Regulatory Raj" what happens if you don't adapt;in AIRBUS when the owners (and CEO's) of a multinational company are more motivated by nationality than by efficacy.
For certain 'metiers' and professions (building trades, radiologists, elective surgery ) the handwriting is on the wall.
Even university professors and economists! I remember when the American Economics Association meetings were both lily white and all male; today it feels as though East Indians (viz Prof. Ghemawat) have globalized that group! Bravo!

Globalization still requires transportation. 9 of Top 10 Fortune Global 500 in terms of sales are oil companies or automakers. Those companies bring in more money EACH than half the world's countries. Transportation is also responsible for a quarter of global smog. Add up all the car, truck and fuel value chains and we could say that transportation is 3 of 10 human jobs and 1/3 of global warming!

Global revenues are the backbone behind the organizations that rule and hire the world. In turn these employees chase personal dreams financed by companies continually lowering costs by transporting costs globally.

But doesn't this remind you of the airplane game in college or the pyramid scheme? Eventually, there will be no low cost places to run to at the same time most of us chase that first car.

Today 5 of 6 billion humans have never owned a car or truck, so transportation is both the bottleneck and culprit. Can you imagine 5 times more global smog, 5 times more traffic and 25 times more transportation of global goods?

Transportation is the reality that keeps the flattening theory in check. It's all about oil and the internal combustion engine not culture. Have you checked your labels? I check every one and buy every product based on where it was manufactured and timing.

Just ask yourself this? How many explosions (trucks deliver everything we consume and engines run at about one million explosions per unit per driving shift) took place for everything in your home from toothbrush to food?

I would guess that everything you buy everyday is/was transported several times per item burning fossil fuels dependent on transportation every step of the way. Transportation is far from flat, clean, fast or culture free.

For everything we consume is transported and everything we do requires transportation, especially globalization!

It is a very interesting observation, at the end of the day, it is all about what makes business sense. For example, having a call centre in Bangalore or Lahore is great in monetary terms as it is a bargain, however a number of existing regulations require extra efforts to implement additional controls in order to mitigate outsourcing risks.

True globalisation exists only if the cost/benefit analysis favours it, and increasingly we are seeing additions to costs in relation to mitigation of a plethora or newly introduced risks.

Globalization has two faces - economic and political.

Precious little has been done to globalize national political systems and institutions.

Since national policies have a significant impact on global trade and investment, it is not surprising that we have reached the economic globalization limit of around 25% as shown by Pankaj's research, with little sign of progress beyond these levels.

To realize the full potential of economic globalization, it is imperative for nations to globalize their national political structure and systems.

One way to achieve greater global political integration is to have foreign representatives in national parliaments. Another option is to have certain percentage of voters from outside the country.

Both these groups could potentially represent the world-view on national policies and help the country’s polity become more integrated with the rest of the world.

If global issues and interests are represented appropriately in national economic debates, it can potentially unleash a new wave of economic globalization. Once the world is integrated seamlessly on both economic and political dimensions, the national-global dichotomy will become irrelevant.

There are always different perspectives. For now, let us consider: firm level and country level.

The moment a firm achieves a business momentum that is beyond the so called "internationalization", it begins to commit its resources to the triple A phenomenon (of Professor Ghemawat's recent HBR article in which he lays out the three As aggregation, adaptation and arbitrage) which is actually "globalization" in the works! At a country (or a region) level, though, the metrics may vary pointing not so yet! The technology and value-chain disruptions and ascendence of critical mass market metrics for flow of goods & services (free market economies), however, are telling us that globalization is a reality.

My two cents...

I believe that globalization, the creation of international strategies by organizations for orverseas expansion expansion and operation on worldwide level is reality. Like F. Hoefert posted, If we could measure the increased connectivity, sharing, or movement of information and of social and cultural values, we might see a 'globalization value' closer to that perceived by those polled than to the 'real' value.

Although Professor Ghemawat speaks to the subject of globalization on a macro level, I think we also need to consider the impact on a micro (i.e.; personal) level as well.

I reside in the US, and many of my family and friends have seen the effects of globalization on a very personal level.

 Myself: Most of the work I did in the past (Helpdesk engineering and management) has been exported. Jobs in this sector have been reduced dramatically in the US.

 3 of my friends, whose jobs disappeared when the companies they worked for outsourced manufacturing overseas or to Mexico. It is impossible to ignore the impact that the “ripples” from this situation has had on their families, thereby increasing the effect to multiples of the original 3 people.

 Several family members who have seen their individual jobs outsourced overseas. Again, the effect on THEIR family members multiplies the impact.

With personal and anecdotal experiences such as these, it’s no wonder that the perception of the average person exceeds the actual statistics.

While I acknowledge the economic sense of globalization and see the long-term benefits, I also believe that governments should take a more active role in overseeing the transition to ensure that the citizens of that country are not thrown into preventable turmoil. I am also concerned about the long-term impact on the US economy. A country that does not manufacture anything is sliding toward being an emerging third-world nation.

