Courtesy Reuters

No Great Transformation

By Allen L. White

To the Editor:

In his description of the "globally integrated enterprise," IBM CEO Samuel Palmisano depicts a future of agile, borderless enterprises operating in a superfluid environment ("The Globally Integrated Enterprise," May/June 2006). Is Palmisano's claim that these brave new corporations will contribute to solving global problems in areas such as health care, education, and the environment plausible?

The future is not as bright as Palmisano would have us believe. Borderless corporations are already triggering backlashes around the world. Populism in Brazil, Mexico, Peru, and Venezuela; economic protectionism in Europe and the United States; and the stalemate in the Doha Round of global trade talks all testify to the significance of resistance to corporate ambitions. Unless deep-seated anxieties about globalization are addressed by international trade agreements and bilateral compacts between governments and corporations, globally integrated enterprises may well be viewed as enemies, not problem solvers.

Global corporations need global governance. Promises of long-term wealth creation equitably shared among the world's peoples would be far more credible if the international business community were to support strong international institutions. The UN Global Compact and the independent Global Reporting Initiative (neither of which IBM participates in as of this writing) are examples of attempts to set accountability norms -- attempts that global enterprises should welcome, not ignore or resist.

Palmisano reminds us of the explicitly public purpose of the earliest corporations. That purpose needs to be embraced once more. The twenty-first-century corporation needs a twenty-first-century corporate charter, one that ensures that the globally integrated enterprise will be intentionally, and not accidentally, focused on social purposes.

Allen L. White

Senior Fellow, Tellus Institute

Allen L. White is a Senior Fellow at the Tellus Institute

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