We live in a Flat World
In his main argument, Friedman proposes that the world is actually flat. To draw the reader's
attention, Friedman uses a figure of speech, "The world is flat," which is a metaphor for how
globalization has flattened the planet over time and will continue to do so. In his main argument,
he expresses strong thoughts regarding what globalization has become and how several factors
have influenced individuals all over the world. It's intriguing how Friedman challenges the
validity of globalization by using this assertion. In other words, his main claim really gives the
reader a new perspective on how globalization has led to the "flattening" of the planet.
Globalization 1.0 (1492–1808) reduced the size of the world from huge to medium, with
countries globalizing for resources and imperial conquest acting as the driving factor. During this
time, nations sent explorers to cross the deep blue oceans in search of fresh resources.
Globalization 2.0 - The world fell from a size medium to a size small because to globalization
2.0 (1800–2000), which was driven by businesses looking abroad for markets and labor. The
world was becoming smaller than it had been by 1800 through 2000, with trade and labor being
the main drivers.
Globalization 3.0 - Due to its dramatic developments, globalization 3.0, which started in 2000, is
very different from previous periods. The rate of travel is one of the adjustments. With the rapid
speed of technology and travel, globalization 3.0 is regarded as the most advanced period in
history. We can connect to the internet in a matter of seconds, send an email, and someone on the
other side of the planet will instantly get it. Never before has the world seemed so "connected."
According to Friedman, globalization 3.0 has caused the planet to become "tiny," or small.
How the world got flat?
1. The fall of the berlin wall which ended old-style communism and planned economies and
the emergence of capitalism
2. Internet browsing and e-mail being commercially viable and user friendly
3. Easier-to-use software and improved connectivity
4. Provide basic software online for free
5. Send employees to specific work through internet
6. Going offshoring
7. Acquisition and distribution improved = lower cost, boost quality
8. Kind of service collaboration
9. Google revolutionized information sharing
10. Technological advances
According to Freidman, the market is being flooded by billions of people from Asia and the
former Soviet Union who want to become more prosperous—fast. This is the result of the
convergence of three more powerful forces: (1) new software and increased public familiarity
with the Internet; (2) the incorporation of that knowledge into business and personal
communication; and (3) the market influx. These variables came together and created their own
critical mass. Each event's advantages grew as it combined with another event. There are now
opportunities for billions of individuals thanks to increased worldwide collaboration among
bright people who don't care about borders, languages, or time zones.
We live in a multi-domestic world
If the globe were flat, international trade and global strategy would be simple, however
international business professor Pankaj Ghemawat strongly disagrees and advocates for a world
that is "semiglobalized" and "multidomestic." It would be a domestic model taken to a larger
market, according to Ghemawat. Global strategy, however, starts with recognizing national
differences in the semi-globalized globe. Ghemawat’s research suggests that to study “barriers to
cross-border economic activity” you will use a “CAGE” analysis. The CAGE framework covers
these four factors:
Culture - Cultural disparities between two nations typically limit their economic interaction.
Differences in language, norms, national or ethnic identity, levels of trust, tolerance, respect for
entrepreneurship and social networks, or other characteristics unique to a particular nation are all
examples of cultural remoteness.
Administration - Bilateral trade flows demonstrate that nations with similar administrative
systems trade much more frequently. Administrative distance alludes to previous ties between
governments,
Geography - This is perhaps the most obvious difference between countries
Economics – economic distance refers to the differences in demographic and socioeconomic
conditions.
How the World is Multi-domestic?
The concept of distance is shared by all of these CAGE dimensions. When the CAGE distance is
large, CAGE discrepancies are likely to be most significant. That is, there will probably be more
opportunities to see business being performed across borders when CAGE disparities are
minimal. Examining an organization's specific industry and its offerings in each of these
categories is also necessary for a CAGE study. Consider the products' cultural sensitivity when
examining culture. When considering administration, take into account whether other nations
favor certain industries or "national champions," and when considering geography, take into
account whether items will last in a different climate. Consider topics like the impact of per
capita income on demand when studying economics.
