The Economist In Praise of the Statel
Global business
In praise of the stateless multinational
Not without its flaws, but infinitely preferable to the state-bound version
Sep 18th 2008 | from the print edition
Illustration by James Fryer
IF YOU hanker after the idealistic spirit of international co-operation, talk to the boss of an emerging-market multinational. Not the boss of Gazprom, perhaps, which has behaved like an arm of the Russian state. But try Chairman Yang Yuanqing of Lenovo, who has moved his family to North Carolina to deepen his appreciation of American culture, so as to help him integrate his Chinese and American workers. Or Lakshmi Mittal, the London-based Indian boss of Arcelor Mittal, who says his multinational team of executives get on so well that he forgets there are different nationalities in the room, and who believes his firm has no nationality, instead being “truly global”.
Lenovo and Arcelor Mittal are at the leading edge of a new phase in the evolution of the multinational corporation, as our special report this week argues. At first companies set up overseas sales offices, to watch over the export of goods made at home. Then they built small foreign replicas of the mother ship, to cater to local demand. Today the goal is to create what Sam Palmisano, the boss of IBM, calls the “globally integrated enterprise”—a single firm in which work is sourced wherever it is most efficient.
For business leaders, building a firm that is seamlessly integrated across time zones and cultures presents daunting obstacles. Rather than huddling together in a headquarters building in Armonk or Millbank, senior managers will increasingly be spread around the world, which will require them to learn some new tricks.
How do you get virtual teams of workers to bond, for instance? The answer seems to be a lot of time spent talking—as well as the odd junket. MySQL, an online database firm, holds virtual Christmas parties, at which teams around the world play games and exchange virtual gifts. And
In praise of the stateless multinational
Not without its flaws, but infinitely preferable to the state-bound version
Sep 18th 2008 | from the print edition
Illustration by James Fryer
IF YOU hanker after the idealistic spirit of international co-operation, talk to the boss of an emerging-market multinational. Not the boss of Gazprom, perhaps, which has behaved like an arm of the Russian state. But try Chairman Yang Yuanqing of Lenovo, who has moved his family to North Carolina to deepen his appreciation of American culture, so as to help him integrate his Chinese and American workers. Or Lakshmi Mittal, the London-based Indian boss of Arcelor Mittal, who says his multinational team of executives get on so well that he forgets there are different nationalities in the room, and who believes his firm has no nationality, instead being “truly global”.
Lenovo and Arcelor Mittal are at the leading edge of a new phase in the evolution of the multinational corporation, as our special report this week argues. At first companies set up overseas sales offices, to watch over the export of goods made at home. Then they built small foreign replicas of the mother ship, to cater to local demand. Today the goal is to create what Sam Palmisano, the boss of IBM, calls the “globally integrated enterprise”—a single firm in which work is sourced wherever it is most efficient.
For business leaders, building a firm that is seamlessly integrated across time zones and cultures presents daunting obstacles. Rather than huddling together in a headquarters building in Armonk or Millbank, senior managers will increasingly be spread around the world, which will require them to learn some new tricks.
How do you get virtual teams of workers to bond, for instance? The answer seems to be a lot of time spent talking—as well as the odd junket. MySQL, an online database firm, holds virtual Christmas parties, at which teams around the world play games and exchange virtual gifts. And