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.

Featured Works

 

  1. Article | American Economic Journal: Economic Policy | May 2018

    Selection and Market Reallocation: Productivity Gains from Multinational Production

    Laura Alfaro and Maggie X. Chen

    Assessing the productivity gains from multinational production has been a vital topic of economic research and policy debate. Positive aggregate productivity gains are often attributed to within-firm productivity improvement; however, an alternative, less emphasized explanation is between-firm selection and market reallocation, whereby competition from multinationals leads to factor reallocation and the survival of only the most productive domestic firms. We investigate the roles of the two different mechanisms in determining the aggregate productivity gains by exploring their distinct predictions on the distributions of domestic firms: within-firm productivity improvement shifts the productivity and revenue distributions rightward while between-firm selection and market reallocation raise the left truncation of the distributions and shift revenue leftward. Using a rich cross-country firm-level panel dataset, we find significant evidence of both mechanisms, but between-firm selection and market reallocation accounts for the majority of aggregate productivity gains, suggesting that ignoring this channel could lead to substantial bias in understanding the nature of gains from multinational production.

    Keywords: Productivity gains; multinational production; selection; Market Reallocation; and within-firm productivity; Multinational Firms and Management; Production; Performance Productivity; Competition; Mathematical Methods;

    Citation:

    Alfaro, Laura, and Maggie X. Chen. "Selection and Market Reallocation: Productivity Gains from Multinational Production." American Economic Journal: Economic Policy 10, no. 2 (May 2018): 1–38. (Also NBER Working Paper w18207. See Harvard Business School Working Paper, No. 12–111, 2015 for longer version.)  View Details
    CiteView DetailsFind at Harvard Read Now Related

  2. Working Paper | HBS Working Paper Series | 2018

    Countering Political Risk in Colonial India: German Multinationals and the Challenge of Internment (1914-1947)

    Christina Lubinski, Valeria Giacomin and Klara Schnitzer

    Internment in so-called “enemy countries” was a frequent occurrence in the 20th century and created significant obstacles for multinational enterprises (MNEs). This article focuses on German MNEs in India and shows how they addressed the formidable challenge of the internment of their employees in British camps during both WWI and WWII. We find that internment impacted business relationships in India well beyond its endpoint and that the WWI internment shaped the subsequent perception of and strategic response to the WWII experience. We show that internment aggravated existing staffing challenges, impacted the perception of racial lines of distinctions, and re-casted the category “European business.” While internment was perceived and managed as a political risk, the case also shows that it created unexpected networking opportunities, generating a tight community of German businesspeople in India.

    Keywords: Multinational Firms and Management; Employees; War; History; Outcome or Result; India;

    Citation:

    Lubinski, Christina, Valeria Giacomin, and Klara Schnitzer. "Countering Political Risk in Colonial India: German Multinationals and the Challenge of Internment (1914-1947)." Harvard Business School Working Paper, No. 18-090, March 2018.  View Details
    CiteView DetailsSSRN Read Now Related

  3. Other Unpublished Work | 2018

    Trump's Populism: What Business Leaders Need To Understand

    Rafael Di Tella

    In the 2016 United States presidential election, candidates from both major political parties used anti-establishment messaging to appeal to Americans, a theme that had been on the sidelines of US political discourse for decades. Donald Trump, in particular, played into the rising anti-establishment sentiment, embracing a populist platform and emphasizing his position as a Washington outsider. Why did his message resonate with voters? Rafael Di Tella discusses how many Americans felt betrayed by the educated “elite” view on globalization, and looked to Trump as a president who would put American workers and values first.

