During the second half of the 20th century, as decolonization was underway and the Soviet Empire collapsed under its own weight, multinationals began reversing their vertical corporate structure in favor of more flat organizations to minimize their exposure to local risk, improve profitability, and focus on operational areas where they have more expertise.
Multinational organizations began transforming themselves from vertical to horizontal structures. Many organizations with vertical integration for mining resources, logistics, production, marketing, and distribution at the retail point, began selling parts of their operations to locals and became experts in their own area of expertise.
By the beginning of the 21st century, multinationals had reshaped themselves into smaller organizations with many of their peripheral work being outsourced to contractors and where appropriate sending expatriates to foreign locations and offshoring some divisions based on their needs. Therefore, while multinationals, operating in few countries morphed into global companies (operating in many countries), they disengaged from local events, and moved many of their main assets to home country. The trend led to competition between emerging and under-developed economies for global businesses’ outsourcing contracts.
The shift in global economies through competition for outsourcing of global companies or in some instances for outsourcing of local companies led to fierce concession of wages while commodity prices led to inflationary trends. The gap between wages and costs of living by workers everywhere had led to mass global dissatisfaction by workers while capitalist continue to thrive in the short term. The question is: How these gaps, new organizations’ format, and disparity in wages will determine the future of globalization?
Multinational organizations began transforming themselves from vertical to horizontal structures. Many organizations with vertical integration for mining resources, logistics, production, marketing, and distribution at the retail point, began selling parts of their operations to locals and became experts in their own area of expertise.
By the beginning of the 21st century, multinationals had reshaped themselves into smaller organizations with many of their peripheral work being outsourced to contractors and where appropriate sending expatriates to foreign locations and offshoring some divisions based on their needs. Therefore, while multinationals, operating in few countries morphed into global companies (operating in many countries), they disengaged from local events, and moved many of their main assets to home country. The trend led to competition between emerging and under-developed economies for global businesses’ outsourcing contracts.
The shift in global economies through competition for outsourcing of global companies or in some instances for outsourcing of local companies led to fierce concession of wages while commodity prices led to inflationary trends. The gap between wages and costs of living by workers everywhere had led to mass global dissatisfaction by workers while capitalist continue to thrive in the short term. The question is: How these gaps, new organizations’ format, and disparity in wages will determine the future of globalization?
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