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I am for and against globalization

31 October 2018

How can any reasonable, thinking person be against globalization? After all, it promotes economic development, particularly in disadvantaged countries, lowers costs to consumers, and by connecting people around the world, helps to avert conflicts.

How can any reasonable, thinking person be for globalization? After all, it exacerbates income disparities, particularly in developed countries, threatens communities with cultural assimilation, and weakens national sovereignties.

How can any reasonable, thinking person be against globalization? After all, it promotes economic development, particularly in disadvantaged countries, lowers costs to consumers, and by connecting people around the world, helps to avert conflicts.

How can any reasonable, thinking person be for globalization? After all, it exacerbates income disparities, particularly in developed countries, threatens communities with cultural assimilation, and weakens national sovereignties.

It is remarkable how many people line up either for or against globalization and then dismiss the other side. Who’s right? Neither. Those who embrace globalization are no more thoughtful than those who dismiss it. We should all be lining up for and against globalization, to retain what is constructive about it while challenging what has become destructive.  We need globalization in its place, namely the marketplace, and out of the public space.

Unfortunately, the prevailing, cosmopolitan powers of the world— investors, executives, economists, and consultants — mostly line up for globalization, leaving those against it to protest locally, on their streets and in their ballot boxes.1  But their marches and occupations have hardly made a dent in the armor of globalization, while voting for the likes of Brexit and Trump—against what is wrong rather than for what could be right—has not solved anything.

What we call globalization is really economic globalization, because it enables economic forces to prevail over social concerns and democratic precepts. Multinational companies play governments off against each other in their quest for reduced taxes and suspended regulations, while local communities have to compete for jobs that can be no more reliable than the next offer. Globalization may be connected everywhere, but it is rooted nowhere, while sustainable employment takes root in local soil, not on the “globe”.

Hence this force for economic development is fast becoming one for abandoning decades of social and political development. Trade pacts now allow companies to sue sovereign governments over legislation that reduces their profits, while companies such as Uber ride roughshod over local regulations. How about this from an article in the New York Times (23 September 2017), about the city of London’s challenge to Uber: “There is a feeling in the air that regulators should stand up to businesses that simply ignore any rules they don’t like.” No kidding!

John Kenneth Galbraith’s forgotten concept of “countervailing power” can help to understand what has been happening.2 Countervailing forces arise in democratic societies to offset concentrated centers of power, as did the unions in America with the rise of the large corporations. But where are the unions in today’s so-called global village, and what other force has arisen to offset that of the global corporations?

The most obvious candidate is global government, but the United Nations is hardly up to that. The globe may be amalgamating economically, but it remains fragmented politically as well as socially. Indeed, the most powerful international agencies, all ardently economic—the WTO, IMF, World Bank, and OECD—have been the cheerleaders for globalization.

How, then, to face this corporate hegemony? The challenge will have to begin from the ground up. Perhaps never before have so many people been prepared to vote with their feet, their ballots, and their pocketbooks. Thoughtful, concerned citizens, acting in local communities that are connected globally through the social media, can bring direct pressure to bear on objectionable behaviors, while prodding their governments to act more concertedly on their behalf. Communities, after all, have been the places where major social change has often begun—for example, with a tea party in the Boston harbor or a woman boarding a bus in Montgomery, Alabama. From such sparks have come significant groundswells that have transformed societies.

True, the most powerful countries have also been cheerleaders for globalization, or at least for their own global corporations. But other countries, especially on the receiving end of the globalization demands, could act together to push back, instead of being further divided and ruled. Is this not what the European Union has been doing with its challenges to Google and other companies? Here, then, lies one potentially countervailing power to economic globalization. (For other suggestions on dealing with such imbalances in society, see my TWOG “Going Public with my Puzzle.”)

Without restraining the power of economic globalization, we shall be facing greater social disruption, the election of more tyrants, and the further deterioration of our democratic institutions. We certainly need strong enterprises. But not free enterprises. Not if we are to be free people.

 

© Henry Mintzberg 2018. A similar version of this bog appeared on September 18 in the Sloan Management Review blog, under the title “We must keep globalization in its place: The Marketplace.” For further discussion of balance across markets, governments, and communities, see my book Rebalancing Society. For management education that is worldly beyond global, see impm.org.

Photo by Lisa Mintzberg is of a soap bubble, about 10 centimeter in diameter.

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1See the classic article by A.W.Gouldner, “Cosmopolitans and Locals: Toward an Analysis of Latent Social Roles”, Administrative Science Quarterly (Vol. 2, No. 3, Dec., 1957: pp. 281-306). In a similar vein, David Goodhart has distinguished “anywhere” people from “somewhere” people” (in the Financial Times, 17 March 2017). About the latter, he wrote: “…more than 60% of British people still live within 20 miles of where we lived when we were 14.”

2J.K. Galbraith, American Capitalism, The Concept of Countervailing Power (originally published 1952).

Managing Scrambled Eggs

17 October 2018

This is the opening story, that sets the tone, for my new book Bedtime Stories for Managers, a collection of my TWOGs, coming out in February. It’s time to unscramble the messes of managing.

One morning, years ago, I flew Eastern Airlines from Montreal to New York. It was the largest airline in the world at the time, but soon to go belly up.

They served food in those days, well sort of—something they called “scrambled eggs.” I said to the flight attendant: “I’ve eaten some awfully bad things in airplanes, but this has to be the worst.” “I know”, she replied, “we keep telling them; they won’t listen.”