    Keywords: globalization; Government and Politics; social issues; populism; Globalization; Public Opinion; Social Issues; Government and Politics; Demographics; United States;

    Citation:

    Di Tella, Rafael. "Trump's Populism: What Business Leaders Need To Understand." HBS Working Knowledge, March 2018.  View Details
    CiteView Details Read Now Related

  4. Article | Keiei ronshū [Meiji Business Review] | March 2018

    Global Business over Time

    G. Jones

    This article explores how business enterprises have been powerful actors in the spread of global capitalism between 1840 and the present day. It also shows how global firms, emerging out of industrialized Western economies, created and co-created markets and ecosystems through their ability to transfer a package of financial, organizational, and cultural assets, skills, and ideologies across national borders. It argues such firms have been shapers of, as well as responders to, globalization waves over the last two centuries. Global firms are also shown to be actors in periodic deglobalization waves. This was because their function was to reinforce the gaps in wealth and income rather than disrupt them. Business enterprises proved disappointing institutions for knowledge and technology transfer. During the first global economy, multinational resource and related investments were highly enclavist and embedded in the institutional arrangements of Western imperialism and autocratic dictators. Western firms reinforced rather than disrupted institutional and societal norms, which restricted growth in many countries outside the West. They often functioned, as a result, as part of the problem, rather than part of the solution. In the more recent globalization era, the strategies of Western corporations have moved beyond the practices of the colonial past, but linkages and spillovers to local economies have often been disappointedly low. Their ability, and motivation, to locate value-added activities in the most attractive locations means that they strengthen clustering rather than encourage dispersion of knowledge.

    Keywords: global; multinational; business history; Globalization; Business History; Globalized Firms and Management; Globalized Markets and Industries; Economic Systems;

    Citation:

    Jones, G. "Global Business over Time." Keiei ronshū [Meiji Business Review] 65, no. 1 (March 2018): 1–26.  View Details
    CiteView DetailsRelated

  5. Chapter | Business Groups in the West: Origins, Evolution, and Resilience | 2018

    Britain: Global Legacy and Domestic Persistence

    G. Jones

    This chapter explores the British experience in a volume which examines the historical evolution of business groups in developed Western economies. The chapter argues that during the nineteenth century British merchant houses established business groups with diversified portfolio and pyramidal structures overseas, especially in developing economies, including both British colonies and the independent nations of Latin America. While these types of business groups remained a significant form of firm organization among enterprises specializing in overseas ventures, they did not become the dominant form of large enterprises within British economy itself. Business groups organized under the holding company such as Calico Printers' Association and Associated Portland Cement, as their names imply, were eventually a federation of many specialized companies. As they seldom committed to administrative centralization, their efficiency gain as a business organization remained marginal. The chapter first looks at the appearance and development of industry-focused and family-owned companies before World War II and the relative decline in importance of internationally-focused business groups during the second half of the twentieth century. The chapter then discusses the rise and fall of diversified and conglomerate type of groups like Hanson Trust and BTR, and the more durable Virgin Group and its counterparts. The empirical evidence presented in the chapter demonstrates that diversified business groups can add value in mature markets such as Britain. Even the much-criticized conglomerates of the 1970s-1990s were quite successful forms of business enterprise, and the demise of many of them appears to owe more to management fads than to serious underperformance.

    Keywords: business groups; business history; conglomerates; Globalization; Entrepreneurship; Business History; Organizations; Business Conglomerates; United Kingdom;

    Citation:

    Jones, G. "Britain: Global Legacy and Domestic Persistence." Chap. 5 in Business Groups in the West: Origins, Evolution, and Resilience, edited by Asli M. Colpan and Takashi Hikino, 123–146. New York: Oxford University Press, 2018.  View Details
    CiteView DetailsFind at HarvardRelated

  6. Case | HBS Case Collection | February 2018

    Uruguay: Facing the 21st Century

    Sophus A. Reinert, Michael Chu and Carin-Isabel Knoop

    In the fall of 2017, self-made business leader Edgardo Novick pondered his campaign to be elected President of Uruguay, “the Switzerland of Latin America.” Inspired by populist revolts against the status quo observable worldwide, Novick hoped he could ride popular momentum to break the political monopoly of the traditional parties and return the country to its past greatness. Uruguay had been one of the world’s most successful countries in the nineteenth and early twentieth centuries but had since experienced a long period of relative decline. Could Novick’s campaign turn the tide of history? And what policy should Uruguay adopt with regard to the world economy?

