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whether products will survive in a different climate. When looking at economics, consider such issues as the effect of per capita income on demand.Saylor URL: Saylor.org34
An Amusing AnecdotePankaj Ghemawat provides this anecdote in partial support of his multidomestic (or anti-flat-world) view. “It takes an aroused man to make a chicken affectionate” is probably not the best marketing slogan ever devised. But that’s the one Perdue Chicken used to market its fryers in Mexico. Mexicans were nonplussed, to say the least, and probably wondered what was going on in founder Frank Perdue’s henhouse. How did the slogan get approved? Simple: it’s a literal translation of Perdue’s more appetizing North American slogan “It takes a tough man to make a tender chicken.” As Perdue discovered, at least through his experience with the literal translation of his company motto into Spanish, cultural and economic globalization have yet to arrive. Consider the market for capital. Some say capital“knows no boundaries.” Recent data, however, suggests capital knows its geography quite well and is sticking close to home. For every dollar of capital investment globally, only a dime comes from firms investing “outside their home countries.” For every $100 US investors put in the stock market, they spend $15 on international stocks. For every one hundred students in Organisation for Economic Co-operation (OECD) universities, perhaps five are foreigners. These and other key measures of internationalization show that the world isn’t flat. It’s 90 percent round, like a rugby ball. While the world may not be flat, it is probably safe to say that it is flattening. We will use the CAGE framework throughout this book to better understand this evolving dynamic.KEY TAKEAWAYSThe globalization debate pits the opinions of Thomas Friedman against those of Pankaj Ghemawat. Their differing views help you better understand the context of international business. Through exposure to Friedman’s ideas, you gain a better perspective on the forces, or “flatteners,” that are making cross-border business more prominent.Ghemawat portrays a world that is “semiglobalized” and “multidomestic,” where global strategy begins with noticing national differences.Saylor URL: Saylor.org35
Ghemawat’s CAGE framework covers four factors—culture, administration, geography, and economics.EXERCISES(AACSB: Reflective Thinking, Analytical Skills)1What are the basic tenets of the flat-world perspective?2Why does Ghemawat disagree with the flat-world perspective?3What are the four components of the CAGE analytical framework? William J. Bernstein, A Splendid Exchange: How Trade Shaped the World(New York: Atlantic Monthly Press, 2008).