Globalization

Globalization is a featured research topic and an initiative at Harvard Business School.
 
The globalization of business has long encouraged Harvard Business School (HBS) faculty to research international business practices and the effects of globalization. Seminal contributions - Christopher Bartlett on managing across borders, Michael Porter on competition in global industries, and Louis Wells on foreign investment in emerging markets - helped pave today’s global research path. Supported by eight Global Research Centers that facilitate our contact with global companies and the collection of international data, key investigations concentrate on the effectiveness of management practices in global organizations; cross-cultural learning and adaptation processes; the challenges of taking companies global; emerging-market companies with global potential; and international political economy and its impact on economic development.
  1. Monetary Policy and Global Banking

    Victoria Ivashina and Falk Bräuning

    Global banks use their global balance sheets to respond to local monetary policy. However, sources and uses of funds are often denominated in different currencies. This leads to a foreign exchange (FX) exposure that banks need to hedge. If cross-currency flows are large, the hedging cost increases, diminishing the return on lending in foreign currency. We show that, in response to domestic monetary policy easing, global banks increase their foreign reserves in currency areas with the highest interest rate, while decreasing lending in these markets. We also find an increase in FX hedging activity and its rising cost, as manifested in violations of covered interest rate parity.

    Keywords: global banks; monetary policy transmission; cross-border lending; Capital Markets; Globalization; Banks and Banking;

    Citation:

    Ivashina, Victoria, and Falk Bräuning. "Monetary Policy and Global Banking." NBER Working Paper Series, No. 23316, March 2017. View Details
  2. Global Marketing Management: A Casebook

    John A. Quelch

    During the last quarter century, international business was shaken by a revolution in global competition unlike any previously experienced. As companies move through the twenty-first century, they need to be aware of the range of powerful, dynamic, and often conflicting forces shaping the emerging competitive environment. The globalization of markets, the increasing homogeneity of customer needs worldwide, the impact of the digital economy, and progressively falling tariffs in the face of occasional protectionist reversals together mean that few companies can afford to remain focused on their domestic markets.

    Managers responsible for marketing in a multinational or global enterprise must design appropriate marketing programs for each national market. To some extent, each country must be treated as a separate marketplace, because each has its own legal requirements, cultural traditions, and business methods, and most have their own currencies. The dramatic changes in strategic thinking and organizational relationships have made the boom in alliances, consortia, and strategic partnerships a worldwide phenomenon.

    Sensing, analyzing, and developing appropriate responses to the complex new demands of the expanded, global marketplace is difficult, and the greatest challenge comes in developing the organizational capabilities and managerial competencies to implement a clearly defined strategic intent. This book of cases provides real examples of these challenges.

    Keywords: Marketing; Management; Globalization; Competitive Strategy;

    Citation:

    Quelch, John A. Global Marketing Management: A Casebook. 6th ed. Redding, CA: BVT Publishing, 2017. View Details
  3. Globalizing Latin American Beauty

    G. Jones

    This article discusses the growth over time of the beauty industry in Latin America, and its bias towards celebrating whiter rather than darker skins. Although alleged Latin American fascination with beauty is regularly ascribed to culture, Latin sensuousness and machismo attitudes, this article shows that the growth of the industry was historically contingent. It was shaped by corporations, especially Avon and Colgate, who transferred marketing capabilities from the United States and Europe. The industry also grew as the means out of poverty for many women who worked as sales consultants and in salons. Winning beauty contests became the equivalent to winning a lottery. In this respect,the impact of the beauty industry was positive. However it also, as elsewhere, imposed restrictive notions of beauty on generations of women, and created cultures in which breast implants and buttocks injections became the societal norm. The industry intensified rather than challenged the deep racism of the region.

    Keywords: Beauty and Cosmetics Industry; Latin America; race and ethnicity; Globalization; Race; Ethnicity; Prejudice and Bias; Beauty and Cosmetics Industry; Latin America;

    Citation:

    Jones, G. "Globalizing Latin American Beauty." ReVista: Harvard Review of Latin America 16, no. 3 (Spring 2017): 10–14. View Details
  4. Globalization in Historical Perspective

    Pankaj Ghemawat and Geoffrey Jones

    This chapter explores the role that firms have played over time in promoting international trade and investment. It takes a chronological perspective and is organized around a first wave of globalization from the mid-nineteenth century until the 1920s and a second wave that started after World War 2, intensified from the 1980s until around the 2008 global financial crisis.

