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World Inc. Excerpts
Chapter 1:
On Competition and Social Needs
There is something incredibly rapid and shocking about global consolidation. When one company merges with another, they grow exponentially overnight. We see it happen all the time, but we do not know exactly what it means.
I once shared a five-minute elevator ride with a Senator in Washington before a key session of Congress. As we discussed this global phenomenon, he said: "Certainly, the seven sisters — the world's largest oil players — must be doing something right to get that big. It could not just be their love of debt, their faith in complex technologies, and their thirst to span the globe. They must be doing something right, don't you think?"
I have been pondering this question for ten years now. There are only five oil giants left standing, so not all do it exactly right. Yet, overall, is this rapid expanse of companies a result of doing things right? And by "right," what exactly is meant: Right for the environment, right for people of all means, right for the profitability of the owners at any cost to others? Is the growth of these companies good or bad for our world and those of us who live in it?
Consider these facts:
- Fifty-one of the 100 largest economies in the world are now corporations, not nations. They are massive countries onto themselves who have great political leverage.
- The 100 largest multinational corporations (MNCs) now control about twenty percent of global assets. These top 100 are household names.
- Three hundred MNCs — conglomerates such as Honeywell, IBM, DuPont, Dow and Whirlpool — now account for 25 percent of the world's total assets, a sizeable impact.
- As much as 40 percent of world trade now occurs within these top multinationals, which explains why they are studied and emulated by smaller companies.
- Only 21 nations have gross domestic product markets larger than the annual sales revenue of each of the six largest multinational corporations.
This astonishing increase in the size and global scope of a few key companies defines our world. Three hundred billion dollar entities with branches in at least 150 countries each are no longer rare. GE is in this realm, as are Wal-Mart and Microsoft, among others.
I now believe this new global world can help improve your car, your computer, your food and its safety, medical devices, the length, comfort and satisfaction of your life, and even the appliances and construction of your home. By doing so, it can also address the social problems we struggle with, in conjunction with the government, in a way that's good for both society and business. And in fact, it must do this: Our future is at stake.