This is the opening story, that sets the tone, for my new book Bedtime Stories for Managers, a collection of my TWOGs, coming out in February. It’s time to unscramble the messes of managing.

One morning, years ago, I flew Eastern Airlines from Montreal to New York. It was the largest airline in the world at the time, but soon to go belly up.

They served food in those days, well sort of—something they called “scrambled eggs.” I said to the flight attendant: “I’ve eaten some awfully bad things in airplanes, but this has to be the worst.” “I know”, she replied, “we keep telling them; they won’t listen.”

Now how could this be? If they were running a cemetery, I could understand the difficulties of communicating with their customers. But an airline? Whenever I encounter awful service, or a badly designed product, I wonder if the management is running the business, or reading the financial statements?

The financial analysts were certainly reading those statements, and probably explaining the airline’s problems in terms of load factors and the like. Don’t believe a number of it. Eastern Airlines went belly up because of those scrambled eggs.

Some years later, after telling this story to a group of managers, one of them, from IBM, came up to tell me another story. The CEO of Eastern Airlines came rushing in at the last minute for a flight, he said. First class was full, so they bumped a paying customer to put him where I guess he had become accustomed. Apparently feeling guilty, he reportedly made his way to Economy Class (no mention was made of him having to ask where it was). There he apologized to the customer, introducing himself as the CEO of the airline. The customer replied: “Well, I’m the CEO of IBM.”

Now, don’t get this wrong. The problem was not about who was bumped. Quite the contrary, status was the problem: higher class counted for more than common sense. Managing is not about sitting where you have become accustomed. It’s about eating the scrambled eggs.

 

© Henry Mintzberg 2018 (was on this site 7 April 2016 with small differences). Bedtime Stories for Managers can be preordered on Amazon.

Nailing Corporate Reformation to the Door

2 October 2018

Co-authored with Frederick Bird

In the sixteenth century, there were calls for reforms of the Christian Church, which was then the largest, wealthiest, and most global institution in the world. Some critics engaged in protests, others offered advice or called for a gathering of leaders. But what eventually sparked action was a poster nailed to the door of the All Saints Church, Wittenberg, in the fall of 1517, by Martin Luther, a monk and professor. He posted 95 theses about fundamental issues to be addressed. Thus began the Reformation.

Photo credit: Martin Luther [Public domain], via Wikimedia Commons

Co-authored with Frederick Bird

In the sixteenth century, there were calls for reforms of the Christian Church, which was then the largest, wealthiest, and most global institution in the world. Some critics engaged in protests, others offered advice or called for a gathering of leaders. But what eventually sparked action was a poster nailed to the door of the All Saints Church, Wittenberg, in the fall of 1517, by Martin Luther, a monk and professor. He posted 95 theses about fundamental issues to be addressed. Thus began the Reformation.

Photo credit: Martin Luther [Public domain], via Wikimedia Commons

At a meeting last November at the Drucker Forum in Vienna, Charles Handy called for a reformation of our time, concerning the business corporation.  David Hurst and Nick Hixson, both Drucker Associates, responded by asking a number of management thinkers to reflect, in the manner of Luther’s 95 theses, on ills and remedies concerning the corporation today.

As management professors, one of us trained in religious studies, we have taken up this call, rather literally. We propose 9.5. theses (Luther’s were highly repetitive!), directed at fostering reform of an institution whose influence today is arguably comparable to that of the Christian Church at the time of Luther.

These 9.5  theses are not meant to be comprehensive, only, like those of Luther, a possible starting point for reformation. One thesis is taken straight from Luther, and all but one of the others have been modified from, and inspired by, Luther’s own words. (An # designates the number of Luther’s original thesis, with our modifications of his original in italic.) Like Luther, we state these theses without comment: they should speak for themselves.

1. They preach only human doctrines who say that as soon as the money clinks into the money chest, the soul flies out of purgatory. (#27)

2. Those who believe they can be certain of their salvation because they have achieved higher share value will be eternally damned, together with their consultants. (#32)

3. Why do so many corporations, whose combined wealth is today greater than the wealth of most nations, build their one basilica of globalization for their own benefit rather than for everyone? (#86)

4. Away with all those economists who say to the people “more, more, more” when the people need better, better, better. (#92)

5. … for the souls in purgatory, fear by downsizing should necessarily decrease and distribution of wealth increase. (#17)

6. Leadership indulgences must be preached with caution, lest people erroneously think that they are preferable to the good works of communityship. (#41)

7. The true treasure of business is to add value to society. (#62)

8. Because love grows by works of love, businesses become better when they engage in love of the people and the planet. (#44)

9. To repress these very sharp arguments of the laity by force alone, and not to resolve them by giving reasons, is to expose the corporations and their CEOs to the ridicule of their enemies and to make citizens unhappy. (#90)

9.5. Blasphemous is the dogma that greed is godly and markets are sacred.

We believe that this dogma has taken our world out of balance, in favor of self-interest over collective needs and the common good. As a consequence, tyrants are being elected, only to undermine further the very democracies that put them into office. With no countervailing power to stop them—no serious global government, no reliable superpower—these tyrants threaten peace on earth. Faith will have to be restored in our institutions, including a reframing of corporate social responsibility, to favor balance in society.

© Frederick Bird and Henry Mintzberg 2018. For more on balance, see Rebalancing Society…radical renewal beyond left, right, and center.

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