Global Strategy 5th Edition

Book Preface

The first four editions of Global Strategy have made this book the world’s number-one global-strategy textbook.

The fifth edition aspires to do even better. Global Strategy has set a new standard for (1) global or international stra-tegy courses, (2) strategic management courses, and (3) in-ternational business courses at the undergraduate and MBA levels. It has been widely used in Angola, Australia, Austria, Brazil, Britain, Canada, Chile, China, Denmark, Egypt, Fin-land, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Lithuania, Macau, Malaysia, Mexico, the Netherlands, Netherlands Antilles, New Zealand, Norway, Peru, the Philip-pines, Portugal, Puerto Rico, Romania, Russia, Singapore, Slovenia, South Africa, South Korea, Spain, Sweden, Switzer-land, Taiwan, Thailand, and the United States. Now available in Chinese, Portuguese, and Spanish, Global Strategy is global.

Written during the tumultuous time of the coronavirus that shut down most of the global economy, the fifth edition continues the market-winning framework centered on the strategy tripod pioneered in the first edition. Its most stra-tegic features include (1) a broadened definition of global strategy; (2) an evidence-based, in-depth, and consistent explanation of cutting-edge research; and (3) an interesting and accessible way to engage students.

A Broadened Definition of  “Global Strategy”

In this text, “global strategy” is defined not as a particular multinational enterprise (MNE) strategy but as strategy around the globe. In other words, we do not exclusively focus on international strategy. Global strategy is most fundamentally about strategy before being global. Most global-strategy textbooks take the perspective of the foreign entrant, typically the MNE, and ignore the other side. The other side—namely, the domestic side—does not sit around waiting for its market to be invaded. Instead, domestic firms actively strategize, too. Failing to understand the other side captures only one side of the coin at best.

Offering a more balanced and more inclusive perspective, Global Strategy covers the strategies of both large MNEs and small entrepreneurial start-ups, both foreign entrants and do-mestic firms, and enterprises from both developed and emerg-ing economies. In short, this is a truly global global-strategy text.

An Evidence-Based, In-Depth, and Consistent Explanation

The breadth of the field poses a challenge to textbook au-thors. My respect for the diversity of the field has increased tremendously over the past two decades. To provide an evi-dence-based, in-depth explanation, I have leveraged the lat-est research. Personally, I have accelerated my own research, publishing more than 40 articles after I finished the fourth edition. Drawing on such cutting-edge research has greatly enriched Global Strategy.
In addition to my own work, I have also drawn on the latest research of numerous colleagues—please check the Index of Names. Beyond academic sources, I have often relied on my two favorite magazines—Bloomberg Busi-nessweek and Economist. Recently, I have also subscribed to Foreign Affairs, Fortune, Harvard Business Review, and Wall Street Journal. The end result is an unparalleled, most comprehensive set of evidence-based and timely insights on the market.

Given the breadth of the field, it is easy to lose focus. To combat this tendency, I have endeavored to provide a consis-tent set of frameworks in all chapters. This is done in three ways. First, I have focused on the four most fundamental questions in strategy. These are: (1) Why do firms differ? (2) How do firms behave? (3) What determines the scope of the firm? (4) What determines the success and failure of firms around the globe?

Another way to combat the tendency to lose the sight of the “forest” while scrutinizing various “trees” (or even “branches”) is to consistently draw on the strategy tripod—the three leading perspectives on strategy—namely, indus-try-based, resource-based, and institution-based views. This provides a great deal of continuity in the learning process.

Finally, I have written a beefy “Debates and Extensions” section for every chapter. Virtually all textbooks uncritically present knowledge “as is” and ignore the fact that the field is alive with numerous debates. Because debates drive practice and research ahead, it is imperative that students be exposed to important debates and that their critical thinking skills be fostered. The new debates that have become more promi-nent since the fourth edition—such as globalization versus deglobalization and firms’ role in reducing versus contribut-ing toward income inequality—are more spicy, making the book more relevant.

An Interesting and Accessible Way to Engage Students

If you fear this text must be boring because it draws so hea-vily on latest research, you are wrong. I have used a clear and engaging conversational style to tell the “story.” Relative to rival texts, my chapters are shorter and livelier. The length of all our Integrative Cases is shorter than that of many long “monster cases” found elsewhere.

Some earlier users commented that reading Global Stra-tegy is like enjoying a “good magazine.” A large number of interesting anecdotes have been woven into the text. Non-traditional (“outside-the-box”) examples range from ancient Chinese military writings to modern “four-star company commanders” armed with UAVs (Chapter 1), from Shake-speare’s The Merchant of Venice (Chapter 5) to Tolstoy’s Anna Karenina (Chapter 7). Some of the discussions are truly cutting-edge. For example, the closing case for Chapter 8, “Is There an Antitrust Case Against Big Tech?” (written in March 2020), will force students to discuss it in a future tense. This is because the US government—in an effort to make the discussion about this case more interesting—sued Google in October 2020 after this case was written, and the future outcome of this case is unknown as the fifth edition goes to press. A consistent theme is to engage ethics. This is not only highlighted in Chapters 4 and 12, but also through-out all chapters in the form of Ethical Dilemma features and Critical Discussion Questions marked “On Ethics.”
So what? Many textbooks leave students to struggle with this question at the end of every chapter. In Global Strategy, every chapter ends with a section titled “The Savvy Strate-gist” with one teachable table or slide on “Strategic Implica-tions for Action” from a practical standpoint. No other competing textbook is so savvy and so relevant.

