Multinationals 2.0
IBM chief sets off a debate about the global role of corporations
Here's the even bigger vision: As more and more countries--particularly the developing ones in Africa, Latin America, and the Middle East--become more interconnected and dependent, it will result in a safer, more orderly world. "The business world has this enlightened self-interest in integration," says Steve DeAngelis, CEO of Enterra Solutions, a software solutions company that helps global companies integrate far-flung operations. "Look at China and the United States. Look at all the economic bridges we are building. Each one we build is a step away from military conflict." So while multinationals have traditionally been stereotyped as corporate villains--for polluting the environment or attempting to overthrow unfriendly Third World governments--the new organization would supposedly make the planet a better place.
Yet given all this Bono-friendly talk about corporate responsibility and global economic development, it's easy to forget that the primary functions of global corporations are to make a profit and please shareholders. "These public statements help IBM's business because basically it removes some taboos," says Uri Dadush, a trade economist at the World Bank. "[Palmisano] is saying that if we find a relatively low-cost place to do R&D, we will do that."
In an era of integrated global networks, could the "good jobs" that are supposed to stay in the United States get moved offshore and disappear as well? "The ground is being softened for a whole new group that will have to compete to keep their jobs in the global economy," says L. Josh Bivens, an economist at the liberal Economic Policy Institute.
The traditional response from economists has been that global development enlarges the overall economic pie and will lessen the advantage of moving work to low-wage locales. But in the case of globally networked companies, cost is only one factor. Having engineers and designers overseas is considered a benefit in and of itself. The real backlash global CEOs might need to worry about could take place right in their own backyard if the pie doesn't grow fast enough to create oodles of good jobs at home. And despite the best efforts of media-savvy CEOs, globally integrated enterprises might end up being seen as merely version 2.0 of traditional multinationals.
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