Advice to Execs: `Think Globally' Business Leaders Looking to Position Their Companies for the Next Century Will Take Advantage of Innovative Technologies, New Management Techniques, and New Trade Opportunities in the Pacific Rim and Europe to Develop Winning Strategies. So Say the Experts Quoted by the Monitor for This Special Section on the `Global Frontiers of Business.' Series: GLOBAL FRONTIERS. Part 1 of a 4-Part Series. First of Nine Articles Appearing Today

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FOR business, the frontier is the globe.

Business executives and business-school professors often talk about "globalization." Peter Drucker, professor of management and social science at Claremont Graduate School, has told corporate officials, "If you don't think globally, you deserve to be unemployed, and you will be."

"The global marketplace surely has arrived when villagers in the Middle East follow the Gulf war on CNN (Cable News Network), via Soviet government satellite, and through a private subsidiary of a local government enterprise," notes Murray Weidenbaum, an economist at Washington University in St. Louis. "Both public and private business are involved and they are located in three different continents."

More than half the products manufactured in the United States have one or more foreign components. Half of all imports and exports - foreign trade - are transacted between domestic companies and their foreign affiliates or foreign parents. Foreign operations of US-owned companies account for more than $1 trillion in annual sales worldwide, four times the total export of US-made goods.

Robert Reich, an economist at Harvard University, maintains that globalization has gone so far that the managers of supranational corporations feel little allegiance to the nation of their headquarters.

"In the global enterprise, the bonds between company and country ... are rapidly eroding," he writes in the latest issue of the Harvard Business Review. "Instead, we are witnessing the creation of a purer form of capitalism, practiced globally by managers who are more distant, more economically driven - in essence more coldly rational in their decisions, having shed the old affiliations with people and place.

"Today corporate decisions about production and location are driven by the dictates of global competition, not by national allegiance."

In his new book, "The Work of Nations" (Knopf), Professor Reich goes further: "We are living through a transformation that will rearrange the politics and economics of the coming century. There will be no national products or technologies, no national corporations, no national industries. There will no longer be national economies, at least as we have come to understand the concept. All that will remain rooted within national borders are the people who comprise a nation. Each nation's primary assets will be its citizens' skills and insights."

Some say Reich has exaggerated, that the nationality of a corporation still matters. Another Harvard professor, Michael Porter, writes in his massive tome, "The Competitive Advantage of Nations" (Free Press): "As globalization of competition has intensified, some have begun to argue a diminished role for nations. Instead, internationalization and the removal of protection and other distortions to competition arguably make nations, if anything, more important. National differences in character and culture, far from being threatened by global competition, prove integral to success in it.

"The home base is where strategy is set, core product and process development takes place, and the essential and proprietary skills reside. The home base is the platform for a global strategy in the industry in which advantages drawn from the home nation are supplemented by those from an integrated, worldwide position. …


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