Are Businesses Becoming Too Fragmented?

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April 2 (Bloomberg) –- In today’s “Global Outlook,” Sam Palmisano, former chairman and CEO of IBM, discusses corporate globalization with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

About here is the globalization of business and the world.

You explain how corporations can take advantage of that.

Give us some examples.

Basically, if you look at the factors that are driving the change of a multitude of things, one is the fact that more and more of the emerging countries are now engaged in the global economy.

Their governments are more stable.

They are more oriented to global economics and they have moved in.

? examples like china.

You have a population that is educated in these geographies that are entering the middle class and you have a technology shift.

When these three factors converge, governments opening up, engaging in the economic world, complying with the wto-types of characteristics, that created an opportunity for economic expansion and growth for the company and access to great sets of skills.

In other words, you don't have to rely on -- if you are in texas, instead of all your workers being in texas, you can have workers anywhere in the world so long as they can do the job because of the advantages in technology.

That's right.

G eiji is really a concept -- gig is really a concept.

As a global entity, you have access to talent pools and natural resources.

You have access to capital anywhere in the world where it makes sense.

What does this mean for a company, a pretty good-sized company that is taking advantage of these?

Mid to large companies that would be looking at this, one is growth and expansion.

When i was at ibm from about 2004 through 2011, those countries were [indiscernible] so tremendous growth opportunities.

The other thing it represents is access to great talent.

They have great technical skills and talent that you can have access to that can help you innovate, provide services, do all sorts of things that are now available to you in this globalized world.

As you do these things beyond growth, which i referred to as something in the book, you create a scale that drives tremendous productivity, therefore competitiveness.

Let me play devil's advocate.

Where does face time and genuine one-on-one interaction -- how does that fit into this plan if people are scattered all over the world?

That may make sense from a talent perspective, but does it ultimately work if people don't get a chance to see each other?

Basically, think about it for a second, there are always good to be human interaction.

There is a lot of study going around what is global and what is local.

You will never have a substitute for people on the ground establishing relationships, selling and serving to customers or clients, wherever they happen to be.

I used to always say our address is not planet earth, milky way galaxy.

I don't sell to planet earth.

You sell to a company or a country or seoul, korea or beijing, china.

That will always occur.

At the same time, innovation and development, collaboration goes on all over the world.

But small teams interact not always face-to-face but often times in a face-to-face environment.

The reason for that is because you need to build trust.

Trust skills within the corporation itself am a they depend on each other.

If you are going to create this global model that provides accounting services or technical services for your entire entity, if a bloomberg llp were to do that, you need to trust each other.

If you are a company operating in a country, ibm which is now operating in china or india, you have to be trusted.

The only way you will be trusted is through government interaction.

Trust is very important in today's world.

There are so many concerns about the u.s. economy and the u.s. worker and the american dream ostensibly, the chance for one generation to do better than the other.

A lot of people pointed to globalization.

It is this kind of outsourcing a very technical skills, not just manufacturing, but as it moves up the food change, it is really threatening this a standard of living for all americans.

My view is that you need to engage the world.

If you would retrench -- think about it from the u.s. perspective.

I can make the argument from the asia perspective and i will take the u.s. perspective.

The economic growth in the united states is not enough to sustain standard of living improvement.

That is a fact.

The only way you will get the economic growth is you have to engage the global economy.

You have to export.

You have to sell.

You have to service.

Any company can be successful in that environment.

Why can't we just live in our borders?

That will lead to a standard of

This text has been automatically generated. It may not be 100% accurate.


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