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ARTICLE
GLOBALIZATION
The False Dichotomy
Between Globalism
and Nationalism
by David A. Waldman and Mansour Javidan

This document is authorized for use only in Prof. Ramya T. Venkateswaran's Strategic Decision Making in International Business_Term-V_2022-23_Prof. Ramya T. Venkateswaran at Indian
Institute of Management - Calcutta from Sep 2022 to Mar 2023.
 GLOBALIZATION

The False Dichotomy

Between Globalism and
Nationalism
by David A. Waldman and Mansour Javidan
JUNE 18, 2020

YUJI SAKAI/GETTY IMAGES

For years, government officials, business school professors, and executives have espoused the
benefits of globalization, supporting their arguments with sound evidence. For example, the United
Nations has reported that globalization and economic interdependence among nations helped world
GDP to increase from $50 trillion in 2000 to $75 trillion in 2016. Another important metric is rising
employment opportunities across borders: in 2017, migrant workers sent an estimated $466 billion to

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 their families in home countries. Synonyms for globalism include development, growth, and
maturation, and multinational executives are routinely encouraged to have a global mindset.

In recent years, however, nationalist sentiments seem to be on the rise. During the current pandemic
and economic downturn, political leaders might find it more expedient to search for solutions for
their own citizenries, instead of combining efforts to find a global one. Before the crisis, protectionist,
populist politicians were gaining favor in many parts of the world. And even in the corporate arena,
one could see signs of a turn inward, with companies touting the jobs that they are creating at or
bringing back home and encouraging consumers to buy domestically produced goods. In the United
States, many manufacturers applauded the tariffs that the Trump administration placed on foreign
competitors. In Great Britain, voters made their Brexit, and businesses will need to adjust
accordingly. And we know Chinese executives at American firms who vocally defend the Communist
party. As one told us, “There is nothing wrong with the government of China developing policies to
ensure maximum benefit to the country.”

We recognize that nationalism is often linked to negative things like bigotry and xenophobia. But it,
too, can carry positive connotations, such as patriotism and good citizenship. Given this, and
nationalism’s increasing relevance, we believe that today’s executives can’t choose whether to be
globalists or nationalists. Instead, they must figure out how to be both at the same time.

Is this possible? At first glance, it might seem that one has to pick either globalism or nationalism
because they appear to be diametrically opposed. We believe that this “either/or” approach leads to
highly undesirable outcomes, however. An exclusive focus on globalism could cause an executive to
ignore, or even worse, look down upon those who display national pride and allegiance, making it
more difficult to see opportunities at home. A strong nationalist focus, on the other hand, narrows
one’s perspective in a different way, limiting possibilities abroad. Either bias can reduce effective
communication, understanding, and collaboration.

A paradox mindset – one that merges both globalist and nationalist views — is the solution. Let’s take
the example of an American executive in charge of R&D in a U.S.-based multinational healthcare
company faced with a decision about where a new eye-disease prevention/medicine development
project should be launched. The cost is substantially lower in India, and the required talent is ample.
But there is pressure to keep the investment and jobs in the United States. The nationalist’s choice is
to do just that — take India out of the equation, and make and sell the medicine at home. The
globalist approach meanwhile points to India, presuming that benefits still accrue to the United
States via taxes and shareholder returns. This is a mild win-win, but in today’s climate it might not be
enough.

Accordingly, a more integrative strategy would be to invest in R&D to invent a low-cost medication in
India, where it is produced, marketed, and distributed. The company might also explore the
possibility of doing the same in the United States as an affordable alternative for low income patients,
or selling it at a higher cost but offering special discounts to those populations. Such an intiative

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 would help the company’s position in India, while also creating employment and providing a service
to Americans. It honors a global ambition, while satisfying nationalistic desires. It generates
additional revenues and jobs both in India and in the United States.

The current Covid-19 crisis provides a unique learning opportunity for how to integrate nationalism
and globalism. In the United States, efforts to quickly respond to the outbreak were impeded by the
scarcity of personal protection equipment (PPE), such as masks, owing to the fact that globally-
oriented corporate policies had pushed the manufacturing of such products in faraway markets. (This
happened in other countries, too, but the U.S. case was most notable.) In other words, nationalistic
concerns were not taken into account. We’ve learned that effective emergency response requires that
adequate supplies also be available at home. Going forward, corporations could balance a global and
nationalistic stance by either investing in domestic product development and manufacturing in
addition to their foreign investments or adding a clause in contracts with foreign suppliers requiring
a rapid increase in supply to the home country under certain circumstances (e.g., health crises).

This example of PPE looks back in time. Now let’s look to the future of vaccine development. On
April 30, 2020, AstraZeneca, the giant British pharmaceutical company, announced a partnership to
manufacture and distribute a Covid-19 vaccine that the University of Oxford is working to develop.
We don’t have any insight into how project leaders plan to proceed but we can think hypothetically
about how they might. A pure nationalistic approach would be to contain this process within the
United Kingdom: the vaccine would be produced to first help the British population, and allow its
economy to recover, while allowing for the possibility of exporting it. A globalist approach would call
for making the vaccine wherever it is most efficient and cost-effective and then making it widely
available, perhaps prioritizing hardest hit countries first. Or senior executives could take more of an
integrative approach. They might replicate the Oxford partnership with a number of centers of
medical research excellence, including universities, institutes, or other corproations, around the
world.. For manufacturing and distribution, they could either form joint ventures or contract with
other companies in other countries. In other words, they could help develop a global ecosystem to
satisfy local or national needs as well as those of the international community.

We have been party to hundreds of discussions among executives related to similar decisions.
Following conventional wisdom over the past few decades, executives often focus on globally-
oriented actions and benefits but almost never take the following integrative steps. First, recognize
and explain to your team that it’s not only okay, but actually important, to represent both global and
national concerns in decision-making. In fact, we should all endeavor to take both perspectives into
account even if we naturally lean toward one side or the other. Second, in making any major
business decision that seems to juxtapose a globalist view against a nationalist view, ask three
questions: 1) what criteria would a pure nationalist decision-maker who focuses on clear benefits to
national stakeholders use?; 2) what criteria would a pure globalist decision-maker who focuses on
benefits to the global corporation use?; and 3) how can we integrate at least some of the two sets of
criteria in making the final decision? In our experience, addressing such questions goes a long way

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This document is authorized for use only in Prof. Ramya T. Venkateswaran's Strategic Decision Making in International Business_Term-V_2022-23_Prof. Ramya T. Venkateswaran at Indian
Institute of Management - Calcutta from Sep 2022 to Mar 2023.
 toward harmonizing both global and national concerns in an executive’s decision-making and
actions.

David A. Waldman is a professor of leadership at W. P. Carey School of Business at Arizona State University.

Mansour Javidan is Garvin Distinguished Professor and Director of Najafi Global Mindset Institute at Thunderbird School
of Global Management, Arizona State University.

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This document is authorized for use only in Prof. Ramya T. Venkateswaran's Strategic Decision Making in International Business_Term-V_2022-23_Prof. Ramya T. Venkateswaran at Indian
Institute of Management - Calcutta from Sep 2022 to Mar 2023.