Even as companies are being told that the future lies in globalization, some are severely punished for their international moves. A simple test can help you decide what makes strategic sense for your organization.
When You Shouldn’t Go Global by Marcus Alexander and Harry Korine
Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 When You Shouldn’t Go Global 8 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications
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When You Shouldn’t Go Global
The Idea in Brief
Globalization promises substantial advantages like new growth and scale. For some companies, it’s paid off handsomely. But global mania has also blinded many firms to a hard truth: global strategies are devilishly tough to execute. The landscape has become littered with some of these unfortunates’ remains. DaimlerChrysler and ABN Amro— dismembered and bought up by activist shareowners—are particularly painful examples. To escape this fate, don’t assume you should go global, say Alexander and Korine. Instead, determine whether a global move makes sense for your firm. Ask: • Could the move generate substantial benefits? • Do we have the capabilities (for example, experience in postmerger integration) required to realize those benefits? • Will the benefits outweigh the costs (such as the complexity that comes with coordinating far-flung international operations)? A yes to these questions suggests globalizing may be right for you.
The Idea in Practice
THREE QUESTIONS TO ASK BEFORE GOING GLOBAL Could the strategy generate substantial benefits for our firm? The global race can lead you to overestimate the