MIT Sloan Management Review

Spreading foreign operations and outsourcing relationships over a broad, well-balanced mix of regions and countries reduces risk and increases potential reward.

Information and knowledge management models that exclude the influence of national and regional culture seriously undercut their potential effectiveness.

As entrepreneurs are considering international expansion earlier and earlier, it is crucial that they structure their ventures to anticipate and mitigate the tensions that can arise from the ongoing need to match perceived opportunities to available resources.

Although large-scale risks garner media attention, it is the everyday, small-scale risks associated with a lack of transparency in countries’ legal, economic, regulatory and governance structures that can confound global investment and commerce. Executives planning such investment will benefit from this new research that identifies the causes of opacity and measures its effects in 48 countries.

Traditional models for developing and managing corporate portfolios are based on financial frameworks, business synergies, or leveraging core competencies into related businesses. Drawing from geopolitics, the author offers an alternative, the sphere of influence model, which focuses on how the strategic intent of each part of the portfolio supports the overall strategy of the company. He provides a framework for designing a sphere of influence and illustrates with the examples of Microsoft, Anheuser-Busch, Nokia, Harley Davidson and Cemex.

By sourcing and integrating knowledge from dispersed geographic locations, companies can generate more innovations of higher value and lower cost.

A decade ago, multinational companies seemed poised to dominate in China. Today that picture has changed. Whereas IBM, HP and Compaq had quickly won more than 50% of the personal computer market, for example, Chinese company Legend Group Ltd. is now the number one supplier. Research in 10 industries over the last 10 years reveals a pitched battle of competencies between multinational and local players and points to five strategies that can help multinationals regain the edge.

Like nations, companies build spheres of influence that are not static, but coexist in a dynamic balance of power. A well-designed sphere can project a company‘s power outward, maneuver competitors into a corner and shape the future of the industry to the player‘s advantage. Drawing on examples from the automotive industry and the contact lens market, the author offers strategies for optimizing the relative power of a company‘s sphere and managing threats to it while avoiding fatal “overstretch” of resources.

The increasingly common practice of migrating business processes overseas to locales such as India, the Philippines and China is often seen as a negative phenomenon that suppresses domestic job markets. On the contrary, says the author, offshoring is a critical component of next-generation business design, a dynamic process of continually identifying how to deliver superior value to customers and shareholders.

Before September 11, the Bush administration was often criticized for going it alone in foreign relations, notably in its decisions to abrogate the Anti-Ballistic Missile (ABM) Treaty and to reject the 1997 Kyoto Protocol on global warming. Since September 11, while the United States has built a broad coalition against terrorism and is talking seriously [...]