The multinationals of 2025 are likely to be held together and controlled by strategy.
Statistically, multinational companies play much the same part in the world economy today as they did in 1913. But they have become very different animals. Multinationals in 1913 were domestic firms with subsidiaries abroad, each of them self-contained, in charge of a politically defined territory, and highly autonomous. Multinationals now tend to be organized globally along product or service lines. But like the multinationals of 1913, they are held together and controlled by ownership. By contrast, the multinationals of 2025 are likely to be held together and controlled by strategy. There will still be ownership, of course. But alliances, joint ventures, minority stakes, know-how agreements and contracts, will increasingly be the building blocks of a confederation.
This kind of organization will need a new kind of top management. In most countries, and even in a good many large and complex companies, top management is still seen as an extension of operating management. Tomorrow’s top management, however, is likely to be a distinct and separate organ: it will stand for the company.
ACTION POINT: Is your expertise or your boss’s expertise in the nuts and bolts of operating a division or in knitting together a far-flung confederation of strategic partners? Do two things that will improve your personal attractiveness as a strategic partner, such as reading a book about another business or culture or talking to an executive who has partnering expertise.
Managing in the Next Society
* Source: The Daily Drucker by Peter F. Drucker