Book Review

Thinking Globally

Global Dreams: Imperial Corporations
and the New World Order
By Richard J. Barnet and John Cavanagh
New York: Simon & Schuster, 1994
480 pp., $25.00


Reviewed by Robert Weissman


THAT WE NOW LIVE IN A GLOBAL ECONOMY is a sentiment repeated so often these days that it has become cliché. Global corporations, global competition, global interdependence and global thinking: these have become the economic buzzwords of the day.

 But what does it all mean? What does globalization mean for everyday working people? What do global corporations do that distinguishes them from big corporations of days gone by? Who are the global thinkers, and what are their plans and visions? These are the questions that Global Dreams, the 20-years-later follow-up to the groundbreaking Global Reach, seeks to answer.

 Authors Richard Barnet and John Cavanagh look for answers in the history, experiences and strategies of five companies - Sony, Bertelsmann, Philip Morris , Ford and Citibank - and in the world views of their executives. Case studies of the five corporations form the core of profiles of the global entertainment industry, the worldwide consumer products industry, workplaces in a globalized economy and the international finance system.

 Global Dreams' profile of Sony, and its shrewd and strong-minded founder, Akio Morita, reveals a Japanese company with a uniquely cosmopolitan outlook. Sony self-consciously tries to maintain a global identity and to fit into local cultures where it produces or sells - rather than trying to adjust those cultures to fit its own needs, as so many U.S.-based companies do. At the same time, Sony's dynamic innovation in electronic gadgetry has greatly affected popular culture the world over, with the Walkman and its endless permutations providing the best illustration of this influence.

 Ultimately, however, the processes of globalization took a toll on Sony, and it found itself in the mid-1980s confronted by Korean companies Samsung and Goldstar and others that were able to copy its ideas and products and sell them below Sony's price in fast order, sometimes only months after Sony introduced a new item. Now presided over by Norio Ohga (Morita remains the company's chair), Sony has developed a four-pronged strategy to address the new global challenges; not surprisingly, it relies heavily on a further globalization of the company.

 First, Sony is diversifying its product base. Second, in an effort to cut labor costs, it is locating its production abroad in low-wage countries - outside of Japan as well as the United States and other countries which provide its major markets. Barnet and Cavanagh report that in the 1970s, Sony had resisted the growing trend of shifting factories in pursuit of ever lower wage rates. Instead, the company maintained most of its operations in Japan; and it selected sites for its factories abroad with an eye to market access, overcoming trade barriers and preempting potential adverse political moves against the company. Third, the corporation is pursuing what Morita calls a strategy of "global localization." "The basic idea," the authors write, "has been to decentralize authority and to adapt working arrangements, product lines and promotion ideas to local conditions, but all within the context of a coherent global strategy." Finally, Sony has entered the global entertainment software industry, most notably with its purchases of Columbia Pictures and CBS Records.

 Globalization is presenting challenges and opportunities to the other corporations profiled in Global Dreams that are both similar and different to those facing Sony. The companies do not have a uniform vision of globalization.

 Like Sony, Bertelsmann, the German publishing and recording industry giant, places a heavy emphasis on decentralization in its managerial structure. But it draws on the German concept of codetermination and employee involvement in a way that differs from the Japanese labor relations schemes. And as a media company, it is a global company with local or regional products; unlike Sony and its Walkman, Bertelsmann cannot sell the same product around the world.

 Philip Morris is an aggressive, image-driven, advertising-reliant company looking to international markets to make up for lost sales in the increasingly health-conscious United States. It has relied heavily on the U.S. government, under the Reagan and Bush administrations, to work on the company's behalf in prying open foreign markets.

 Ford, the company which gave its name to a sociological designation of assembly- line, mass-production industrial organization, found global competition an enormous threat. It responded by moving away from Fordist forms of organization, and toward the just-in-time and team concept approaches made famous by the Japanese auto makers.

 Citibank has sought to position itself as the leading global consumer lender by creating a worldwide private banking network. (Its success has facilitated capital flight from the very Latin American countries whose economies Citibank helped debilitate through irresponsible loans to corrupt, military governments in the 1970s.) The Citibank approach is targeted at serving the emerging elite 10 or 20 percent of the world population. In entering the Indian market, Citibank's head of global consumer operations said in a 1990 interview, "Forget about 90 percent of the people and focus on the top 10 percent. That's 80 million people, larger than West Germany, and if you look at their standard of living, it's higher than the average German's."

 The overarching concern of Global Dreams is that "as economies are drawn closer, nations, cities and neighborhoods are being pulled apart. The processes of global economic integration are stimulating political and social disintegration." But in its extensive description of emerging corporate strategies, the book fails to develop this crucial theme adequately. It devotes relatively little attention to how globalization is pulling communities apart, or to the communities themselves. The book does contain several chapters which critically assess trends in the industry areas it profiles, but these chapters consist of scattershot (though provocative) observations, rather than fleshed-out analysis.

 Appropriately, the book bemoans the fact that the heads of global corporations, caught up in the day-to-day challenges of running a huge enterprise, do not have the luxury of thinking about the social or environmental consequences of their actions. Meanwhile, national and local government officials, who ostensibly should have such a perspective, are increasingly without the tools to control corporate behavior. But there is a disconnect between the book's focus on corporations' individual strategies, and these larger themes; the book does not succeed in explaining how the corporate strategies it so carefully describes are contributing to the destructive social and environmental harms to which it alludes.

 For a book written by critical commentators as sophisticated and insightful as Barnet and Cavanagh, there are too many other significant sources of disappointment in Global Dreams. It spends only a few pages discussing the environmental consequences of globalized corporate activity, and these are rather cautious.

 The book also gives short shrift to citizen efforts to constrain corporate power. It makes brief mention of the anti-smoking movement, discusses the environmental movement in a few short passages and devotes only a few pages to labor (including an inappropriately dismissive reference to United Auto Worker dissidents for failing to offer an alternative to their union's cooperation with Ford and the other two major U.S. auto companies).

 A book focused on a topic as large as the growth of global corporations will inevitably leave some things out; the range of implicated issues is too big to be completely captured in a single work. But the failure to include any meaningful discussion of citizen opposition is particularly problematic. Popular opposition - from the labor movement, environmentalists, community-based campaigns, consumer organizations - is a major concern of global corporations, and an essential element of the story is missing if this opposition is left out.

 Even more disturbingly, ignoring countervailing citizen movements contributes to the impression left by Global Dreams that the destructive activities of giant corporations are inevitable and unstoppable. Only in the area of finance do the authors even discuss serious proposals for reform. Global Dreams does end with two pages calling for the development of a "global consciousness" among business and government leaders which would sensitize them to the social and ecological effects of their actions, placing hope for the inspiration of such a consciousness in the political energy generated by "globalization from below" - the rapid proliferation and networking of local citizens' movements and alternative institutions across the planet. But the final pages' assertion that "one can imagine different global dreams that inspire the development of sustainable economies and less brutal social systems" is not convincing in the absence of any serious discussion of those alternatives, or the forces that may bring them into being.