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1. What are the basic tenets of the flat-world perspective? 

2. Why does Ghemawat disagree with the flat-world perspective?

3. What are the four components of the CAGE analytical framework?

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Flat world perception is given by THOMAS FRIEDMAN in his book THE WORLD IS FLAT. His main concentration was on globalization and commerce. He had a view that there is no barriers to conduct business worldwide there is a irrelevance of historical as well as geographical divisions so that's opens a gate for small as well as big companies to conduct free trade worldwide.

Here the main tenets of flat world perceptions are free trade which covers free flow of goods and services worldwide, boundary less communication , acceptance of rapid changes(no resistance to change) etc.

2.         Flat world perception got positive as well as negative feedback in that GHEMAWAT gives negative feedback his say that free flow of goods and services are not possible because world is not flat instead it is geographically divided into smaller parts and we need to formulate domestic strategies to globalize our business.

3.         When company wants to globalize its business it should analyses the different factors of particular nation where it want to expand its business because each area is different in many ways. Here, CAGE analysis is one of the tools which help the manager to analyze the factors and formulate international strategies. This CAGE framework is developed by Pankaj Ghemawat.

Four components of CAGE are,

1.         Cultural distance

2.         Administrative distance

3.         Geographical distance

4.         Economic distance

Cultural distance comprises of difference in language, norms, values, beliefs, ethical code of conduct, level of trust, regional differences etc.

Administrative distance comprises of regional trading blocks, political condition or hostilities, level of corruption, free market for foreign industries, colonial ties etc

Geographical distance comprises of difference in climate, time zone, border issues which may become obstacle for sharing of resources, transportation facilities etc

Economic distance comprises of GDP and GNI, fiscal and trade policies, tax, availability of financial, human, land and other required resources, level of income, size of economy also matters like developed, developing or under developed economy that decided size of business.

So, it's important to analyze all factors before globalisizing our business.

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