A Cautionary Tale For Globalization

Featuring Robert Salomon

While companies continue to pursue global dominance, Robert Salomon, NYU Stern professor and author of “Global Vision: How Companies Can Overcome the Pitfalls of Globalization,” is waving a flag of caution. Salomon says there are several crucial factors that managers are not considering when expanding operations overseas, which include the varying political, cultural and economic views in different nations. Filmed April 24, 2018 in New York.

Published on
9 July, 2018
Topic
Business Strategy, Globalization, Politics
Duration
25 minutes
Asset class
Equities
Rating
4

Comments

  • MS

    Matt S.

    18 7 2018 04:04

    0       0

    Xenophobia? No brother - it's called protecting one's own culture and traditions. Infinitely more important than making some money in the stock markets.

  • jm

    judith m.

    18 7 2018 01:24

    0       0

    Don't agree but his delivery was clear, thorough and interesting.

  • WB

    William B.

    13 7 2018 05:00

    0       0

    Excellent! Wish it had been published much sooner.

  • RM

    Ritwik M.

    13 7 2018 04:02

    0       0

    e

  • TG

    TEDDY G.

    12 7 2018 07:26

    0       2

    Stop at 2minutes mark when this idiot (sorry no other word considering the statement) mentioned how UBER "lost 2 billions in cash". Uber owns 20% of DIDI thanks to selling their China operation to them, how much do you think this is worth ?

  • DP

    David P.

    12 7 2018 02:37

    0       1

    Great video. Brngs

    • DP

      David P.

      12 7 2018 02:40

      0       1

      Brings to mind that trade is not the only game in town. FDI's, currencies (and exorbitant privilege) all impact each others.

  • WG

    Wade G.

    11 7 2018 01:00

    0       1

    I loved being a student back in the day, but I can't imagine being excited about this material. Wondering if this is not great (I don't want to be over-the-top rude about it) or if I've moved on that much...

  • ZY

    ZHENG Y.

    11 7 2018 00:07

    0       1

    Actually i like the video that spark most debate in the comment part, meaning there is a space for discussion. (Almost 50% thumb up and down) Great conversation starter.

  • JG

    Jory G.

    10 7 2018 18:34

    6       2

    I worked in and was general manager of a packaging manufacturing company for 50 years. During that time saw dozens of companies leave our area for other countries. Thousands of jobs that paid good wages and had good benefit packages were lost. Most of those who lost jobs either took multiple jobs to maintain their standard of living or lowered their standard of living, or left the area to try to find better opportunity. For many is was a dramatic change in lifestyle.
    While not a protectionist, I do not think higher taxes on the rich or more education is the solution. Academia as far as I can tell has had little to do with economic prosperity. I tend to agree with famous Oklahoman Will Rogers who was quoted as saying "An economist's guess is likely to be as good as anybody's."

  • PU

    Peter U.

    10 7 2018 13:13

    7       7

    Remove this video, not worthy of RV, imo

  • HH

    Heath H.

    10 7 2018 12:05

    1       0

    Audio failed

    • PU

      Peter U.

      10 7 2018 12:13

      4       0

      consider yourself lucky

  • AD

    Anthony D.

    9 7 2018 18:41

    4       0

    mate you should see how uber has impacted in emerging markets was in Kenya last summer and uber are with you within a minutes. but they actually plugged a hole in the market where taxis before ripped people off.

    The changes/disruptions will get more pushback in developed markets.

    one thing I agree with is parachuting expertise with under of local context increases probability of failure.

  • WH

    W H.

    9 7 2018 17:36

    11       0

    The statistics cited are not necessarily untrue, but this analysis doesn't look at the most important known unknown at all, and that is the impact of corporate internal transfer pricing regimes on the global distribution of profits. Have run JVs in China and other EMs and always did so at a small loss by design so profits could be attributed offshore to lower tax jurisdictions that would not take my FX hostage in the form of capital controls. Without unpacking supply chains and transfer pricing regimes any analysis of corporate profitability in geographic terms is close to worthless. Large companies do not address this in their reporting, intentionally.