    Keywords: globalization; international business; international marketing; History; Marketing; Investment; Trade; Globalization;

    Citation:

    Ghemawat, Pankaj, and Geoffrey Jones. "Globalization in Historical Perspective." Chap. 3 in The Laws of Globalization and Business Applications, by Pankaj Ghemawat, 56–81. New York: Cambridge University Press, 2017. View Details
  5. Godiva Japan: Think Local, Scale Global

    Rohit Deshpandé, Esel Cekin and Akiko Kanno

    This case tracks Jerome Chouchan’s strategies and execution for a successful turnaround of Godiva Japan’s operations which was experiencing a decline in sales when he became the managing director of the company in 2010. Through various initiatives and innovations, Godiva Japan had targeted a variety of demographic segments in different sales points, acquired new customers and created a moment of luxurious consumption for all ages. Accordingly, within Godiva’s global enterprise, Godiva Japan had become number two in terms of worldwide sales and number one in terms of profits. It exported made-in-Japan products and concepts to Godiva’s other markets. How could Chouchan keep the momentum and sustain Godiva Japan’s top-line and bottom-line growth going forward? Would he be able to keep the balance between aspirational and accessible? How much of the success in Japan might contribute to the growth of Godiva's global sales?

    Keywords: branding; internationalization; Product; innovation; positioning; customer segmentation; occasion-based segmentation; Execution; Talent; change management; customer-focused strategies; Product Positioning; Globalized Firms and Management; Change Management; Talent and Talent Management; Customer Focus and Relationships; Product; Segmentation; Innovation and Invention; Brands and Branding; Retail Industry; Food and Beverage Industry; Japan;

    Citation:

    Deshpandé, Rohit, Esel Cekin, and Akiko Kanno. "Godiva Japan: Think Local, Scale Global." Harvard Business School Case 517-056, January 2017. (Revised January 2017.) View Details
  6. Managing Risk in Reinsurance: From City Fires to Global Warming

    Niels Viggo Hauter and Geoffrey Jones

    This is the first book to provide a comprehensive history of the reinsurance industry from the nineteenth century to the present day. Reinsurance developed at the fringe of financial services and, for most of its existence, was largely unnoticed outside the expert community. However more recently public and professional sensitivity towards managing risks has increased. This book traces the global development of reinsurance and explores how the nature of risk itself has changed over time. It highlights key aspects that have shaped the evolving industry, including shifts in risk engineering and risk management, the development of actuarial science, and the impact of changes in political and regulatory contexts. The authors point to the special role reinsurers have played in the capitalist system. As the industry developed, it had a vested interest in preventing excessive risks, while also providing complex societies with a mechanism to limit the damage that natural and other catastrophes inflicted. This has led reinsurers, once a very secretive industry, to take increasingly public stances on the risk of human-induced climate change and the need to take urgent action to contain it.

    Keywords: globalization; Insurance; risk management; business history; Globalization; Risk and Uncertainty; Financial Services Industry; Insurance Industry; Africa; Europe; Latin America; North and Central America; Asia;

    Citation:

    Hauter, Niels Viggo and Geoffrey Jones, eds. Managing Risk in Reinsurance: From City Fires to Global Warming. New York: Oxford University Press, 2017. View Details
  7. Africa's New Generation of Innovators

    Clayton M. Christensen, Efosa Ojomo and Derek van Bever

    With a young, urbanizing population, abundant natural resources, and a growing middle class, Africa seems to have all the ingredients necessary for huge growth. Nevertheless, a number of multinationals have recently left the continent, discouraged by widespread corruption, a lack of infrastructure and ready talent, and an underdeveloped consumer market. Some innovators, however, have succeeded by building franchises to serve poorer consumer segments; tapping the vast opportunity represented by nonconsumption; internalizing risk to build strong, self-sufficient, low-cost enterprises; and integrating operations to avoid corruption. The difference, the authors believe, lies in the choice between “push” and “pull” investment. MNCs seek growth by pushing current products onto emerging middle-class consumers. They retain some large portion of their existing cost structure and operating style, and thus set prices that limit market penetration. The winning strategy diverges from this approach in almost every respect. When innovators develop products that people want to pull into their lives, they create markets that serve as a foundation for sustainable growth and prosperity.

