Forelæsning 1

Question 1

4 Dimensions of Globalization

Answer 1

• Economic Integration: Increased dependence between countries economy.
• Technological development: IT and network allows for globalization.
• Political integration: International relations, politicians and agreements.
• Cultural dimensions

Question 2

Who is against Globalization?

Answer 2

Developed Countries due to loss of low-paid jobs. Usually protectionist countries.

Developing Countries:
- Import of products/services from the outside threatens local culture, identity and economy.

Question 3

Scpetics vs Globalists

Answer 3

SCEPTICS:

• Globalization is not a new phenomenon
• The world is not flat (meaning that cross-border integration is close to complete), but characterized by persistent differences despite partial integration (Gaps in culture, institutions, trust etc.)
• In a semi-globalized world, firms must therefore pay more attention to the differences between cultures than to similarities.
• DISTANCE STILL MATTERS (EVEN ONLINE!!!)

GLOBALIST

• The world is flat
• Global integration
• One global popular culture rather than more cultures.

Question 4

Laws of semi-global business world

Answer 4

The law of semiglobalization: International interactions are much less intense than domestic interactions, yet non-negligible.
The law of distance: International interactions are ‘dampened’ by external/objective distance.

Question 5

CAGE Framework

Answer 5

The analytical framework used to understand country and regional differences along the distance dimensions of culture, administration, geography, and economics

4 differences
Cultural: Language, etnicity, religion etc.

Economic: Income per capita, cost of labor, GDP etc.

Geographic: Time zones, climate, transportation etc.

Administrative: Currency, trade agreements, legal systems etc.

Question 6

Aggregation, Adaption and Arbitrage

Answer 6

Aggregation strategy:
Exploit similarities across countries, while side-stepping some differences to gain increasing returns to scale. (tensions between integration and responsiveness become salient (fremtrædende)).

Adaption strategy:
Create value by adapting elements of company (e.g. products) to local preferences/requirements.

Arbitrage strategy
(The strategy of difference):
Exploit differences between countries by taking advantage of variations, e.g. in costs and willingness-to-pay (by locating different parts of the value chain in different countries).