    • CM

      C M.

      11 7 2018 02:30

      0       0

      Good point. Thanks for sharing.

  • SS

    Sam S.

    9 7 2018 17:16

    13       5

    This piece is mostly non-sense. Great Depression can not be blamed on a single reason like tariffs and trade. Much more complex. Trump is a DEAL maker. Not sure how many deals Mr. Salomon has made with his own money on the line, but Trump's made hundreds of really big deals. Deal makers start off asking for the world, everyone comes running and screaming how terrible it all is, then compromise on a much more FAIR deal. Past administrations have given away the farm and raided the US Treasury. Trump is the symptom, not the cause. USA needs to make better deals and more win - win deals for us and not all for them. Anyone pay attention to how many leaders, both political and corporate, showed up at Trump Tower right after Trump got elected but wasn't sworn in yet???? They were there making deals. Clinton pay for play foundation was a fraud and has crumbled. More taxes---really----tax less, regulate less and people will spend more, play more and the economy will thrive! I'm just saying.

    • BM

      Beth M.

      9 7 2018 17:42

      8       3

      I hold many of the same views Sam...great observation. What is occurring is so threatening to the "deep state" and so called "authorities" who weaponize government for their own advantage. The little guy on the street is finding this out the hard way. I also believe that the work that Kyle Bass has done on China shows just how communisum is not compatible with the free market economy of the world. Kyle tirelessly points out their currency manipulation as well as the 600 billion dollars they steal in intellectual property every year. The struggle is the massive global debt, and the debt Obama screwed us with, left us in a precarious place. It will be very difficult to grow our economy enough to overcome that. I voted for Trump but there has not been real fiscal responsibility. As much of an optimist that I am...I am truly concerned (as many of the guests have stated on Real Vision) that the next recession/depression will be devasting...and we will be searching for answers.

    • CM

      C M.

      11 7 2018 02:43

      3       3

      Trump has not cut one deal that I am aware of with another country. Saw the Republican Senator from Iowa this Sunday on Meet the Press asking Trump to please start cutting deals, the sooner the better. His bullying style of negotiating works with small businessmen that he can say "sue me", but not so much with countries. As a private businessman, the only two deals I can think he negotiated well was developing Trump Tower in NYC and with his bankers in the early 1990s to save himself from declaring personal bankruptcy by selling them on building a licensing business. Could not negotiate himself out of all the bankrupt companies he started, i.e. casinos, Trump University. So the jury is still out on whether Trump can negotiate a deal on the world stage since he has not done one as President. Look at how badly he did in giving concessions to North Korea without getting anything in return. That was some tough negotiating as you saw the Koreans response to the recent Secretary of State visit. It looks like most of the thumbs down on this video are based on political beliefs.

    • CM

      C M.

      11 7 2018 02:59

      3       2

      In response to Beth, please go look at the last 35 years of federal deficits. https://www.thebalance.com/us-deficit-by-year-3306306 They accelerated under Reagan as trickle down economics never saw Federal receipts recover after the Reagan tax cut (Reagan was first president to drive deficits over $100 billion). They declined under Clinton (into a surplus) and the first few years of Bush. Reaccelerated after the Bush tax cuts, and with the collapsing economy (greatest since 1929) into the early years of Obama. After the huge government fiscal increase to keep the country from shutting down due to the economy passed forward by George W, deficits decline under Obama and start re-accelerating under Trump (although the economy is performing at maximum capacity). Trump's first two budgets exceeded the budget deficits for Obama's last three years. Trump may be the first president to have a deficit exceed a trillion dollars. As a Republican, can't believe I am defending Democratic presidents, but the numbers are what they are. Hate to see people revise history to paint a different story.

    • BM

      Beth M.

      14 7 2018 05:00

      1       0

      Obama DOUBLED U.S. Debt = Fact...and we the people got nothing for it except a enormous headache!

  • SH

    Steve H.

