Essay on Differences Across Countries the CAGE Distance Framework

Essay on Differences Across Countries the CAGE Distance Framework Essay on Differences Across Countries: the CAGE Distance Framework Essay on Differences Across Countries: the CAGE Distance FrameworkQ1. From the perspective of the CAGE framework, which country is closer to the U.S., China or India?The CAGE framework helps to assess the distance between business environments in different countries. In this framework, the following types of distance are taken into account: cultural distance, administrative distance, geographic distance and economic distance (Ghemavat, 2007). All of these distances should be considered when investing into different countries.In the case of China and India, both countries have aspects in which they are closer to the U.S. and aspects in which they are significantly different from the U.S. It is possible to state that China is more attractive than India for U.S. investors and businessmen on economic and geographic grounds, but India is more attractive on administrative and cultural grounds (Ghemavat, 2007).Therefore, the difference between China/India and the U.S. is determined not only by the types of distances and factors influencing them but also by the priority of distance. The answer to the question which country is closer to the U.S. depends on the nature of the industry and the specifics of the industry. For industries in which geographic and economic grounds are most important (e.g. manufacturing or distribution of perishable products) China is closed to the U.S. compared to India (i.e. is more attractive for investment). However, for industries with high administrative or cultural sensitivity such as outsourcing software development and customer support services India is closer to the U.S. compared to China.Q2. What (other) uses might the CAGE framework be put to?Besides assessing investment opportunities and industry attractiveness, CAGE framework can also be applied for other business purposes. It is possible to use this framework to resolve operating conflicts between different parts of MNCs located in different areas. Furthermore, CAGE can be used to evaluate the liability of foreigners and the position of foreigners in the business sphere of a chosen country (Gandelini, Pezzi Venanzi, 2013).It is efficient to apply CAGE to comparing international expansion opportunities and markets. CAGE can serve as the basis for comparing foreign competitors of the chosen industry (Ghemavat, 2007). This framework can provide information for choosing the mode of international expansion into a particular country (Gandelini, Pezzi Venanzi, 2013) and for introducing adjustments for distances between countries.