If, indeed, globalization were to reflect a complete free movement of capital, workforce and goods (briefly the free movement of wealth), then we are still too far (very far from the 100% realization). However, we will not ignore the fact that free trade is much better than what it was some years ago; and it continues improving. Globalization, like any other source of wealth and power,cannot develop itself outside the control of nations, trying to use it as a means of expanding their own political influence.
All barriers to globalization will always come from state powers and their mercantilist leaders. Any book on international political economy would confirm that truth.And, globalization will not be reached before the gaps existing within the development levels of nations will subsist.

I am from HK. I work in a local small-scale trading company. Our goods are manufactured in China and exported to Europe, is it so called "Globalized"? But the fact is HK guys run business in this way many years ago. We produced goods locally in 70's & 80's and then moved to China (where the labour cost was cheap) starting from 80's. Nowadays, some people also invest in developing countries such as Vietnam. I think "Globalization" can be simply subjected to SUPPLY and DEMAND. Wherever there is market, there is demand. Wherever we find cheap manufacturing cost, there is supply....People are saying "Globalization" everyday as they are concerning political & economical reasons (of course beneficial) rather than any other issues.

Susan M. Khan wrote:

"While I acknowledge the economic sense of globalization and see the long-term benefits, I also believe that governments should take a more active role in overseeing the transition to ensure that the citizens of that country are not thrown into preventable turmoil. I am also concerned about the long-term impact on the US economy. A country that does not manufacture anything is sliding toward being an emerging third-world nation."

I must say that I hold the same opinions as the above statement and the rest of her comments. Yes, unbridled supply and demand will chase manufacturing to the far corners of the earth as long as a cheaper supply exist. However, is it not the role of the developed countries' governments to smooth this transition? It is certainly not being done on the scale it should be. We have the (naive?) statements proclaiming "...just re-train those whose jobs are outsourced." I must ask, Re-train to what? What are these mystery occupations? Unfortunately for those who aren't gifted - and perhaps many who are - they may be a lower-paying service industry job. What shall countries like U.S. do if the majority of their economy is based on services that other countries don't need, when their trade deficit was incredibly upside-down to start with? Then again, these issues may be the very ones that slow globalization to a pace that is inferior to the progress that could have been made with a more controlled effort.

Thank you, thank you, thank you.
At last, someone who is credible enough states that the king has no cloth. Remember "the end of history", "end of the cold war" (which is slowly rebounding) and slow rise of nationalism which will be strengthen in Europe and the US in the coming years. At the end of the day, most of the GDP is still being generated locally in most countries. Although protectionism is not a politically correct term any more, the average Joe, no matter how silent the majority is, feels the pain. They don’t connect the dots yet but they will eventually. History may not exactly repeat itself but it rhymes beautifully and this one shall pass too. Enjoy your international travels long it is fashionable, it will go out of fashion soon as the end of history did.

What globalization has done is made everything equidistant for a lot of us. The physical distance has lost its meaning, the e-distance is becoming more important, just like in any big city now the distance is spoken about in terms of time instead of distance.

Yes Mr.Pankaj Ghemawat is right and I agree with his ideas. Actually globalization is considered as a free and easy mobility of capital, resources and labor across the borders. And it seems that the whole world is going to benefited equally from this new phenomena but ground realities reflect its true effects on world. MNCs have really enjoyed globalization as it made possible for them to achieve scale of economies by getting access to cheap labor and resources. The major part of profit earned from LDCs is not invested in them thus cause disrupting the domestic market and influencing the Govt. economic policies aimed to development and stability of economic system. So phenomenon of anti globalization is emerging.
But still globalization can not be blamed completely for that because it is in growing process. Supranational institutions need to reform their policies to minimize the influence of political powers and their use of globalization to get own goals.

Globalization is there: is a concept, is a vision, is a potential.
The most important element is that capitalism is global, market is global and exists capital mobility.
Globalization is no direct investment and by rationality of it, never will be.
Globalization is not people mobility and do not have to be university students mobility, is more the dependency of countries to a unique way to rule its economies and that is true today.

Where will poor go. Globalisation in itself is a myth. Few will decide how majority should live?

We are still far away from Globalization. If you see growth in India and China is not a product of Globalization but the exploitation of cheap labour. Need to have fast growth in standard of living in these countries, then only we can claim that YES it is Globalized economy.

Hi, valuable readers…

I am from India; I maxim the interview in which MR. Pankaj was asked
Is the world still round “what’s your view”..??
Actually I don’t know whether the effects of globalization are very good or bad.
As countries like USA, UK, Germany, France, Italy, Japan, where the outcomes
Of globalization, or glocalization (cultural mix) is prominent and visible
To organizations, society, universities, study papers, research work, job market, environment, share market, every aspect of their people life.