    Keywords: Innovation Strategy; Multinational Firms and Management; Economic Growth; Africa;

    Citation:

    Christensen, Clayton M., Efosa Ojomo, and Derek van Bever. "Africa's New Generation of Innovators." Harvard Business Review 95, no. 1 (January–February 2017): 129–136. View Details
  8. The Dark Side of Going Abroad: How Broad Foreign Experiences Increase Immoral Behavior

    Jackson G. Lu, Jordi Quoidbach, F. Gino, Alek Chakroff, William W. Maddux and Adam D. Galinsky

    Due to the unprecedented pace of globalization, foreign experiences are increasingly common and valued. Past research has focused on the benefits of foreign experiences, including enhanced creativity and reduced intergroup bias. In contrast, the present work uncovers a potential downside of foreign experiences: increased immoral behavior. We propose that broad foreign experiences (i.e., experiences in multiple foreign countries) foster not only cognitive flexibility but also moral flexibility. Using multiple methods (longitudinal, correlational, and experimental), eight studies (N > 2200) establish that broad foreign experiences can lead to immoral behavior by increasing moral relativism, or the belief that morality is relative rather than absolute. The relationship between broad foreign experiences and immoral behavior was robust across a variety of cultural populations (anglophone, francophone), life stages (high school students, university students, MBA students, middle-aged adults), and seven different measures of immorality. As individuals are exposed to diverse cultures, their moral compass may lose some of its precision.

    Keywords: Moral Sensibility; Globalization; Behavior;

    Citation:

    Lu, Jackson G., Jordi Quoidbach, F. Gino, Alek Chakroff, William W. Maddux, and Adam D. Galinsky. "The Dark Side of Going Abroad: How Broad Foreign Experiences Increase Immoral Behavior." Journal of Personality and Social Psychology 112, no. 1 (January 2017): 1–16. View Details
  9. thredUP: Think Secondhand First

    Thomas Eisenmann, Allison Ciechanover and Jeff Huizinga

    In the fall of 2016, the management team at thredUP, the largest U.S. online retailer of second hand clothing, is deciding whether to expand into international markets. Over the past 12 months the 7-year-old startup, which had raised over $130 million in venture capital, had seen revenue grow 100% and gross margin double. Would moving abroad expand thredUP's total addressable market and help position the company for an IPO? Or would it prove a distraction, derailing momentum in the core U.S. business?

    Keywords: scaling start-ups; international expansion; online consignment; Apparel; entrepreneurship; e-commerce; Online Technology; Expansion; Entrepreneurship; Global Strategy; Business Startups; Apparel and Accessories Industry; Retail Industry; San Francisco;

    Citation:

    Eisenmann, Thomas, Allison Ciechanover, and Jeff Huizinga. "thredUP: Think Secondhand First." Harvard Business School Case 817-083, December 2016. View Details
  10. Public Mission, Private Funding: The University of California, Berkeley

    William C. Kirby and Joycelyn W. Eby

    UC Berkley, long known as one of the leading public universities in both the U.S. and the world, has seen turbulent times recently. While student enrollment and costs have increased steadily in recent years, the school, which has been fiercely proud of its public mission, received ever diminished funding from the state of California. Although Berkeley survived the financial crisis of 2008 under the leadership of Chancellor Robert Birgeneau, new Chancellor Nicholas Dirks inherited an ongoing structural deficit and a divided faculty. New controversies arose over the process of strategic planning, the building of a “Global Campus” in neighboring Richmond Bay, and allegations of sexual misconduct on the part of faculty and administrators. Can Berkeley overcome these challenges and maintain its distinguished reputation with its current governance structure and status as a privately funded public university?

    Keywords: higher education; Public University; university administration; conflict management; State Funding; competition; Faculty Governance; University of California Berkeley; Change Management; Volatility; Diversity; Residency; Higher Education; Giving and Philanthropy; Globalization; Policy; Leading Change; Crisis Management; Growth and Development Strategy; Organizational Design; Privatization; Problems and Challenges; Education Industry; United States;

    Citation:

    Kirby, William C., and Joycelyn W. Eby. "Public Mission, Private Funding: The University of California, Berkeley." Harvard Business School Case 317-023, December 2016. View Details
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