Global-Spin News

CAGE Distance Framework to Help with Company Internationalisation

CAGE Distance Framework to Help with Company Internationalisation
Wednesday, 12 September 2018

Developed by Pankaj Ghemawat, the CAGE framework is a way of evaluating the distance between countries. CAGE considers that “distance” is more than the physical, geographic space that exists between places and also includes the cultural, administrative, and economic differences that play important roles when starting companies. [1] This methodology is especially interesting when talking about company globalisation as it allows business to analyse where they are most likely to be successful.

Pankaj Ghemawat is a professor at the Stern School of Business at New York University and IESE Business School. He specialises in Management and Strategy, Globalisation of Education, and Global Strategy. [2] This focus has allowed him to develop the CAGE Distance Framework that is used to identify and prioritise which difference(s) between countries should be taken into account by companies when developing globalisation strategies. CAGE (which stands for the Cultural, Administrative, Geographic, and Economic) prompts businesses to keep a variety of these dimensions in mind when considering internationalisation. [3]

Considering more than just the geographic distance between two places is something that all companies have to keep in mind—as we have talked before on the Global-Spin Project here and here. The CAGE Framework is one way of looking at the larger differences between places, facilitating the decision making process when companies want to expand. [1]