Their subject is complex, [b]ut this is must reading for anyone who seeks to do international business from the inside, or to observe the workings of multinationals from the outside. In fact, this is one of the freshest and most important books about managing multinational companies to emerge in recent years. The book argues that companies must move from their current methods of organization to a new model that the authors call "metanational." They describe this model as one step more sophisticated than the "transnational" one depicted by Christopher A. Bartlett and Sumantra Ghoshal in another book, Managing Across Borders, in 1989. 

American multinationals have such strong domestic bases that they started globalizing by merely projecting what they had learned at home to faraway places, the "Metanational" authors contend. In that sense, General Motors projects from its base in Detroit, just as Intel does from its base in Silicon Valley.

Over time, many American multinationals have fine-tuned that model by establishing country or regional managers on the ground, brand or technology managers with global responsibility, and a headquarters staff that keeps centralized control. Because someone selling Procter & Gamble detergent in Japan must report to both a Japan manager and a global detergent manager, this management system is called a "matrix."

American multinationals that are organized along these lines have rarely been good at taking full advantage of new knowledge or new insights in the faraway lands where they operate, Mr. Doz, Mr. Santos and Mr. Williamson write. So what has to happen? American multinationals, the authors say, have to learn from some smaller European, Japanese and Taiwanese companies that have found ways to sense new pockets of knowledge and to mobilize them globally. Increasingly, successful companies will be the ones that find new ideas in distant lands and transform them into global products. That's what the authors mean by the ability to exploit the "knowledge economy."

To make the transition to this nimbler form of corporate organization, companies must create three planes of activity, the book says. The first is the "sensing" plane — a group of people around the world who prospect for new knowledge, or "sense" it.... Once that plane has found valuable knowledge, including technologies that may disrupt the way the company has operated for many years, it relays the knowledge to a "magnet" plane. This group, also spread around the world, has the primary job of working inside the company to disseminate the knowledge. Finally, the knowledge should be melded and infused into a third, or "operations," plane. It comprises people who actually make things, market them and have face-to-face contact with distributors or customers.

In effect, the authors of "Metanational" are proposing a new vocabulary and organizational model for how global companies should be organized and managed.... If taken to heart, the advice offered in "Metanational" would require multinationals to rip up their organizational charts.

Becoming a metanational also implies behavioral changes at the top. The job of the chief executive is no longer to preside over a "center" that projects knowledge and technology to the world; instead, he or she must attract senior talent from all over the world to the headquarters, and must view the headquarters as a node in a network....

Perhaps the biggest question hanging over the book's line of argument is whether managements of multinational companies can get from here to there. Already, the internal decision-making of large multinationals is chokingly complex. Mr. Doz, Mr. Santos and Mr. Williamson contend that they need new mentalities, cultures, systems and processes and that these cannot be shoehorned into existing operating units. To make matters even trickier, some of the sensing and magnet organizations that a company sets up will prove temporary in nature; others will endure. Moving people in and out of these units, and figuring out how to compensate and motivate them, will require tremendous skill.

The authors dedicate a chapter to the here-to-there issue. They acknowledge that it isn't easy. The alternative, however, is being overtaken by competitors like Nokia who seemingly come out of nowhere to roll out innovative products and attack the profitability of incumbents. If the authors are right, there just might not be a choice but to take the leap into a metanational future. 

From Business Finance, Feb. 2000 
"Citizens of the World"
by LAURIE BRANNEN

If you believe your company has not fully tapped global business opportunities but you're unsure how to turn those opportunities into profits, you will want to read about a sea change in international growth strategies. Doing business overseas used to mean projecting a homegrown formula into new markets, but a new breed of company is finding international success by applying a broader perspective....

The idea behind this new mind-set is that businesses should learn from the world as they go, rather than shoehorning existing operating structures into distant markets. By no means do the authors imply that worldwide success comes in a one-size-fits-all model, but they explain that traditional global strategies are not sufficient to differentiate leading competitors.... the good news is that many of today's multinationals have an excellent head start in reaching that exalted state -- if they can break free from the "legacies that their historic geographic roots and patterns of international expansion have left behind."

... The authors describe companies that embody their concepts; these examples make the book come alive. Consider, for example, PolyGram, the world's largest record company, for which Seagram paid $10.4 billion in a takeover in 1998. The company developed a unique system that lets it think beyond national borders and turn local artists into international stars. (Ever hear of Icelandic singer Bjork?)

The book offers a blueprint for becoming a corporate citizen of the world in the best possible sense, hammering a nail into the coffin of the "not invented here" syndrome.

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