Site icon Pakistan & Gulf Economist

Leadership & Business Wisdom

The Transnational Company

Successful transnational companies see themselves as separate, non national entities.

Most companies doing international business today are still organized as traditional multinationals. But the transformation into transnational companies has begun, and it is moving fast. The products or services may be the same, but the structure is fundamentally different. In a transnational company there is only one economic unit, the world. Selling, servicing, research, finance, marketing, pricing, and management are conducted in contemplation of the world market. One of America’s leading engineering companies, for instance, makes one critical part for al its forty-three plants worldwide in one location outside of Antwerp, Belgium – and nothing else. It has organized product development for the entire world in three places and quality control in four. For this company, national boundaries have largely become irrelevant.

The transnational company is not totally beyond the control of national governments. It must adapt to them. But these adaptations are exceptions to policies and practices decide on for worldwide markets and technologies. Successful transnational companies see themselves as separate, non national entities. This self-perception is evidenced by something unthinkable a few decades ago: a transnational top management.

Modern Organization Must Be a Destabilizer

Only a society in dynamic disequilibrium has stability and cohesion.

Society, community, and family are all conserving institution conserving institutions. They try to maintain stability and to prevent, or at least to slow, change. And yet we also know that theories, values, and all the artifacts of human minds do age and rigidify, becoming obsolete, becoming affliction.

Yet “revolutions” every generation, as was recommended by Thomas Jefferson, are no the solution. We know that “revolution” is not achievement and the new dawn. It results form senile decay, from the bankruptcy of ideas and institutions, from a failure of self-renewal. The only way in which an institution – whether a government, a university, a business, a labor union, an army – can maintain continuity is by building systematic, organized innovation into its very structure. Institutions, systems, policies, eventually outlive themselves, as do products, processes, and services. They do it when they accomplish their objectives, and they do it when they fail to accomplish their objectives. Innovation and entrepreneurship are thus needed in society as much as in the economy, in public service institutions as much as in business. The modern organization must be a destablizer; it must be organized for innovation.

Human Factor in Management

Management is about human beings.

The task of management is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant. This is what organization is all about, and it is the reason that management is the critical, determining factor.

Management must be built on communications and on individual responsibility. All members need to think through what they aim to accomplish – and make sure their associates know understand that aim. All have to think through what they owe to others – and make sure that others understand. All have to think through what they, in turn, need from others – and make sure other know what is expected of them.

Management must enable the enterprise and each of its members to grow and to develop as needs and opportunities change.

The Educated Person

The educated person needs to bring knowledge to bear on the present, not to mention molding the future.

In his 1943 novel, published in English as Magister Ludi (1949), Hermann Hesse anticipated the sort of world the humanities want – and its failure. The book depicts a brotherhood of intellectuals, artists, and humanists who live a life of splendid isolation, dedicated to the Great Tradition, its wisdom and its beauty. But the hero, the most accomplished Master of the Brotherhood, decides in the end to return to the polluted, vulgar, turbulent, strife-torn, money grubbing reality – for his values are only fool’s gold unless they have relevance to the world.

Postcapitalist society needs the educated person even more than any earlier society did, and access to the great heritage of the past will have to be an essential element. But liberal education must enable the person to understand reality and master it.

Exit mobile version