A Critical Assessment of Whether the Complications of the Impact of Globalization on Global Strategy Is Completely Covered by the Four Debates in the Field of Global Strategy .

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It is preferable to address both overseas and domestic employees and communities when there are enough resources. However it is noted that management needs to prioritize when they are faced with harsh pressure for cost cutting and reorganization (Sundaram and Inkpen, 2004). Due to no proper solution as to who the organizations are corporately social responsible to, the complexity of globalization.

Culture verse Institutional Distance

This debate sheds light on the role cultural features play in the institutional base view of global strategy which Hofstede work on national culture was been applied. Culture is the values, norms and belief of individuals of a country (Hofstede, 2001). International business transaction is being viewed as the interaction amongst different social values, as such culture is considered an essential aspect of all business transaction (Miller and Tsang, 2011). In explaining the role culture plays, the concept of ‘phyics distance’ has been applied by many scholars (Ionascu, Meyer, and Erstin, 2004). Hence, Cultural distance is suggested to be the degree to which values and shared norms vary in various countries (Hofstede, 2001).

Cultural distance assumes that as the distance amongst the parenting country and the hosting country of the organization increases, the more difficult it gets for the multinational enterprise to function effectively in the host market. Culture distance has been used to explain international diversification (Grosse and Trevino, 1996) organizations’ entry mode choice (Barkema et al., 1996) and multinational enterprise performance (Morosini et al., 1998).

However culture distance has been critiqued by several researchers. There is a negative relation amongst cultural distance and entry mode choice, international diversification, and multinational enterprises performance (Tihanyi et al., 2005). In addition, it ignores that other facets other than cultural norms impact business strategies (Ghemawat, 2007 and Shenkar, 2001). Also culture measurement covers only a small part of the aspect of distance of interest to international business (Ionascu, Meyer, and Erstin, 2004). Last but not least, in the beginning stage culture distance is thought of being vital, but it vitally falls when it is assessed on the institutional base view basis (Donaldson and Dunfee, 1994)

As such, Institutional distance was suggested to be the better construct for measuring organizations’ behaviour and performance, as it includes factors like regulatory differences, normative pressures and cognitive identification in addition to culture (Xu and Shenkar, 2002). The degree to which two countries are alike or vary in their regulatory, cognitive, and normative institutions is called institutional distance (Kostova and Zaheer, 1999).

Concerns however have been expressed that the explicit focus on institutional distance in national boundaries may be too simple in disclosing the behaviour of multinational enterprise as institutional distance is anchored in national level properties and does not pay attention to the transnational level properties (Larsen and Mannings, 2015). Despite the critic, each measure is fitting as both institution and culture supplies a comprehensive reason of firm’s performance (Davis, Schoorman and Donaldson, 1997)

Convergence verse Divergence in Corporate Governance

This debate questions whether corporate governance should converge globally base on economic ideologies or diverge given the environmental factors and cultural factors of a particular country (Scott, 2001). The connections amidst an organization’s management, other stakeholders, its board and its shareholders are considered to be corporate governance (Sasan, Moradi and Eskander, 2014). It also supplies the method of obtaining organization’s objectives, monitoring performance are regulated and supplies the framework for which organizations goals are set. (Organisation for Economic Co-operation and Development (OECD), 2015).

The followers of convergence corporate governance argue that organizations will assume global best practice as a result of globalization unleashing ‘survival-of-the-fittest’ procedures (Rubach and Sebora, 1998). This one best practice that is being adopted is that of the Anglo-American approach. This may be as a result of global investors preferring to disburse more money for stock in organizations that utilizes Anglo-American-style governance approach (Young et al. 2004 and Hebb and Wojcik, 2005). However the actual driver of this part of the debate is that organizations adopt international standards because of the threats from market conformity pressure (Peng and Pleggenkuhle- Miles, 2009).

On the flip side, according to divergence followers, corporate governance should be prescribed based on environmental factors (Peng and Pleggenkule, 2009). The followers of divergence preserved that it is harder to export informal norms, value and belief without affecting the underlying ownership and control structure, while there is a possibility for exportation of formal US or UK-style regulation (Bruton et al, 2003).

However, overall complete divergence and convergence is considered impractical and unrealistic hence, crossvergence is thought of. Crossvergence argues that neither of the construct fully describes the lively interaction taking place (Ralston et al, 1998). As such, the OECD who was the advocate of Anglo-American governance principles have amended their principles to mirror the experience of both OECD countries and emerging economies in order to remain relevant (Jescover and Kirkpatrick , 2005).

Global verse Regional Geographic Diversification

Global verse regional geographic diversification focuses on the classification of multinational enterprises whether they are global or regional (Dunning, 1996). The geographic scope is thought of here as being a vital aspect of global strategy (Peng and Delios 2006), as it provides all of the global characteristics of an organization that is too hard to determine. In attempting to explain the extent of multi-nationality of an organization the author turn its eyes on internal factors of organizations. Hence the discovery of many ‘regional’ multinational enterprises having been incorrectly labelled ‘global’ (Peng and Pleggenkuhle- Miles, 2009).

Having noting this, the empirical evidence for regional provided vital connotations. One, it’s about many of the multinational enterprise international activities not being done at the inter-regional level instead of at the intra-regional level (Goulding, 2002). Two, majority of the multinational enterprise affairs