    Keywords: uruguay; Edgardo Novick; Business Cycles; Macroeconomics; Geographic Location; Government and Politics; Wealth and Poverty; Economic Slowdown and Stagnation; Globalization; Pulp and Paper Industry; Agriculture and Agribusiness Industry; Uruguay;

    Citation:

    Reinert, Sophus A., Michael Chu, and Carin-Isabel Knoop. "Uruguay: Facing the 21st Century." Harvard Business School Case 318-019, February 2018.  View Details
    CiteView DetailsEducatorsPurchaseRelated

  7. Case | HBS Case Collection | February 2018 (Revised March 2018)

    Huawei: How Can We Lead the Way?

    Elie Ofek, Tian Tao, Eden Yin and Nancy Hua Dai

    On September 12, 2017, just as Apple’s Tim Cook was unveiling the iPhone X, Richard Yu, CEO of Huawei’s Consumer Business Group (CBG), and Glory Cheung, his Chief Marketing Officer, were discussing some key strategic issues regarding Huawei’s smartphone business. Established in 1987, Huawei was the largest telecom equipment company in the world. Huawei established the CBG in 2012 to focus on Huawei-branded smartphone models and within five years had risen to be the No. 3 player in the market in terms of shipments—next only to Apple and Samsung. As they finished watching Cook’s presentation, Yu and Cheung thought about the Mate 10 series, Huawei’s most advanced smartphone that would be launched on October 16, 2017, in Germany. The new models would include Huawei’s proprietary Kirin 970 chipset, which boasted having the world’s first artificial intelligence (AI) mobile processor. They had to decide how to position, communicate, and price the new phones. Yet beyond these near-term decisions, a major challenge facing Huawei was how to make good on Yu’s bold vision to overtake Apple and Samsung in market share within three to five years, while maintaining healthy profits. This task seemed particularly daunting given the difficulties the company had encountered in penetrating the lucrative U.S. market. What would it take for Huawei to be the number one smartphone brand globally?

    Keywords: Product Launch; Product Positioning; Marketing Communications; Price; Competitive Strategy; Global Strategy;

    Citation:

    Ofek, Elie, Tian Tao, Eden Yin, and Nancy Hua Dai. "Huawei: How Can We Lead the Way?" Harvard Business School Case 518-071, February 2018. (Revised March 2018.)  View Details
    CiteView DetailsEducatorsPurchaseRelated

  8. Case | HBS Case Collection | February 2018 (Revised March 2018)

    ArcelorMittal and the Ebola Outbreak in Liberia

    Sophus A. Reinert, Sarah Nam, Sisi Pan and Eric Werker

    During the summer of 2014, Alan Knight, general manager of corporate responsibility at the integrated steel and mining company ArcelorMittal, observed the unfolding of an Ebola epidemic in Liberia and other countries in West Africa with great concern. On the one hand was the sheer tragedy of the calamity that struck the poverty-stricken country, recently emerged from a long and painful civil war; on the other, the fact that ArcelorMittal’s mining concession in Liberia was a crucial part of the company’s business going forward. How was ArcelorMittal to face the mounting crisis? What response did it owe its employees? Its shareholders? Its stakeholders? Given the low state capacity in Liberia, ArcelorMittal helped organize a private sector response to the crisis, and, as a pandemic finally was averted, he wondered what lessons to draw from the experience.

    Keywords: Ebola; Epidemics; Ebola Private Sector Mobalization Group; EPSMG; civil war; sovereignty; Change Management; Judgments; Development Economics; Geopolitical Units; Globalized Firms and Management; Emerging Markets; Business and Community Relations; Business and Government Relations; Safety; War; Wealth and Poverty; Welfare or Wellbeing; Crisis Management; Mining Industry; Liberia;

    Citation:

    Reinert, Sophus A., Sarah Nam, Sisi Pan, and Eric Werker. "ArcelorMittal and the Ebola Outbreak in Liberia." Harvard Business School Case 718-029, February 2018. (Revised March 2018.)  View Details
    CiteView DetailsEducatorsPurchaseRelated

