2nd Term MBA-2016
GLOBALIZATION OF BUSINESS ENTERPRISE
COURSE OUTLINE
1. Introduction
Globalization of Business Enterprise (GLOBE) is a 12-session first-year course that
focuses on the global nature of business today and the implications of globalization
for businesses and those who lead them.
The course is designed as a complement to IESE Business School's core first year
curriculum and is meant to link to course work in a number of academic areas such as
leadership, finance, strategy, and operations.
As IESE enjoys perhaps the most international student body of any of the leading
business schools, a particular first year course on the impacts of globalization and the
way business is managed around the world is particularly relevant.
2. Objectives
The primary objective of GLOBE is not to cover globalization in a comprehensive way
in 12 sessions, but to encourage students to look deeply into one of the key drivers of
change in the business world and appreciate its complexity, as well as exploring their
own biases and beliefs on the topic. Specifically, the course will focus on
understanding the actual level of globalization of markets and firms by looking at both
similarities across countries as well as at the enormous differences that still exist
between themat the national and regional level as one does business around the
world.
The emphasis on differences may seem odd given the common conception of
globalization as a leveling force that increases similarities between countries. We do
it to counteract the tendency—even among senior managers with significant
international experience—to overestimate similarities and underestimate differences
between countries, leading to biased decision-making and potentially huge business
mistakes.
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3. Learning Outcomes
After taking Globe, students should be able to:
Conceptualize the impact of the economic, cultural, administrative and geographic
distance between two countries on the potential to develop businesses among them in
a variety of industries.
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Evaluate a firm’s process of internationalization in terms of the value-creation
potential of its primary motivations.
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Distinguish between different forms of organization of countries around the world
in terms of capital formation, labor protection and corporate governance.
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Examine their own conceptions or misconceptions concerning the level of
globalization in the world and gain insight into doing business in emerging markets.
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Acquire the habit of reflecting on globalization-related issues by relying on sound
sources of data.
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Enhance ability to research a topic and present findings in a coherent way in
working.
4. Competences
General competences:
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Critical thinking
Judgment
Communication
Holistic vision
Specific competences:
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Articulate a personal view concerning globalization including its benefits and
dangers.
Learn respect for the role of data in forming judgments about the state or the
world.
Be able to critically analyze the relevant business press concerning globalization.
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5. Content
GLOBE is organized into three modules that are designed, successively, to:
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Review the basic facts about globalization, as in cross-border integration along
various dimensions.
Discuss the differences between countries that underlie observed levels of crossborder integration—and provide a simple framework for thinking systematically
about them.
Spark thinking about management in the presence of such differences and broader
reflections about the future agenda for global leaders.
The three modules move from the macro to the managerial, and in terms of the
emphasis in the discussions, from data to analysis to judgment. They are described in
more detail below:
I. Introduction: Globalization
The first module of GLOBE discusses the opportunities and challenges associated with
the globalization of business.
GLOBE begins with the case of Grolsch, a small Dutch brewery, and tracks its global
expansion and eventual acquisition by SAB Miller, the second largest brewery in the
world. The case introduces the major themes of the course and sets the stage for the
lecture in session 2. In addition to highlighting virtually all the key questions that
arise in the course of globalization, the case offers numerous insights into better
practices.
Session 2 is structured around a lecture concerning two readings that present very
different ways of thinking about globalization. These readings provide a backdrop for
students to test their own intuitions about globalization.
Session 3 deals with the case study of Martifer, a Portuguese manufacturing company
which found itself transformed as it followed the boom in renewable energy in the
2000s into a number of new geographic markets. Martifer goes deeper into the issues
raised in Grolschand permits further discussion of the topics raised in session 2.
II. The CAGE Distance Framework
The second and longest module in GLOBE focuses on understanding the cross-country
differences mentioned above and highlighted to some extent by the Grolsch and
Martifer cases. The discussion is organized in terms of the CAGE distance framework,
where “CAGE” is an acronym for Cultural, Administrative (institutional and political),
Geographic and Economic distances among countries developed by Pankaj Ghemawat.
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Session 4 of the course, thus, introduces this idea of differences with the example of
News Corporation's expansion into Asia with the 19XX acquisition of Star TV. The case
describes a number of differences between Asia and the West, as well as between
Asian countries and regions of them which bring complications to the business model.
Session 5 is a lecture devoted to discussing in depth the CAGE framework’s empirical
underpinnings and its applications to business. The framework envisions countries as
embedded in space at varying distances from each other instead of simply
dichotomizing between home and abroad. It goes beyond simple economic data,
highlights the importance of looking at country pairs and recognizing the importance
of a company's point of origin, and derives much of its power from being customized
to the particular industry being studied Real competitive advantage can come from
exploiting these differences and enormous mistakes avoided by taking them into
account.
Session 6 gives an opportunity to apply the CAGE framework to analyze and make
strategic and organizational decisions concerning the Chinese operation of Levendary
Café, an American “fast casual” restaurant chain.
Session 7 is a lecture and takes a broader look at administrative differences—the “A”
in the CAGE distance framework—based on a reading that focuses attention on how
international differences in capital and labor systems affect the ways in which
business enterprises are structured and governed around the world. The in-class
discussion focuses on the function-by-function implications of such cross-country
differences.
