International business and the historian
Through tracing the rise of the global company, we can observe a major influence on the modern era: few would question the importance of multinational enterprise to the world economy, but multinationals have shaped, too, the politics and societies of individual countries, and the relations and power balance between nations. The bonds between the economic and political are too often downplayed in the accounts of international history, more concerned with states, diplomatic alliances, and wars. Yet European industrialization and rising living standards in the nineteenth century incited the search for raw materials and commodities, trade and investment overseas, and imperial expansion. Cold War divisions and the economic, technological, and military hegemony of the USA shaped the workings of the post-war international economy. With the liberalization of markets and cross-border investment from the late twentieth century onwards, it was multinationals that hastened and transformed the economic interdependence of countries.
While the governments of investing nations supported their firms abroad, host nation governments strove through their policies to gain from these investments, and, in many cases, to protect encroachments on their sovereignty; for multinationals, governments were as much part of the business challenge as trends in the global marketplace. In addition to changing the nature of individual states, the rise of the global company reminds us that national economies did not develop in isolation: cross-border interaction and the transfer of capital, technology, business practices and much else have determined the fortunes of countries and their industries. As a result, multinationals have been both a force for change and dynamism, and a magnet for criticism and concern.
Economists, during the 1960s, fashioned the idea of ‘multinational enterprise’, without realizing how long it had existed as a form of business. Others soon grasped that the giant international corporation, which had become such a prominent feature of the post-war world, had deep origins (Wilkins, 1970; Stopford and Wells, 1972; Stopford, 1974; Franko, 1976). Each revelation remained, nonetheless, a preamble to the main analysis. Why might we move historical study centre stage instead? One suggestion borrows heavily from leading ideas in strategic management and the theory of international business, which view the firm or the multinational as a unique bundle of organizational systems, managerial knowledge, technologies, products and skills.