The Economics of Globalization

There has been a seismic shift in the global business landscape—those companies who clung to previously successful business models are frantically trying to reinvent themselves or dying. One only has to look at the demise of Eastman Kodak and Circuit City to see that the old business models no longer apply. A phrase being bantered about is the “global hyper-competitive marketplace” (Harvey, Kiessling, and Novicevic, 2003) in which the global landscape is a combination of rapidly changing variables, technology, uncertainty, and quickly appearing competitive threats (Ilinitch, Soderstrom, and Thomas, 1998). The world is increasingly diverse, complicated, and moving quickly. Everyone understands that the nature of competitive advantage is changing but no one is sure what will be required in ten years. Most understand what is needed: flexibility, adaptability, innovation, and the ability to replicate this across a number of markets. It is the ability to manage innate tensions from thinking globally but acting locally, not once but in 190 different locations. Some organizations are able to do this, others have failed, and still others choose not to even try.