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[from THE FUTURIST, November-December 2002]

The Future of Corporate Globalization: From the Extended Order to the Global Village
by Jeremiah J. Sullivan. Quorum Books, www.quorumbooks.com. 2002. 259 pages. $69.95.

Corporations and the Global Village
Review by Victor Ferkiss

Multinational corporations are increasingly viewed as the enemy of the Global Village. To succeed in the future, corporations need to restore trust and virtue to the balance sheet.

Most of the current discussion of globalization consists of proponents and opponents talking past each other. The Future of Corporate Globalization--highly readable, often brilliant, and always accessible--is a welcome exception.

Its author, a professor of international business at the University of Washington, is no armchair theorist. In addition to teaching in Japan, Jeremiah J. Sullivan has been a consultant to the U.S. and Chinese governments and has previously published a book on Japanese businessmen in America. Not a dry academic study, Sullivan's new book displays the author's formidable knowledge of philosophy, history, literature, and anthropology and is very well worth reading.

Sullivan defines globalization as "two things: the expansion of trade and investment across borders and increased linkages so that a company's or country's economic actions affect and are affected by economic, political, social, and cultural events in other societies." On balance, he believes that it is not only inevitable but good for all concerned. He devotes several chapters to a detailed, evenhanded, and well-researched analysis of various claims of its critics, demonstrating that he not only takes them seriously but also shares many of their views.

"Clearly," Sullivan contends, "the market model is in trouble." The main reason is the narrowness of its proponents, the traditional mainstream economists whose views and even whose craft, he argues, are fundamentally flawed: "The microeconomic, rational-man theory of human choice behavior does not account for habitual, emotional, values-driven behavior." We are not, he goes on, "only unsure of the fundamental roots of economic growth, but we also know little about the day-to-day processes through which growth occurs."

The critics of globalization may or may not accept the fact that the market can bring about greater output of material goods and services, but they are, quite legitimately, interested in other things as well: justice, order, virtue, and sovereignty. The claims of the critics--even leaving their possible merits aside--are growing louder and will continue to grow and global corporations will have to take them into account.

Sullivan posits two grand models for society. One is the Extended Order model, the "idea that work is solely an economic exchange relationship within the context of a market model, in which an individual willingly puts himself under the direction of another in return for some reward."

The other model, toward which Sullivan believes the globalized world will move, is the Global Village. It involves "a shift from twentieth-century homo economicus rooted in a world of transactions aimed at future well-being to twenty-first-century communal man embedded in orderly, just, and virtue-enhancing processes focused on living well in the present." It is the Internet that makes the Global Village possible, but not inevitable. In answer to the question of whether the Internet will "drive the peoples of the world into a stateless Global Village or a series of national elite-dominated mass and perhaps totalitarian societies," he contends that "some kind of location in a middle ground is going to emerge."

Sullivan believes that, "when an individual can be connected to a transaction environment at any time in any place, the whole idea of a market is questionable," and that in e-commerce brand building is often community building, and "flow-like experience is an end in itself." In this new environment created by globalization, the multinationals will have to face up to new challenges. They have, in the Extended Order model, usually acted according to a "shareholder profit model," but increasingly followed a "stakeholder" model. But "the next step beyond the stakeholder model is the Global Village, in which parties to exchange and production activities are much more interdependent."

Sullivan has sophisticated strategies for multinationals to survive in this new environment, but they all boil down to his belief that the homo economicus model is inadequate and culture bound, that trust is essential to a thriving economy, and that trust can only exist in a climate of virtue: "A different ethics is needed, and a return to virtue is in order." He discusses corruption as an issue, but this book was written before Enron and other corporate scandals showed how corrupt major American firms were. More recently, he said in an e-mail interview that, given Americans' root belief in justice, these "scandals are likely to speed up a process that I originally thought would take decades." But he also thinks that reforms might strengthen the Extended Order model and "we may be in store for polarization and conflict rather than gradual change." In any case, the recent collapse of so many economic icons underlines how far we have to go from the Extended Order to the Global Village.

About the Reviewer
Victor Ferkiss is an emeritus professor of government at Georgetown University. His address is 5716 Beech Avenue, Bethesda, Maryland 20817. E-mail vferkiss@aol.com.

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