In the New York Times this past Sunday, I found a book review that struck me as a balanced take on the true role of large companies in the global economy. The review is of a book that strikes me as a balanced take on the true role of large companies in the global economy.
That's right, I'm recommending a book I've yet to read. Get over it - I ordered it from Amazon already.
The article, "The American Multinational, Unbowed, reviews the book titled "Globality: Competing with Everyone from Everywhere for Everything.
What sold me on the book?
While the consensus is that U.S. (and, I believe, any) multinationals are under serious threat from foreign competitors like Tata or Cemex, the facts are that these behemoths are much more competent and capable than their size or age suggest. The book - via the article - is said to point to 5 core strengths that are often overlooked:
- Human Capital - While most of what we hear is that China and India are creating more engineers and technologists than the U.S., those countries face challenges of extremely high turnover rates, language barriers (most are not fluent in English - only marginally competent), most require further training beyond university, and many indigenous companies can't offer career paths that attract and keep talent.
- International Agility - Conglomerates and multinationals are actually more agile and adept in foreign markets than they're given credit for.
- Mergers & Acquisitions - Western companies have the capital and experience to consistently expand themselves or eliminate competition - much more so than their international competitors.
- Technology Innovation - Again, more capital and experience at functioning openly with other cultures give multinationals the edge.
- Brand Strength - Coke. Google. American Express. Enough said.
The authors sure son't seem to be poo-pooing the emerging challenges from other markets and countries. U.S. manufacturers - especially the large ones - have bureaucracies and administrative layers that can certainly block progress. And these emerging markets are growing at incredible rates of scale.
But many conglomerates have overcome these impediments by learning to do business in the very countries that are seen as challengers. For example, the authors point out that General Motors was the number 1 in China car sales in 2007, and it is beating Toyota in other markets (Brazil, India and Russia).
We don't hear much about that in the mainstream media. That's why I'm looking for good things from this book.
