The INSEAD-Wharton Alliance on Globalizing: Strategies for Building Successful Global Businesses

472 Pages·2004·2.13 MB·English

by  Hubert Gatignon

The INSEAD–Wharton
Alliance on Globalizing
The INSEAD–Wharton Alliance combines the insights of two leading
globalbusinessschoolstoexaminetheforcesthataredrivingfirmstoglob-
alize,theconsequences–positiveandnegative–thataccompanyincreasing
globalization,andtheirmanagerialandpoliticalimplications.Writtenby
expertsindiversemanagementdisciplines–includingleadership,finance,
marketing,andoperationsmanagement–thebookisanimportantcontri-
butiontocontemporarybusinessstrategy.Incontrasttostridentandoften
heavily rhetorical debates, this volume focuses on the managerial strate-
giesinvolvedinglobalizingbusinesses,includingleadership,marketentry,
and managing risks. The non-partisan treatment of the issues will be of
interesttomanagerswrestlingwiththemanychallengesofglobalizing,to
policymakers interested in whether and how to either slow or accelerate
the process, and to those in non-governmental organizations concerned
withunderstandingglobalbusinesschallenges.
hubert gatignon isResearchDirectoroftheAllianceandDirectorof
theAllianceCenterforGlobalResearchandDevelopment.Dr.Gatignon
is the Claude Janssen Chaired Professor of Business Administration and
ProfessorofMarketingatINSEADandisalsoINSEAD’sDeanofthePhD
Program.
john r. kimberly isExecutiveDirectoroftheAlliance.Dr.Kimberly
istheHenryBowerProfessorofEntrepreneurialStudiesandProfessorof
Management,HealthCareSystems,andSociologyattheWhartonSchool
oftheUniversityofPennsylvania.

