Joseph Cramer, M.D.: Globalization of 'American' companies the new reality in business
If you think you are buying American, think again. Just because the business address on a company's envelope is American does not make it so.
Mark Hurd is the president of Oracle Inc., a multibillion-dollar high-tech computer database multinational company. At a recent industrial gathering Hurd related the following incident. While in Washington, Hurd was told, “Oracle is an American company.” Very quickly and with a "harrumph," Hurd corrected that statement. “No, Oracle is a global company with headquarters in America.”
Is this assertion arrogance or merely a fact? If global companies aren't strictly American, what can we do about it? And how does this new reality affect our children?
Companies have offices scattered around the globe; therefore, headquarters could be anywhere. These days pushing a button connects a CEO with the world, and teleconferencing has become so sophisticated it is as if people are in the same room sitting across the table. Headquarters could be wherever.
Furthermore, if shareholder owners of a company are widely dispersed throughout the world and its customers are in dozens of different countries, where is home? Shouldn’t the head be where the company makes the most money? It could be just as easy to set up a base in Singapore or Shanghai, Tokyo or Thailand, Paris or Paraguay. A CEO could zoom anywhere, and where the plane stops is the company’s headquarters. However, my gut feelings tell me most companies aren’t going to move to AsunciÓn anytime soon.
That suggests that General Electric, General Motors and even McDonald's are not really American companies. True, they are on the New York Stock Exchange, but so are hundreds of other international corporations. They may have started here in the continental U.S., but even if products are manufactured within the 50 states the instructions are in 12 different languages.
Therefore, the question of location of the command post becomes a matter of taxes plus the availability of good, bright workers and manicured golf courses, security, tasty local cuisine or secret fishing holes. Big cities provide plentiful labor and restaurants but are poor fishing venues.
Being global means wherever there is a branch of the company a different flag flies outside of its office. The employees indirectly pledge allegiance to the red, white and blue in France, Liberia or Russia, even if they and their governments don't like Old Glory.
Being global means, as stated by Hurd, that his worldwide company has the power and the need to hire the best and the brightest wherever they are on the planet.
Expectations for salaries must include money to pay off loans and provide a living. That makes U.S. students more expensive and less desirable.
Just as there isn’t any allegiance to American soil there is no inherent loyalty to its children. An assembly line inserts the proper part for the finished product without looking at the country of origin. If the students of other nations are better educated, harder working and less expensive, why hire anyone from Iowa?
There are some who say in anger that they will punish this agnostic corporate practice by buying only American. The problem is what do you call a car assembled in Alabama with parts manufactured in Mexico, Vietnam and China for a company based in Germany?
There is at least one other approach that could help; let’s sell American workers. Let’s educate our students to be the best. Let’s prepare them to work hard anywhere in the world. Let’s teach them the languages spoken by the majority of the world: Mandarin, Hindi/Urdu, Spanish, Bengali and Arabic.
Let’s build an education second to none with more focus on science and math and how to think and express ideas. Give students the freedom to innovate.
It was said that the sun never set on the British Empire. It was also true of the East India Trading Company. Today both enterprises are done. In their places are thousands of businesses that can make the same boast. We can’t beat them. We have to join them. We just can’t call them American.