Introduction
Despite the increasing volume of theory and research on globalization there are still those who claim that the phenomenon is not new, very much exaggerated or even that it is a myth.[1] Those who reject the idea of economic globalization in particular, argue that large corporations, which are usually taken to be at the heart of the global economy, remain overwhelmingly domestic or national companies, largely oriented to their home countries and largely constrained by home country rules and regulations.[2] The purpose of this paper is to examine the extent to which these criticisms of economic globalization arc valid in the case of the corporations legally domiciled in California included in Fortune magazine's 'Global 500'.
The California Global 500 are analysed in relation to four economic spaces: the economy in California, the economy in the USA, the global economy, and business sectors. Theories of globalization are well-placed to build on the arguments about the social relations of space that have informed the social science literature in recent decades. Scholars from a variety of interdisciplinary perspectives (for example Gregory and Urry, 1985; Harvey, 1989; Soja, 1989) have asked important questions about the significance of the spatial context of social relations as rapidly changing technology compresses space-time, but I shall recontextualize these questions in terms of a central problematic of globalization, the issue of state-centrism. The study of globalization faces two types of state-centrism inherent in most social science data-gathering and theory. These are, first, the common failure to distinguish systematically between the international (explanations in terms of the ongoing system of nation-states) and the global (explanations in terms of genuinely global forces); and second, the tendency to prioritize governments and other state agents in explanations of what happens within and outside the boundaries of given states.
The approach followed here, global system theory, conceptualizes globalization in terms of transnational practices, practices that cross state boundaries but do not necessarily originate with state agencies or actors. Analytically, they operate in three spheres, the economic, the political, and the cultural-ideological. The whole is what I mean by 'the global system'. The global system, at the end of the twentieth century, is not synonymous with global capitalism but global capitalism is the dominant global system. The building blocks of the theory are the transnational corporation, the characteristic institutional form of economic transnational practices; a still-evolving transnational capitalist class in the political sphere; and in the culture-ideology sphere, the culture-ideology of consumerism (Sklair, 1995).
Global system theory sets out to demonstrate in the case under investigation that a genuine theory of globalization prioritizes only one economic (and, by implication, political and cultural) space, namely the global, and much of what happens in other spaces (communities of various types including, certainly, urban, regional, societal, intrastate and supra-state spaces, collectively referred to as local spaces) cannot be fully understood without reference to the global. Clearly, the structures and outcomes of some social relations can be fully explained in terms of local or national state authorities and local social forces with very little if any reference to global forces. What global system theory predicts is that in the institutional arenas commonly accepted as having the most influence on people's lives, the economy, politics and culture-ideology, the proportion of structures and outcomes that can be fully explained without important reference to global forces will decline, and those that cannot be fully explained without important reference to global forces will increase. In common with a substantial literature (for example, Dicken, 1992; Dunning, 1993), the theory holds that the transnational corporation is the dominant institutional force in the global economy, along with the major transnational financial institutions (World Bank, IMF) which act, in any case, much like TNCs. Thus, if we can demonstrate that the vital economic spaces for large corporations have been transformed from local to global spaces, and if we can explain this transformation in terms of global forces, then we will have gone some way to support the globalization thesis and to undermine state-centrism. If, however, the vital economic spaces of the corporations have become more 'nationalized', either to their countries of domicile or to other countries, then the globalization thesis will be undermined.
The working hypothesis that lies behind this study of the California Fortune Global 500 is that a new class of global capitalists and their corporations and those who service them is emerging that pursues every person all over the world in its pursuit of private profit and eternal accumulation. This transnational capitalist class (TCC) is made up of TNC executives, globalizing state bureaucrats, politicians and professionals and consumerist elites (Sklair, 1995; 1996). While these four groups are analytically distinct in that they serve different though complementary functions for global capital in the abstract, concretely the individuals in them overlap to a considerable degree in most places. Some executives of Fortune 500 companies have spent time as state bureaucrats (globalizing and localizing) and many more bureaucrats and politicians have moved into the corporations. While this paper does not address the TCC directly, research on the California Global 500 provides some support for the existence of such a class and information on how it operates.
The study
In 1995 there were 16 corporations in the Fortune Global 500 legally domiciled in California. These ranged from Chevron, the biggest corporation in California by revenue, to SCEcorp, the southern Californian utility company (Fortune, 7 August 1995). Table 1 lists the corporations by sector, rankings, revenues and number of employees (Lockheed, which merged with the Martin Marietta Corporation and relocated to Washington DC in 1996, was excluded from the study).
Interviews were conducted in ten of these corporations plus Bechtel, a privately-owned company whose revenues would have been enough for a place in the lower ranks of the Global 500.[3] The interviews were focused on the uses and meanings of the term globalization in the company's corporate vocabulary and practices. Four criteria commonly cited in connection with globalization were identified:
1 Foreign direct investment (FDI);
2 Benchmarking and world best practice;
3 Global corporate citizenship; and
4 Global vision.[4]
Respondents were asked to what extent these were part of the corporation's concept and practice of globalization. In the course of these discussions information was elicited on how the corporation connected the local and the global.
Corporations and business sectors in the Global 500
The point of this section and the following empirical test of some of the propositions put forward above, is not to analyze the position of each of the California-based corporations in terms of the four economic spaces identified. That would be a very large task, even for such a small group of corporations. What is at issue is the much more limited question of the extent to which the strategies and practices of these corporations can be said to be driven by the demands of the local and national (state and federal) economic spaces or the global, and how this can be explained, if at all, in terms of the business sectors, locally or globally, in which they are located. It is not at all obvious that these corporations are or should be globalizing. If globalization is a myth, if there is no such entity as the 'global economy' but only separate national economies interacting within an international economy, then this should be reflected in the rhetoric and practices of the TNCs.
Specifying the conditions under which these propositions could be falsified is simple to do. The globalization thesis would be falsified if the corporations failed to recognize globalization (generally and in terms of the criteria identified above) as a process involving them, if they argued that corporate strategy was more influenced by the demands of local and national economic spaces than global economic spaces and if their actual corporate practices bore this out, and if they reported that they were not becoming more global in any way. No doubt one could attach numerical values to all these variables and come up with a globalization score[5] but the smallness of the sample and the conviction that we are dealing with still dimly-lit processes of transformation suggest that the qualitative method pursued here is more appropriate.
Petroleum refining
There are 30 petroleum refiners in the Fortune Global 500. The sector is dominated by two US corporations (Exxon, the biggest, and Mobil, number three) and two British (Royal Dutch/Shell co-domiciled in the Netherlands, and BP). Chevron, the biggest California-based company, has revenues almost double the sector median, and ARCO is just short of the median. The oil industry has always been considered to be highly 'internationalized' (Lax, 1988) due to its dependence on finding and extracting natural resources, mainly oil and gas, which are spread all over the planet with no regard for political boundaries. Chevron and ARCO are no exception.
Despite the fact that California on its own would be, nominally, something like the seventh largest economy in the world (Kotkin and Levy, 1996) they and, as we shall see, most of the other California-based Global 500 corporations, increasingly appear to operate under the assumption that there are minimal possibilities of growth in California or the US as a whole. For the oil companies, reflecting their specific business sector conditions, this is partly due to declining resources and partly due to the regulative climate locally and nationally inhibiting their growth.
Electronics
For many people, corporate California means Silicon Valley where the electronic revolution of the latter part of the twentieth century is, not entirely accurately, reputed to have started.[6] Fortune distinguishes the computers and office equipment sector from electrical and electronic equipment but, for convenience, these two sectors are treated together here.
