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Friedman's Follies: Insights on the Globalization/Regionalization Debate

Published online by Cambridge University Press:  20 January 2017

Alan Rugman  and
Chang H. Oh
Alan Rugman
Affiliation:
Indiana University
Chang H. Oh
Affiliation:
Brock University
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Abstract

In this paper we deconstruct the popular book by Thomas Friedman which argues that the world is integrated through the advent of a new form of globalization based on the Internet. We use the logic of international business strategy to demonstrate that Friedman's examples of worldwide integration are special cases which ignore the empirical realities of multinational enterprises (MNEs). We provide empirical evidence to demonstrate that the world's largest MNEs do not operate globally, but sell and produce the vast majority of their output within their home region of the triad. We develop a new analytical framework to explain the limited nature of Friedman's thinking, and we contrast this with the more robust frameworks available in international business. The latter frameworks, which take into account country level and regional level barriers to integration, are better at explaining the activities of MNEs. We conclude that, from the viewpoint of international business strategy, the prescriptive thinking from Friedman is misleading if it is believed that a global strategy is feasible. Instead, MNEs need to develop strategies to accommodate the realities of intra-regional integration and to overcome the liabilities of inter-regional expansion across the triad.

Keywords

globalizationregionalizationinternational business strategymultinational enterprises
Type
Article
Information
Business and Politics , Volume 10 , Issue 2 , August 2008 , pp. 1 - 14
Copyright
Copyright © V.K. Aggarwal 2008 and published under exclusive license to Cambridge University Press 

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