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

Author

Listed:
  • Rugman Alan

    (Indiana University)

  • Oh Chang H.

    (Brock University)

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 Friedmans examples of worldwide integration are special cases which ignore the empirical realities of multinational enterprises (MNEs). We provide empirical evidence to demonstrate that the worlds 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 Friedmans 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.

Suggested Citation

  • Rugman Alan & Oh Chang H., 2008. "Friedman's Follies: Insights on the Globalization/Regionalization Debate," Business and Politics, De Gruyter, vol. 10(2), pages 1-16, September.
  • Handle: RePEc:bpj:buspol:v:10:y:2008:i:2:n:4
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    Cited by:

    1. Miroslav N. Jovanovic, 2011. "Globalisation: An Anatomy," Chapters,in: International Handbook on the Economics of Integration, Volume I, chapter 11 Edward Elgar Publishing.
    2. Jin, Zhongqi & Lynch, Richard & Attia, Samaa & Chansarkar, Bal & Gülsoy, Tanses & Lapoule, Paul & Liu, Xueyuan & Newburry, William & Nooraini, Mohamad Sheriff & Parente, Ronaldo & Purani, Keyoor & Ung, 2015. "The relationship between consumer ethnocentrism, cosmopolitanism and product country image among younger generation consumers: The moderating role of country development status," International Business Review, Elsevier, vol. 24(3), pages 380-393.
    3. Alain Verbeke & Christian Geisler Asmussen, 2016. "Global, Local, or Regional? The Locus of MNE Strategies," Journal of Management Studies, Wiley Blackwell, vol. 53(6), pages 1051-1075, September.
    4. Sebastian Florian Enea & Silvia Palaºcã, 2012. "Globalization Versus Segregation - Business Cycles Synchronization In Europe," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 4(4), pages 668-692, December.
    5. Narula, Rajneesh & Verbeke, Alain, 2015. "Making internalization theory good for practice: The essence of Alan Rugman's contributions to international business," Journal of World Business, Elsevier, vol. 50(4), pages 612-622.
    6. repec:jes:wpaper:y:2012:v:4:p:668-692 is not listed on IDEAS

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