The computers sector (eight companies) is dominated by IBM, whose revenues are almost double that of its nearest rival, Fujitsu. Two of the others, Hewlett-Packard (HP) and Apple, are domiciled in California. HP is a computer hardware and software company, located on the edge of the campus of Stanford University where it is part of the official history of Silicon Valley. It is a keen rival of IBM in the computer systems market and the leading manufacturer of laser and inkier printers. HP is also a technological leader in testing equipment and medical electronics. Apple is a main rival of IBM in the personal computer field but this did not prevent an intimate partnership with IBM (and Motorola) in the development of the PowerPC 603 chip in fierce competition with Intel's Pentium microprocessor. Apple markets its products as people-friendly under the logo: 'Changing the World, One Person at a Time', a cutting edge global image. Its corporate HQ is located at 1 Infinite Loop, Cupertino, California, a campus-like complex which includes the Apple University, Museum, company store and fitness centre (Garsten, 1994: Chapter 1). Management problems have plagued Apple since the mid-1980s, with a highly-publicized turnover of top personnel.
The electrical and electronics sector is dominated by Japanese companies (six of the top ten) with only one US company, General Electric, in the top ten. Intel and Rockwell International are in the bottom half of the sector. Intel does not make computers but, as its advertising budget of $100 million in 1994 sought to inform the world, many computers have 'Intel Inside'. Intel projects itself as the 'Architect of the Microcomputer Revolution' and is clearly seeking to revolutionize everyday life through electronics. Like HP and Apple, Intel's headquarters are campus-style, with the Intel Museum, a notably user-friendly historical and contemporary guide to the electronic revolution, attracting thousands of students, tourists and researchers every year.
On the surface Rockwell is an entirely different type of company, but also dedicated to deepening and widening the electronic revolution. It is a very profitable conglomerate which made up the loss of $4 billion in US government contracts with commercial business between 1986 and 1995, though it still has substantial defence and space contracts. It is also a leader in various niche electronic and aerospace products.
Commercial banks
Of the 59 banks in the Global 500, only one, BankAmerica Corporation, is domiciled in California. The peculiarities of the US banking system which inhibit the growth of what are in most countries huge 'national' banks, state-owned or private, account for the fact that there are only seven US-based banks in the Global 500, though significant deregulation is under way (see Vietor, 1994: Chapter 5). The strength of the yen largely explains the relative dominance of Japanese banks in 1995 (six of the top ten and 18 overall), notwithstanding the fact that Deutsche Bank was number one and Citicorp number two. While BankAmerica offers consumer services outside the US, it is the global corporate banking business, organized in three regional groupings -- US Corporate, Latin America and Canada, and Asia Wholesale Banking Group -- that is of most interest here. This business is nicely summed up by the treasurer of Dow Chemical Canada endorsing his company's choice of BankAmerica: 'Dow is a truly global company and we need a truly global corporate bank -- one that can coordinate the resources we need wherever we do business' (US Corporate Group brochure, 1995: 23). The acquisition of Continental Bank in 1994 made BankAmerica the largest corporate banker in the US, serving more than 85% of the Fortune 500.
Electric and gas utilities
There are 17 electric and gas utilities in the Global 500 and two of these, Pacific Gas and Electric (PG&E) and Edison International, are domiciled in California. The situation of corporations in this sector is as near as one can get to a 'crucial experiment' for the globalization thesis in California, given the geographical constraints and the regulatory regime within which these corporations operate. This should be seen in the context of the trends to privatization and deregulation in many parts of the world and the end of actual or quasi-monopoly conditions for many energy providers.
The PG&E Annual Report for 1995 opened with these words: '1995 marked the end of one era and the start of another for electric utilities in California. This new beginning was ushered in by the California Public Utilities Commission (CPUC) on December 20, 1995, when it issued an order that inevitably will lead to profound changes in the electric utility industry'.[7] The CPUC order replaced the vertically integrated monopoly of generation, transmission and distribution with a new market framework. Over a seven year period, generation will become a competitive commodity business, while transmission and distribution remain regulated but open to competition by competing generators. From 1996 big corporate users could shop around for their energy, smaller companies would be allowed to do so from 1998, and by 2002 competition in the residential market would be introduced (Business Week, 14 November 1994: 68-9). As we shall see below, both PG&E and Edison International are rapidly globalizing to offset the anticipated competitive pressures in their traditional local markets.
Engineering, construction
Fluor is unique in this study as the only US company in its Global 500 business sector, coming in bottom of a list of 13 dominated by Japanese corporations. An engineering and construction company focused on the oil industry since the 1920s, it prospered building refineries and energy installations. It was caught up in the oil industry crisis of the 1980s and ran into serious difficulties. Restructuring involved halving the workforce, selling its prestigious Orange County corporate HQ (subsequently leased back) and refocusing away from petroleum megaprojects. Fluor had acquired Daniel International Corporation in 1977 which led to the creation of Fluor Daniel in 1986.
Bechtel is well-known as one of the world's most important engineering and construction companies, having built more than 450 power plants since the 1940s, and pioneered the development of nuclear power. Revenues in 1995 were around $8 billion and employees worldwide totalled 16,000. Bechtel and PG&E formed an international energy company, InterGen, in 1995 to develop, own and operate offshore power projects under the credo: Local Partnerships/Global Power Solutions.
The business sectors of the California Fortune Global 500 include three of the top five, and six of the top 16 sectors by revenue overall. These sectors, in brief, are a good part of the Global 500. If the proposition that capitalism is globalizing is correct then we should certainly expect this to be evident in the rhetoric and practices of these corporations.
California: economy and society[8]
The global images of California are of sunny beaches and glittering nightlife, of Hollywood, Disneyland, the Golden Gate Bridge, freeways packed with new cars, and Silicon Valley. The population of the state in the mid-1990s was over 32 million and its GDP in excess of $860 billion.[9] It is, therefore, one of the richest regions in the world. These images, however, distort a reality that is highly stratified by ethnicity, class and gender. The proportion of Anglos (whites) is in decline, from about two-thirds of the total in 1980 to a projected 50% in 2000, while the proportions of Latinos seems set to rise from about 20% to 30% and Asians from 7% to 13%. The proportion of blacks, around 7% in 1980, is predicted to decline a little. Latinos and blacks are underrepresented on many indicators of prosperity and privilege (for example home ownership, high-paying occupations, political representation, higher education) and over-represented in those connected with poverty and deprivation (for example, high school dropout rates, unemployment, lack of health insurance, prison inmates) compared with Anglos and Asians.
Since the early 1980s a more brutal political economy has developed as the voters of California, overwhelmingly richer Anglos, have enacted a series of tax-cutting measures that have led to a shrinking of the welfare state, education budgets and social amenities for the less well-off (Gayk, 1991). Orange County actually went bankrupt in the 1990s. The 'peace dividend' at the end of the cold war meant the loss of billions of dollars in defence contracts and massive redundancies all over the state (Scott, 1993).
Little of this, of course, is visible to the tourist or those jetting in and out for business or professional purposes. Davis (1991) describes how parts of Los Angeles have been turned into veritable fortresses to protect the privileges of the rich, and urban 'regeneration' in California (and elsewhere) has forced the homeless off city streets. Defying these depressing facts, in December 1995 the State of California Trade and Commerce Agency spent half a million dollars (funded by several of the Global 500) on a glossy 16-page promotional insert for Forbes and Inc. magazines, designed to reach a readership of four million worldwide to broadcast the 'state's prominent position as a leading player in a global marketplace'. The successful campaign in 1986 to repeal the unitary tax in California, thus making it more profitable for TNCs to do business in the state, has been adduced as evidence that many Californians 'feel closer to the Pacific rim than they do to the rest of the country and argue that they are part of a global, not national or state economy' (Tolchin, 1993: 127). It is clear, then, that for part at least of the economic elite in California the issue of globalization is on the agenda. The analysis of the Global 500 that follows supports and elaborates on this proposition.