What’s New in the Fifth Edition?

Most strategically, the fifth edition has (1) significantly up-graded the global-strategy knowledge base, (2) enhanced the executive voice by drawing more heavily from CEOs and other strategic leaders, (3) drawn directly on the author’s consulting experience, (4) introduced a new and diverse set of cases, and (5) returned to the traditional format of having one hardcopy book including everything.

The scale and scope of the changes in the global-strategy landscape between the publication of the fourth edition (2017) and the fifth edition is likely to be some of the most profound since the launch of the first edition (2006). Sources of such changes not only come from disruptive tech-nological start-ups known as unicorns—a term coined as recently as in 2013—but also from worsening geopolitical relationships between the top two economies of the world. Instead of globalization, the new buzzword is deglobaliza-tion. On top of all of the above, the coronavirus of 2020—a black swan event—shut down the global economy. Tho-roughly updated, the fifth edition helps students make better sense of this rapidly changing and tumultuous era.

If Global Strategy aspires to train a new generation of global strategists, we need to coach them to think, act, and talk like CEOs. Although I have taught a few execu-tive education classes with Global Strategy, most students using the text have not assumed that kind of executive responsibility. To facilitate strategic thinking, the fifth edition has enhanced the executive voice by featuring extensive block quotes from the following CEOs and other strategic leaders:

Armstrong Industries’ outside director Michael Jensen
(Chapter 11)
Business Roundtable (183 members who are CEOs of prominent US firms signed a statement on the purpose
of a corporation in 2019—Chapter 12)
Canada Goose’s CEO Dani Reiss (Chapter 5)
Dow Chemical’s CEO William Stavropoulos (Chapter 10)
The (new) East India Company’s founder Sanjiv Mehta
(Chapter 5)
Facebook’s founder and CEO Mark Zuckerberg (Chapter 1)
GE’s chairman and CEO Jeff Immelt (Chapters 8)
GE’s chairman and CEO Jack Welch (Chapter 12)
Google’s CEO Eric Schmidt (Chapter 7)
IBM’s CEO Ginni Rometty (Chapter 3)
L’Oreal’s CEO Jean Paul Agon (Chapter 10)
P&G’s chairman and CEO A. G. Lafley (Chapter 1)
US Assistant Attorney General (commenting on the global vitamin cartel case—Chapter 8)
US Assistant Attorney General (representing the Department of Justice to challenge AT&T’s proposed merger with T-Mobile—Chapter 8)
Walmart’s CEO Doug McMillon (Chapter 1)
Whole Foods’s cofounder and CEO John Mackey
(Chapter 12)
World Health Organization’s Director-General Margaret Chan (Chapter 12)
Zoom’s founder and CEO Eric Yuan (Chapter 1)

I have directly drawn on my consulting experience to inject new insights. Chapter 1 describes my consulting engagement with MTR Corporation in Hong Kong (see Table 1.3). Chapter 3 illustrates a strategic sweet spot for UK manufacturing, which I developed for a major con-sulting engagement I completed for the UK government as part of its two-year Future of Manufacturing project (see Figure 3.6). Table 4.5 (“Texas Instruments Guidelines on Gifts in China,” which is in the public domain) is shared with me by a consulting client at TI. In addition, I have written the new Integrative Case 1 “The Consulting Indus-try” to more comprehensively introduce this strategically important industry.

The fifth edition has expanded case offerings by (1) pre-senting 21 new Integrative Cases and (2) making available four popular and still timely Integrative Cases from earlier editions. Students and instructors especially enjoyed the wide-ranging and globally relevant cases in previous editions. Fourteen of the 25 Integrative Cases were authored by me, and the other 11 were contributed by 17 colleagues from Australia, Canada, China, New Zealand, and the United States. The fifth edition is blessed with that many new Integrative Cases. The end result is an unparalleled, diverse collection of cases that will significantly enhance the teaching and learning of global strategy.

Finally, what’s new in the fifth edition is what is old—returning to a hardcopy format that includes everything (including all Integrative Cases). The fourth edition experi-mented with a format that (1) was completely digital or (2) was a hybrid—printing the 12 chapters in a hardcopy loose-leaf book but keeping all Integrative Cases online. Customer feedback indicated that the all-inclusive hardcopy is still the most preferred format. Of course, for those digitally savvy, the product will also be online.