Procuring materials. Locating operations. Raising capital. Sourcing talent and ideas. It often seems that, as the world gets smaller, the challenges become larger. One way businesses can cope is to develop an overarching geographic strategy. Accenture explains what such an effort entails and profiles its five underlying fundamentals.

BCG has developed an analytical framework—the Global Advantage Diamond—for assessing a company’s current market position and devising strategies to achieve global competitive advantage. The Global Advantage Diamond differs from previous global-strategy models in its focus on all four aspects of global advantage: market access to reach new markets and segments, resource access to maximize competitive advantage, local adaptation to meet the full range of needs of RDE customers, and network coordination to capitalize on the business’s global reach.

No one disputes that the competitive chessboard today is global, and will continue to become even more international in scope as emerging markets like China, India and Latin America burgeon. Yet, most U.S. multinationals, alleging impediments like travel impositions and language and cultural barriers, retain boards that reflect the American and not the global marketplace.

When facing a cross-border negotiation, the standard preparatory assessments—of the parties, their interests, their no-deal options, opportunities for and barriers to creating and claiming value, the most promising sequence and process design, etc.— should be informed and modified by two classes of potentially relevant cross-border factors, the general and the negotiation-specific. Drawing on considerable literature in cross-border and cross-cultural negotiation, this paper develops the first two levels of a four-level prescriptive framework for effectively carrying out such assessments:

1. Common expectations for surface behavior: etiquette, protocol, and deportment. A surface-level assessment informs one about local expectations concerning greetings, business cards, gift giving, dress, punctuality, body language, table manners, and so forth.
2. Deeper cultural characteristics and their implications for the negotiation process itself. Below the surface are characteristics such as whether a culture is focused on the individual or the collective, the nature and importance of relationships, how personal space and the role of time are viewed, the extent to which authority and hierarchy are accepted, how ambiguity and risk are regarded, and so on. Extending this assessment to expectations that are more specific to the negotiation process itself yields several questions: Is there a view that negotiation is a collaborative process aimed at mutual advantage or a competitive battle? Should one focus on specific issues early on or is there a lengthy process of relationship building first? Is the process formal or informal? Is communication direct or indirect? Are agreements constructed from general principles "down" or from specific provisions "up"? And so on.
3. The bulk of this essay develops these two points but with some strong caveats against stereotyping, overemphasizing national culture, falling prey to potent psychological biases in cross-cultural perception, as well as potentially adapting "past" one's counterpart. [A close companion paper-"Assess, Don't Assume, Part II: Decision Making, Governance, and Political Economy in Negotiation"—elaborates the importance to effective negotiating strategy and tactics of incorporating two less well-studied factors beyond etiquette and deeper cultural characteristics: 3) systematic cross-border differences in decision making, governance, and 4) the broader economic and political context for negotiation as well as salient "comparable" deals.]

When facing a negotiation that crosses national borders and/or cultures, the standard preparatory assessments—of the parties, their interests, their no-deal options, opportunities for and barriers to creating and claiming value, the most promising sequence and process design, etc.—should be informed and modified by potentially relevant factors. Drawing on considerable literature in cross-border and cross-cultural negotiation, a two-paper series develops a four-level prescriptive framework for effectively carrying out such assessments. The first paper in this series ("Etiquette and National Culture in Negotiation") described:

1. common expectations for surface behavior
2. some implications of deeper cultural characteristics for the negotiation process itself, as well as cross-border caveats such as stereotyping and overemphasizing national culture to the exclusion of other factors. The current paper carries this analysis further by systematically analyzing a third and fourth class of factors that often prove critical in cross-border dealmaking
3. The decision-making and governance processes that are the targets of influence efforts. While negotiations take place with individuals, those individuals are typically enmeshed in organizational processes and cultures. Thus, a key assessment focuses on the organization's decision-making and governance processes. Several questions guide this analysis: Who has what decision rights? Is it a one-person authoritarian process? A simple consensus? A multi-stage consensus process? A key subgroup? How does the formal decision-making and governance process differ from the informal one?
4. The broader economic and political context for negotiation as well as salient "comparable" deals. Several questions guide this analysis: Is there a formal or informal government policy toward the kind of arrangements under negotiation such as the requirement that the majority of a joint venture be owned by a local partner? Are high-tech deals particularly sought after by the state? What recent deals by others, successful or not, will be salient in the minds of your local hosts and authorities when they contemplate yours? Does the political ethos favor state control or privatization? Does a wrenching political transition foster managerial uncertainty and decision paralysis? And so on.

How global does it need to be if your customers are around the world?

Perils of international joint ventures: Foreign companies often enter joint venture partnerships unaware of the dominating corporate governance practices in developing countries. Susan Perkins outlines the potential costs of not recognizing and accounting for these dynamics in the design of a joint venture.

Globality is not a new word for the well-known phenomenon of globalization; it is a fundamentally different business environment that has been been created by the rise of a set of companies based in the rapidly developing economies. These “global challengers” are giving the established multinationals ¯ the “incumbents” ¯ a run for their money in industries and markets around the world, and forcing them to confront the "seven struggles" of globality.

Evaluating country risks is a crucial exercise when deciding where to set up operations in a foreign country. While some risks can be managed with insurance or hedging strategies, others can be measured with a risk-analysis. Though uncertainty will remain in either case, it can be transformed into planned uncertainty, with no surprises in store and contingency plans in place. The author discusses the analytical frameworks a business should examine as it evaluates risk and creates a strategy to manage the uncertainties.

The biggest challenge in creating value from cross-border mergers and acquisitions (M&A) in rapidly developing economies (RDEs) is not extracting synergies, but understanding the full spectrum of risks before the deal is closed. Based on a survey of executives with extensive experience in M&A in RDEs, this focus highlights the four main drivers of these risks and how to minimize and manage them.

Given the dearth of national leadership experience in China, companies are turning to expatriates to fill critical leadership roles, and promoting these leaders very quickly. The cultural dimensions of leadership developed by Hofstede help provide a foundation for business leaders operating in foreign territories. These dimensions of leadership include power distance, individualism, uncertainty avoidance, and masculinity. For an expatriate leading a national team in China, it is essential to understand the cultural dimensions of leadership to improve productivity, increase company profits, and improve interpersonal relationships.

Increasingly, companies are spreading “knowledge work” tasks – such as research and product development – overseas as a means to increase competitiveness, reduce costs, access new talent pools and establish a presence in emerging markets. Yet many struggle to achieve the performance to which they aspire.

This paper describes how a structured approach for understanding the link between decision-making (how work is governed) and workflow (how work is organized) can help global businesses structure their organizations effectively for knowledge work. We propose a typology of organization models comprising two dimensions: the degree of workflow across locations and the structure of decision-making responsibilities. We also present several case studies that depict organizations at different points in their journeys.

The framework we present can serve as a starting point for you to understand how strategic choices between the structures of your organization’s decision-making and workflow can help you address organizational design questions and, ultimately, achieve more positive outcomes in your global knowledge-work initiatives.

It doesn’t matter where scientific discoveries and breakthrough technologies originate—for national prosperity, the important thing is who commercializes them. The United States is not behind in that race.

Patents reveal the most innovative places to do it.

For multinational enterprises, the rise of the multi-polar world— a phenomenon in which traditional centers of economic power are being dispersed more widely across the globe—makes global operating model configurations and organizational capabilities more important than ever. However, a recent Accenture survey shows that 95 percent of senior executives say that they doubt that their companies have the right operating model to support their international strategy.

To effectively support an organization’s international strategy, five organizational components need to work in synergy: leadership; people; organizational structure; processes and technology; and metrics. But which model is best suited? How do developed-market and emerging-market multinationals’ operating models differ? What can they learn from each other?