Session 8 looks at a case on Haier, a Chinese appliance manufacturer, targeting the
U.S. market for refrigerators. Variations in the offshorability of different refrigerators
call attention to the interplay of geographic and economic differences (the “G” and
the “E” in the CAGE distance framework), and the expansion strategy of Haier brings
other categories of differences into the picture as well.
Session 9 focuses on the offshoring of services rather than manufacturing and, in
particular, the industry that prompted Thomas Friedman to conclude that the world is
flat: i.e. Indian IT services.
III. Maximizing Global Potential
This last, short module of GLOBE takes an integrative perspective on the opportunities
and challenges of globalization by looking at a company that has developed “new
game” strategies for competing in their industries, as well as by providing insights on
career development in global companies and providing a course summary.
Session 10 looks at Mittal Steel’s remarkable rise to the top of its industry through a
wave of cross-border consolidation aimed at changing the industry’s competitive and
geographic structure.
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Session 11 will address the key changes that can be observed at the functional level in
many companies as a result of globalization and explore the implications of those
changes in terms of international management and career development.
The final day of GLOBE will be structured as a workshop aimed at wrapping-up the
whole course, in which we will reflect on how we see the issue of globalization and its
implications for society, business, and themselves.
6. Methodology
Globe is a unique combination of traditional case studies and participatory lectures.
In the first place, the week-by-week outline below is tentative and subject to change.
The Global Campus course platform will be the definitive guide to what is coming up
next. Synopses of the individual class/sessions and all assignment questions or
activities will be provided on the course platform the week before particular sessions
actually take place. The course platform is also the delivery vehicle for any optional
readings and other supplemental resources for the course.
Second, while almost two-thirds of classes will be case study discussions, the lectures
will require careful study of one or two conceptual readings per week that are critical
to successful completion of the course. A variety of resources for further self-study
will also be suggested.
Finally, In addition to class preparation, some sessions may involve exercises that
have to be turned in before the beginning of class such as, for instance, a one-page
written assignment or a 2-3 minute video blog. As mentioned above, any such
assignments will be posted in advance on the Global Campus.
7. Evaluation
Grading in Globe will be based on class participation, any additional assignments,
quizzes, etc. and a final exam. Class participation will count approximately for 50%
with the additional 50% will be divided between the exam and other assignments.
8. Course Outline
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I. Introduction: Globalization
Case Study: Grolsch: Growing Globally
The case explores the logic of global expansion for a small Dutch
Brewer which is then acquired by one of the world's largest brewing
companies and serves as a striking introduction to the themes
explored in the course.
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II.
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Lecture: The current state of Globalization.
The lecture goes beyond two reading below as well as additional
research which indicates that the current state of the world could be
characterized at best as semi-globalized although there is vigorous
debate on the subject.
Case Study: Martifer
The case looks at a Portuguese company which finds itself following
the boom in renewable energy across a number of new geographic
markets and how both internal and external issues challenge its
development.
The CAGE (Cultural-Administrative-Geographic-Economic) Distance Framework
Case Study: Star TV.
The case follows the move of one of the largest satellite television
operators into Asia and uncovers a number of differences between
Asia and the west as well as between Asian countries and regions of
them which bring complications to the business model.
Lecture: The CAGE Framework.
The lecture explains the CAGE framework in depth showing both how
it is derived and indicating how best to use it.
Case Study: Levendary Cafe
The case study gives an opportunity to apply the CAGE framework to a
very successful American coffee shop concept and explores the degree
to which it has been able to adapt to the Chinese market.
Administrative differences: capital and labor
The lecture takes a look at how international differences in capital
and labor systems affect the ways in which firms are organized,
funded and governed around the world.
Case Study: Haier in the US in 2008
The case looks at China's leading appliance maker and its
developments in the U.S. market for refrigerators.
Case Study: The Indian IT Services Industry
The case study tracks the spectacular growth in the Indian IT sector
and offers another opportunity to apply the CAGE model and also look
at the microeconomic reasons for the industry's success.
III. Maximizing Global Potential
Case Study: Mittal Steel in 2006
To illustrate how many of the issues rose in the course can come
together, Mittal Steel will be offered as an example of a local
company that pursued a relentless global ambition over the long term.
Lecture: Globalization of firms
The lecture explores how globalization is changing business at the
functional level and also raises its implications for career management
Tba in January 2014
Workshop: Thoughts & Ideas
The last session of the course will be focused on exploring student's
opinions regarding the degree of globalization in the world and the
implications for society, business, and themselves.
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9. Bibliography
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Bartlett, C. and Ghoshal, S. (1998) The Differentiated Network. Harvard Business
Review Press
Ghemawat, P. (2006). Redefining Global Strategy. Harvard Business School Press
Ghemawat, P. (2011). World 3.0. Global Prosperity and How to Achieve it. Harvard
Business Review Press.
Gupta, A. and Wang, H. (2009). Getting India and China Right. Jossey Bass.
Khanna, T. and Palepu, K. (2010). Winning in Emerging Markets. A Road Map for
Strategy Execution. Harvard Business Review Press.
Rugman, A. y Collinson, S. (2009). International Business. (5th Edition). Prentice
Hall.
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