The INSEAD–Wharton
Alliance on Globalizing
Strategies for Building Successful
Global Businesses
edited by hubert gatignon and
john r. kimberly
with robert e. gunther
published by the press syndicate of the university of cambridge
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(cid:1)C TheINSEAD–WhartonAlliance2004
Thisbookisincopyright.Subjecttostatutoryexception
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Firstpublished2004
PrintedintheUnitedKingdomattheUniversityPress,Cambridge
TypefaceSabon10/13pt. SystemLATEX2ε [tb]
AcataloguerecordforthisbookisavailablefromtheBritishLibrary
LibraryofCongressCataloguinginPublicationdata
TheINSEAD–WhartonAllianceonglobalizing:strategiesforbuildingsuccessful
globalbusinesses/[editedby]HubertGatignonandJohnR.Kimberlywith
RobertE.Gunther.
p. cm.
Includesbibliographicalreferencesandindexes.
ISBN0521835712
1.Strategicalliances(Business). 2.Internationalbusinessenterprises–Management.
I.Title:Strategiesforbuildingsuccessfulglobalbusinesses. II.Gatignon,Hubert.
III.Kimberly,JohnR.(JohnRobert),1942– IV.Gunther,RobertE.,1960–
V.INSEAD–WhartonAlliance.
HD69.S8A4345 2004
658(cid:2).049–dc22 2004040755
ISBN0521835712hardback
ThepublisherhasuseditsbestendeavourstoensurethattheURLsforexternal
websitesreferredtointhisbookarecorrectandactiveatthetimeofgoingtopress.
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Contents
Listoffigures page viii
Listoftables x
Notesoncontributors xi
Foreword xxi
Acknowledgments xxii
1 Globalizationanditschallenges 1
HubertGatignonandJohnR.Kimberly
PartI Leadingtheglobalorganization
2 Thechanginginternationalcorporategovernance
landscape 23
MauroF.Guille´nandMaryA.O’Sullivan
3 Corporategovernanceandleadershipinaglobalizing
equitymarket 49
MichaelUseem
4 Leadershipinaglobalorganization:across-cultural
perspective 78
MansourJavidan,Gu¨nterK.Stahl,andRobertJ.House
5 Theglobalizationofbusinesseducation 104
ArnoudDeMeyer,PatrickT.Harker,andGabriel
Hawawini
PartII Globalmarketparticipation
6 Globalizationthroughacquisitionsandalliances:an
evolutionaryperspective 129
HarbirSinghandMaurizioZollo
v
vi Contents
7 Developingnewproductsandservicesfortheglobal
market 159
ReinhardAngelmar
8 Managingbrandsinglobalmarkets 184
GeorgeS.DayandDavidJ.Reibstein
9 Globalmarketingofnewproducts 207
HubertGatignonandChristopheVandenBulte
10 Globalequitycapitalmarketsforemerginggrowthfirms:
patterns,drivers,andimplicationsfortheglobalizing
entrepreneur 229
RaphaelAmitandChristophZott
PartIII Managingriskanduncertainty
11 Cross-bordervaluation:theinternationalcostof
equitycapital 255
GordonM.Bodnar,BernardDumas,andRichard
Marston
12 Managingriskinglobalsupplychains 288
PaulR.KleindorferandLukN.VanWassenhove
13 Globalrecombination:cross-bordertechnologyand
innovationmanagement 306
PhilipAndersonandLoriRosenkopf
14 Fromcorporatesocialresponsibilitytoglobalcitizenship 331
EricW.Orts
15 Collidingforces:domesticpoliticsandtheglobaleconomy 353
EthanB.KapsteinandStephenJ.Kobrin
16 Globalimplicationsofinformationandcommunication
technologies(ICT) 378
ArnoudDeMeyer
PartIV Implicationsandconclusions
17 Globalizationanditsmanyfaces:thecaseofthehealth
sector 395
LawtonR.Burns,ThomasD’Aunno,andJohnR.
Kimberly
Contents vii
18 Conclusion:Thecontinuingprocessofglobalizing 422
HubertGatignonandJohnR.Kimberly
Authorindex 431
Subjectindex 438
Figures
1.1 Globalizingdecisions page2
3.1 ValueofforeignequityheldbyUSresidents,andof
USequityheldbyforeigninvestors,1990–2002 53
3.2 PercentageofvalueofJapanesesharesheldandtradedby
foreigninvestors,1990–2002 54
3.3 ForeigndirectinvestmentintheUnitedStates,
1990–2002 54
3.4 Shareofinstitutionalownershipof1,000largestUS
companies,1987,1995,and2000 56
3.5 Compensationoftopsevenoreightmanagersat
forty-fiveUSmanufacturingfirms,1982–2003 60
3.6 MedianchangeinCEOwealthper$1,000changein
companyvalue,1980–94 61
4.1 Culturaldimensions 91
5.1 Fourmodelsforglobalization 108
6.1 Cisco’scorporatedevelopmentchoice 135
6.2 Managingthepost-agreementphase:overlapping
challenges 143
7.1 Profitimpactofglobalnewproductstrategyoptions 172
8.1 Distributionofpricepremiumforastrongbrand 190
8.2 Brandstrategyspectrum 193
9.1 Globalmarketingofnewproducts 208
10.1 Domesticvs.non-domesticIPOs 231
10.2 EvolutionofNasdaq 232
10.3 NeuerMarkt 233
10.4 Theincreasingshareofnon-domesticIPOsonNasdaq
andtheNeuerMarkt 234
10.5 NumberofforeigncountriesrepresentedonNasdaqand
theNeuerMarkt(cumulativeIPOs) 235
viii
Listoffigures ix
10.6 Numberofnon-domesticIPOsonNasdaqbycountryof
origin(cumulativenumberoflistings
fortheperiod1988–2001) 237
10.7 Numberofnon-domesticIPOsontheNeuerMarktby
countryoforigin(cumulativenumberoflistingsforthe
period1997–2001) 239
10.8 Issuepricevs.firstprice(average),NeuerMarkt,
1997–2001 239
10.9 Percentagedifferencebetweentheissuepriceandthefirst
price,NeuerMarkt,1997–2001 240
10.10 Issuepricevs.firstprice(average),Nasdaq,
1990–2001 241
10.11 Percentagedifferencebetweentheissuepriceandthefirst
price,Nasdaq,1990–2001 242
11.1 Equityreturnsaroundtheworld,1900–2000 259
11.2 TestingtheCAPMacrosscountries 262
11.3 TestingtheCAPMacrosscountriesandcurrencies 263
11.4 Theworldinvestorpopulation 269
12.1 Thesupplychain 290
12.2 Thesupplychain’simpactonROA 291
12.3 Thesupplychain’sbalancingact 292
13.1 Fourcapabilitiesforsuccessfulglobalrecombinative
innovation 312
17.1 Thehealthcarevaluechain 398
Tables
2.1 Stockmarketcapitalizationforselectedadvanced
economies page32
2.2 Stockmarketcapitalizationforselectedeconomies
classifiedas“developing”atbeginningofperiod 33
3.1 MembersoftheboardsofdirectorsofEnron,Tyco,
andWorldCombeforeandaftertheirscandals,
2001,2003 67
4.1 JackBrown’sactionitems/talkingpointsfordifferent
partsoftheworld 92
5.1 Globalizationoftopbusinessschools 105
7.1 Typesofglobalsegments 165
8.1 Valueofglobalbrands 192
9.1 Threeinternationalsegmentationapproaches 213
9.2 Waterfallvs.sprinklerstrategies 216
11.1 SegmentedandintegratedviewsofThale`s 261
11.2 RequiredUSdollarpremiumonThale`saccording
tothe“hybridmodel”incorporatingworldand
countryfactors 264
11.3 Jointβsandhybridpricingmodelforselected
USfirms 265
11.4 Jointβsandhybridpricingmodelforselected
Frenchfirms 266
11.5 RequiredUSdollarpremiumonThale`saccordingto
theIAPMincorporatingworldandcurrencyfactors 270
11.6 RequiredeuropremiumonThale`saccordingtothe
IAPMincorporatingworldandcurrencyfactors 271
11.7 Amulti-betamodelthatpricespoliticalrisk 273
15.1 Irreconcilabledifferencesonprivacy? 360
15.2 InformationtechnologyintheUSeconomy 370
x