Globalization in the corporate vocabulary
When asked whether 'globalization' was part of the company's corporate vocabulary, seven of the eleven respondents (Chevron, HP, Apple, BankAmerica, Edison International, Fluor and Bechtel) answered very positively. The main reasons volunteered, which appeared as a coda throughout all the interviews and much of the corporate literature, were versions of the theme: if you want to grow the company you have to do it globally (or internationally).[10] Some companies claimed to have been globalizing for decades, for example the founders of Hewlett-Packard had a vision of the global economy, expressed in their decision to expand into Europe and Asia in the 1960s (see Packard, 1995), and by the mid-1990s over half of HP revenues came from outside the USA, as did almost half of Apple's. While the US market is not saturated, it is mature, and the view is often expressed that most of the future growth for these companies is going to be in South East Asia, then perhaps eastern Europe.
BankAmerica is a more recent globalizer, having set this course in 1990 as a response to the troubled 1980s (Vietor, 1994: Chapter 5). In many sectors globalization runs in parallel with regionalization, and this is particularly true for banks. Financial markets go with the sun and financial flows are widely seen as the most globalized part of the world economy. As intra-regional trade and investment flows are growing faster than interregional flows, BankAmerica's capital markets group, while it is managed globally, tailors its activities by region. An expanding feature of this activity is the Global Payment Service for tracking corporate accounts globally and clearing transactions across currencies.
The utilities, historically locked into the domestic markets of north and south California, have been forced to globalize, paradoxically, by the deregulation of their monopolies. PG&E responded to this crisis by establishing a wholly-owned subsidiary, PG&E Enterprises, as the 'growth vehicle for the company', targeting power projects in the other 49 and a half states and outside of the US. The shift to a holding company structure is one move to globalization and InterGen, the joint venture with Bechtel, presents itself as a provider of 'global solutions'. SCEcorp actually restructured to Edison International to capitalize on the global visibility of the 'Edison' name and make the point that it was no longer simply a 'Southern California' company.
Another enthusiastic globalizer is the engineering and construction company Fluor, which propagated the slogan 'Sustaining Dynamic Global Growth' on company publications in the mid-1990s. The 1995 Annual Report proclaims that: 'globalization remains the dominant theme for all companies' in the group. The main driver of this process is the globalization of the client base. Bechtel has been globalizing since the early 1990s when the company articulated the idea of 'global reach, local touch'. From seeing itself primarily as a US company working abroad it began to change in response to the competition it was facing. As a consequence Bechtel has moved from following American and other clients around the world to being an insider in local communities on its own account. So, for Bechtel as well as for many other companies, large and small, being global means being local. This mentality leads to the creation of networks of local companies, joint ventures and strategic alliances. The issue for a contractor like Bechtel is how to create global advantages from a series of local delivery points.[11]
Intel tends to speak about internationalization rather than globalization and it is difficult to judge what the significance of this is. Its Annual Reports and corporate literature rarely if ever use the term 'global'. On the other hand, Rockwell is in the early stages of moving towards globalization, expressed by clear global images in corporate publications. Rockwell is evolving from export orientation to manufacturing outside its domestic base, primarily due to the costs of distribution. Its stated aim is for every one of its businesses to be managed globally but tailored to the needs of individual markets.
Only the ARCO respondent was openly sceptical about globalization, but this contradicted one of the company's five Key Goals, to 'Continue the transformation of ARCO from a predominantly domestic company to a global company' (Annual Report, 1994: 6). The inconsistency may reside in the distance along the path to globalization travelled.
Thus, in the eleven companies interviewed, there were seven unambiguous confirmations that some version of globalization was taking place and was a regular part of the corporate vocabulary. The rest affirmed that they were moving in a globalizing direction even if the term was not used in any systematic fashion. Respondents were clearly imputing a range of meanings to globalization, though the themes of the maturing US market and shareholder-driven growth imperatives were widespread in interviews and corporate publications. To investigate further the meanings of globalization, I now consider the responses to the four criteria.
Criteria of globalization
Foreign direct investment (FDI)
Academic research (Dicken, 1992; Dunning, 1993), international agencies (notably the World Bank and the OECD) and TNCs (see below) all acknowledge the connection between FDI and globalization. OECD pinpoints this: 'the growth of FDI flows should continue in the foreseeable future ... In spite of all the hyperbole about the unstoppable juggernaut of globalization, countries retain the power to prevent inward investment -- albeit at an increasing cost' (OECD, 1996: 47).
All the California Global 500 recognized the general connection between FDI and globalization. Although the reasons given for FDI differed from sector to sector and in fine detail, the underlying motive was uniform across all businesses. Globalization is necessary to increase shareholder value (in some cases it always has been, in others it now is) and foreign direct investment is the strategy through which it is most successfully accomplished.
While Chevron has always been an active foreign investor it has become much more active in recent years, for example in upstream activities in Africa, Latin America, the Far East and the former USSR, and downstream (refining, marketing and petrochemicals) too. In 1996, the company's 500 affiliates operated in more than 100 countries. Caltex, a 50/50 joint venture of Chevron and Texaco established in 1936, has substantial petrochemical interests in Japan and South Korea and trades in over 60 countries. ARCO is dominated by its enormous Alaskan oil discoveries in the 1960s (in partnership with Exxon and others) and has less FDI. However, its convenience stores (Am/pm), copper, coal and chemicals investments outside the USA are likely to play a more important role in the company's future. ARCO's Five Year capital plan in the mid-1990s envisaged 40% of total new investment outside the USA. According to the Chemical Manufacturers Association: 'Chemicals have already become the most globalized of all major industries' (Journal of Commerce, 12 July 1996). This lesson is not lost on an oil industry beset by low rates of return, political difficulties and environmental challenges. The driver of globalization for Chevron and ARCO is the maturity of the oil industry in the United States (where 60% of all oil wells ever drilled are located) and both are trying to cope with this by globalizing their downstream, mainly chemical businesses. Chevron's acquisition of Gulf Corporation in 1984 was a significant move in this direction. ARCO also has substantial chemical interests -- ARCO Chemical is the world's leading producer of propylene oxide, widely used in the automobile and building industries.
In the computer sector HP grants worldwide product charters to local companies who are encouraged to fill out their product lines, an oblique form of FDI. There is also a substantial current investment programme in China. Apple, on the other hand, though it does have some manufacturing plants outside the US, relies more on the infrastructure of dealers networks and ancillary services backed up by long-term investments in education systems around the world.
The electronics companies, Intel and Rockwell, both have substantial FDI. In 1995, well over half of Intel's revenues originated outside the USA as did 20,000 of its 45,000 employees. Research and development facilities are spread widely to utilize local talent banks. Indeed, the need to tap global labour markets is seen as a key driver of globalization in all high-tech sectors. Rockwell operates in 140 countries and 25% of its employees work outside of the USA.
BankAmerica actually reduced its foreign presence from 80 to under 40 countries between 1985 and 1995, in order to concentrate on key markets. The bank's FDI equivalent is its network of wholesale banking businesses all over the world. The branches are regionally focused and are targeted mainly on the largest corporations and the biggest projects, a narrow but lucrative client base.
The utilities are latecomers to foreign investment, for reasons explained above. However, according to PG&E: 'From Australia to Great Britain, governments are privatizing electric distribution companies. From Chile to India, demand for energy is growing. Together, these create opportunities to acquire, build and operate electric distribution, generation and gas transport facilities around the world' (Annual Report, 1995: 5). Edison International has been involved in some high profile project financing through syndicated arrangements with state banks all over the world and through its subsidiary, Edison Mission Energy, it has over 50 independent (non-state) power projects. The one billion dollar acquisition in 1995 of the newly privatized First Hydro in the UK, 'to meet shareholder expectations', made Edison the world's leading owner, developer and operator of independent power facilities, a market that looks set to grow rapidly in the near future.
