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
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
"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
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. …