Accenture is researching the answers. Ahead of the full results—scheduled for publication in August 2009—this research report compares the literature on emerging- and developed-market multinational enterprises and sets out the six core research-based hypotheses that the Global Operating Models program is testing. By testing these hypotheses, this research project will provide answers to strategic questions and provide key lessons for multinational enterprises as they seek global expansion in the multi-polar world.

Global markets are changing the relationship between firms and nation-states in important ways, says HBS professor Mihir A. Desai. His new working paper, "The Decentering of the Global Firm," offers a practical framework for business leaders to think strategically about where to locate their company's financial and legal homes, and managerial talent. Q&A with Desai.

In the Management feature of this edition, "Winning in emerging markets," Bain's Nicholas Bloch and Robert Schaus elaborate on six common practices that give consumer companies the edge over domestic competitors. Also in this issue: An editorial by Partner Jean-Charles van den Branden titled "Learning from the lucky 13" a guest interview with Robert Franssen, CEO, Allianz Belgium; and a look at a Bain toolkit on Revenue hunt.

Companies compete in a multi-polar world—an environment characterized by a new and more complex phase of increased economic interdependence across multiple centers of economic power and activities. Accenture research into global operations reveals that succeeding in this environment demands a new way of thinking about global operations. In particular, it points to five guiding principles that can position companies for high performance on this new global stage.

A billion consumers around the world—neither affluent nor poor—spend just over $1 trillion a year. As much as a third goes for trading up to better products and premium brands. Yet most consumer businesses don’t know how to reach them or serve them profitably. Drawing from their survey of 15,000 next-billion consumers, the authors discuss how companies can achieve sustained competitive advantage by understanding the ways in which the next billion differ from consumers in other segments.

As globalization continues to play out over the next 30 years, geographic and regulatory barriers will fall, electronic distribution will start to parallel and even overtake physical distribution, installed capacity will become obsolete before it is depreciated, and focused competitors will attack like piranhas. Companies must restructure or die.

Editor's Note: a bit topical in places (written in 1999) but still a good read

M&A is complicated. Cross border M&A is even more difficult, and it now accounts for almost half the world’s total deal value. Managing cultural differences, integrating across borders and creating the right organizational structure are just some of the challenges Accenture has identified.

A new form of global organization grounded in “gateway” countries can allow a company to operate profitably around the world.

At some point in the past few years, that overworked phrase "the post-Cold War world" fell out of fashion, even though it has not really been replaced. It was neither a satisfactory nor a popular way of describing the strange and somewhat anomalous time after the Gorbachev reforms and the subsequent collapse of the Soviet Union changed the geopolitical furniture. Some preferred to describe the 15 years after the fall of the Berlin Wall as America's unipolar moment, the period when it was the sole and unquestioned hyperpower, uniquely and unprecedentedly dominant in military, economic, technological and even cultural power.

Companies sourcing from China are reaping huge benefits but also encountering increasingly tough challenges, both internal and external. A recent BCG study reveals the nature of the challenges and summarizes ten key practices that separate the most effective China sourcing offices from their peers: defining a clear sourcing strategy; aligning the China sourcing organization with global procurement; enabling collaboration across regional and functional boundaries; integrating suppliers and R&D into design; systematically developing suppliers; recruiting, developing, and retaining the best people; gaining 100 percent transparency into sourcing volumes and savings; providing internal education to increse awareness and understanding; tying incentives to sourcing targets; and addressing real and perceived risks.

A dozen contributors explore whether nationality still has a role to play in business success. Contributors include:
- Karl Moore & David Amar
- Mads Mordhorst
- Winfried Ruigrok & Peder Greve
- Paul N Gooderham & Atle Jordahl
- Majken Schultz
- Vikas Kumar
- Àngel Castiñeira
- Malla Paajanen & Mikko Laukkanen