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Executive Interviews: Interview with Pankaj Ghemawat on Global Strategy
January 2008
Pankaj Ghemawat Anselmo Rubiralta Professor of Global Strategy at IESE Business School the Jaime and Josefina Chua Tiampo Professor of Business Administration at the Harvard Business School. 
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What changes should global
companies be prepared for in the
next decade or do you think little
change is ahead?
What will persist, for the next few
decades at least, is the reality of
semiglobalization. But within that
frame, here are some broad pointers
about how a company might improve
on the common expedients of sailing
in one direction until striking a
sandbar, playing pinball to the
headlines, or simply marking time:
Anticipate bumps and detours,
even if you do believe that the
world will eventually become
much more integrated. Volatility
of this sort is
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relation to the
BRIC economies that Friedman and others emphasizes as centers
of value creation in the 21st
century.But even companies that
are supposed to be sophisticated
about emerging markets trip up
on this point by entering at the
top of the cycle and exiting at the
bottom. (U.S. companies have a
particularly bad reputation in
this regard.) Pay attention to other predictable
surprises as well. A number are in
the air as far as the general global
environment is concerned: global
warming, different kinds of
meltdowns in the Middle East,
China and India, and the United
States, among other possibilities, a
global liquidity crisis, a general
sociopolitical backlash against
globalization, and so on. Notions
of a global governance gap
reinforce the idea that a shock of
this sort might have a persistent
effect. How many such shocks is
your company prepared for? Add to predictive power by taking
things down to the industry and
company level. Shocks, cycles,
and trends vary greatly across
industries and companies in their
effects, in ways that greatly reduce
the usefulness of trying to fit one
world-historical conception to all
of them. Focus on the risks and
questions that are most likely to
affect your company, and how
they will do so. Thus, even the
effects of something as potentially
far-reaching as global warming
depend on whether one looks at
the issue from the perspective of a
financial investor, a construction
firm, an automaker (whose
reaction would also depend on its
focus on large vs. small cars) or a
potential supplier of cleaner
energy, to cite some varied
examples. Recognize the importance of
business in shaping broad
outcomes-including those related
to the future of globalization. The
previous points might have
seemed to suggest that outcomes
will unfold independently of what
businesses decide to do. But for
many key uncertainties, that is
clearly not the case. In particular,
business leaders cannot and
should not stick their heads in the INTERVIEW 6
sand in response to issues as
fundamental as the controversies
that swirl around globalization.
And exaggerations about the
actual extent of globalization
typically do not help defuse such
controversies, which brings me
back to the point with which this
Interview began.
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Is it going to be China Vs India or
should it be China and India? What
are the implications of each one of
this (may be a preposterous)
perspective?
In many cases, of course, the
competition between China and
India isn't zero-sum, and the answer
in most such eventualities should be
"both." But to focus exclusively on
such cases would be to deny the
existence and importance of
tradeoffs-in terms of both resources
and managerial bandwidth. When
there is a trade-off between China
and India, how should it be
resolved? Based on the CAGE framework for
thinking about the differences
between countries that I have
developed-and applied to this
specific problem in more detail-in
my book-China seems more
attractive than India to generalpurpose
U.S. investors on many
geographic and economic grounds,
but less attractive on a number of
cultural and administrative grounds That summary statement should be
elaborated in four respects. First, the
choice of perspective is key. From
West Europe, the comparison looks
different: Although China is more
distant geographically, India's
English language capabilities are of
narrower relevance. And for
purposes of offshoring, both East
Europe and, to a lesser extent, North
Africa are much closer to West
Europe than either India or China.
1.
Global Expansion Case Study
2. ICMR
Case Collection
3.
Case Study Volumes
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