IBM wants to change the corporate world

For a guy who doesn't speak much to the public, IBM chairman and CEO Sam Palmisano sure can deliver a punch when he needs to.

Palmisano wrote in the Financial Times last week that big corporations need to radically change their thinking, get their heads out the sand and fully embrace the world as one, big, integrated operation lest a bunch of anti-globalization zealots bring down the world economic house.

He said large multinational corporations such as IBM, General Motors, Ford and others need to stop treating foreign countries as colonies, basically keeping the good stuff at home and offshoring the junk to the remote outposts where labour is cheap.

In Palmisano's "globally integrated enterprise", new technology and business models will let companies treat their functions and operations as component pieces, that can be pulled apart and put back together in new combinations, based on judgments about which operations the company wants to excel at and which are best suited to its partners, regardless of locations.

"These decisions are not simply a matter of offloading non-core activities, nor are they mere labour arbitrage -- that is, shifting work to low-wage regions," he wrote. "Rather, they are about actively managing different operations, expertise and capabilities to open the enterprise up in multiple ways, allowing it to connect more intimately with partners, suppliers and customers and, most importantly, enabling it to engage in multifaceted, collaborative innovation."

It's an interesting concept, one that makes sense on a number of levels in that such an undertaking could reduce corporate and manufacturing costs, increase the labour pool and really open up a global economy. But even Palmisano sees the difficulties here, or at least he perceives them. "These issues are too big and interconnected for business or government alone to solve. I believe public sector leaders will find in business a willing partner to reform healthcare and education, secure trade lanes and electronic commerce, advance innovation, train and enable the displaced and dispossessed, grapple with environmental problems and infectious diseases and tackle the myriad other challenges that globalization raises," he wrote.

Those are some big requirements. And of course the reality is much harsher. Countries tend not to be so open -- just look at our own program which controls the number of foreign tech workers entering the US, and the numerous anti-offshoring/outsourcing groups. Not to mention the hoops Google, Microsoft, Yahoo, Cisco and others have had to jump through to compete in China. Even India -- where IBM recently said it was going to invest $US6 billion -- is routinely lambasted as protectionist. And that's just the tip of the iceberg.

It's a fascinating idea and certainly the world needs more of those, but the reality of the fractured environment that Palmisano suggests changing seems beyond the scope of what most companies can handle.

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