But when it comes to countries like mine, and all so called third and second world
Emerging and developing countries (Pakistan, Bangladesh, Myanmar, Nepal, countries from Africa, Brazil).We are still in a arena where (truly we are in a trance… our economies fate is just written by the CEO’S of top mnc’s). Neither we still in a phase, where we can’t enlighten nor we intended for ourselves towards the result. It’s just like..
We sat on the exam of globalization. We got the question papers, but as we are student
And we are working on it, we can’t give any annotations.
But countries as I stated above they have already given the exam of globalization
So MR. Pankaj can effortlessly comments and explain his view. But I can’t.
Only time can tell the story whether we accepted the exam of globalization with
High grade or low or may fail.

Dear Sir,

Globalisation is an avenue for monopolist and cartel to expand their networking and market share overseas.

Price mechanism still affected by monopolistic market behaviour and government intervention is required to ensure a fair price been set.

Otherwise it allows parasite of global inflation to set in.

I commend Pankaj Ghemawat for taking a critical approach to pop views of a globalised world. In particular anyone who takes a poke at Thomas Freidman’s “The World is Flat” is doing us all a lot of good.

He presents international aggregates such as investment, immigration and trade flows as bench markets. This makes a very legitimate point that global economic integration is not an overwhelming influence. Rather it is one of the issues that business and political leaders need to consider.

However, in doing so, Ghemawat needs to be careful on his use of metrics. My concern is that Ghemawat bumps international aggregates up against the results of survey of 400 respondents on the HBR site. I have two analytical issues and one strategy problem with this approach.

The first analytical issue is, given the very limited sample size, I would expect the survey results to be at variance to globally based values. There is absolutely no reason to expect 400 individuals – each faced with their unique personal and professional experience – to line up with global numbers. Secondly, the bias introduced by drawing respondents only from the HBR site could well explain a “globalization bias” even if the sample was much larger.

Finally, with respect to strategy, let us assume for a moment that the 400 person HBR survey is meaningful. This would clearly imply that government and business leaders see themselves as working in a globalized environment. While this perception may be wrong it is – based on the HBR survey - an entrenched view. Consequently you cannot ignore the issue of globalization.

So, while the problems raised by “globalization” may be real or imagined, your clients, customers, suppliers, regulators and investors are - according the HBR survey – expecting a business model that addresses the issue. The answer is simply - get on with it. Trivial as it may be to your organization’s success, globalization must be addressed.

In my view, the "World is Flat" perspective was relevant and aspirational when there was hubris during the Internet bubble. Ultimately the law of nature does prevail and the importance of geography (shape of the earth), history and culture will remain invariant. Therefore every interaction, whether it occurs in a onshore, nearshore or onshore setting, is fundamentally and respectfully a cross-border (long lived) transaction so that the outcome can be biased towards win/win. Since every two party interaction has three opportunities for failure, this is an important but subtle point, which has implications for a n-party interaction. Recent critical global business challenges that were encountered by Boeing and Mattel are counterexamples to the "world is flat" quasi-mantra because the Business Process Orchestrator who is managing key strategic alliances (moving parts) has to achieve an excruciating focus on connectivity and coordination, dynamic specialization and leveraged capability building. This requires a cross-border, UPS-like persistence to "synchronize the world of commerce" in a world that is NOT (always) flat. Only then there is strategic alignment between the aspirational and operational dimensions.

'Quality Fade': China's Great Business Challenge
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1776

Reshaping the toy recall debate
http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=toydesign23&date=20070923&query=china+and+Mattel

Mattel's apology to China seems designed to appease a key partner
http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=chinatoy23&date=20070923&query=china+and+Mattel

Boeing may junk worldwide assembly for next jet
http://seattletimes.nwsource.com/html/boeingaerospace/2003986894_bair01.html

Global is fine, but I dont understand equating global with flatness.. its not intuitive but what I feel is Flatness=Globalization Glorified...and in that I agree with Pankaj that this glorification is short on fundamentals..

The figures are not what i expected. Having managed a large number of out sourcing projects and having read much about the flat world and out sourced projects I had expected the figures to be higher and the actuals presented in this article come as a surprise.

This may be attributed to the fact that the world has just gone flat. The movement in the flat world is just picking up and is expected to go higher.

Can you also give the readers some more insight into how the charts data is compiled?

It appears to me that Pankaj Ghemawat has lost perspective. Up until 50 years ago except for World Wars there was very little interaction among peoples from different continents.

50 years is just a pin head in the cosmic time space continuum.

Analysis of globalization needs to be put into perspective as to where the world was just 50 even 10 years ago to where it is now and in what direction it is heading.

There is no doubt that globalization is a reality and will continue to grow.

It seems to me that a good analogy is solar energy. Solar energy today even with the billions of Euros recently invested in it is still just a pin head in terms of total world wide energy usage. The trend though is as clear as the sky on a sunny day.

The questions to ask about globalization are where is it today vs 50 years ago and what is the trend? Globalization is a reality, the trend is clear and just like solar energy its future growth and expansion is inevitable.

I am from China. Globalization really means too much to us. first China market is potential market for all companies. and that also bring more opp. into China.

on the other side of the coin, i believe that we are now in post-globalization era. in China, most of the MNCs have already set up the factories and offices here. so i think the marginal benefit of further globalization is decreasing.