For construction companies such as Fluor and Bechtel, FDI has always involved going where the projects are, anywhere in the world. Fluor has a long history of FDI, its first major project outside the USA was the expansion of the Aramco oil facilities in Saudi Arabia in 1947 and its first permanent overseas office was opened in London in 1957 (Fluor, 1978). In the 1990s the company became a heavy investor in new technologies, actively buying low-cost and high-value engineering capacity, notably in Poland, Indonesia, Chile and Mexico. Over half of Bechtel's business has been outside the USA since the early 1980s, for example in the Jubail Project for a futuristic industrial city in the Persian Gulf. Bechtel's strategy in the 1990s was to take more equity in projects and create assets for itself, one of the objectives of the joint venture with PG&E noted above.
The question of how much of a company's business actually comes from outside its country of legal domicile is complex. Foreign direct investment is normally measured in terms of plant and machinery located abroad, but increasingly this is widened to include offices of service industries, for example the branches of banks and insurance companies, and the sales points of manufacturers, for example for car and computer firms. While FDI excludes exports and cross-border transfers of finished goods and parts, 'foreign' economic activities and, by implication, degree of globalization, clearly has to include them. Table 2 presents data culled from company Annual Reports, which are not always entirely clear on these matters.
The three utilities companies (two oil and gas and one telephone), not surprisingly, have little if any economic activity outside the USA although, as noted above, as these industries are increasingly being deregulated, this is changing. Already, almost 15% of Edison International's assets are outside the USA. Of the remaining 12 companies, two (Hewlett Packard and Intel) derive over 50% and a further seven companies derive more than one-fifth of their revenues from outside the USA. Even the non-globalizers Safeway, the food retailer, and McKesson, the medical supplies giant, derived 21% and 12% respectively of their revenues from business in Canada and Mexico. There appears to be no clear relationship between the percentage of profits and the percentage of revenues from outside the USA. The patterns are similar, but not necessarily for the same companies. Therefore, considering that the USA as a national economy is by far the largest in the world, it is striking that these corporations do derive a substantial portion of their revenues and profits from outside the USA.
Benchmarking and world best practice
Benchmarking is a system of continuous improvements derived from systematic comparisons with world best practice. It tends to be sector-based, but the most progressive enterprises appear to benchmark processes and activities across business sectors globally. For example, in order to improve the operation of its mobile equipment workshop in Western Australia, the Global 500 company BHP discovered that the critical process was hydraulics. The world best practice site for hydraulics was found to be in Disneyland, California and so BHP benchmarked itself against Disneyland. In previous research in Australia (Sklair, 1996) it was found that benchmarking and world best practice were very much connected, both in rhetoric and in fact, with those companies who claimed to be globalizing. Some of the inspiration for benchmarking comes from prominent corporations in the US, notably Motorola and Xerox, so it is not surprising that this finding is thoroughly confirmed from the California Global 500.[12]
Chevron is typical in its enthusiasm for benchmarking. Prior to the 1980s the company was very 'volumetric' but as benchmarking began to penetrate the boardrooms it was realized that being the biggest was not the same as being the best. In imagery that is repeated elsewhere, in Chevron benchmarking swept through the company, 'cascading down to every single employee'. The result was a cut in operating costs by $1 billion from 1990 to 1992 and the loss of 12,000 jobs.[13] Chevron benchmarks against all major oil companies and, for some processes, outside the industry. A continuous search for world best practice is now part of the corporate culture. ARCO also benchmarks extensively and one significant result was that the propylene oxide business was entirely restructured and re-established as an 80/20 company (20% of the shares offered to the public and 80% controlled through the ARCO main board). So benchmarking can have important consequences not just for manufacturing processes and services but for corporate structures.
HP call their benchmarking 're-engineering' and it has been going on since the mid-1980s. As an acknowledged leader in several electronic fields, for example Test and Measurement Systems Language, HP is often benchmarked against -- it is one of Watson's (1993) case studies. In 1996 it made the prestigious top ten of Fortune's 'America's Most Admired Companies', a distinction shared with Intel. Apple is a more recent convert to benchmarking. Though its claim to be the computer industry standard sounds immodest, that it is not entirely without foundation is suggested by the judgement of BYTE Magazine: 'it would not be an exaggeration to describe the history of the computer industry for the past decade as a massive effort to keep up with Apple' (quoted in Apple Annual Report, 1995: 2).
BankAmerica embarked on a global project to assess world best practice within the banking industry in the mid-1990s. As with some other sectors, there is an independent organization, Greenwich Associates of Connecticut, which provides (and has been doing so for decades) global benchmarks for the industry.
Intel's commitment to benchmarking derives from the early marketing strategy of its founders to produce in huge volumes and constantly to cut costs. Intel benchmarks continually against whoever has world best practice, quantitatively and qualitatively. The Intel Quality Award, based on Baldridge criteria, is a comprehensive self-assessment internal mechanism to encourage best practice and continuous improvement. Rockwell, as the only genuine conglomerate in the sample, has its own specific problems with respect to benchmarking. It introduced a new corporate vision in 1995 (see below) defined in terms of four elements: customers, shareowners, employees and communities. Internally, 23 vision implementation groups were established to identify the changes needed for the company to become 'the best'. Workers are benchmarked globally on the basis of gap analysis and how to close the gaps. This is done by monitoring 12 different companies for world best practice.
Neither PG&E nor Edison International appeared to benchmark to any great extent and it will be interesting to see, as these two companies begin to globalize more systematically, if this becomes more important for them. The fact that in 1996 Edison recruited a new Vice President for Strategic Planning from the management consultants, McKinsey, a leader in global benchmarking, suggests that this might well be the case (see The McKinsey Quarterly, passim).
Fluor's commitment to benchmarking is summed up by its CEO as follows: 'Everything is being scrutinized with the mission of performing BETTER, FASTER, CHEAPER AND SAFER than any global competitor' (Annual Report, 1995: 2, upper case in original). An illustration of this is that before Fluor entered into diversified services for new businesses (construction equipment and temporary personnel recruitment), it first benchmarked its own likely performance against the competition. The results confirmed that it could compete. Bechtel's response to the question expressed the specific position of a private company in the global construction business. For Bechtel, the tender process is the real benchmark, benchmarking by market forces. In this respect, private companies differ from public corporations where the management team itself is benchmarked by shareholders and the stock price. However, Bechtel does benchmark its engineering and accounting skills against world best practice.
Global corporate citizenship
Most large companies nowadays acknowledge some form of social responsibility and make specific reference to this in their Annual Reports and other corporate literature. One indicator of globalization is where a local/national concept of corporate citizenship is transformed into a concept of global corporate citizenship, very often expressed in terms of applying the highest standards of business practice wherever the corporation operates (Logan, 1993). This trend is frequently labelled 'caring capitalism' in contrast to the culture of corporate greed that characterized the 1980s.
Given the sensitive nature of oil industry operations and some very widely publicized disasters, it is not surprising that both Chevron and ARCO interpret this issue mainly in terms of environmental impact. Chevron's record on social issues and the environment in the 1970s and 1980s was generally poor, according to the Council on Economic Priorities (Lydenberg et al., 1986: 312-4). In 1996, Chevron argued that corporations are only allowed to operate 'with the permission of the public' and that good citizenship is the key to being successful in any country. The SMART (Save Money and Reduce Toxics) Program, introduced in 1986, has saved the company considerable sums of money and, no doubt, won it acclaim in some quarters. In 1994, the Annual Report had a one-page 'Report on the Environment' which explained that Chevron's environmental policy is implemented through a worldwide 'Protecting People and the Environment' programme. The company spent almost $1.5 billion dollars globally on environmental protection in that year. The environmental millstone of the oil industry in California is the blowout of a Unocal platform in 1967, which caused a devastating oil spill on the beaches around Santa Barbara (Nash et al., 1972). This led to restrictions on most new projects. Only in 1988 was Chevron able to restart large offshore development in California, and the company built schools and other community facilities and installed environmental monitoring equipment to avoid further disasters though it appears not to have won the hearts and minds of most of the local population.[14] Corporate giving is also an important part of global corporate citizenship. In 1993 Chevron donated about $19 million to 6000 projects including a primary school in Angola (where the company has a substantial operation), an exhibition of Balinese and Javanese children's drawing and a day centre for people with HIV in San Francisco, but it also contributed to what Rowell (1996) calls 'anti-environmentalism organizations'.
