The concept of the flat-world perspective was put forward by Thomas Friedman in the book “The Flat World”. The concept gives a statement on how the world is interconnected. According to Friedman, if the world is imagined to be flat, this gives people the opportunity to innovate where they are with no reason for shifting positions. The world is flat in that the competitive field between industrial innovation and the emerging market countries is almost attaining a plateau. Entrepreneurs and companies have already become an integral part of the large and complex global chain which extends overseas where competition spans across continents.
The basic tenets of the flat-world perspective
The concept of the flat world perspective according to Friedman is comprised of personal observation as well as anecdotes. Friedman gives several flatteners which conform in a triple convergence of supply chaining, offshoring, and outsourcing. The basic tenets of the flat world- perspective include globalization prevalence, across-the-border exchange of goods and services, free course of communication flow, easy and quick movements of goods and services as well as restriction of the flow of foreign goods. The Concept emphasizes that all growing and developing nations should embrace change which is inevitable and is taking over the globe rapidly (Göndör & Ohlsson, 2018) . Friedman argues that it is globalization that has bound markets, countries, and people much close together which has almost rendered cross-border interaction very effective.
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Why Ghemawat disagrees with the flat-world perspective
Ghemawat developed an antidote index to challenge Friedman’s concept of the flat world in terms of globalization and cross-border interactions. Ghemawat disagrees with Friedman’s concept of the flat world in the sense that the world only about 10-25% globalization. His point of view in challenging the flat-world perspective is that the world is still short of the full version of integration into globalization. He argues that all cross border interactions are only a fraction of the whole. Ghemawat gives statics of Facebook, international phone calls, non-informational flows, trade statistics, etc are all yet to be integrated to scale up to full globalization. Direct investment is only estimated to be about 10% across the world. Ghemawat relies on such data in order to make the conclusion that the world is semi-globalized (Ghemawat, 2017) . In this case, a close check into the data in regard to globalization reveals the world which is just a fraction of the integrated than that which Friedman describes.
Components of the CAGE analytical framework
The cage analytical framework describes distance as the key critical component which influences business competitiveness and the economy. The framework helps to identify the differences that affect the industry. The four components of the CAGE framework include Cultural, Administrative, Geographic and Economic.
The cultural distance describes the probable distinctions in the way individuals relate with one another from different nations and the way to deal with a given behavior or value. Secondly, the Administrative component deals with the identification of the historical and current legal frameworks among the trading parties which in one way or the other can obstruct business relationships. Thirdly, the Geographic component describes the physical mileage or localities of the trading parties. Although technology has reduced the world into a global village mostly in the sense of communication, physical visits are required in order to understand different business operational models. Finally is the Economic component which must observe the discrepancies related to wealth, income, purchasing power in different demographics ( El-Zayaty & Coff, 2017).
References
El-Zayaty, A., & Coff, R. (2017). Appropriation of Value from Competitive Advantages. Oxford Research Encyclopedia of Business and Management . doi:10.1093/acrefore/9780190224851.013.18
Fashion education for the future: sustainable development in social, economic, environmental, cultural and geographic dimensions. (2017). doi:10.11606/9788564842311
Ghemawat, P. (2017). Globalization Under Fire: How Should Leaders Respond?: Strategic Truths for a Post-Truth World. IESE Insight , (35), 15-22. doi:10.15581/002.art-3094
Göndör, A., & Ohlsson, R. (2018). Enhancer functions in three dimensions: beyond the flat world perspective. F1000Research , 7 , 681. doi:10.12688/f1000research.13842.1
