Fifty Two: Leadership and Trust


The world finds itself at a historical inflection point, when the very nature of business and business institutions is changing. New forms are emerging, and I think it’s important that the leaders of the future understand the enterprises and institutions they will lead in the years ahead. Globalization is changing the fundamental model, even the idea, of the corporation. I discussed this recently in an essay in the American public policy journal Foreign Affairs, where I looked at the evolution of the modern corporation through three distinct models. The first was the “international” model of the 19th century. For the international corporation, most operations were centered in the home country, with overseas sales and distribution. This basic structure of import/export — centralized manufacturing and international distribution — applied across almost every industry. Next was the “multinational” model of the 20th century — which in many ways was a response to the rise of trade barriers during and following the World Wars. To gain access to local markets, the multinational created smaller versions of the parent company in multiple countries around the world, and it made heavy local investments. American multinationals such as General Motors and Ford, for instance, built auto plants in Europe and Asia, which allowed them to sell to important local markets without incurring tariff penalties.

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