    9 7 2018 16:58

    7       3

    I wonder how many of those making negative comments have ever had the opportunity to establish a JV or other form of operation in a culturally very different market. I had that opportunity nearly 40 years ago in Korea and then several more times after that. I don't see anything wrong with this presentation. The bit at the end about redistribution doubtless offends the one percent and their useful idiots, who - presumably - see an optimal solution lying in the ongoing polarisation of our societies, with all the socio-political and economic disruption which will almost certainly be the ultimate end-game.

    • VC

      Vince C.

      10 7 2018 04:56

      3       0

      Hi Steve,
      I was a negative commenter.
      I've had the opportunity to experience start up, to establishment, to closing of businesses in 4 countries (directly & indirectly, personally &/or through family).
      Admittedly, interviewee made one good comment w.r.t emphasis on economic - political - cultural - ?? - risks when setting up shop in other countries but, how conventional... same as saying to consider wearing a jacket before going outside during winter.
      The veiled comments on taxes and contradictory views on globalisation however, sunk the video.
      Also wouldn't be so quick to assume those commenting negatively on taxes are all in the "1%", whatever that's supposed to mean...

    • TB

      Tim B.

      10 7 2018 13:46

      0       0

      Hi Steve,

      Appreciated your comment...very well stated.

    • DK

      Daniel K.

      15 7 2018 08:07

      1       0

      Thanks for pointing this out Steve. People are commenting on here like it's Twitter. It's really unprofessional and disrespectful to the guest.

  • RR

    Roman R.

    9 7 2018 16:45

    2       0

    I’m puzzled by the 1%/99% conversation here in the context of unfairness. What does he mean and what’s the proposal? The fact that due to the globalization hundreds of millions of people get out of property is shadowed in his view by the fact that the corporations got richer?

    • CM

      C M.

      11 7 2018 03:29

      0       0

      Guessing his argument is that the 1% benefited from globalization via stock ownership in companies as stocks have risen (in that the 1% owns 40% of stocks and the bottom 60% owns 2%). On the other side, US workers have not seen salaries increase as real wages have only grown from $332 per week in 1979 to $351 per week today. So stock market is up an inflation adjusted 740% in that time period while salaries are up 5.7%. So his point appears to be that workers are not benefitting from globalization at the same rate as equity owners.

  • JL

    Joe L.

    9 7 2018 15:32

    7       2

    The stuff about US companies investing internationally was interesting. His comments on globalization are foolish. Fix the corrupt globalization to the benefit of the 1% by raising taxes? Riiiiiiight.

  • VC

    Vince C.

    9 7 2018 15:31

    13       2

    Higher taxes! Because the government surely knows how to redistribute money fairly. Great way to de-incentivise and reduce productivity. And, last I checked "globalisation" has benefited more than just 10% of the population.
    Globalisation itself what a buzzword... the world has been globalising since the beginning of mankind, limited only by a time period's infrastructure and networks.

  • PU

    Peter U.

    9 7 2018 13:50

    6       1

    didn't / couldn't even finish it

  • SZ

    Scott Z.

    9 7 2018 12:38

    1       0

    The audio file download for this episode seems to be corrupted

  • JH

    John H.

    9 7 2018 12:24

    1       1

    Wealthiest companies and individuals enjoy higher taxes because increased reliance on their products & services leads to them dictating policy. Just look at Virgin, they'd love more money to the NHS because that will lead to them "winning" more work when it is "outsourced." World needs to move away from dependencies on monopolies by increasing competition, lowering taxes and awarding contracts to smaller firms

    • SH

      Steve H.

      9 7 2018 16:38

      1       0

      Better still, stop the outsourcing. I'm old enough to remember when the NHS functioned properly - without overpaid trust managements, overrewarded management consultants, corrupt PFI 'investments', and without outsourcing.

  • sm

    stephane m.

    9 7 2018 10:55

    17       4

    We see his true color at the end of the clip... I'm not surprise by his conclusion (the government needs more money to pay for his pension!!).