ARCO's social record throughout the 1970s and early 1980s has been described as 'exceptional' and its environmental record 'generally very good' (Lydenberg et al., 1986: 309-10). Restructuring in the mid-1980s led to doubts that this could be maintained but Gladwin (1992) suggests that it has been. ARCO claims to have accepted the message that it is 'just good business to operate on world class standards' on environmental and related issues, though Rowell (1996) reports that, like Chevron, it supports several anti-environmentalism organizations. Nevertheless, its 1995 Environment, Health and Safety Report is one of the most comprehensive endorsements of global corporate citizenship of any major corporation. This is an admission of past errors, including a chart of environmental fines, $8.3 million between 1990 and 1994, and a reference to 'the disastrous' Exxon Valdez spill. It argues forcefully for sustainable development along the lines that people created the mess and people, with science and technology, can clear it up. The report highlights local California issues (ARCO's reformulated gasoline is said to have helped reduce Los Angeles smog), national issues (water quality in the US), international issues (environmental impacts of coal mines in Australia, oil in the Ecuadorean rain forest) and global issues ('Air is the earth's ultimate renewable resource').
At BankAmerica, global corporate citizenship is seen 'not so much as an issue, more as a necessity'. Support for citizenship, however, is weighted by the level of investment and length of domicile the bank has in each location. In one form or another it has been operating in California for 90 years and claims the reputation of a 'green bank'. Environmental components are written into all loan contracts and credit reports. BankAmerica set up a task force on ecology in the 1980s, and since then has given $6 million in loans to different environmental organizations and for 'debt for nature swaps' which helped clear some third world debt. However, in the mid-1990s the Bank still had about one and a half billion dollars in third world debt, more than half of this in Brazil. BankAmerica Foundation gives grants and loans for a wide variety of local community development and inner-city projects, and is rated highly for its efforts to serve lower-income credit needs, reported in its quarterly newsletter, Community & the Bank. Most of this activity is US-based but the Foundation reviews requests for grants worldwide (see Gladwin, 1992).
The high priority that HP gives to this issue is expressed in the following statement from the CEO: 'Our corporate objective on citizenship challenges the company to "honor our obligations to society by being an economic, intellectual and social asset to each nation and each community in which we operate." ... This citizenship objective, like all our corporate objectives, is grounded in HP's core values. One of these values is a deeply rooted trust in and respect for individuals. In today's global marketplace, we bring this value to life in our efforts to promote diversity' (Annual Report, 1994: 3-4). The subtext to this credo, shared by most high-tech companies, is that they cannot rely on the US educational system to supply all the technical personnel that they need to keep ahead in an industry where constant innovation is a matter not simply of success, but of survival. So global corporate citizenship also means, to high-tech companies, an enthusiasm for recruiting talent globally and a willingness to promote locals to senior positions. In addition to this very hard-headed approach to diversity (a code-word for hiring non-white people inside and outside of the USA), corporate citizenship for HP also includes protecting the environment and strong support for education and philanthropy. In 1994 donations of cash and equipment totalled $467 million (including support for the new right), supporting the claim that it is one of the world's most generous corporations.
Apple appears to see the issue of global corporate citizenship in terms of education through its vision of changing the world, one person at a time. A Worldwide Community Affairs department provides Apple technology to non-profit groups and schools and enlists employees to volunteer in their local communities. A major public relations coup for Apple and a vindication of citizenship through technology was their impressive contribution to the 1995 NGO Forum on Women, in China. Gladwin (1992) confirms that HP and Apple deserve their reputations as good corporate citizens.
Intel sees global corporate citizenship in terms of participation in extra-business activities in the locations where the company has a presence. This is achieved through community committees, particularly support for education in the community. The Intel Foundation donates equipment and employees' time. The money to support these activities is derived from a set percentage of profits distributed globally. Management in each geographical area also has separate budgets for local giving. As Intel is the actor with the highest technology in many places it accepts the responsibility this implies, for example through its summer intern programmes in various locations and support for many universities. The company produced separate 'Corporate Contributions' and 'Environmental, Health, and Safety' reports in 1996.
The fourth primary action strategy of the Rockwell Vision reads: 'Contribute to the well-being of our communities' (Annual Report, 1995: 4). As with the other high-tech companies, Rockwell highlights the issue of diversity. The company also issues an environmental report and has committed itself to the principle: 'In countries where legal environmental requirements are less stringent than in the United States, the company adopts standards based on US models' (ibid.: 24). Rockwell has a corporate ombudsman and produces an ethics handbook. Charitable giving of $12 million in 1995 was targeted mainly in the US. In a quite extraordinary manifestation of local corporate citizenship Rockwell donated funds 'to help insure continued delivery of essential health and human services following the bankruptcy of Orange County, California' (ibid.: 25). Against this, Rockwell is of course a major arms systems supplier.
Utility companies are always in the public eye, 'under a microscope'. The only indication of a global conception of corporate citizenship in the two utilities is the statement by Edison Mission Energy: 'We focus on the environment intensely, not only because of applicable rules and laws, but because we recognize that the quality of our lives and those of our children are at stake' (Annual Report, 1995: 5).
Fluor's realization of the value of corporate citizenship is long-standing. A former CEO described this as follows: 'The corporate personality took on an additional stature when our employees established an in-plant federation to support charitable organizations in their communities. We also started a formal programme for corporate contributions to charitable causes, education and civic betterment in 1952' (Fluor, 1978: 19-20). The Annual Reports make no specific reference to global corporate citizenship or to environmental issues. Bechtel, as a private company, might be thought to be under less pressure than public companies to be a good corporate citizen, but this is not the case. Since the 1960s Bechtel has been involved in several major public scandals concerning malfunctions at one of its nuclear generators ($14 million in settlement fees), allegations of corruption in South Korea and a bribery case in New Jersey that resulted in convictions for company employees. The other side of the picture is that the company has substantial corporate giving, both through the Bechtel Foundation and family trusts. This is mostly US-oriented and often anonymous. Bechtel officially would not recognize the idea of global corporate citizenship, choosing to concentrate on local community issues by separate country groups in which the company has business.[15]
The evidence on global corporate citizenship is less clear cut than in other spheres. Corporate citizenship and the social responsibility of big business or business ethics has been of intermittent concern to corporations in the United States,[16] though critics have been drawing attention to the lack of it for some time (see any issue of the public interest monthly Multinational Monitor). Global corporate citizenship, as we have seen, is not widespread outside the high-tech and oil companies where, as I have argued, key issues are access to the global talent pool and the environment.
Global vision
Domestic or even international or multinational businesses have little need of a global vision. The key problem for a domestic company is to ensure its local market, and for an international or multinational corporation to ensure the foreign country markets it serves, whether by direct exports or through local manufacturing and/or services. Global vision usually includes the other three criteria but, for a truly global corporation, it is more than the sum of the parts in the sense that it implies an attempt to resolve the local-global relationship. Most of the California Global 500 appear to be striving to achieve a global vision but concede that in practice they are falling short of the goal.
It is a widely-held misconception that globalization and localization are mutually exclusive and contradictory processes. Those who draw attention to the vitality of local entrepreneurs and cultures as evidence against globalization are correct to the extent that some globalization theorists predict the demise of the local as global forces inexorably create a homogenous global culture. This argument has no place in the theoretical framework that underlies this study. The global capitalist system is predicated on the accumulation of private profits on a global scale and the leading actors in the system have no specific interest in destroying or sustaining local cultures apart from the drive for increased profitability. Where local or national agents threaten profits capitalists certainly destroy them, as imperialists have done in the past wherever local enterprise interfered with their expansionist plans. Economic globalization has changed this to some extent by encouraging global corporations to integrate local interests into their own global businesses and to take advantage of local talents and resources, an advantage that creates new local elites (Sklair, 1995). Where the local and the global are opposed, this is often the result of a rather naive static view of traditional practices and cultures. Global forces certainly change local cultures but this does not entail that they destroy them and does not preclude local influence on global forces, on occasion. The views of the California Global 500 on this issue help to deepen orthodox views on globalization.
