Global Vision

About the Author

Robert Salomon is a Professor of International Management and an NYU Stern Faculty Scholar at the NYU Stern School of Business. With nearly 20 years of experience teaching and researching globalization and global strategy, Salomon has become a recognized authority in the field. He has received over ten commendations for excellence in teaching at NYU Stern. His book, Global Vision: How Companies Can Overcome the Pitfalls of Globalization, encapsulates his extensive knowledge and provides a valuable resource for managers navigating the complex terrain of global business.

Main Idea

In Global Vision, Robert Salomon presents a comprehensive guide to understanding the risks associated with globalization and offers tools to overcome these challenges. The book highlights the pitfalls that companies often encounter in global markets and provides a framework, called Global Acumen, to help managers assess and mitigate these risks. Salomon emphasizes the importance of understanding institutional differences across political, economic, and cultural dimensions to make informed globalization decisions.

Table of Contents

• Introduction
• Globalization: A Cautionary Tale
• Failure to Globalize Effectively
• Institutional Distance: A Key Factor
• The Globalization Process
• The Impact of National Institutions on Globalization
• Political Institutions and Globalization
• Economic Institutions and Globalization
• Cultural Institutions and Globalization
• Using Global Acumen to Account for Risk
• Global Acumen in Practice
• The End of the Beginning for Global Acumen
• Finally Bringing It All Together

Globalization: A Cautionary Tale

Managers often view globalization with an overly optimistic lens, underestimating the associated risks. Salomon underscores that managers frequently assume their successful domestic business models will seamlessly translate to foreign markets, which is rarely the case. This overconfidence leads to numerous pitfalls as managers fail to account for the significant differences between countries that impact operational effectiveness.

"Risk goes hand in hand with opportunity, and managers fail to accurately account for the risks they face in global markets." - Robert Salomon

companies that have struggled with globalization include Tesco, IKEA, and Walmart. These companies, despite their domestic success, encountered substantial challenges in foreign markets due to institutional differences they did not adequately prepare for.

• Higher operational costs and longer setup times
• Higher wages and increased likelihood of legal issues
• Lower profitability in foreign markets compared to domestic operations

Failure to Globalize Effectively

Salomon points out that globalizing companies often underperform in foreign markets, failing to achieve their desired performance targets. Foreign companies face numerous challenges, such as higher wages, increased legal risks, and longer setup times, which lead to higher costs and lower profitability compared to domestic operations.

"Globalizing companies take about three months longer and spend anywhere from 5 to 25 percent more than domestic companies just to get their businesses off the ground." - Robert Salomon

This higher cost structure and increased risk of failure highlight the need for a comprehensive understanding of the local market conditions and institutional differences that affect business operations.