Has Globalization Hurt America?

By Reynolds, Larry | Management Review, September 1989 | Go to article overview

Has Globalization Hurt America?


Reynolds, Larry, Management Review


Has Globalization Hurt America?

The simple concept that a company should put the needs of its customers above all other concerns should soon set off a radical re-evaluation and re-definition of the whole concept of United Sttes competitiveness and trade policy.

With globalization becoming the corporate buzzword of the 1990s, more companies are operating without regard to borders. Instead of exporting goods and services from their "home" country, many firms are going where their customers are, assuming the local color and establishing manufacturing facilities to serve those customers directly from overseas bases.

As a result, the concept of defining large multinational companies as American companies or Japanese companies, as opposed to corporations that simply happen to be headquartered in either the U.S. or Japan, is quickly becoming passe. In fact, the term "multinational" is even undergoing a change, with "transnational" becoming the description of choice.

"The very idea of 'American' products made by 'American' firms is becoming obsolete," argues Robert Reich of Harvard's Kennedy School of Government. For instance, Honda's top-of-the-line cars now contain more American-made parts than comparable models produced by the U.S.'s big Three automakrs, contends Reich. Moreover, "IBM-Japan is Japan's biggest exporter of computers, while Sony makes audiotapes and videotapes in an alabama factory to be sold in Europe."

The percentage of total U.S. corporate assets located overseas has jumped from 14.4 percent in 1984 to nearly 17 percent today, according to the National Bureau of Economic Research. As American firms invest more in overseas plants and equipment as well as in joint overseas manufacturing ventures with foreign corporations, executives are more likely to view America as a mailing address rather than as a home base. "The United States does not have an automatic call on our resources. There is no mindset that puts this country first," Cyrill Siewert, chief financial officer of Colgate-Palmolive--which receives at least 30 percent of its total revenues from overseas sales--told the New York Times recently.

GOVERNMENT/BUSINESS

CONFLICTS

These emerging corporate trends seem to run in direct conflict with government policies aimed at promoting "U.S." trade and improving the competitiveness of American companies. "This has touched a raw nerve," says Washington Post Economics Columnist Hobart Rowen. "If national borders are disappearing as far as profit-oriented companies are concerned, the question about whether American companies can remain competitive is not even the right one to be asking."

Further, companies that produce, sell and service their wares from foreign facilites, rather than export these products from this country, would seem to go against the White House's "national" goal of increasing exports and, hopefully, lowering the trade deficit.

Part of this problem is that "our laws are still geared to regulate a domestic marketplace when markets are now global," notes Calman J. Cohen, vice-president of the Emergency Committee for American Trade, a group of multinational companies that follows trade issues.

"There is a basic conflict between current world marketplace realities and government policy," adds Bill Galston of the University of Maryland's School of Public Affairs. "I don't feel Congress or the Administration has officially recognized the conflict and focused on it yet. But they will have to."

This conflict makes it especially difficult for Washington policy-makers to devise effective programs to increase U.S. exports. "You might say that large multinationals have become too global in that they are no longer tied exclusively to the American market," Galston says. At the same time, "most medium and smaller firms are not global enough," since many are hesitant to explore overseas market opportunities, he explains.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Has Globalization Hurt America?
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.