While the CEO and Chairman of the Board of Chevron, Kenneth Derr (also on the board of CitiCorp), would certainly express a global vision, internally there is a debate over whether the corporation is international or global. The business may not be structured globally (in contrast to Hewlett-Packard, for example) as there is little integration between different country operations, each being quite autonomous. However, in the Far East, Caltex is a force for globalization as is the chemical wing of Chevron. The entry into China, where there is one Chevron initiative rather than separate affiliated companies all vying for business, is one indicator of the global vision at work, driven by the market. ARCO's restructuring in the mid-1980s had renewed its senior management and secured its future as an international company. While there is little reference to a global vision as such, as noted above one of its key goals is: 'To continue the transformation of ARCO from a predominantly domestic company to a global company'.
The global vision of the founders of HP was clear from 1947 when the company was first incorporated. HP is 'one single company, with the flexibility of a small company and the strengths of a large one -- the ability to draw on corporate resources and services; shared standards, values, and culture; common goals and objectives; and a single worldwide identity' (Packard, 1995: 151). This is expressed in terms of 'local decentralization'. The annual Business Strategy Review has a specific section on 'global presence' which reflects less of a push within the company than a pull from the marketplace. 'It is inconceivable for a high-tech company like HP not to be globally-minded'. Part of HP's global vision is to increase the number of senior executives from outside the USA.
The same can be said for Apple. The example of Apple Canada was cited as having had a 'branch mentality' in the past, but no longer. No Apple affiliate can now be run in this way, as Garsten (1994) illustrates in her ethnography of Apple centres in Cupertino, Paris and Kista (Stockholm). However, there is a sense in which it is very difficult for any major TNC to avoid the 'imperialistic condescending manner' that has historically been typical of the biggest corporations. Apple is striving to build executive overseas experience for all its senior management as a way to combat this. Because it cannot rely on the market alone, globalization is a necessity rather than an option and the company's global vision is a consequence of this. The famous logo, the rainbow apple, missing one bi[y]te and one colour is, the company claims: 'One of a handful of globally recognized corporate symbols' (Annual Report, 1995: 15). As noted above, Apple also highlights the educational role of its technology in its concept of global corporate citizenship which spills over into its global vision. This helps to explain why it chose to sponsor the NGO Women's Forum in China, an expensive and risky piece of public relations, as well as Travelocity, a one-stop travel website for the Atlanta Olympics in 1996. However, the local-global issue in Apple appears to have been responsible for some splits within the company between those (notably employees outside the USA) who accept the idea of globalization and believe in a definite global 'Apple Culture' and, on the other hand, the 'US-centrists' [sic] who do not or will not accept the dilution of the national/local by the global.[17]
Intel's global vision is embodied in the beliefs that 'we essentially drive the digital age' and that Intel has taken the lead in defining what a personal computer is and what it can do. People all over the world are now buying personal computers who were not previously in this market and the company claims that it is the global vision of Intel and companies like it that are responsible for this world-historical transformation. The $100 million 'Intel Inside' advertising campaign is a tangible expression of this global vision and is one of only two such successful campaigns of unseen component manufacturers to project themselves globally.[18]
Rockwell, unlike most of the other companies in the California Global 500, does have an explicit corporate vision, to be 'the best diversified technology company in the world'. This vision was first publicly articulated in detail in 1995, after a process of senior management deliberation and employee commentary. The company claims that the vision is not just another 'programme of the month', but part of a genuinely global vision that results from the recognition that it is no longer US-based in the ways it once was (by 1995, US government contracts had declined to only 16% of the company's total business). The prime driver of this process is market dynamics, notably global business opportunities and competitive threats. The vision follows the market.
BankAmerica's global vision is driven by its customers. By targeting global corporations the bank necessarily has an increasingly global mentality. 'Global vision, local hand' (its version of 'think globally, act locally') means that while it is important not to lose sight of local differences, it is vital to be able to change the reference point from local to global. The bank, in common with many Global 500 corporations, no longer uses the term 'expatriate', which traditionally meant an American abroad.
The utility companies have come late to globalization and the expression of global visions, but the process if not far advanced has clearly started. Both PG&E Enterprises, the unregulated business arm of PG&E, and its joint venture with Bechtel, InterGen, are actively pursuing markets in the global arena, as is Edison Mission Energy, an equivalent initiative of Edison International. The main driver is the need to enhance shareholder value as the California energy industry is increasingly deregulated.
Fluor's global vision -- Sustaining Dynamic Global Growth -- is emblazoned on the front cover of its Annual Report (1995) and on its New York Stock Exchange Factcard, where the terms 'global' and 'globalization' occur no less than eight times. Another expression of its global vision is its International Advisory Board, to which Sir Robin Renwick, formerly British Ambassador to South Africa and the United States, was appointed in 1996. In welcoming him the CEO commented that his 'very diverse diplomatic career will provide us with a unique perspective on global political and economic issues' (Fluor Press Release, 10 April 1996). Bechtel's Annual Reports in the 1990s have a distinctive global flavour based on the belief that infrastructure projects have great potential to service the surrounding communities. The current CEO (1997), a fourth generation Bechtel, encourages employees to abandon ideas of assignments, expatriate staff and 'home' and promotes the idea of Bechtel executives as 'global people', able and willing to carry the company's banner anywhere in the world.
Conclusions
The evidence presented in the body of this paper suggests that the idea of globalization has strong resonances for most of the California Global 500 corporations. It also suggests that most of the corporations are aware of and satisfy, to a greater or lesser extent, four criteria of globalization and that most respondents consider their corporations to be in a transitional state between the international/multinational and the transnational (or global) corporation. Also clear was the finding that, in order to fulfil a 'shareholder-driven growth imperative', most of the corporations considered that they had no alternative but to globalize, despite the problems and pain that might be caused to employees in the USA and the local communities where they were originally established. All of these findings demonstrate a move to globalization among the California-based Global 500 and a certain level of success for some, but not that all these corporations consider themselves entirely globalized.
From the perspective of global system theory there is no single best management strategy for globalization. Many management structures are compatible with FDI and a global vision and the other components of globalization. Similarly, many different ways of coping with global-local relations are also possible. So globalization here signifies the ways in which the corporation relates to its place of birth, its country of domicile, the global context and its business sector, more than how the corporation structures itself internally. Indeed, some corporations go through multiple restructurings precisely to achieve globalization.[19]
Globalization implies that it is now impossible for companies simply to export their way to competitiveness. This trend of thought is well expressed, in the context of how the oil refiners are globalizing their chemicals interests, by an ARCO Chemical executive: 'producers should form partnerships with customers ... Relationships have to be expanded beyond the traditional sales-purchasing interface to involve research and development, business management and logistics information process' (quoted in Journal of Commerce, 12 July 1996). In this light attempts, however embryonic, to globalize can be best understood.
There is a common thread that connects most of these processes of globalization, strongly reinforcing one of the central tenets of global system theory. Directly or indirectly, all the strong global visions appear to depend on a link with the global marketplace, with the world of consumption and consumerism (see Sklair, 1995). For Chevron, Caltex -- the company's best-known global brand -- is singled out as a force for globalization; for HP 'a single worldwide identity' refers to the HP brandname;[20] Apple has one of a handful of globally recognized corporate symbols; for BankAmerica, the global vision is driven by the needs of corporate customers; for Intel, brand-recognition of the Pentium processor (Intel Inside) projects the company into the global arena; and SCEcorp, which means nothing to most people outside Southern California, changed its name to the more recognizable Edison International to maximize brandname equity. For the utilities and construction companies, demand for their 'products' depends directly on consumer demand for energy, infrastructure and the built environment where consumption takes place.
