IBM chief executive Sam Palmisano has called on major corporations to become “globally integrated enterprises”, with business strategy, production and management around the world.
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Writing in the Financial Times, Palmisano says, “The globally integrated enterprise is an inherently better and more profitable way to organise business activities – and it can deliver enormous economic benefits to both developed and developing nations.”
His declaration comes just days after IBM announced plans to invest $6bn (£3.35bn) in India.
Palmisano contrasts the “globally integrated enterprise” with the way big businesses have traditionally built factories overseas but kept research and development and other key areas based in the firm’s home country.
Decisions to base business activity around the world are “not simply a matter of offloading non-core activities, nor are they mere labour arbitrage – that is, shifting work to low-wage regions”, Palmisano says.
Unless corporations shift to a new global model, they face an anti-globalisation backlash, he warns. Unease about globalisation could develop into a full-scale assault on big business, bringing with it the election of governments that would attempt to crack down on corporations, Palmisano says.
“The alternative to global integration is not appealing: left unaddressed, the issues surrounding globalisation will only grow... People may ultimately choose to elect governments that impose strict regulations on trade or labour, perhaps of a highly protectionist sort,” the IBM chief says.