The Future of Multinationals

Last Updated Aug 20, 2007 8:45 PM EDT

Halliburton created a political kerfuffle last month when it announced it was moving its corporate headquarters from Houston to Dubai. But this article from the Economist says that several corporations are rethinking their strategies on where they should base their businesses. Here's what the article says about IBM boss Sam Palmisano and his take on globalization and multinationals:
"In his scheme, multinationals began when 19th-century firms set up sales offices abroad for goods shipped from factories at home. Firms later created smaller "Mini Me" versions of the parent company across the world. Now Mr. Palmisano wants to piece together worldwide operations, putting different activities wherever they are done best, paying no heed to arbitrary geographical boundaries. That is why, for example, IBM now has over 50,000 employees in India and ambitious plans for further expansion there. Even as India has become the company's second-biggest operation outside America, it has moved the head of procurement from New York to Shenzen in China."
The article goes on to say that some of multinationals are going to struggle with this, while others are going to get stronger as they adapt. So it appears that the companies who can master this strategy swiftly will end up winners.