Tuesday, March 11, 2008

Stateless Corporations

An article at CNN.com talked about American companies that by establish bogus headquarters in the Cayman Islands and in other nations, are avoiding paying their share of federal taxes, according to the Senate Finance Committee, which requested that Government Accountability Office investigators visit the Caribbean islands.

This is the tip of the iceberg, and a natural result of globalization. The eventual end result will be “stateless” corporations with no geographic roots. When companies had a national identity they drew their management primarily from citizens where their headquarters were located. The managers brought their cultural ethics with them, one result was that the corporation was seen as and thought of it self as part of the community.

We’ve already seen that as corporations think more globally they have been less concerned with the local impact of their decisions. After all, that location is a small part of their overall operation. What will the results be when the headquarters and managers stop thinking of themselves as “locals” and have no connection to the place where the company and they reside?

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