Where does this leave the argument about economic spaces? For some of the corporations, particularly the utilities and BankAmerica, meeting the demands of the local space, California (or even part of it) had been until relatively recently the dominating feature of their businesses (this is also true for Safeway and McKesson). The others have always been more oriented to national and international markets, the economic space of the US and other national economies, as companies operating and trading abroad. The global moment comes when the corporation stops thinking and acting primarily in terms of 'developing foreign markets and meeting competition from abroad' and starts to think and act more in terms of 'competitive strategies for global marketing' (Hoffman and Gopinath, 1994: 633) and the social organization of global business. This is a consequence both of universal forces of globalization (cross-sector technological change, capital flow, movements of personnel) and changing conditions in different industries. As business sectors globalize, the corporations in them must do so too, or fail. The globalization of business orientations and practices has a series of important consequences for employees at all levels, and for the communities where corporate facilities are located and where the impacts of corporate policies (employment, environmental, welfare and others) are felt. This suggests that, far from deflecting attention from the local and regional, the globalization of the major corporations actually forces us to research them more intensively.[21]
[1] See, for example, Sachs and Warner (1995) on the 'novelty issue', and Hirst and Thompson (1996) on 'myths'. For a careful critical analysis of such arguments, see Bairoch and Kozul-Wright (1996). For my own critical review of the globalization literature, see Sklair (1988).
[2] Kapstein (1994), for example, argues this vigorously for the case of the international banks. There is a wide variation in the terms used to characterize the corporations. Here, international and multinational are used to denote national companies with units abroad, while transnational and global are used to denote corporations who fulfil the four criteria of globalization discussed in the text.
[3] Of the respondents, six were senior executives and five were middle managers. Five corporations -- Safeway, McKesson, Disney, Pacific Telesis and Occidental -- declined to be interviewed. A survey of corporate and other publications indicates that Safeway and McKesson are not globalizing; the telecommunications company Pacific Telesis, like the other two utility companies, is beginning to globalize; and Disney, clearly and famously, and Occidental to a lesser degree, share many of the features of the globalizers in the study.
[4] There are, of course, many other ways to characterize globalization but as my approach originates in the sociology of global capitalism rather than 'international business' or the 'theory of the firm', these are the most telling criteria.
[5] As Hoffman and Gopinath (1994) have done, with very interesting results for the distinction between 'international' and 'global' business orientations of CEOs of US corporations.
[6] It was certainly the birthplace of the semiconductor industry. On Silicon Valley see Saxenian (1984; 1994), Hall and Markusen (1985), and Packard (1995) for an insider account.
[7] On the complexities of the energy utilities in the US, see Moorhouse (1986). Many cities have had competition in the supply of electricity and gas for decades.
[8] In what follows, all unattributed material in quotation marks is directly quoted from the interviews carried out in the corporations.
[9] Unless otherwise noted the facts and figures cited in this section are from Kotkin and Levy (1996) and Lowenthal and Burgess (1993). See also Soja (1987), Mitchell and Wildham (1989), Davis (1991), Kling et al. (1991) and Scott (1994) on southern California; Hartman (1984) on San Francisco; and on Silicon Valley, note 6 above.
[10] In common with many academic writers, corporations often use 'international' and 'global' interchangeably (see Hoffman and Gopinath, 1994: 631). I assume that my respondents are doing this where the context provides sufficient evidence to do so.
[11] In her contrast between the successes of Silicon Valley and the failures of Route 128, Saxenian (1994: 158-9) highlights these factors for HP and Apple.
[12] The Baldridge Award in the US. the Deming Prize in Japan, the European Foundation for Quality Management and the British Quality Foundation prizes are institutional evidence for the global importance of benchmarking, world best practice and similar ideas (see Watson, 1993).
[13] While benchmarking does not always lead to downsizing, it often does, especially in large corporations. Korten (1995: 216-18) notes this for ARCO, Pacific Telesis, Chevron and others, to which should be added substantial job losses in Rockwell, Occidental and Apple in the 1990s.
[14] The original spill was cited as a continuing problem by industry respondents. Unocol's $1.5 million fine in 1994 for another spill, said to be far larger, was largely unreported in the mass media (see Jensen, 1995: 79-80).
[15] Many of the Fortune 500 have been accused and some have been found guilty of a variety of crimes (see Ryan et al., 1987). See also Korten (1995) and Rowell (1996) on suspect corporate behaviour.
[16] For example, in May 1996 President Clinton invited CEOs to a conference on 'corporate citizenship' though, as Multinational Monitor (June 1996: 4) points out, 19 of the 110 companies represented had been convicted of crimes; and in July 1996, the magazine Business Ethics announced its first 'Business Ethics 100'. It should be noted that not a single respondent brought up the issue of the corporation's responsibility for sacked workers.
[17] It is relevant to note that my respondent in Apple was a middle manager, recruited from outside the USA. The detailed ethnography of Garsten (1994) and my own findings confirm that these local-global tensions are quite widespread in globalizing corporations.
[18] The other is Nutrasweet, the sugar substitute, widely used in processed foods and beverages.
[19] Quelch and Bloom (1996) argue that the globalization trend of the 1980s which reduced the power of the country manager caused so many problems that it is now necessary to reintroduce strong country managers and fortify their powers in the further interests of globalization. This is, presumably, the management consultancy industry's version of 'built-in obsolescence'.
[20] David Packard reveals that a manager at Macy's in San Francisco was responsible for his 'initiation into the consumer market. Building to fill shelves was a new concept to HP [in the 1970s]' (Packard, 1995: 112).
[21] The potential impact of the Multilateral Agreement on Investment (being negotiated at the OECD) on local communities highlights the relevance of this conclusion.
Table 1
California Fortune Global 500 Corporations (1995)
Legend for Chart:
A - Corporation
B - Business sector
C - Global rank in sector
D - Global 500 rank
E - US 500 rank
F - Revenue ($b)
G - Employees
A
B C D E F G
Chevron
petroleum 8 68 18 31.06 45,758
Hewlett-Packard
computers 3 97 22 24.99 98,400
BankAmerica
commercial bank 23 181 46 16.53 90,000
ARCO
petroleum 19 196 53 15.68 23,200
Safeway[a]
food & drug stores 9 197 54 15.63 109,969
Lockheed[b]
aerospace 4 259 70 13.13 82,500
McKesson[a]
wholesalers 3 261 78 12.43 14,500
Intel
electronics 20 314 90 11.52 32,600
Rockwell
electronics 21 330 94 11.20 71,891
Pacific Gas & Electric
electric &
gas utilities 11 361 102 10.45 22,000
Walt Disney[a]
miscellaneous 7 383 108 10.06 65,000
Pacific Telesis[a]
telecommunications 19 406 116 9.49 51,590
Occidental[a]
chemicals 14 408 117 9.42 19,660
Apple
computers 8 422 123 9.19 14,592
Fluor
engineering 13 452 134 8.56 39,807
SCEcorp[c]
electric &
gas utilities 15 469 139 8.35 16,531
a These corporations were not interviewed (see note 3).
b Relocated to the Washington DC area in 1996 (see text).
c SCEcorp (Southern California Edison Corporation) changed its name to Edison International in 1995.