  9. Case | HBS Case Collection | February 2018 (Revised March 2018)

    Kickstarting Tomato Jos in Nigeria

    Sophus A. Reinert and Risa Kavalercik

    In the spring of 2016, Mira Mehta (HBS 2014), faced a difficult decision. Following a successful Kickstarter campaign and winning the second place in the HBS New Venture Competition—Social Enterprise Track, she had moved to Northern Nigeria, where she founded the tomato paste company Tomato Jos. Though her brand had gained traction, she had, in the face of endless foreseen and unforeseen obstacles, yet to produce any actual paste. As the Nigerian government pondered new tariffs to protect local alternatives against the competition of ostensibly cheap and low-quality “killer tomato paste,” Mehta considered a job offer from a major agricultural company that would secure her financially, but at the cost of her independence and, perhaps, of her dreams.

    Keywords: Nigeria; entrepreneurs; import substitution; China in Africa; Killer Tomato Paste; Mira Mehta; Tomato Jos; Developing Countries and Economies; Social Entrepreneurship; Cross-Cultural and Cross-Border Issues; Government Legislation; Business History; Emerging Markets; Business and Government Relations; Agriculture and Agribusiness Industry; Nigeria;

    Citation:

    Reinert, Sophus A., and Risa Kavalercik. "Kickstarting Tomato Jos in Nigeria." Harvard Business School Case 718-027, February 2018. (Revised March 2018.)  View Details
    CiteView DetailsEducatorsPurchaseRelated

  10. Case | HBS Case Collection | January 2018 (Revised March 2018)

    ZBJ: Building a Global Outsourcing Platform for Knowledge Workers (A)

    Feng Zhu, Weiru Chen and Shirley Sun

    ZBJ.com (ZBJ), an online platform that connects knowledge workers to small and medium-sized enterprises, is China’s largest outsourcing platform. Founded by Mingyue Zhu in 2006, ZBJ had grown into a unicorn with 4,000 employees and a daily transaction volume of RMB15 million by 2017. During the company’s 11-year history, ZBJ had launched ten transformation campaigns to overcome various challenges by changing its products, operations, and business model. For example, it encountered winner-takes-all competition, disintermediation (when service providers and clients took transactions off the platform to avoid the platform’s 20% commission fees), the rise of fake transactions, member management issues, and difficulties in delivering satisfactory services to large enterprises. Zhu must decide how to use the next campaign to address challenges that had emerged since the last campaign and how ZBJ should expand globally.

    Keywords: outsourcing; disintermediation; Two-Sided Platforms; Information Technology; Problems and Challenges; Global Strategy; Information Technology Industry; China;

    Citation:

    Zhu, Feng, Weiru Chen, and Shirley Sun. "ZBJ: Building a Global Outsourcing Platform for Knowledge Workers (A)." Harvard Business School Case 618-044, January 2018. (Revised March 2018.)  View Details
    CiteView DetailsEducatorsRelated
    11.  
See all faculty publications on Globalization »

Initiatives & Projects

  • Global

    The Global Initiative builds on a legacy of global engagement by supporting the HBS community of faculty, students, and alumni in their work, encouraging a global outlook in research, study, and practice.

Faculty

HBS Working Knowledge

Pic
re Willy C. Shih
The world's economies are interconnected by globalization, which makes threats of tariff wars doubly dangerous, says Willy Shih.
Pic
re Charles C.Y. Wang
Over the last 20 years, shortcomings of classical asset-pricing models have motivated research in developing alternative methods for measuring ex ante expected stock returns. This study evaluates the
Pic
re Rafael M. Di Tella
Whether you are a fan of populism or not, it is vital for business leaders to understand the debate around it, says Rafael Di Tella in our latest Cold Call podcast.

More »

Harvard Business Publishing

Article
by Paul M. Healy and Karthik Ramanna
Case
by Sophus A. Reinert, Michael Chu and Carin-Isabel Knoop

More »

Campus Map
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→ Map & Directions
Copyright © President & Fellows of Harvard College