Table Of ContentStorm over the
Multinationals
The Real Issues
Written under the auspices of
The Center for International Affairs
and Graduate School of Business Administration,
Harvard University
Storm over the
Multinationals
The Real Issues
Raymond Vernon
© Raymond Vernon 1977
Softcover reprint of the hardcover 1st edition 1977
All rights reserved. No part of this publication may be
reproduced or transmitted, in any form or by any means
without permission
First published in the U.S.A. 1977
First published in the United Kingdom 1977
Published by
THE MACMILLAN PRESS LTD
London and Basingstoke
Associated companies in New York
Dublin Melbourne Johannesburg and Madras
ISBN 978-1-349-03539-7 ISBN 978-1-349-03537-3 (eBook)
DOI 10.1007/978-1-349-03537-3
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I Preface
BOOKS that deal with the multinational enterprise, the
transnational corporation, or the international firm have
not been a rarity over the past few years. Indeed, it is a
little frightening to observe the mounting flood of words
on these subjects coming from the typewriters of scholars,
journalists, government officials, and novelists. Why one
more such book?
This book is intended to help the reader who is trying
to keep his head above the flood. It tries to maintain some
sort of large perspective on the nature and consequences
of the multinational enterprise. That is not an easy thing
to do. Here and there, swept along in the torrent of pub
lished words, one can find a revealing fact, a perceptive
study, a powerful generalization. But much of the out
pouring turns out to be a tide of special pleading or of
narrow pedantry. Anyone who tries to filter out the po
lemic and the propaganda so as to grasp the meaning of
what is left is likely to find the task forbidding. That task
is what this book tries to perform.
Systematic efforts to grasp the meaning of the mul
tinational spread of large enterprises began at Harvard
nearly fifteen years ago. Not surprisingly, I have drawn
heavily on the substantial body of research that has been
conducted at the Harvard Business School during those
years, as well as on the work of my colleagues at Har-
v
vi Preface
vard's Center for International Affairs. In more recent
years, the network of serious researchers and the output
of useful research on the subject have increased astro
nomically, so that exciting and revealing contributions
have been coming from dozens of institutions. Very soon
the sheer weight of all the materials will be so great that
no individual scholar will be able to keep up with the im
portant contributions. But up to the time that this book
went to press, that was my aspiration.
The subject of the multinational enterprise, as this
analysis points out, engages the values, the fortunes, and
the psyches of some of the most powerful leadership
groups in modern society-businessmen, politicians, in
tellectuals, and poets. Any author who lays claim, as I do,
to a position detached from all such leadership groups is
likely to generate a predictable reaction. From the per
spective of every disputant, the hapless author is clas
sified as belonging to the enemy.
On the other hand, as the reader will shortly see, I
regard the subject as much too important to be settled by
the parties who so far have led the debate. Most of them,
as it turns out, are cast in leadership roles that oblige
them to assess the multinational enterprise from special
points of view; most cannot stray very far from a predict
able set of conclusions without weakening the position of
the institutions they are committed to lead or without fail
ing the test of their loyalty to the well-formed ideology
with which they are identified.
No one, of course, can quite escape the traps that his
training, experience, associations, and interests con
stantly set for his unwary intellect. Indeed, some social
scientists have insisted that the very effort not only is
doomed to failure but also is intended to mislead and to
deceive. This book, then, entails a risk on everybody's
part: on mine in aspiring to an unattainable measure of
objectivity; on the reader's in exposing himself to a pre
sentation that could conceivably entrap.
Preface vii
Writing this book has taken a great deal of time, of
money, and of institutional support. Throughout the
project, substantial support came from the Ford Founda
tion and from the Associates of the Harvard Business
School. In the later stages, the Rockefeller Foundation and
the National Science Foundation also made significant
contributions, as did the Federal Work Study Program.
The National Bureau of Economic Research extended to
me the hospitality of its West Coast office for six indis
pensable months of quiet scribbling.
The support, as usual, came not only from institu
tions but also from individuals. A number of my col
leagues were good enough to play the role of helpful
critic, but the contribution of L. T. Wells, Jr., in this role
was particularly devastating and creative. William David
son directed a heroic effort in data collection and bibili
ographical search, assisted by an unusual group of stu
dents that included Roger Greene, James Hughes, Brian
Ike, John Murville, Edward Samorajczyk, and Samson Tu.
Rajan Suri broke all precedent by coaxing the needed data
out of the computers precisely on schedule. And Joan C.
Curhan was responsible for the recruitment, training,
budgeting, controlling, and reporting that are entailed in
research efforts of this order.
Contents
I
1 The Multinational Enterprise as Symbol 1
2 The Multinational Enterprise: A Close-up
View 19
3 Enterprise Strategies: The Technology Factor 39
4 Enterprise Strategies: The Drive for Stability 59
5 Enterprise Strategies: The Struggle against
Entropy 89
6 The Strain on National Objectives: The
Industrialized Countries 103
7 The Strain on National Objectives: The
Developing Countries 139
8 Transnational Processes and National Goals 175
9 The Gap between Prospects and Policies 191
Notes 219
Index 253
Storm over the
Multinationals
The Real Issues
1
The Multinational
Enterprise as Symbol
hE
WORLD we are obliged to inhabit, it sometimes
seems, is managed by a deity with an exceedingly wry
sense of humor. This is a century in which technological
forces have pushed nation-states together and sharply
reduced their autonomy. It is also a century in which
national governments have taken on the novel and
difficult task of actively trying to promote the welfare of
ordinary people. The decline in national autonomy has
seemed at times to hamstring governments in the exer
cise of their new responsibilities, and the rise of the mul
tinational enterprise has epitomized the seeming clash.
Created in part as a result of the shrinkage of interna
tional space, in part as a response to new opportunities
those forces have generated, the multinational enterprise
is widely seen as threatening the autonomy of the
nation-state.
If scientists and engineers had not found a way to
shrink international space over the past century or so, the
odds are high that the multinational enterprise would be
a rarity today. The international telephone, the computer,
and the commercial aircraft have been indispensable to
the growth of such enterprises. At the same time, even
without benefit of the multinational enterprise, these rev
olutionary innovations vastly altered the international en
vironment of the nation-states.
1
