Storm over the Multinationals: The Real Issues PDF
Preview Storm over the Multinationals: The Real Issues
Storm over the Multinationals The Real Issues Written under the auspices of The Center for International Affairs and Graduate School of Business Administration, Harvard University Storm over the Multinationals The Real Issues Raymond Vernon © Raymond Vernon 1977 Softcover reprint of the hardcover 1st edition 1977 All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means without permission First published in the U.S.A. 1977 First published in the United Kingdom 1977 Published by THE MACMILLAN PRESS LTD London and Basingstoke Associated companies in New York Dublin Melbourne Johannesburg and Madras ISBN 978-1-349-03539-7 ISBN 978-1-349-03537-3 (eBook) DOI 10.1007/978-1-349-03537-3 This book is sold subject to the standard conditions of the Net Book Agreement I Preface BOOKS that deal with the multinational enterprise, the transnational corporation, or the international firm have not been a rarity over the past few years. Indeed, it is a little frightening to observe the mounting flood of words on these subjects coming from the typewriters of scholars, journalists, government officials, and novelists. Why one more such book? This book is intended to help the reader who is trying to keep his head above the flood. It tries to maintain some sort of large perspective on the nature and consequences of the multinational enterprise. That is not an easy thing to do. Here and there, swept along in the torrent of pub lished words, one can find a revealing fact, a perceptive study, a powerful generalization. But much of the out pouring turns out to be a tide of special pleading or of narrow pedantry. Anyone who tries to filter out the po lemic and the propaganda so as to grasp the meaning of what is left is likely to find the task forbidding. That task is what this book tries to perform. Systematic efforts to grasp the meaning of the mul tinational spread of large enterprises began at Harvard nearly fifteen years ago. Not surprisingly, I have drawn heavily on the substantial body of research that has been conducted at the Harvard Business School during those years, as well as on the work of my colleagues at Har- v vi Preface vard's Center for International Affairs. In more recent years, the network of serious researchers and the output of useful research on the subject have increased astro nomically, so that exciting and revealing contributions have been coming from dozens of institutions. Very soon the sheer weight of all the materials will be so great that no individual scholar will be able to keep up with the im portant contributions. But up to the time that this book went to press, that was my aspiration. The subject of the multinational enterprise, as this analysis points out, engages the values, the fortunes, and the psyches of some of the most powerful leadership groups in modern society-businessmen, politicians, in tellectuals, and poets. Any author who lays claim, as I do, to a position detached from all such leadership groups is likely to generate a predictable reaction. From the per spective of every disputant, the hapless author is clas sified as belonging to the enemy. On the other hand, as the reader will shortly see, I regard the subject as much too important to be settled by the parties who so far have led the debate. Most of them, as it turns out, are cast in leadership roles that oblige them to assess the multinational enterprise from special points of view; most cannot stray very far from a predict able set of conclusions without weakening the position of the institutions they are committed to lead or without fail ing the test of their loyalty to the well-formed ideology with which they are identified. No one, of course, can quite escape the traps that his training, experience, associations, and interests con stantly set for his unwary intellect. Indeed, some social scientists have insisted that the very effort not only is doomed to failure but also is intended to mislead and to deceive. This book, then, entails a risk on everybody's part: on mine in aspiring to an unattainable measure of objectivity; on the reader's in exposing himself to a pre sentation that could conceivably entrap. Preface vii Writing this book has taken a great deal of time, of money, and of institutional support. Throughout the project, substantial support came from the Ford Founda tion and from the Associates of the Harvard Business School. In the later stages, the Rockefeller Foundation and the National Science Foundation also made significant contributions, as did the Federal Work Study Program. The National Bureau of Economic Research extended to me the hospitality of its West Coast office for six indis pensable months of quiet scribbling. The support, as usual, came not only from institu tions but also from individuals. A number of my col leagues were good enough to play the role of helpful critic, but the contribution of L. T. Wells, Jr., in this role was particularly devastating and creative. William David son directed a heroic effort in data collection and bibili ographical search, assisted by an unusual group of stu dents that included Roger Greene, James Hughes, Brian Ike, John Murville, Edward Samorajczyk, and Samson Tu. Rajan Suri broke all precedent by coaxing the needed data out of the computers precisely on schedule. And Joan C. Curhan was responsible for the recruitment, training, budgeting, controlling, and reporting that are entailed in research efforts of this order. Contents I 1 The Multinational Enterprise as Symbol 1 2 The Multinational Enterprise: A Close-up View 19 3 Enterprise Strategies: The Technology Factor 39 4 Enterprise Strategies: The Drive for Stability 59 5 Enterprise Strategies: The Struggle against Entropy 89 6 The Strain on National Objectives: The Industrialized Countries 103 7 The Strain on National Objectives: The Developing Countries 139 8 Transnational Processes and National Goals 175 9 The Gap between Prospects and Policies 191 Notes 219 Index 253 Storm over the Multinationals The Real Issues 1 The Multinational Enterprise as Symbol hE WORLD we are obliged to inhabit, it sometimes seems, is managed by a deity with an exceedingly wry sense of humor. This is a century in which technological forces have pushed nation-states together and sharply reduced their autonomy. It is also a century in which national governments have taken on the novel and difficult task of actively trying to promote the welfare of ordinary people. The decline in national autonomy has seemed at times to hamstring governments in the exer cise of their new responsibilities, and the rise of the mul tinational enterprise has epitomized the seeming clash. Created in part as a result of the shrinkage of interna tional space, in part as a response to new opportunities those forces have generated, the multinational enterprise is widely seen as threatening the autonomy of the nation-state. If scientists and engineers had not found a way to shrink international space over the past century or so, the odds are high that the multinational enterprise would be a rarity today. The international telephone, the computer, and the commercial aircraft have been indispensable to the growth of such enterprises. At the same time, even without benefit of the multinational enterprise, these rev olutionary innovations vastly altered the international en vironment of the nation-states. 1
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