The world, we are told, is flat. It is also tipping, and not in America's favor. Pollsters tell us that US foreign policy--especially in the Middle East--accounts for 35 percent of anti-American feelings around the world. But that's small comfort for American businesses, which not only share plenty of blame for the balance but may be unwittingly contributing to the tilt .
When communism collapsed, it seemed that free-market capitalism had become the world's reigning economic ideology; US corporations, its principle delivery vehicle. The Wall Street Journal was even moved to editorialize that "We are all capitalists now" . Well, we are not all happy about it.
Consider how closely American-style capitalism is identified with the current activist bugaboo, globalization. US firms account for less than a third of the sales of the top 200 companies in the world. In fact, of the top 200, Japanese firms account for almost 39 percent of total sales compared to US firms' 28 percent. But when was the last time you heard of someone marching on the local Sony office to protest globalization?
The reason may be that much of the world has a sharply different conception of "capitalism," and subsequently of a corporation's role in society, than the American model. Charles Hampden-Turner and Alfons Trompenaars asked 15,000 executives from around the world to choose one of the following as the proper goal of a corporation:
* the only real goal of a corporation is making a profit; or
* a company, besides making profit, has the goal of attaining the well-being of various stakeholders, such as employees, customers, etc.
Out of the 12 nationalities surveyed, 40 percent of American managers said the sole goal of the corporation was to make a profit, compared to less than 30 percent of their non-Anglo-Saxon counterparts .
A 2003 survey by the Pew Research Center showed broad support for the "free market model" in Eastern Europe, sub-Saharan Africa, the Middle East or Asia . But when the possible impacts of free market capitalism get specific--such as closing inefficient factories or laying off large numbers of people--a great deal of resistance surfaces. In India, for example, 53 percent say they favor free markets, but 78 percent oppose closing inefficient factories.
Many protests against "globalization" are rooted in the perception it is being driven by US companies trying to export a "stock ticker" capitalism that sacrifices human values on the altar of quarterly earnings expectations. Globalization not only crowds Tintin, Orangina and Wimples off the shelves, it forces local companies to change their social contract in a race to the bottom where Deutsche Bank will be no more German than CitiGroup.
People in industrialized countries worry that American-style capitalism will eventually lead to massive layoffs and a general meaning and leaning of the workplace for those who survive. People in the third world worry about being exploited only to be discarded when American sweat-shops and natural resource companies have stripped them clean. It is not only US foreign policy that is seen as arrogant, heavy-handed and self-centered, so is American business. The "ugly American" of the 1950s was loud, boring and obnoxious. His twenty-first century descendant is all that, plus a sharp-elbowed, sanctimonious bully who patronizingly assumes that, given the chance, everyone would adopt his way of life in a heartbeat. Meanwhile, he will force it on them.
When European intellectuals complain about the pervasive influence of American culture, they are not so much bemoaning our fast food, gangster rap and movie violence as our hyper-competitive, share-price obsessed business culture. Jack Welch scares them much more than Britney Spears.
Right or wrong, these perceptions have significant implications for American businesses.
Hard-core anti-American activists have already demonstrated how they can inflame the emotions of the larger body of consumers when a potential forum (e.g. a meeting of the World Bank) meets examples of "bad behavior," either by the American government (e.g. Abu Ghraib prison) or a US-based corporation (e.g. allegations that Coke is stealing water from peasants in India). In such an environment, iconic American corporations can find themselves the target of attack if only because they have publicity value. For example, globalization protestors trashed a McDonald's restaurant in Bern, Switzerland, during the 2001 World Economic Conference being held in Davos, three hours away by train over the Alps.
Though isolated, such incidents surely reinforce attitudes with long-term consequences. We are all wired to keep our thoughts, feelings and actions in sync one way or another. Anyone who believes action follows feelings knows that the impact of negative attitudes towards America and all things American will one day be felt. Business people who believe otherwise are like the window washer who fell off the scaffolding of a skyscraper and yelled "so far so good" as he plunged by the 13th floor.
Anti-American feelings already contribute to a hostile business environment, increasing security costs in overseas facilities and making it more difficult to recruit employees outside the US as well as to win public approval for mergers, opening new facilities, etc.
The risks are significant. General Electric, for example, expects 60 percent of its growth to come from developing countries in the next decade …