Table 2
Revenues and profits of California Fortune Global 500 Corporations ($ million)
Legend for Chart:
A - Corporation
B - Geographical identifiers
C - Total revenues
D - of which non-US (%)
E - Total profits
F - of which non-US (%)
G - Notes
A
B
C D E F
G
Chevron
US; International
37,082 11,924 2,756 2,173
(32%) (79%)
Lost $106m on petroleum and coal in the US in 1995
Hewlett-Packard
US; Europe; Asia-Pacific; Canada; LA
32,510 17,901 3,564 2,170
(55%) (61%)
Products and services in 120+ countries
BankAmerica
US, LA/Canada; Asia; Europe; ME; Africa
232,446 50,044 20,386 4,281
[assets] [assets] (21%)
(22%)
$657b in foreign exchange contracts in 1995
ARCO
US; International
18,257 3,354 1,376 114
(18%) (8%)
Before Brazilian operation sold off in 1993, non-US
revenues were 23%
Safeway
US; Canada
16,398 3,495 4,454 869
(21%) (20%)
49% interest in Mexican retail chain
McKesson
US; International
11,805 1,384 44 31
(12%) (70%)
$230m Profit in 1994
Intel
US; Europe; Japan; Asia-Pacific; Other
14,261 11,748 5,252 2,417
(82%) (46%)
Includes $9.8b transfers between geographic areas
Rockwell
US; Canada; Europe; Asia-Pacific; LA
12,970 3,598 1,560 274
(28%) (18%)
Total revenues include $898m 'eliminations' and
export sales of $1,635m
Pacific Gas & Electric
US; Developing and mature markets
9,622 n/a 1,339 n/a
Intergen (j-v with Bechtel) in 8 countries
Walt Disney
US; Europe; Rest of world
12,112 2,801 2,446 787
(23%) (32%)
Euro Disney lost $680m (1993-5)
Pacific Telesis
No overseas business
9,042 n/a 2,011 n/a
Entering global telecom market in 1997
Occidental
US; Other Western hemisphere; Eastern hemisphere; Other
10,694 1,660 913 405
(16%) (44%)
US revenues include exports of $1b+
Apple
Domestic; International
11,062 4,932 (20) 674
(45%)
Substantial losses since 1995
Fluor
US; Europe; Central & South America; Asia-Pacific;
Canada; ME
9,301 3,486 397 100
(37%) (25%)
Total revenues include exports of $680m
SCEcorp
Domestic; Foreign
7,873 290 1,709 131
(3%) (7%)
'Foreign assets' of $3.5b (14.8% of total assets)
Sources: Company Annual Reports (1995).
References
Bairoch, P. and R. Kozul-Wright (1996) Globalization myths: some historical reflections of integration, industrialization and growth in the world economy. Discussion Papers 113, March, UNCTAD, Geneva.
Davis, M. (1991) City of quartz. Verso, London.
Dicken, P. (1992) Global shift: the internationalization of economic activity. 2nd edn., Paul Chapman, London.
Dunning, J. (1993) Multinational enterprises and the global economy. Addison-Wesley, Wokingham.
Fluor, J.R (1978) Fluor Corporation. A 65-year history. Newcomen Society, New York.
Garsten, C. (1994) Apple world: core and periphery in a transnational organizational culture. Studies in Social Anthropology, Stockholm.
Gayk, W.F. (1991) The taxpayers revolt. In R. Kling, S. Olin and M. Poster (eds.), Postsuburban California: the transformation of Orange County since World War II, University of California Press, Berkeley and Los Angeles.
Gladwin, T. (1992) Building the sustainable corporation: creating environmental sustainability and corporate advantage. National Wildlife Federation Corporate Conservation Council.
Gregory, D. and J. Urry (eds.) (1985) Social relations and spatial structures. Macmillan, London.
Hall, P. and A. Markusen (eds.) (1985) Silicon landscapes. Allen and Unwin, Boston.
Hartman, C. (1984) The transformation of San Francisco. Rowman and Allanheld, Totowa.
Harvey, D. (1989) The condition of postmodernity. Basil Blackwell, Oxford.
Hirst, P. and G. Thompson (1996) Globalization in question: the international economy and the possibilities of governance. Polity Press, Oxford.
Hoffman, R. and C. Gopinath (1994) The importance of international business to the strategic agenda of US CEOs. Journal of International Business Studies 27.3, 625-37.
Jensen, C. and Project Censored (ed.) (1995) Censored. The news that didn't make the news -- and why. Four Walls Eight Windows, New York.
Kapstein, E. (1994) Governing the global economy: international finance and the state. Harvard University Press, Cambridge, MA.
Kling, R., S. Olin and M. Poster (eds.) (1991) Postsuburban California: the transformation of Orange County since World War II. University of California Press, Berkeley and Los Angeles.
Korten, D. (1995) When corporations rule the world. Herrett-Koehler, San Francisco.
Kotkin, J. and S. Levy (1996) California: a twenty-first century prospectus. Center for the New West, Ontario, CA.
Lax, H. (1988) States and companies. Political risks in the international oil industry. Praeger, New York.
Logan, D. (1993) Transnational giving: an introduction to the corporate citizenship activity of international companies operating in Europe. The Directory of Social Change, London.
Lowenthal, A. and K. Burgess (eds.) (1993) The California-Mexico connection. Stanford University Press, Stanford.
Lydenberg, S., A. Marlin and S. Strub (1986) Rating America's corporate conscience. Addison-Wesley, Reading, MA.
Mitchell, D. and J. Wildhorn (eds.) (1989) Can California be competitive and caring? Institute of Industrial Relations, UCLA, Los Angeles.
Moorhouse, J. (1986) Electric power. Pacific Research Institute for Public Policy, San Francisco.
Nash, A., D. Mann and P. Olsen (1972) Oil pollution and the public interest: a study of the Santa Barbara oil spill. University of California Institute of Governmental Studies, Berkeley.
OECD (1996) Recent trends in foreign direct investment. Financial Market Trends 64 (June), 37-61.
Packard, D. (1995) The HP way: how Bill Hewlett and I built our company. Harper Collins, New York.
Quelch, J. and H. Bloom (1996) The return of the country manager. The McKinsey Quarterly 2, 30-43.
Rowell, A. (1996) Green backlash: global subversion of the environment movement. Routledge, London.
Ryan, M., C. Swanson and R. Buchholz (eds.) (1987) Corporate strategy, public policy and the Fortune 500. Blackwell, Oxford.
Sachs, J. and A. Warner (1995) Economic reform and the process of global integration. Brookings Papers on Economic Activity 1, 1-118.
Saxenian, A. (1984) The urban contradictions of Silicon Valley: regional growth and the restructuring of the semiconductor industry, in L. Sawers and W. Tabb (eds.), Sunbelt/snowbelt: urban development and regional restructuring, Oxford University Press, New York, 163-97.
----- (1994) Regional advantage: culture and competition in Silicon Valley and Route 128. Harvard University Press, Cambridge, MA.
Scott, A. (1993) Technopolis: high-technology industry and regional development in Southern California. University of California Press, Berkeley and Los Angeles.
Sklair, L. (1995) Sociology of the global system. 2nd edn., Prentice Hall and Johns Hopkins University Press, London and Baltimore.
----- (1996) Conceptualizing and researching the transnational capitalist class in Australia. The Australian and New Zealand Journal of Sociology 32 (August), 1-19.
----- (1998) Globalization: new approaches to social change. In S. Taylor (ed.), Contemporary, MacMillan, London.
Soja, E. (1989) Postmodern geographies. Verso, London.
----- (1987) Economic restructuring and the internationalization of the Los Angeles Region. In M.P. Smith and J. Feagin (eds.), The capitalist city: global restructuring and community politics, Blackwell, Oxford.
Tolchin, M. and S. Tolchin (1993) Buying into America: how foreign money is changing the face of our nation. Farragut, Washington.
Vietor, R. (1994) Contrived competition: regulation and deregulation in America. Harvard University Press, Cambridge.
Watson, G. (1993) Strategic benchmarking. John Wiley, New York.
~~~~~~~~
By Leslie Sklair
Leslie Sklair (L.SKLAIR@lse.ac.uk), The London School of Economics and Political Science, Houghton Street, London WC2A 2AE, UK.
Copyright of International Journal of Urban & Regional Research is the property of Blackwell Publishing Limited and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.